A model of parties' litigation and settlement decisions under imperfect information is studied. The model shows how informational asymmetry influences parties' decisions, and how it might lead to parties' failure to settle. The model is used to identify how the likelihood of settlement and the...

This article analyzes incentives to acquire information about the value of things before sales transactions, and voluntary versus required disclosure of such information. Two distinctions are emphasized: whether information is mere foreknowledge or instead can raise value -- has social value; and...

A model of the occurrence of accidents is used to examine liability and safety regulation as means of controlling risks. According to the model, regulation does not result in the appropriate reduction of risk--because the regulator lacks perfect information--nor does liability result in that...

Minimum asset and liability insurance requirements must often be met in order for parties to participate in potentially harmful activities. Such financial responsibility requirements may improve parties' decisions whether to engage in harmful activities and, if so, their efforts to reduce risk....

In this article the voluntary sharing of information prior to settlement negotiations is studied in a model where one type of litigant -- plaintiffs, to be exact -- possesses private information. In equilibrium, plaintiffs whose expected judgments would exceed a certain threshold will reveal...