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Settlement Negotiations with Two-Sided Asymmetric Information: Model Duality, Information Distribution and Efficiency Author info | Abstract | Publisher info | Download info | Related research | Statistics Andrew F. Daughety (Economics)
Jennifer F. Reinganum (Univ. of Iowa)
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registered author(s):
We analyze a settlement and litigation game in which both parties possess private information relevant to the value of a claim. The plaintiff knows the level of damages, while the defendant knows the probability he will be held liable for those damages. We consider two alternatives: (1) the plaintiff proposes a settlement, which the defendant accepts or rejects; and (2) the defendant proposes a settlement, which the plaintiff accepts or rejects. Despite the extensive symmetry of the model, these alternatives will generally result in different equilibrium expected frequencies of trial, and therefore different social efficiencies.
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Paper provided by EconWPA in its series Game Theory and Information with number
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Length: 22 pages
Date of creation: 31 Mar 1994Date of revision:
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Article Daughety, Andrew F. & Reinganum, Jennifer F., 1994.
"Settlement negotiations with two-sided asymmetric information: Model duality, information distribution, and efficiency ,"
International Review of Law and Economics ,
Elsevier, vol. 14(3), pages 283-298, September.
[Downloadable!] (restricted) Find related papers by JEL classification: C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory D8 - Microeconomics - - Information, Knowledge, and Uncertainty
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references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
Álvaro Bustos & Ronen Avraham., 2008.
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