This paper analyzes the principal-agent relationship between a plaintiff and his or her lawyer when the lawyer's investment in discovery is private information. The plaintiff uses the level of the contingency fee and potentially also restrictions on settlements to guide the lawyer's...

We investigate how third-party punishers and potential violators decide under evidentiary uncertainty in a take game. In line with the legal requirement and in contrast to economic models, neither the sanction nor the harm level affects the punishment probability, but the quality of evidence...

In the economic analysis of liability law, information about accident risk and how it can be influenced by precautions is commonly taken for granted. However, a profound understanding of the relationship between care and accident risk often requires learning-by-doing. In a two-period model, we...

This paper studies the differential effects of fines and damages on people's investment in accident prevention. We report results from a laboratory experiment in which monetary payoffs are maintained across the two policy instruments. While standard theory predicts no difference in behavior, we...