The impact of defendant offers into court on negotiation in the shadow of the law: experimental evidence

Brian G Main () and Andrew Park
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Brian G Main: http://homepages.ed.ac.uk/mainbg/

Edinburgh School of Economics Discussion Paper Series from Edinburgh School of Economics, University of Edinburgh

Abstract: A common procedural arrangement that is thought to influence the pre-trial settlement of civil disputes is one which allows the defendant to make an offer to settle which if it is rejected by the plaintiff and not subsequently bettered by the judge's trial decision will affect the division of the legal costs between the two sides. Operating under Federal Rule 68 in the USA, as "offers to settle" or "payments into court" in England and Wales, and as "tenders" in Scotland, these devices are generally assumed to encourage settlement. This paper extends the theoretical model of Miller (1986) and Chung (1996a) to the British context, and presents some experimental evidence on how agents react to such arrangements. The rule seems to have little empirical impact on the propensity to settle and to favour the defendant in terms of the level of settlement.

JEL-codes: C70 K40 (search for similar items in EconPapers)
Pages: 30
Date: 1999-04
New Economics Papers: this item is included in nep-exp and nep-law
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