NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Suing Solely to Extract a Settlement Offer

Lucian Arye Bebchuk

NBER Working Paper No. 2161
Issued in 1987

In many disputes, the expected value to the plaintiff from going to trial is negative, either because the chances of winning are small or because the litigation costs are large. While such a plaintiff would not go to trial, he might sue in the hope of extracting a settlement offer: the defendant might make such an offer if he is uncertain as to whether or not the expected value to the plaintiff of going to trial is negative. This paper seeks to identify the factors that determine: (i) whether a plaintiff who does not intend to go to trial will nonetheless succeed in extracting an offer; and (ii) how much will such a plaintiff succeed in extracting.

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Document Object Identifier (DOI): 10.3386/w2161

Published: Journal of Legal Studies, vol. 17, June 1988,pp. 437-450.

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