Asymmetric Reimbursement and Contingent Fees in Environmental Conflicts: Observable vs. Unobservable Contracts

Sung-Hoon Park and Chad E. Settle ()
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Sung-Hoon Park: Department of Economics, Chosun University, 309 Philmoondaero, Dong-gu, Gwangju 61452, Republic of Korea
Chad E. Settle: Department of Economics, University of Tulsa, 800 S. Tucker Drive, Tulsa, OK 74104, USA

Games, 2023, vol. 14, issue 4, 1-10

Abstract: We investigate the impact of observability of contracts between a plaintiff and his attorney on both the efficiency of the environmental conflict and the fairness of the resulting outcome from the environmental conflict. By including two specific game-theoretic models (an observable-contract game and an unobservable-contract game), we find two key results: (i) The unobservability of a contract may increase inefficiency of the environmental conflict in terms of legal efforts; however, (ii) the unobservability of a contract may increase the fairness of the outcome in terms of the plaintiff’s probability of winning the contest.

Keywords: asymmetric reimbursement; contingent fee; inefficiency; fairness; Tullock-type contests; unobservable and observable contracts (search for similar items in EconPapers)
JEL-codes: C C7 C70 C71 C72 C73 (search for similar items in EconPapers)
Date: 2023
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