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Indemnisation des préjudices et fréquence des procès en présence d'une asymétrie d'informaion sur l'aversion au risque des parties
[Compensation of damages and frequency of trials with asymmetric information on preferences of litigant parties]

Author

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  • Langlais, Eric

Abstract

The paper addresses the issue of the impact of asymmetric information on risk aversion of litigant parties in a model à la Bebchuk. First we study the case where the plaintif is the informed party, and characterize the equilibrium with and without a pretrial negociation round. Then, we focuse on the comparative statics of the model and analyse the role of the choice of a cost allocation rule. Finally, we discuss several extensions: the case where the defendant is the informed party, the influence of the assumption on the representation of preferences, and the role of self-serving bias.

Suggested Citation

  • Langlais, Eric, 2005. "Indemnisation des préjudices et fréquence des procès en présence d'une asymétrie d'informaion sur l'aversion au risque des parties [Compensation of damages and frequency of trials with asymmetric i," MPRA Paper 1150, University Library of Munich, Germany, revised 06 Nov 2006.
    • Handle: RePEc:pra:mprapa:1150
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    References listed on IDEAS

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    2. Roell, Ailsa A, 1987. "Risk Aversion in Quiggin and Yaari's Rank-Order Model of Choice under Uncertainty," Economic Journal, Royal Economic Society, vol. 97(388a), pages 143-159, Supplemen.
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    5. Farmer, Amy & Pecorino, Paul, 2002. "Pretrial bargaining with self-serving bias and asymmetric information," Journal of Economic Behavior & Organization, Elsevier, vol. 48(2), pages 163-176, June.
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    11. Ichino, Andrea & Polo, Michele & Rettore, Enrico, 2003. "Are judges biased by labor market conditions?," European Economic Review, Elsevier, vol. 47(5), pages 913-944, October.
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    Cited by:

    1. Johanna Etner & Meglena Jeleva, 2013. "Risk Perception, Prevention And Diagnostic Tests," Health Economics, John Wiley & Sons, Ltd., vol. 22(2), pages 144-156, February.

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    More about this item

    Keywords

    litigation; asymmetric information on preferences; self-serving bias;
    All these keywords.

    JEL classification:

    • K10 - Law and Economics - - Basic Areas of Law - - - General (Constitutional Law)
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior

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