Hedonic adaptation and the settlement of civil lawsuits

Columbia Law Review

Volumn 108, Issue 6, 2008, Pages 1516-1550

  Bronsteen, John ^a   Buccafusco, Christopher ^b   Masur, Jonathan S ^c  

^a LOYOLA UNIVERSITY   (United States)

^b UNIVERSITY OF ILLINOIS AT URBANA CHAMPAIGN   (United States)

^c UNIVERSITY OF CHICAGO   (United States)

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[No Author keywords available]

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EID: 56849084593     PISSN: 00101958     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (247)

1. See Daniel Kahneman et al., Preface to Weil-Being: The Foundations of Hedonic Psychology, at ix, ix (Daniel Kahneman et al. eds., 1999) [hereinafter Well-Being] (defining and exploring hedonic psychology).
2. See id. (describing past and future hedonic research).
3. See Isabelle Brocas & Juan D. Carrillo, Introduction to The Psychology of Economic Decisions: Rationality and Well-Being, at xiii, xiii-xv (Isabelle Brocas & Juan D. Carrillo eds., 2003) [hereinafter Rationality and Well-Being] (describing challenges posed by behavioral economics to both psychologists and economists).
4. Nobel laureate Daniel Kahneman writes: "The fundamental surprise of well-being research is the robust finding that life circumstances make only a small contribution to the variance of happiness...." Daniel Kahneman, Experienced Utility and Objective Happiness: A Moment-Based Approach, in Rationality and Well-Being, supra note 3, at 187, 199.
5. On the role of attention in adaptation, see infra notes 80-84 and accompanying text,
6. On the differences between adaptable and unadaptable injuries, see infra notes 72-77 and accompanying text.
7. See Daniel T. Gilbert et al., Immune Neglect: A Source of Durability Bias in Affective Forecasting, 75 J. Personality & Soc. Psychol. 617, 634-35 (1998) [hereinafter Gilbert et al., Immune Neglect] (discussing reasons why people may not be attuned to their ability to emotionally adapt to undesired outcomes).
8. For a discussion of this research, see infra notes Part II.B.
9. For a particularly incisive treatment of the relationship between due process requirements and government decisionmaking costs, see Adam M. Samaha, Undue Process, 59 Stan. L. Rev. 601 (2006).
10. See, e.g., Mathews v. Eldridge, 424 U.S. 319, 334-35 (1976). In that case, the Court wrote: [D] ue process generally requires consideration of three distinct factors: First, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value...of additional or substitute procedural safeguards; and finally, the Government's interest....Id. at 335.
11. Marc Galanter, The Vanishing Trial: An Examination of Trials and Related Matters in Federal and State Courts, 1 J. Empirical Legal Stud. 459, 462 tbl.1 (2004) (depicting trial rates declining since 1962 to less than two percent in 2002).
12. See infra Part I.A.
13. See infra Part I.B.1.
14. See infra Part I.B.2.
15. Charles Dickens, Bleak House (Norman Page ed., Penguin Books 1971) (1853).
16. See, e.g., Warren E. Burger, Isn't There a Better Way?, 68 A.B.A J. 274, 274 (1982) (criticizing "delay" and "time lapse" associated with litigation).
17. James C. Duff, Admin. Office of the U.S. Courts, 2006 Judicial Business of the United States Courts 192 tbl.C-5 (2006), available at http://www.uscourts.gov/judbus20 06/completejudicialbusiness.pdf (on file with the Columbia Law Review) (depicting "Median Time Intervals From Filing to Disposition of Civil Cases" for U.S. district courts).
18. See Fed. R. Civ. P. 7, 12.
19. See Fed. R. Civ. P. 26, 30, 33, 34;
20. see also Stephen D. Easton, My Last Lecture: Unsolicited Advice for Future and Current Lawyers, 56 S.C. L. Rev. 229, 240-41 (2004) ("Many civil litigators spend most or all of their time drafting discovery requests, compiling and reviewing documents and data to respond to discovery requests, drafting discovery responses, filing motions for protective orders regarding discovery or motions to compel discovery, responding to these motions, and otherwise fighting over discovery issues.").
21. See Fed. R. Civ, P. 56. Summary judgment is an important part of litigation.
22. See Edward Brunet & Martin H. Redish, Summary Judgment: Federal Law and Practice §1:1, at 1-2 (3d ed. 2006) ("As the primary procedure used to avoid unnecessary civil trials, summary judgment is probably the single most important pretrial device used today.");
23. John Bronsteen, Against Summary Judgment, 75 Geo. Wash. L. Rev. 522, 523-24 (2007) [hereinafter Bronsteen, Against Summary Judgment] (noting summary judgment is a "staple of how today's U.S. civil justice system conducts business"). As a result, it can consume considerable time on the part of both lawyers and the court.
24. See Jeffrey W. Stempel, A Distorted Mirror: The Supreme Court's Shimmering View of Summary Judgment, Directed Verdict, and the Adjudication Process, 49 Ohio St. L.J. 95, 171 (1988) ("The judge deciding a summary judgment question must along with her law clerks read, research, reflect, hold a hearing, read and research some more, and often must draft, revise, and issue a lengthy written opinion as well.");
25. Morton Denlow, Summary Judgment: Boon or Burden?, Judges'J., Summer 1998, at. 26, 26 ("[Summary judgment motions] are expensive to prepare and consume substantial lawyer and judicial resources.").
26. See U.S. Const. amend. VII.
27. See Bronsteen, Against Summary Judgment, supra note 20, at 530 (listing points al which a lawsuit can be terminated),
28. See Windle Turley, Creating the Right Settlement Environment, Trial, June 1994, at 28, 29 (recognizing clients may lack training and information necessary for successful negotiation).
29. D. Theodore Rave, Note, Questioning the Efficiency of Summary Judgment, 81 N.Y.U. L. Rev. 875, 903 (2006) (noting bulk of cost to plaintiff is lawyer fees for time spent in preparation for and at trial).
30. Bronsteen, Against Summary Judgment, supra note 20, at 534-35.
31. See id. at 540-41 (recognizing that until trial ends, the court cannot fully attend to other cases) ;
32. Judith Resnik, Managerial Judges, 96 Harv. L. Rev. 374, 421 (1982) ("If cases are disposed of quickly, the time saved can be used to consider more cases."). One commentator has estimated that trials cost federal courts about $4,000 per day, excluding the cost to litigants.
33. David Wippman, The Costs of International Justice, 100 Am. J. Int'l L. 861, 868 (2006). Although he was discussing criminal cases, many of the costs (such as judicial salary) apply equally to civil cases.
