Comparative Analysis of Litigation Systems: An Auction-Theoretic Approach

A simple auction-theoretic framework is used to examine symmetric litigation environments where the legal ownership of a disputed asset is unknown to the court. The court observes only the quality of the case presented by each party, and awards the asset to the party presenting the best case. Ration...

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Bibliographic Details
Published in:The Economic journal (London) 2005-07, Vol.115 (505), p.583-601
Main Authors: Baye, Michael R., Kovenock, Dan, de Vries, Casper G.
Format: Article
Language:English
Subjects:
Assets
Attorneys
Attorneys fees
Auctions
Comparative analysis
Comparative studies
Courts
Economic analysis
Economic costs
Economic equilibrium
Economic systems
Empirical evidence
Enterprises
Expected utility
Legal aspects
Legal reform
Legal services
Legal systems
Litigants
Litigation
Market theory
Ownership
Trials
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Summary:A simple auction-theoretic framework is used to examine symmetric litigation environments where the legal ownership of a disputed asset is unknown to the court. The court observes only the quality of the case presented by each party, and awards the asset to the party presenting the best case. Rational litigants influence the quality of their cases by hiring skilful attorneys. This framework permits us to compare the equilibrium legal expenditures that arise under a continuum of legal systems. The British rule, Continental rule, American rule, and some recently proposed legal reforms are special cases of our model.
ISSN:0013-0133
1468-0297
DOI:10.1111/j.1468-0297.2005.01010.x