Retaining Counsel : the tipping point effect

A real-world puzzle has eluded the attention of scholars and policymakers. Using unique data sets covering more than 8 million civil lawsuits in mainland China, Taiwan, and Japan, we observe that parties are often pro se even when high amounts of money are at stake. One (partial) explanation could be a "tipping point effect": parties are more inclined to be represented by an attorney if they expect the case to be a close call - and less inclined if they believe the odds of winning to be very high or very low. We support the tipping point effect in survey experiments framed as litigation. If the otherwise identical experiment is an unframed lottery, the effect disappears. Based on this evidence, we argue that the effect results from the combination of two behavioral effects: reference point dependence, and competitive spirit.