34. Russell Korobkin & Chris Guthrie, Psychological Barriers to Litigation Settlement: An Experimental Approach, 93 Mich. L. Rev. 107, 111 (1994) [hereinafter Korobkin & Guthrie, Psychological Barriers] ("Lawsuits will settle if the defendant's maximum offer is higher than the lowest offer the plaintiff will accept").
35. William M. Landes, An Economic Analysis of the Courts, 14 J.L. & Econ. 61 (1971);
36. Richard A. Posner, An Economic Approach to Legal Procedure and Judicial Administration, 2 J. Legal Stud. 399 (1973);.
37. see also John P. Gould, The Economics of Legal Conflicts, 2 J. Legal Stud. 279 (1973) (seeking to show why a larger percentage of lawsuits are settled out of court and providing hypothesis about what causes cases to go to trial). Building on their work, George Priest and Benjamin Klein later proposed a model of settlement - predicting that when cases fail to settle, they will be adjudicated in favor of the plaintiff fifty percent of the time - that has come to be identified with the assumption of wealth maximizing behavior.
38. George L. Priest & Benjamin Klein, The Selection of Disputes for Litigation, 13 J. Legal Stud. 1, 4-5 (1984).
39. Posner, supra note 28, at 418.
40. For a similar explanation and example, see Russell Korobkin, Apirations and Settlement, 88 Cornell L. Rev. 1, 7 (2002) [hereinafter Korobkin, Apirations].
41. See Samuel Issacharoff & George Loewenstein, Second Thoughts About Summary Judgment, 100 Yale L.J. 73, 101 (1990) ("[I]t is natural - as well as customary in the legal and economic literature - to assume that the likelihood of settlement is positively related to the width of the settlement zone.") ;
42. Rave, supra note 24, at 892 ("Generally, the wider the settlement zone, the more likely the case is to settle."). The existence and size of the bargaining (or "settlement") zone is, on this account, the primary condition on which settlement depends.
43. See Korobkin, Apirations, supra note 30, at 6 (noting disputes will settle in bargaining zone or not at all if zone does not exist).
44. See Posner, supra note 28, at 419 ("[A]ny increase in the stakes must increase the likelihood of litigation by making the plaintiff's minimum settlement offer grow faster than the defendant's maximum settlement offer.").
45. Daniel Kahneman & Amos Tversky, Choices, Values, and Frames, 39 Am. Psychologist 341, 344 (1984);
46. Daniel Kahneman & Amos Tversky, Prospect Theory: An Analysis of Decision Under Risk, 47 Econometrica 263, 268-69 (1979);
47. Amos Tversky & Daniel Kahneman, The Framing of Decisions and the Psychology of Choice, 211 Science 453, 453 (1981).
48. One might speculate that, at least under certain circumstances, plaintiffs would not view the money at stake as a gain and defendants would not view it as a loss. If, for example, a defendant had taken money from the plaintiff via the underlying tort or contract violation, then anything less than a full repayment of that baseline sum could be treated by the defendant as an overall gain and by the plaintiff as an overall loss. This possibility is mentioned briefly infra Part I.B.2. However, Rachlinski's experimental findings suggest otherwise, indicating that generally plaintiffs view settlements as gains whereas defendants view them as losses.
49. See infra note 35.
50. Jeffrey J. Rachlinski, Gains, Losses, and the Psychology of Litigation, 70 S. Cal. L. Rev. 113, 118-19 (1996). In one experiment, undergraduates were assigned the role of attorney for either a plaintiff or defendant in a property lawsuit. They were told the amount the plaintiff stood to gain at trial and the percentage chance of such a plaintiff victory. Then they were told that the opposing side had offered to settle for an amount that corresponded to the probability times the amount; e.g., if a trial victory would yield $100,000 and the plaintiff had a seventy percent chance to win, then the offer was $70,000. Far more plaintiff-attorney subjects than defendant-attorney subjects accepted the offer rather than take the all or nothing risk of a trial. Id. at 135-40.
51. Chris Guthrie, Framing Frivolous Litigation: A Psychological Theory, 67 U. Chi. L. Rev. 163, 168 (2000).
52. See id. at 167 ("When choosing between low-probability gains and losses with equal expected values, Kahneman and Tversky have found that individuals make risk-seeking choices when selecting between gains and risk-averse choices when selecting between losses.").
53. More precisely, her goal is to maximize utility, which is defined as wealth with a built-in accommodation for rational risk aversion in keeping with the declining marginal value of money.
54. Fairness is not the only nonmonetary consideration that can matter to litigants. See Russell Korobkin & Chris Guthrie, Psychology, Economics, and Settlement: A New Look at the Role of the Lawyer, 76 Tex. L. Rev. 77, 79-80 (1997) ("Litigants litigate not just for money, but to attain vindication; to establish precedent; 'to express their feelings'; to obtain a hearing; and to satisfy a sense of entitlement regarding use of the courts...."
55. (quoting Austin Sarat, Alernatives in Dispute Processing: Litigation in a Small Claims Court, 10 Law & Soc'y Rev. 339, 346 (1976)) (footnotes omitted)).
56. See, e.g., George Loewenstein et al., Self-Serving Asessments of Fairness and Pretrial Bargaining, 22 J. Legal Stud. 135, 139 (1992) [hereinafter Loewenstein et al., Self-Serving] ("[S]ubject disputants seemed more concerned with achieving what they considered to be a fair settlement of the case than maximizing their own expected value.");
57. see also John Bronsteen & Owen Fiss, The Class Action Rule, 78 Notre Dame L. Rev. 1419, 1448-49 (2003) (distinguishing between actual justice and adequate settlements in class action context);
58. Owen M. Fiss, Justice Chicago Style, 1987 U. Chi. Legal F. 1, 10-11 (arguing that justice is different from efficiency and should be prioritized over it in civil justice system);
59. Resnik, supra note 26, at 444-45 (1982) (expressing concern that docket pressures may be causing judges wrongly to value efficiency over justice).
60. See Werner Güth & Reinhard Tietz, Ultimatum Bargaining Behavior: A Survey and Comparison of Experimental Results, 11 J. Econ. Psychol. 417, 447 (1990) (describing research using ultimatum bargaining games and results);
61. Loewenstein et al., Self-Serving, supra note 40, at 142-43 (observing that fairness concerns affect bargaining in ultimatum bargaining games).
62. See Martin A. Nowak et al., Fairness Versus Reason in the Ultimatum Game, 289 Science 1773, 1773 (2000) ("The irrational human emphasis on fair division suggests that players have preferences which do not depend solely on their own payoff....").
