Settling with salience-biased defendants

Tim Friehe and Cat Lam Pham

Economics Letters, 2020, vol. 192, issue C

Abstract: This paper analyzes how a salience bias of the defendant influences the settlement process and outcome. We consider the classic screening model in which the plaintiff makes a settlement demand on the privately informed defendant. In our framework, the plaintiff’s settlement demand increases with the defendant’s salience bias and the defendant’s salience bias may make the plaintiff worse off.

Keywords: Litigation; Screening; Salience (search for similar items in EconPapers)
JEL-codes: D82 D91 K41 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:192:y:2020:i:c:s0165176520301658

DOI: 10.1016/j.econlet.2020.109235

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