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Sequential versus Unitary Trials with Asymmetric Information

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  • Chen, Kong-Pin
  • Chien, Hung-Ken
  • Chu, C Y Cyrus

Abstract

Suppose a legal conflict involves a plaintiff claiming to have been injured by the defendant. A unitary trial (UT) is one in which the plaintiff litigates damage and liability at the same time. A sequential trial (ST) is one in which the plaintiff first litigates damage (or liability) and decides whether to litigate liability (or damage) only after the first stage suit is tried. A UT differs from an ST mainly in that some private information is revealed during litigation in the ST but not in the UT. We discuss the effect of this information revelation on the behavior of the agents, the settlement probability, and the corresponding litigation costs. Our analysis can also be extended to other economic applications with sequential information disclosure. Copyright 1997 by the University of Chicago.

Suggested Citation

  • Chen, Kong-Pin & Chien, Hung-Ken & Chu, C Y Cyrus, 1997. "Sequential versus Unitary Trials with Asymmetric Information," The Journal of Legal Studies, University of Chicago Press, vol. 26(1), pages 239-258, January.
    • Handle: RePEc:ucp:jlstud:v:26:y:1997:i:1:p:239-58
    DOI: 10.1086/467994
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    Cited by:

    1. repec:elg:eechap:15325_17 is not listed on IDEAS
    2. At, Christian & Gabuthy, Yannick, 2015. "Moral hazard and agency relationship in sequential litigation," International Review of Law and Economics, Elsevier, vol. 41(C), pages 86-90.
    3. Jef Mot, 2012. "Sequential trials and the English rule," European Journal of Law and Economics, Springer, vol. 34(1), pages 31-43, August.
    4. Chu, C.Y. Cyrus & Chien, Hung-Ken, 2007. "Asymmetric information, pretrial negotiation and optimal decoupling," International Review of Law and Economics, Elsevier, vol. 27(3), pages 312-329, September.
    5. Cremers, Katrin & Gaessler, Fabian & Harhoff, Dietmar & Helmers, Christian & Lefouili, Yassine, 2016. "Invalid but infringed? An analysis of the bifurcated patent litigation system," Journal of Economic Behavior & Organization, Elsevier, vol. 131(PA), pages 218-242.
    6. Gorkem Celik, 2015. "Implementation by Gradual Revelation," RAND Journal of Economics, RAND Corporation, vol. 46(2), pages 271-296, June.
    7. Warren F. Schwartz & Abraham L. Wickelgren, 2009. "Credible discovery, settlement, and negative expected value suits," RAND Journal of Economics, RAND Corporation, vol. 40(4), pages 636-657, December.

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