63. Karen M. Page & Martin A. Nowak, Empathy Leads to Fairness, 64 Bull. Mathematical Biology 1101, 1102 (2002) ("One half of offers of 20% or less are rejected.").
64. Korobkin & Guthrie, Psychological Barriers, supra note 27, at 110-11.
65. Id. at 130-32.
66. Id. at 132-33.
67. See id. at 109 ("People avoid risk when they choose between options they understand as gains, but they prefer risk when they select between choices viewed as losses....[S]ettlement rates will depend on whether the offeree understands a given settlement offer as a gain or loss.").
68. See, e.g., Landes, supra note 28, at 61 ("The basic assumption of the model is that both the prosecutor and the defendant maximize their utility, appropriately defined, subject to a constraint on their resources.");
69. Posner, supra note 28, at 417-18 ("The plaintiff's minimum offer is the expected value of the litigation to him plus his settlement costs, the expected value of the litigation being the present value of the judgment if he wins, multiplied by the probability...of his winning, minus the present value of his litigation expenses.");
70. Priest & Klein, supra note 28, at 4 ("According to our model, the determinants of settlement and litigation are solely economic....The most important assumption of the model is that potential litigants form rational estimates of the likely decision....").
71. Korobkin & Guthrie, Psychological Barriers, supra note 27, at 144-47.
72. For an excellent summary of the initial research on hedonic adaptation, see Shane Frederick & George Loewenstein, Hedonic Adaptation, in Well-Being, supra note 1, at 302, 311-18 [hereinafter Frederick & Loewenstein, Hedonic Adaptation].
73. See Gilbert et al., Immune Neglect, supra note 7, at 634 (concluding from research results that respondents recover much more quickly from variety of negative events than they predicted).
74. Unless otherwise noted, when we refer to "disability," we are not using the term to refer to any specific legally or medically defined injury but rather as a catch-all category covering a wide range of injuries, illnesses, and debilities that potentially affect one's health and happiness.
75. Daniel Kahneman & Robert Sugden, Experienced Utility as a Standard of Policy Evaluation, 32 Envtl. & Resource Econ. 161,169 (2005) [hereinafter Kahneman & Sugden, Experienced Utility].
76. Daniel Kahneman et al., Preface to Well-Being, supra note 1, at ix, ix.
77. Id.
78. The economist Richard Easterlin compares how quickly people adapt to increases in income due to concomitant changes in aspirations and how slowly they adapt to nonpecuniary benefits like family life. He writes: In particular, people make decisions assuming that more income, comfort, and positional goods will make them happier, failing to recognize that hedonic adaptation and social comparison will come into play, raise their aspirations to about the same extent as their actual gains, and leave them feeling no happier than before. As a result, most individuals spend a disproportionate amount of their lives working to make money, and sacrifice family life and health, domains in which aspirations remain fairly constant as actual circumstances change, and where the attainment of one's goals has a more lasting impact on happiness. Hence, a reallocation of time in favor of family life and health would, on average, increase individual happiness. Richard A. Easterlin, Explaining Happiness, 100 Proc. Nat'l Acad. Sci. 11,176, 11,182 (2003);
79. see also Richard Layard, Happiness: Lessons from a New Science 29-31 (2005) ("When people become richer compared with other people, they become happier. But when whole societies have become richer, they have not become happier - at least in the West").
80. Philip Brickman et al., Lottery Winners and Accident Victims: Is Happiness Relative?, 36 J. Personality & Soc. Psychol. 917 (1978).
81. Id. at 920-21.
82. See id. at 918 (describing processes of "Contrast and Habituation" that tend to mitigate effects of extreme good or bad fortune).
83. For a further explanation of the hedonic treadmill theory, see Daniel Kahneman, Objective Happiness, in Well-Being, supra note 1, at 3, 13-15.
84. See Ed Diener et al., Beyond the Hedonic Treadmill: Revising the Adaptation Theory of Well-Being, 61 Am. Psychologist 305, 306-11 (2006) (suggesting modifications to treadmill model);
85. Richard E. Lucas, Adaptation and the Set-Point Model of Subjective Well-Being: Does Happiness Change After Major Life Events?, 16 Current Directions Psychol. Sci. 75, 76-78 (2007) (arguing that hedonic adaptation is not inevitable and may depend on individual differences).
86. See Vida L. Tyc, Psychosocial Adaptation of Children and Adolescents with Limb Deficiencies: A Review, 12 Clinical Psychol. Rev. 275, 276-77 (1992) (collecting studies).
87. C. Lundqvist et al., Spinal Cord Injuries: Clinical, Functional, and Emotional Status, 16 Spine 78, 80 (1991).
88. David R. Patterson et al., Psychological Effects of Severe Burn Injuries, 113 Psychol. Bull. 362, 370 (1993).
89. See Norman F. Boyd et al., Whose Utilities for Decision Analysis?, 10 Med. Decision Making 58, 63 (1990) (finding patients with colostomies consistently assign higher utility value to life with colostomy than do healthy patients).
90. Jason Riis et al., Ignorance of Hedonic Adaptation to Hemodialysis: A Study Using Ecological Momentary Asessment, 134 J. Experimental Psychol. 3, 6 (2005).
91. Id. at 7.
92. Andrew J. Oswald & Nattavudh Powdthavee, Does Happiness Adapt? A Longitudinal Study of Disability with Implications for Economists and Judges, 92 J. Pub. Econ. 1061 (2008).
93. The survey contains over ten thousand adults who were interviewed between September and December each year since 1991. Id. at 1065.
94. Id. There were 675 person-year observations in the "Moderately Disabled" category and 3442 observations in the "Severely Disabled" category. Id.
95. Id. at 1066.
96. Id, at 1070, That is to say, over the course of two years, moderately disabled people recover approximately fifty percent of their "lost" happiness, and even severely disabled people regain more than thirty percent of the happiness they lost due to their injury, Id.
97. But see Richard E. Lucas, Long-Term Disability Is Asociated with Lasting Changes in Subjective Well-Being; Evidence from Two Nationally Representative Longitudinal Studies, 92 J. Personality & Soc. Psychol. 717, 722 (2007) [hereinafter Lucas, Long-Term Disability] (finding no evidence of adaptation from same data set). Oswald and Powdthavee note methodological differences between their paper and Lucas's, but, they write, "[W]e cannot be certain why we find much more adaptation than does Lucas."
