Landeo, Claudia M. --- "Law and economics and tort litigation institutions: theory and experiments" [2018] ELECD 218; in Teitelbaum, C. Joshua; Zeiler, Kathryn (eds), "Research Handbook on Behavioral Law and Economics" (Edward Elgar Publishing, 2018) 247

Book Title: Research Handbook on Behavioral Law and Economics

Editor(s): Teitelbaum, C. Joshua; Zeiler, Kathryn

Publisher: Edward Elgar Publishing

ISBN: 9781849805674

Section: Chapter 9

Section Title: Law and economics and tort litigation institutions: theory and experiments

Author(s): Landeo, Claudia M.

Number of pages: 22

Abstract/Description:

In tort litigation, delayed settlement imposes high costs on the parties and society. An appropriate design of litigation institutions and tort reform requires a good knowledge of the factors that affect litigants’ behavior. Both theoretical and experimental law and economics, which represent the cornerstones of the application of the scientific method, enhance our understanding of the effects of litigation institutions and tort reform on settlement and deterrence. This chapter evaluates the interaction between theoretical and experimental law and economics in the study of tort litigation institutions. Special attention is devoted to liability, litigation and tort reform institutions, and behavioral factors that might affect an impasse. The analysis suggests a productive interaction between theoretical and experimental law and economics. In particular, findings from experimental economics work on litigation institutions indicate the presence and robustness of cognitive biases, and provide evidence of the effects of litigants’ biased beliefs on the likelihood of impasse.