Split-Awards and Disputes: An Experimental Study of a Strategic Model of Litigation
53 Pages Posted: 10 Sep 2004 Last revised: 4 Mar 2018
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Split-Awards and Disputes: An Experimental Study of a Strategic Model of Litigation
Split-Awards and Disputes: An Experimental Study of a Strategic Model of Litigation
Date Written: February 26, 2006
Abstract
This paper studies experimentally the impact of the split-award statute, where the state takes a share of the plaintiff's punitive damage award, on litigation outcomes. Our findings indicate that dispute rates are significantly lower when bargaining is performed under the split-award institution. Defendants' litigation losses and plaintiffs' net compensation are significantly reduced by the split-award statute.
Keywords: Settlement, bargaining, litigation, asymmetric information, experiments
JEL Classification: K41, C70, D82, C90
Suggested Citation: Suggested Citation