98. Oswald & Powdthavee, supra note 67, at 1065 n.10.
99. Frederick & Loewenstein, Hedonic Adaptation, supra note 50, at 311-12.
100. Neil. D. Weinstein, Individual Differences in Reaction to Noise: A Longitudinal Study in a College Dormitory, 63 J. Applied Psychol. 458, 460 (1978).
101. Richard E. Lucas et al., Unemployment Aters the Set Point for Life Satisfaction, 15 Psychol. Sci. 8, 11 (2004).
102. Richard. E. Lucas et al., Reexamining Adaptation and the Set Point Model of Happiness: Reactions to Changes in Marital Status, 84 J. Personality & Soc. Psychol. 527, 535 (2003).
103. See Richard F. Antonak & Hanoch Livneh, Psychosocial Adaptation to Disability and Its Investigation Among Persons with Multiple Sclerosis, 40 Soc. Sci. & Med. 1099, 1105 (1995) ("Regressions to earlier phases of the hypothesized adaptation process are predictable from the renewed life crises associated with unexpected exacerbations of physical symptoms and the resultant imposition of disability.");
104. Craig A. Smith & Kenneth A. Wallston, Adaptation in Patients with Chronic Rheumatoid Athritis: Application of a General Model, 11 Health Psychol. 151, 151 (1992) ("[Rheumatoid arthritis] and its associated pain have been linked to poor adjustment, including depressive symptoms and impaired quality of life." (citations omitted)). Frederick and Loewenstein note, however, that the degree of adaptation may be particularly difficult to measure with these progressive diseases.
105. Frederick & Loewenstein, Hedonic Adaptation, supra note 50, at 312 ("Even maintaining a constant hedonic state in the face of these deteriorating conditions would be impressive evidence of hedonic adaptation.").
106. See Diener et al., supra note 60, at 310-11 ("[W]e have found individual differences in the rate and extent of adaptation that occurs even to the same event. In our longitudinal studies, the size and even the direction of the change in life satisfaction varied considerably across individuals.").
107. Frederick & Loewenstein, Hedonic Adaptation, supra note 50, at 302-03.
108. Gilbert et al., Immune Neglect, supra note 7, at 619.
109. Id.
110. Daniel Kahneman & Richard H. Thaler, Utility Maximization and Experienced Utility, J. Econ. Persp., Winter 2006, at 221, 230 [hereinafter Kahneman & Thaler, Utility Maximization].
111. Id.
112. See Lucas, Long-Term Disability, supra note 72, at 718 ("[J]ust as homeostatic temperature regulation mechanisms prevent extreme heat or extreme cold from causing physical damage to the body, homeostatic emotion regulation mechanisms may protect the body from dangerous physiological and psychological reactions that occur with prolonged emotional states.");
113. cf. Eugene Kontorovich, Comment, The Mitigation of Emotional Distress Damages, 68 U. Chi. L. Rev. 491, 491 (2001) (suggesting emotional distress may be mitigated by tort plaintiffs and lack of mitigation standards may lead to moral hazard problems).
114. See, e.g., Timothy D. Wilson & Daniel T. Gilbert, Affective Forecasting: Knowing What to Want, 14 Current Directions Psychol. Sci. 131, 131 (2005) [hereinafter Wilson & Gilbert, Affective Forecasting] ("Research on affective forecasting has shown that people routinely mispredict how much pleasure or displeasure future events will bring and, as a result, sometimes work to bring about events that do not maximize their happiness.").
115. For an excellent recent review of research on misprediction of hedonic reactions, see Daniel T. Gilbert & Timothy D. Wilson, Prospection: Experiencing the Future, 317 Science 1351 (2007) [hereinafter Gilbert & Wilson, Prospection].
116. Wilson & Gilbert, Affective Forecasting, supra note 85, at 131.
117. See Boyd et al., supra note 64, at 63 (finding that healthy controls assigned lower utilities to colostomies than did patients who had undergone the procedure);
118. David L. Sackett & George W. Torrance, The Utility of Different Health States as Perceived by the General Public, 31 J. Chronic Diseases 697, 702 (1978) (finding that patients undergoing dialysis gave higher utilities to that treatment than did healthy controls);
119. Peter A. Ubel et al., Disability and Sunshine: Can Hedonic Predictions Be Improved by Drawing Attention to Focusing Illusions or Emotional Adaptation?, 11 J. Experimental Psychol.: Applied 111, 111 (2005) [hereinafter Ubel et al., Disability and Sunshine] ("One of the most commonly replicated 'happiness gaps' is that observed between the self-rated quality of life of people with health conditions and healthy people's estimates of what their quality of life would be if they had those conditions..," (citation omitted));
120. Peter A. Ubel et al., Do Nonpatients Underestimate the Quality of Life Associated with Chronic Health Conditions Because of a Focusing Illusion?, 21 Med. Decision Making 190, 197 (2001) [hereinafter Ubel et al., Do Nonpatients Underestimate] (finding that healthy peoples' underestimates of quality of life for paraplegics could not be altered by defocusing tasks);
121. Peter A. Ubel et al., Misimagining the Unimaginable: The Disability Paradox and Health Care Decision Making, 24 Health Psychol. S57, S57 (Supp. 2005) [hereinafter Ubel et al., Misimagining the Unimaginable] ("Across a wide range of health conditions, patients typically report greater happiness and [quality of life] than do healthy people under similar circumstances....") .
122. For an example of a focusing illusion, see David A. Schkade & Daniel Kahneman, Does Living in California Make People Happy? A Focusing Illusion in Judgments of Life Satisfaction, 9 Psychol. Sci. 340, 344-45 (1998) (describing indications of focusing illusion when people asked how happy they are and then asked how happy they would be in another region).
123. Ubel and his colleagues define a "focusing illusion" as "a failure to appreciate that not all life domains or life events will be equally affected by a given change in circumstances." Ubel et al., Disability and Sunshine, supra note 88, at 112.
124. Timothy D. Wilson et al., Focalism: A Source of Durability Bias in Affective Forecasting, 78 J. Personality & Soc. Psychol. 821, 822 (2000) [hereinafter Wilson et al, Focalism].
125. Gilbert and Wilson discuss four reasons why affective forecasting errors occur - mental simulations of future events tend to be " unrepresentative" because they are based on faulty memories, "essentialized" because they only include central features, "abbreviated" because they are shorter than the actual event, and "decontextualized" because they do not take place in the same circumstances as the actual event. Gilbert & Wilson, Prospection, supra note 86, at 1352-54. Summarizing the research, they write: "[The mind's] simulations are deficient because they are based on a small number of memories, they omit large numbers of features, they do not sustain themselves over time, and they lack context. Compared to sensory perceptions, mental simulations are mere cardboard cut-outs of reality."
