Can suits with negative expected value really be profitable?: Defendants Can Play Games Too

Legal Theory

Volumn 9, Issue 2, 2003, Pages 83-97

  Schwartz, Warren F ^a  

^a GEORGETOWN UNIVERSITY LAW CENTER   (United States)

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EID: 62749121692     PISSN: 13523252     EISSN: 14698048     Source Type: Journal    
DOI: 10.1017/S1352325203000041     Document Type: Article

References (5)

1. The first is Warren F. Schwartz, Long-Shot Class Actions: Toward a Normative Theory of Legal Uncertainty, 8 LEGAL THEORY 297 (2002).
2. Lucian Arye Bebchuk, Suits with Negative Expected Value 3 PALGRAVE DICTIONARY OF ECONOMICS AND THE LAW 551, 554 (1998).
3. Avery Katz, The Effect of Frivolous Lawsuits on the Settlement of Litigation, 10 INT'L REV. L. & ECON. 3, 4 (1990), briefly but cogently makes many of the same criticisms of the Rosenberg and Shavell analysis as I do. Bebchuck's survey essay presents the Rosenberg and Shavell thesis but omits Katz's criticism of it.
4. Katz, The Effect of Frivolous Lawsuits on the Settlement of Litigation note 5, points out that Rosenberg and Shavell assume this problem away by conferring on plaintiff the ability to make a take-it-or-leave-it offer.
5. See Lucien Arye Bebchuk, A New Theory Concerning the Credibility and Success of Threats to Sue, 25 J. LEGAL STUD. 1 (1996).