Information and externalities in sequential litigation

Xinyu Hua; Kathryn E. Spier; Eberhard Feess; Hans-Bernd Schäfer

doi:10.1628/0932456054193676

Information and externalities in sequential litigation

Xinyu Hua
, Kathryn E. Spier
, Eberhard Feess
, Hans-Bernd Schäfer

Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review

20 Citations (Scopus)

Abstract

The information created and disseminated through the litigation process can have social value. Suppose a long-lived plaintiff is suing a defendant for damages sustained in an accident. The plaintiff may suffer similar damages in future accidents involving different defendants. Potential injurers update their beliefs after observing the first case and subsequently fine-tune their precautions to avoid accidents. The joint incentive of the plaintiff and the first defendant to create public information through litigation is too small. The optimal liability rule trades off the injurers' incentives to take precautions and the plaintiff's incentive to create public information. (JEL: K 9, K 1, D 8) © 2005 Mohr Siebeck.

Original language	English
Pages (from-to)	215-238
Journal	Journal of Institutional and Theoretical Economics
Volume	161
Issue number	2
DOIs	https://doi.org/10.1628/0932456054193676
Publication status	Published - Jun 2005
Externally published	Yes

Bibliographical note

Publication details (e.g. title, author(s), publication statuses and dates) are captured on an “AS IS” and “AS AVAILABLE” basis at the time of record harvesting from the data source. Suggestions for further amendments or supplementary information can be sent to [email protected].

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title = "Information and externalities in sequential litigation",

abstract = "The information created and disseminated through the litigation process can have social value. Suppose a long-lived plaintiff is suing a defendant for damages sustained in an accident. The plaintiff may suffer similar damages in future accidents involving different defendants. Potential injurers update their beliefs after observing the first case and subsequently fine-tune their precautions to avoid accidents. The joint incentive of the plaintiff and the first defendant to create public information through litigation is too small. The optimal liability rule trades off the injurers' incentives to take precautions and the plaintiff's incentive to create public information. (JEL: K 9, K 1, D 8) {\textcopyright} 2005 Mohr Siebeck.",

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AU - Hua, Xinyu

AU - Spier, Kathryn E.

AU - Feess, Eberhard

AU - Schäfer, Hans-Bernd

N1 - Publication details (e.g. title, author(s), publication statuses and dates) are captured on an “AS IS” and “AS AVAILABLE” basis at the time of record harvesting from the data source. Suggestions for further amendments or supplementary information can be sent to [email protected].

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N2 - The information created and disseminated through the litigation process can have social value. Suppose a long-lived plaintiff is suing a defendant for damages sustained in an accident. The plaintiff may suffer similar damages in future accidents involving different defendants. Potential injurers update their beliefs after observing the first case and subsequently fine-tune their precautions to avoid accidents. The joint incentive of the plaintiff and the first defendant to create public information through litigation is too small. The optimal liability rule trades off the injurers' incentives to take precautions and the plaintiff's incentive to create public information. (JEL: K 9, K 1, D 8) © 2005 Mohr Siebeck.

AB - The information created and disseminated through the litigation process can have social value. Suppose a long-lived plaintiff is suing a defendant for damages sustained in an accident. The plaintiff may suffer similar damages in future accidents involving different defendants. Potential injurers update their beliefs after observing the first case and subsequently fine-tune their precautions to avoid accidents. The joint incentive of the plaintiff and the first defendant to create public information through litigation is too small. The optimal liability rule trades off the injurers' incentives to take precautions and the plaintiff's incentive to create public information. (JEL: K 9, K 1, D 8) © 2005 Mohr Siebeck.

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DO - 10.1628/0932456054193676

M3 - RGC 21 - Publication in refereed journal

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SP - 215

EP - 238

JO - Journal of Institutional and Theoretical Economics

JF - Journal of Institutional and Theoretical Economics

IS - 2

ER -

Information and externalities in sequential litigation

Abstract

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