126. Id. at 1354.
127. Wilson et al., Focalism, supra note 90, at 822.
128. Ubel et al., Disability and Sunshine, supra note 88, at 113.
129. Gilbert et al., Immune Neglect, supra note 7, at 619. Ubel and his coauthors describe a similar phenomenon that they call "failure to consider adaptation."
130. Ubel et al., Disability and Sunshine, supra note 88, at 113.
131. They describe this failure as a distinct type of focusing illusion, noting: People who have read a. description of paraplegia should recognize that paraplegia does not affect the person's ability to enjoy a good TV show. However, they may fail to consider that the grief they will feel upon finding out that they have paraplegia will subside over time and that the sense of loss that they feel because they have to abandon favorite pastimes will be replaced by the joy they derive from other pastimes. Id.
132. Ubel et al., Disability and Sunshine, supra note 88, at 113.
133. Gilbert & Wilson, Prospection, supra note 86, at 1353.
134. Id.
135. As noted, the research compares the predictions of healthy people to the actual ratings of disabled people. This research does not exactly match the situation that we are concerned with in settlement negotiations, where the person making the prediction is actually a recently injured victim. There is every reason to believe, however, that the same biases affecting healthy people will also affect the recently injured. The latter are as likely (if not more likely) to suffer from abbreviated, decontextualized, and essentialized simulations of future states because they will be currently experiencing the intense hedonic effects that tend to improperly color predictions,
136. Sackett & Torrance, supra note 88, at 702 tbl.4.
137. Boyd et al., supra note 64, at 63.
138. Schkade & Kahneman, supra note 89, at 340.
139. Id.
140. Id. at 345.
141. We use the term "overestimate" with some reservation. Considerable debate exists about the policy implications of hedonic adaptation, particularly regarding the value to be attached to ratings of subjective well-being. See, e.g., Paul Menzel et al., The Role of Adaptation to Disability and Disease in Health State Valuation: A Preliminary Normative Analysis, 55 Soc. Sci. & Med. 2149, 2157 (2002) (arguing for "an initial, prima facie privilege for the perspective of the actual, typically adapted patient"). Perhaps the most startling evidence for the limitations of subjective well-being as a measure of welfare comes from a recent study by Dylan Smith and colleagues finding that former colostomy patients (those who had had their colostomies reversed) were willing to trade forty-three months out of the next ten years of their lives to have lived without a colostomy. Yet even this finding seems to be the result of a focusing illusion, since current patients were only willing to trade nineteen months while healthy patients would trade forty-four months.
142. Dylan M. Smith et al., Misremembering Colostomies? Former Patients Give Lower Utility Ratings Than Do Current Patients, 25 Health Psychol. 688, 691 (2006).
143. See Daniel Kahneman & Jackie Snell, Predicting a Changing Taste: Do People Know What They Will Like?, 5 J. Behav. Decision Making 187, 198 (1992) ("[T]he value that is attached to 'informed consent' to surgery is surely limited if patients are incapable of assessing the quality of their post-surgical lives.");
144. see also Boyd et al., supra note 64, at 63-65 (demonstrating "substantial variation between different groups of individuals in the utilities they attach to life with a colostomy" and finding "choice of treatment was strongly influenced by the utility assigned to life with a colostomy");
145. Ubel et al., Do Nonpatients Underestimate, supra note 88, at 190-91 (describing importance of assessing whether people misestimate quality of life associated with health conditions to facilitate good medical decisions by patients);
146. Ubel et al., Misimagining the Unimaginable, supra note 88, at S62 (noting that "people's tendency to...ignore or underestimate the beneficial effects of adaptation contributes to hedonic predictions that are more extreme than warranted" and finding that this "put[s] people at risk for making poor decisions").
147. See, e.g., Jeremy A. Blumenthal, Law and the Emotions: The Problems of Affective Forecasting, 80 Ind. L.J. 155 (2005). Blumenthal discusses the implications of affective forecasting research for a range of legal issues including civil damage awards, victim impact statements, the "death row phenomenon," sexual harassment, surrogate mothering, euthanasia, advance directives, informed consent, and litigants' emotional expectations.
148. Id. at 182-223. In this last section, Blumenthal touches on the impact that litigants' mispredictions of future emotional states may have on litigation behavior,
149. id. at 204-08, but he does not apply these findings to settlement behavior in the ways suggested by our work,
150. id.;
151. see also Frank B. Cross, In Praise of Irrational Plaintiffs, 86 Cornell L. Rev. 1, 19 (2000) (examining behavioral economic implications of plaintiffs motivated by noneconomic goals);
152. Chris Guthrie & David Sally, The Impact of the Impact Bias on Negotiation, 87 Marq. L. Rev. 817, 817 (2004) (suggesting that negotiation scholars and practitioners pay attention to hedonic psychology);
153. Peter H. Huang & Rick Swedloff, Authentic Happiness and Meaning at Law Firms, 58 Syracuse L. Rev. 335, 339 (2008) (discussing how creation of "authentic happiness and meaning for lawyers in law firm settings may be a
154. Oswald and Powdthavee, the economists responsible for the study discussed supra notes 67-72 and accompanying text, framed their research in terms of its value to judges and lawyers. Their goal is to use regression analysis to generate payment schedules that would compensate victims for reductions in happiness.
155. Oswald & Powdthavee, supra note 67, at 1071. Cass Sunstein, in a recent paper, has suggested that affective forecasting errors by jurors may be responsible for some of the variability in pain and suffering awards.
156. Cass R. Sunstein, Illusory Losses 2-3 (Univ. of Chi, John M. Olin Law & Econ., Working Paper No. 340 (2d Series), 2007), available at http://ssrn.com/abstract=983810 (on file with the Columbia Law Review) [hereinafter Sunstein, Illusory Losses].
157. According to Sunstein, because jurors neglect hedonic adaptation, they will tend to overcompensate emotionally salient yet highly adaptable injuries like paraplegia, but undercompensate less salient yet unadaptable injuries such as headaches and migraines. Id. at 17-20.
158. In a recent article on hedonic damages and disability, Samuel Bagenstos and Margo Schlanger also draw attention to the likelihood of jurors' ignorance of the existence of hedonic adaptation. Samuel R. Bagenstos & Margo Schlanger, Hedonic Damages, Hedonic Adaptation, and Disability, 60 Vand. L. Rev. 745, 760 (2008).
