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The Economics of Injunctive and Reverse Settlements

Author

Listed:
  • Keith N. Hylton
  • Sungjoon Cho

Abstract

This paper extends the economic literature on settlement and draws some practical insights on reverse payment settlements. The key contributions follow from the distinction drawn between standard settlements, in which the status quo is preserved, and injunctive settlements, w and under which reverse settlements will be observed among injunctive settlements. Reverse settlements are likely when the stakes associated with the injunction are large relative to damages and litigation costs. The analysis has broader implications for efficient remedies and legal rules. (JEL K10, K40, K41, D24, O34) Copyright 2010, Oxford University Press.

Suggested Citation

  • Keith N. Hylton & Sungjoon Cho, 2010. "The Economics of Injunctive and Reverse Settlements," American Law and Economics Review, American Law and Economics Association, vol. 12(1), pages 181-203.
    • Handle: RePEc:oup:amlawe:v:12:y:2010:i:1:p:181-203
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    File URL: http://hdl.handle.net/10.1093/aler/ahp026
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    Citations

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    Cited by:

    1. Keith Hylton & Sungjoon Cho, 2013. "Injunctive and reverse settlements in competition-blocking litigation," European Journal of Law and Economics, Springer, vol. 36(2), pages 243-269, October.
    2. Ottoz Elisabetta & Cugno Franco, 2012. "Does Banning Side Payments in Patent Settlements Suffice to Fully Protect Consumers?," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201201, University of Turin.
    3. Hylton, Keith N., 2023. "Mutual optimism and risk preferences in litigation," International Review of Law and Economics, Elsevier, vol. 75(C).

    More about this item

    JEL classification:

    • K10 - Law and Economics - - Basic Areas of Law - - - General (Constitutional Law)
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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