We present a dynamic model of noncontractual litigation in which the parties' decision whether to litigate depends on information produced by courts and, vice versa, the courts' involvement in the lawmaking process depends on the cases proposed by the parties. Thereby, we integrate in one model...

For psychologists, bounded rationality reflects the presence of cognitive dissonance and/or inconsistency, revealing that people use heuristics (Tversky and Kahneman (1974)) rather than sophisticated processes for the assessment of their beliefs. Recent research analyzing litigations and...