159. When awarding compensation for hedonic damages, jurors tend to focus inordinately on the limiting effects of a disability and, as ostensibly healthy people, fail to recognize how well most disabled people adapt. Drawing on disability rights literature, Bagenstos and Schlanger suggest that by having healthy jurors pass judgment on the quality of life of disabled people, the legal system devalues the experiences of people with disabilities and encourages the perception of disability as a tragedy in need of pity and governmental support. Id. at 784.
160. Moreover, because the trial process requires that the plaintiff perform her disability in front of the jury, the trial itself is debilitating. Id. at 785.
161. The authors suggest that "by focusing on the negative feelings that occur during [the initial adjustment period], plaintiffs with disabilities may delay or derail their ultimate ability to adapt to their new condition." Id. Accordingly, they conclude that courts should not award hedonic damages for decreased quality of life arising from disability. Id. at 788,
162. Injuries or conditions that fall into this category include loss of limb, partial paralysis, loss of sexual function, blindness or deafness, and a variety of other disabilities that will eventually heal to the point that the subject is no longer in pain, but not to the point that the subject regains the lost functionality. For a more complete description, see supra Part II. It is also possible that emotional injuries, such as the psychic pain caused when someone is discriminated against on the basis of race or gender, are similarly adaptable, and that plaintiffs will behave in a similar fashion after suffering such injuries. (We thank Chris Guthrie for drawing this point to our attention.) Alhough the theory behind hedonic adaptation would predict equal (or perhaps even greater) adaptation to emotional trauma, as of this writing the empirical evidence of such adaptation is substantially less robust.
163. See supra Part I.
164. See Goldberg v. Kelly, 397 U.S. 254, 264 (1970) (arguing that "termination of aid pending resolution of a controversy over eligibility may deprive an eligible recipient of the very means by which to live while he waits" and thus put an end to the litigation itself).
165. See Federal Abitration Act, 9 U.S.C. §§1-16 (2006).
166. See, e.g., J. Thomas Corbett, Mediation, Bankruptcy and the Bankruptcy Administrator, 65 Ala. Law. 410, 410 (2004) (analyzing use of mediation in bankruptcy proceedings and benefits in speed and cost of resolution);
167. James P. George, Access to Justice, Costs, and Legal Aid, in American Law in the 21st Century: National Reports to the XVIIth International Congress of Comparative Law 293, 304 (John C. Reitz & David S. Clark eds., 2006) (discussing states' practice of inserting arbitration provisions into remedial statutes);
168. Frank E.A. Sander & Lukasz Rozdeiczer, Matching Cases and Dispute Resolution Procedures: Detailed Analysis Leading to a Mediation-Centered Approach, 11 Harv. Negot. L. Rev. 1, 1-2 (2006) (recommending mediation as starting point in most cases) ;
169. cf. Samaha, supra note 9, at 620-47 (discussing potential constitutional problems raised by provision or requirement of excessive legal process).
170. See Schkade & Kahneman, supra note 89, at 340 (observing this effect for paraplegia);
171. Ubel et al, Disability and Sunshine, supra note 88, at 112 (observing this effect with regard to variety of health conditions and comparing predictions of healthy individuals against reported happiness of unhealthy individuals);
172. Wilson et al., Focalism, supra note 90, at 822 (describing focalism effects generally).
173. Supra note 17 and accompanying text.
174. See generally supra Part II.
175. See supra Part I.C. We certainly do not mean to suggest that all types of tort damages are susceptible to adaptation. Tort damages typically comprise a variety of linked payments designed to compensate the plaintiff for various aspects of his injury. Plaintiffs can recover damages for medical expenses and economic costs (typically lost wages due to disability) incurred as a result of the injury. These expenses are not "adaptable" in the sense we describe here; a plaintiffs view of these costs is unlikely to change. But plaintiffs may also recover damages for present and future pain and suffering, and in many jurisdictions they are permitted to recoup so-called hedonic damages to compensate for lost enjoyment of their lives.
176. See Sunstein, Illusory Losses, supra note 106, at 3-4 & nn.4-11.
177. For specific examples of hedonic damage awards, see Allen v. Wal-Mart Stores, Inc., 241 F.3d 1293, 1297-98 (10th Cir. 2001) (upholding jury instructions entitling plaintiff to damages for loss of ability to ride horses);
178. Day v. Ouachita Parish Sch. Bd., 823 So. 2d 1039, 1044 (La. Ct. App. 2002) (affirming damage award for loss of ability to play high school sports). Plaintiffs will adjust to the losses for which these latter types of damages are meant to compensate. Pain and suffering awards constitute approximately fifty percent of the total value of monetary damages in personal injury cases,
179. see W. Kip Viscusi, Reforming Products Liability 102-07 (1991) (finding that pain and suffering damages account for "30 to 57 percent of all awards in which bodily injury payment has been received," and well over fifty percent of all awards in which there is a nonzero pain and suffering award);
180. Neil Vidmar et al., Jury Awards for Medical Malpractice and Post-Verdict Adjustments of Those Awards, 48 DePaul L. Rev. 265, 296 (1998) ("[I]t seems reasonable to conclude that the general damages portion of jury awards in malpractice cases is, on average, between 50 and 60%."), and so adaptation that reduces pain and suffering damages could have a substantial effect on the overall valuation of a personal injury case.
181. This is a reasonable approximation of a typical plaintiff's ability to adapt. As we noted previously, moderately disabled plaintiffs recover fifty percent of their "lost happiness" through adaptation over a period of two years. See supra note 71 and accompanying text.
182. See Korobkin & Guthrie, Psychological Barriers, supra note 27, at 130-33 (detailing results of experiment where acceptance of settlement offer differed based on amount already recovered).
183. Supra notes 67-78 and accompanying text.
184. Supra Part I.C.
185. See, e.g., Bement v. Nat'l Harrow Co., 186 U.S. 70, 93 (1902) (expressing view that settlement is "a legitimate and desirable result in itself);
186. C. Scott Hemphill, Paying for Delay: Pharmaceutical Patent Settlement as a Regulatory Design Problem, 81 N.Y.U. L. Rev. 1553, 1574 (2006) ("[S]ettlements are in certain respects desirable, because they conserve litigation expense and benefit parties who are in the best position to arrange their own affairs.").
187. But cf. Owen M. Fiss, Against Settlement, 93 Yale L.J. 1073, 1076 (1984) (arguing that plaintiffs will effectively bear costs of litigation even if they settle before trial as defendants reduce settlement offers to reflect litigation expenses which were not incurred).
