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Strategic announcements of reference points in disputes and litigations

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  • Andrea Gallice

Abstract

We show how the common occurrence of seeing exceedingly high claims in disputes and litigations about how to share a limited resource can be rationalized by a model in which claimants display reference dependent preferences, expect the judge to use a generalized social welfare function, and strategically announce their reference points. The scope of the model is wide as the resource over which the dispute arises can be positive or negative, exogenously given or endogenously determined. Moreover, the social welfare specification is consistent with a number of different liability rules.

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  • Andrea Gallice, 2012. "Strategic announcements of reference points in disputes and litigations," Carlo Alberto Notebooks 279, Collegio Carlo Alberto.
    • Handle: RePEc:cca:wpaper:279
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    Cited by:

    1. Andrea Gallice, 2020. "Self-Serving Biased Reference Points in Bankruptcy Problems," Working papers 067, Department of Economics, Social Studies, Applied Mathematics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.

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    More about this item

    Keywords

    reference points; claims; litigations; accident law.;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process

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