During settlement negotiations, many litigators are very optimistic about their chances at trial. Why? Oren Bar-Gill uses economic game theory to look at the question. Oren Bar-Gill, The Evolution and Persistence of Optimism in Litigation, 22 J.L. Econ. & Org. 490-507 (2006), Westlaw.
The adaptive force of optimism derives from its function as a commitment device in the pretrial bargaining stage. Optimistic lawyers, by credibly threatening to resort to costly litigation, succeed in extracting more favorable settlements. Therefore, market-selection forces and cultural transmission dynamics dictate an equilibrium with a positive level of optimism.It seems to me that litigation in this sense is like other confrontations: you probably don't show up for a duel unless you think you've got a good chance of winning, and you don't challenge someone to tennis if you think you'll be humiliated in defeat.
Filed in: Bar-Gill, economics, psychology
No comments:
Post a Comment