Authors

W. Kip Viscusi

Document Type

Article

Publication Title

The Journal of Legal Studies

Publication Date

1988

ISSN

0047-2530

Page Number

101

Keywords

product liability, litigation, risk aversion

Disciplines

Dispute Resolution and Arbitration | Law | Litigation

Abstract

The recent law and economics literature has directed much energy toward identifying the various factors that determine whether parties will litigate or settle accident claims.' The substantive interest in this area rests in large measure on the obvious element of conflict in all these cases: the plaintiff is trying to obtain reimbursement for his losses from the defendant, which the defendant wishes to avoid paying. The strategic structure of their interaction is quite complex because the outcomes of bringing claims are heavily influenced by the costs, usually substantial, of both bargaining and litigating. The game between plaintiff and defendant is nonzero sum; indeed, it is negative sum. Playing it successfully requires the parties to consider both the competitive and the cooperative elements in their behavior.

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