Comparative Analysis of Litigation Systems: An Auction-Theoretic Approach

Michael Baye, Dan Kovenock and Casper de Vries

No FS IV 00-13, CIG Working Papers from Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG)

Abstract: A simple auction-theoretic framework is used to examine symmetric litigation environments where the legal ownership of a disputed asset is unknown by the court. The court observes only the quality of the case presented by each party, and awards the asset to the party presenting the best case. Rational litigants influence the quality of their cases by hiring skillful attorneys. This framework permits us to compare the equilibrium legal expenditures that arise under a continuum of legal systems. The British rule, American rule, and some recently proposed legal reforms are special cases of our model. ZUSAMMENFASSUNG - (Vergleichende Analyse von Prozeßsystemen: Ein auktionstheoretischer Ansatz) Anhand eines einfachen auktionstheoretischen Ansatzes werden symmetrische Prozeßumwelten untersucht, bei denen der Eigentümer des Streitgegenstandes dem Gericht nicht bekannt ist. Das Gericht kann nur die Qualität der durch die einzelnen Parteien präsentierten Argumente beobachten und dann jener Partei den Vermögenszuschlag geben, die die besten Argumente präsentiert hat. Rationale Prozeßparteien beeinflussen die Qualität ihrer Argumente durch den Einsatz geschickter Anwälte. Der gewählte Ansatz erlaubt es, die im Gleichgewicht entstehenden Prozeßkosten für ein Kontinuum von Rechtssystemen zu vergleichen. Die britische Rechtsregelung, die amerikanische Rechtsregelung und einige jüngst vorgeschlagene Rechtsformen sind Spezialfälle des vorgestellten Modells.

Keywords: Auctions; Contests; Litigation; Fee-Shifting (search for similar items in EconPapers)
JEL-codes: D8 K4 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2000-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Published in Economic Journal , Vol. 115(505), July 2005, pp. 583-601.

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Related works:
Chapter: Comparative Analysis Of Litigation Systems: An Auction-Theoretic Approach (2005)
Journal Article: Comparative Analysis of Litigation Systems: An Auction-Theoretic Approach (2005)
Working Paper: Comparative Analysis of Litigation Systems: An Auction-Theoretic Approach (2004)
Working Paper: Comparative Analysis of Litigation Systems: An Auction-Theoretic Approach (2000)
Working Paper: Comparative Analysis of Litigation Systems: an Auction-Theoretic Approach (2000)
Working Paper: Comparative Analysis of Litigation Systems: An Auction-Theoretic Approach (2000)
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