Strategic announcements of reference points in disputes and litigations
Andrea Gallice ()
No 279, Carlo Alberto Notebooks from Collegio Carlo Alberto
We show how the common occurrence of seeing exceedingly high claims in disputes and litigations about how to share a limited resource can be rationalized by a model in which claimants display reference dependent preferences, expect the judge to use a generalized social welfare function, and strategically announce their reference points. The scope of the model is wide as the resource over which the dispute arises can be positive or negative, exogenously given or endogenously determined. Moreover, the social welfare specification is consistent with a number of different liability rules.
Keywords: reference points; claims; litigations; accident law. (search for similar items in EconPapers)
JEL-codes: D03 D63 K41 (search for similar items in EconPapers)
Pages: 18 pages
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Working Paper: Strategic Announcements of Reference Points in Disputes and Litigations (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:cca:wpaper:279
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