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Libel Bullies, Defamation Victims, and Litigation Incentives

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  • David J. Acheson
  • Ansgar Wohlschlegel

Abstract

In the context of defamation law, we analyze a public figure's incentives to bring negative-value defamation suits in order to appear litigious, and how this affects her incentives to do wrong in the first place and the media's incentives to expose this wrongdoing. In equilibrium, the public figure's litigation incentives depend both on her own direct costs and benefits of doing so, and on journalists' costs and benefits from litigation and publication. Furthermore, equilibrium wrongdoing and publication choices depend on an otherwise nonlitigious public figure's litigation payoffs. Potential effects of legal reform are briefly discussed.

Suggested Citation

  • David J. Acheson & Ansgar Wohlschlegel, 2021. "Libel Bullies, Defamation Victims, and Litigation Incentives," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 177(2), pages 135-166.
    • Handle: RePEc:mhr:jinste:urn:doi:10.1628/jite-2021-0003
    DOI: 10.1628/jite-2021-0003
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    More about this item

    Keywords

    defamation law; litigation costs; signalling;
    All these keywords.

    JEL classification:

    • K19 - Law and Economics - - Basic Areas of Law - - - Other
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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