IDEAS home Printed from https://ideas.repec.org/a/ucp/jlstud/v30y2001i1p143-59.html
   My bibliography  Save this article

Damage Caps, Motivated Anchoring, and Bargaining Impasse

Author

Listed:
  • Pogarsky, Greg
  • Babcock, Linda

Abstract

This paper reports results from a bargaining experiment testing the effect on settlement rates of a damage cap set much higher than the value of the underlying claim. We presented 462 student subjects with materials outlining a personal injury lawsuit and permitted randomly assigned subject pairs to negotiate a pretrial settlement. We find that imposition of a $1 million cap reduced the settlement rate through a process termed "motivated anchoring," in which a relatively high damage cap disproportionately anchors the plaintiff's estimate of the likely damage award. The result is a widened disparity in opposing litigants' judgments and less settlement. These results contrast with findings from previous experiments where a relatively low cap constrains the parties' judgments and produces more settlement. This pair of results suggests the effect of a cap will depend on its size relative to the stakes of the case. Copyright 2001 by the University of Chicago.

Suggested Citation

  • Pogarsky, Greg & Babcock, Linda, 2001. "Damage Caps, Motivated Anchoring, and Bargaining Impasse," The Journal of Legal Studies, University of Chicago Press, vol. 30(1), pages 143-159, January.
    • Handle: RePEc:ucp:jlstud:v:30:y:2001:i:1:p:143-59
    DOI: 10.1086/468114
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/468114
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: https://libkey.io/10.1086/468114?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Peter A. Ubel & George Loewenstein, 2008. "Pain and Suffering Awards: They Shouldn't Be (Just) about Pain and Suffering," The Journal of Legal Studies, University of Chicago Press, vol. 37(S2), pages 195-216, June.
    2. Eric Cardella & Carl Kitchens, 2017. "The impact of award uncertainty on settlement negotiations," Experimental Economics, Springer;Economic Science Association, vol. 20(2), pages 333-367, June.
    3. Claudia M. Landeo, 2018. "Law and economics and tort litigation institutions: theory and experiments," Chapters, in: Joshua C. Teitelbaum & Kathryn Zeiler (ed.), Research Handbook on Behavioral Law and Economics, chapter 9, pages 247-268, Edward Elgar Publishing.
    4. Matteo Migheli & Margherita Saraceno, 2023. "On the propensity to settle or litigate in laboratory disputes," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 40(2), pages 615-642, July.
    5. Doron Teichman & Eyal Zamir & Ilana Ritov, 2023. "Biases in legal decision‐making: Comparing prosecutors, defense attorneys, law students, and laypersons," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 20(4), pages 852-894, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jlstud:v:30:y:2001:i:1:p:143-59. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journals Division (email available below). General contact details of provider: https://www.journals.uchicago.edu/JLS .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.