This paper analyzes whether the behavior of potential offenders can be guided by information on the actual detection probability transmitted by the policy maker. It is established that, when viewed as a cheap-talk game, the existence of equilibria with information transmission depends on the...

This article shows that it may be socially optimal to grant accident victims less than full compensation. In our framework, firms are liable under product liability but also invest in care to prevent consumers switching to competitors. Affecting the partition of consumers by means of care-taking...

This paper introduces the concept of emotions into the standard litigation contest. Positive (negative) emotions emerge when litigants win (lose) at trial and are dependent in particular on the level of defendant fault. Our findings establish that standard results of litigation contests change...