188. See, e.g., Fed. R. App. P. 33 ("The court may direct the attorneys - and, when appropriate, the parties - to participate in one or more conferences to address any matter that may aid in disposing of the proceedings, including simplifying the issues and discussing settlement.");
189. Fed. Dist. Court for the N. Dist. of Cal., Alternative Dispute Resolution Local Rules, California Rules of Court 489-505 (Thompson-West Federal ed. 2008) (setting forth extensive local rules intended to facilitate settlement) ;
190. In re Young, 253 F.3d 926, 927 (7th Cir. 2001) (Posner, J.) (noting that settlements may typically be kept confidential).
191. See supra notes 107-111 and accompanying text.
192. We note in passing that the concept of "closure" as an end goal for crime and tort victims has gained tremendous currency in recent years. According to conventional psychological wisdom, a victim gains something of value from achieving a sense of finality regarding the crime or tort committed against him. See Susan Bandes, Victims, "Closure," and the Sociology of Emotion, 71 Law & Contemp. Probs. (forthcoming 2009) (manuscript at 3, on file with the Columbia Law Review), available at http://ssrn.com/ abstract=1112140 ("Closure has also come to stand for the constellation of feelings - peace, relief, a sense of justice, the ability to move on - that come with finality.");
193. Elizabeth Beck et al., Seeking Sanctuary: Interviews with Family Members of Capital Defendants, 88 Cornell L. Rev. 382, 387-90 (2003) (describing victims' rights movement);
194. cf. Douglas E. Beloof, Constitutional Implications of Crime Victims as Participants, 88 Cornell L. Rev. 282, 288-89 (2003) (describing possible reasons for victims' interest in sentencing of defendants). This emphasis on closure does not fall neatly into classical economic models or categories of preferences. Under standard economic assumptions, the most that might be said is that individuals derive utility by achieving finality - by being able to put one matter aside as successfully completed in order to focus on others. Here, "closure" is an end in itself, and one of dubious pedigree at that. The evidence for hedonic adaptation provides an alternative, deeper explanation. For a tort plaintiff, "closure" means the definitive end to legal proceedings and the end of one setting in which the plaintiff might be reminded of her condition. On this account, realizing closure from a lawsuit is a means of facilitating the process of hedonic adaptation. The more quickly and completely a plaintiff can put matters concerning an accident behind her and "move on," the sooner her psychological immune system can bury thoughts of her injury and adapt the plaintiff hedonically to her new circumstances. Litigants may understand these processes at a conscious level - the search for closure may be deliberate and knowing - or only at an unconscious one - and thus seek closure for reasons not entirely known or understood. On either account, people will act to their own hedonic advantage by seeking closure on matters that have the potential to reinvigorate painful memories. Plaintiffs are thus likely to view settlement as the most ready means by which to gain closure and smooth the progress of psychological repair.
195. This dichotomy is discussed in Sunstein, Illusory Losses, supra note 106, at 19. For examples of cases involving enduring, nonadaptable injuries,
196. see Sarchet v. Chater, 78 F.3d 305 (7th Cir. 1996) (fibromyalgia);
197. Westphal v. Wal-Mart Stores, 81 Cal. Rptr. 2d 46 (Ct. App. 1998) (chronic pain);
198. Hatcher v. Ramada Plaza Hotel & Conf. Ctr., No. CV010807378S, 2003 Conn. Super. LEXIS 255 (Super. Ct. Jan. 29, 2003) (persistent joint pain);
199. Bayer Corp. v. Lassiter, 638 S.E.2d 812 (Ga. Ct. App. 2006) (tinnitus);
200. City of Cedar Rapids v. Mun. Fire & Police Ret. Sys., 526 N.W.2d 284 (Iowa 1995) (chronic pain syndrome);
201. Levy v. Bayou Indus. Maint. Servs., 855 So. 2d 968 (La. Ct. App. 2003) (postconcussion syndrome, including headaches, dizziness, and vertigo);
202. Strawderman v. Creative Label Co., 508 S.E.2d 365 (W. Va. 1998) (migraine headaches).
203. See, e.g., Lundqvist et al., supra note 62, at 80-81 (demonstrating that subjects who have incurred spinal injuries are nearly as happy as the general population four years after their injuries).
204. See supra notes 73-77 and accompanying text.
205. See Posner, supra note 28, at. 422-26 (discussing this function performed by pretrial procedure).
206. Sec Robert E. Scott & George G. Triantis, Anticipating Litigation in Contract Design, 115 Yale L.J. 814, 829 & n.34 (2006) (describing Eastern District of Virginia's reputation for rapid resolution of litigation).
207. See generally supra Part II. The foremost example is probably Oswald and Powdthavee's longitudinal study of thousands of British citizens. Oswald & Powdthavee, supra note 67.
208. See infra note 153 and accompanying text.
209. This trend, which is generally viewed unfavorably, is closely related to the less pejorative theory of "directive lawyering," in which lawyers make "moral" decisions irrespective of the bad intentions of their clients. Robert F. Cochran, Jr. et al., Symposium: Client Counseling and Moral Responsibility, 30 Pepp. L. Rev. 591, 594-96 (2003).
210. Similarly, if the plaintiff has already recovered from her insurer, and the insurance company is the true plaintiff at suit, see June F. Entman, More Reasons for Abolishing Federal Rule of Civil Procedure 17(a): The Problem of the Proper Plaintiff and Insurance Subrogation, 68 N.C. L. Rev. 893, 908-11 (1990) (describing subrogation of claims by insurance companies), the plaintiff's adaptation will not affect the lawsuit. Of course, even insured tort victims are typically uninsured as to pain and suffering and are never insured for anything resembling a punitive damages claims.
211. See Randall R. Bovbjerg et al., Valuing Life and Limb in Tort: Scheduling "Pain and Suffering," 83 Nw. U. L. Rev. 908, 932 n.125 (1989) ("No health coverage, public or private, explicitly pays for noneconomic damages....");
212. Catherine M. Sharkey, Unintended Consequences of Medical Malpractice Damages Caps, 80 N.Y.U. L. Rev. 391, 401 (2005) ("[E]vidence confirms that patients do not purchase coverage for noneconomic damages as part of first-party health care insurance.").
213. See Model Code of Prof 1 Responsibility EC 7-7 (2001) ("[I]t is for the client to decide whether he will accept a settlement offer....").
214. Richard W. Painter, Litigating on a Contingency: A Monopoly of Champions or a Market for Champerty?, 71 Chi.-Kent L. Rev. 625, 626 n.3 (1995).
