Economic Analysis of Pre-trial Negotiations: A Behavioral Approach

Dandekar Suyog Ravindra () and Raja Angara V.
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Dandekar Suyog Ravindra: School of Economics, University of Hyderabad, Gachi Bowli, Hyderabad, Telangana 500046, India
Raja Angara V.: School of Economics, University of Hyderabad, Gachi Bowli, Hyderabad, Telangana 500046, India

Asian Journal of Law and Economics, 2015, vol. 6, issue 1, 1-21

Abstract: The paper provides a behavioral approach to analysis of pre-trial negotiations. This paper differs from earlier studies in that the most likely outcome forms the basis on which the parties assess their benefits and costs. This is based not on precise calculations of expected values, but on the expectations of the parties which depend on assessment of relative strengths of their case. This is modelled as an outcome of an imperfect cognitive process which is characterized by coherence based reasoning and insensitivities to actual probabilities, and legal discovery. Furthermore, the paper identifies factors which affect bargaining power and how bargaining power affects settlement amounts.

Keywords: coherence based reasoning; Hard and Soft Bargaining; probability insensitivity (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1515/ajle-2014-0009

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