Boomerangs, Cliffs, and Inverted U-Curves: Natural Delimitation of Damage Awards

Abstract

Frequently, civil plaintiff trial attorneys want to test how different demands made in closing argument impact case outcomes. They worry that in admitted liability cases (where only damages are at issue) that asking for too much money could isolate jurors. And they worry that in cases in which liability is also at issue, asking for too much money could cause jurors to flip their votes on liability. Simultaneously, critics of juries worry about almost the precise opposite issue, arguing that jurors are excessively malleable and are therefore prone to anchoring and runaway juries. These concerns implicate anchoring, where most of the literature predicts that jurors will respond positively to ever increasing demands. And they implicate fusion effects which teach that liability and damages interact.

This paper examines both phenomena, relying on a unique set of data drawn from studies conducted on real cases for real attorneys. This paper provides fresh insight into the interplay of damage demands and liability rates by relying on case expected value – the average award of jurors who find liability reduced by the liability rate. The data suggests that when expected case value is compared to the amount demanded, total case returns are defined an inverted u-curve. This curve is produced both because of decreased anchor saliency and by negative fusion effects on liability.

At a practical level for attorneys, this suggests that there is a proverbial “sweet spot” for demands where the maximum anchoring effect is obtained without unacceptable levels of negative fusion effects. And at a policy level, the data suggests that jurors impose outer bounds on demands – suggesting the fear of runaway juries is overblown. Indeed, there appears to be a natural circumscription of damage awards in jury trials.

Keywords: jury, trial, damages, anchoring, fusion, inverted u-curve, torts, civil

JEL Classification: K