215. See John Bronsteen, Class Action Settlements: An Opt-In Proposal, 2005 U, IU. L. Rev. 903, 911-12 ("The lawyer could settle many cases in the time it takes to litigate one, so it is rational for her to settle quickly even if doing so reduces her profit in the individual case.");
216. Charles Silver, Class Actions - Representative Proceedings, in 5 Encyclopedia of Law and Economics 194, 213 (B. Bouckaert & G. De Geest eds., 2000) (suggesting that economic factors make plaintiffs' attorneys predisposed to settle),
217. See supra Part IV.A.
218. This type of strategic behavior might eventually result in a type of cycling equilibrium, in which defendants first refused to settle early, followed by plaintiffs' credible threats to refuse settlement late in the litigation, followed by defendants loosening their strategic stance and returning to early settlements, and so forth.
219. See generally supra Part II.
220. See Easterlin, supra note 56, at 11,180, 11,182 (suggesting that people's aspirations change commensurately with changes in life circumstances).
221. See Menzel et al., supra note 104, at 2151-52 (noting "people who have what is commonly thought of as a 'disability' or 'disease' may be stimulated to adopt a radically different and, in their eyes, a more insightful definition of their health").
222. See Wilson & Gilbert, Affective Forecasting, supra note 85, at 133 ("People are motivated to recover from negative emotional events, and the kind of sense making they engage in often involves coping, psychological defenses, and rationalization,").
223. See Kahneman & Sugden, Experienced Utility, supra note 53, at 168 ("[I]f some factor continues to operate over time, the corresponding experience of happiness or unhappiness becomes less intense.");
224. Sunstein, Illusory Losses, supra note 106, at 14-15 (explaining transition in focus over time to "central features of [injured people's] hours and days" after significant loss) ;
225. supra Part II.B.
226. Kahneman & Thaler, Utility Maximization, supra note 82, at 229
227. (citing Schkade & Kahneman, supra note 89),
228. See supra notes 89-92 and accompanying text.
229. See Bagenstos & Schlanger, supra note 106, at 753 ("A leading practitioners' treatise...advises lawyers seeking hedonic damages for disabling injuries to turn the trial into a maudlin spectacle....").
230. See, e.g., id. at 785 (pointing out that plaintiffs with disabilities will delay their adaptation if forced to testify about their disabilities at trial).
231. See supra note 145 and accompanying text.
232. See Austin Sarat & William L.F. Felstiner, Divorce Lawyers and Their Clients: Power and Meaning in the Legal Process 59 (1995) (describing lawyers' insistence on negotiating attorney-to-attorney);
233. John Lande, Possibilities for Collaborative Law: Ethics and Practice of Lawyer Disqualification and Process Control in a New Model of Lawyering, 64 Ohio St. L.J. 1315, 1362 (2003) ("In many traditional cases, represented clients do not personally participate in negotiation.").
234. See supra note 23 and accompanying text.
235. Cf. Robert J. Condlin, Bargaining in the Dark: The Normative Incoherence of Lawyer Dispute Bargaining Role, 51 Md. L. Rev. 1, 84-85 (1992) (describing settlement negotiations between opposing attorneys as "stylized" and "slightly exaggerated, somewhat predictable, and essentially impersonal").
236. It is worth noting that there is good reason to believe that active engagement in the settlement process may in fact promote hedonic adaptation in injured plaintiffs. Among the best predictors of individual adaptation is a person's perceived level of self-control. See Glenn Affleck et al., Appraisals of Control and Predictability in Adapting to a Chronic Disease, 53 J. Personality & Soc. Psychol. 273, 278 (1987) (finding "patients who reported greater personal control over their medical care and treatment expressed more positive mood"). Thus, getting to make decisions about the course of litigation may enhance a person's sense of control and at least moderate any negative effects brought about by refocusing on the injury.
237. On the psychological benefits of client-controlled litigation, see Bruce Winick, Therapeutic Jurisprudence and the Role of Counsel in Litigation, 37 Cal. W, L. Rev. 105, 112-13 (2000) ("Negotiation can itself be a healing process, bringing together disputants to discuss and iron out their differences, and helping ihem to resolve their conflicts and to achieve reconciliation.... Exercising a degree of control and self-determination in significant aspects of one's life may be an important ingredient of psychological wellbeing.").
238. See, e.g., John C. Coffee, Jr., Understanding the Plaintiffs Attorney: The Implications of Economic Theory for Private Enforcement of Law Through Class and Derivative Actions, 86 Colum. L. Rev. 669, 726 (1986) ("[T]he basic goal of reform should be to reduce the agency costs incident to this attorney-client relationship. While various means to this end are possible...all should be understood as responses to this agency cost problem and debated in that light.");
239. Jonathan R. Macey & Geoffrey P. Miller, The Plaintiffs' Attorney's Role in Class Action and Derivative Litigation: Economic Analysis and Recommendations for Reform, 58 U. Chi. L. Rev. 1, 3-5 (1991) (describing continuing problems posed by attorney-client agency costs deriving from attorneys' control over litigation and suggesting reforms to mitigate these costs).
240. See, e.g., Frank A. Sloan et al., Suing for Medical Malpractice 77-78 (1993) (noting even greater attorney-client agency costs when injured plaintiff seeks to fulfill noneconomic goals, including disclosure of information, revenge, and specific deterrence, which are unavailing to her attorney);
241. Leandra Lederman & Warren B. Hrung, Do Attorneys Do Their Clients Justice? An Empirical Study of Lawyers' Effects on Tax Court Litigation Outcomes, 41 Wake Forest L. Rev. 1235, 1244 (2006) ("The presence of a lawyer as agent of a client-principal introduces costs that unrepresented litigants do not face, because, if lawyers are rational actors, they may tend to maximize interests that differ from those of their clients.");
242. Michael A. Perino, Class Action Chaos? The Theory of the Core and an Analysis of Opt-Out Rights in Mass Tort Class Actions, 46 Emory L.J. 85, 140-41 (1997) ("Significant agency costs may be imposed on the clients because the attorney...may seek to promote her best interests ahead of one or both groups of clients. Indeed...if the attorney makes the decisions for both parties, then those parties should in reality be considered a single player.").
243. See Cass R. Sunstein, Irreversible and Catastrophic, 91 Cornell L. Rev. 841, 855-69 (2006) (discussing loss of option value in context of environmental litigation and injunctive relief).
244. We thank Thomas Miles for drawing our attention to this possibility.
245. See Oswald & Powdthavee, supra note 67, at 1068 tbl.1.
246. See id.
247. See id. Oswald and Powdthavee's regressions demonstrate that the effects of time - which they interpret as the workings of the psychological immune system - are at minimum between five and ten times larger than the effects generated by marriage, family size, income, or any other potential confounding factor. Id.