This paper empirically tests the divergent expectations model of pre-trial bargaining by exploiting variation in tort liability for bad faith insurance law. Using a repeated cross-sectional dataset of auto insurance claims from the Insurance Research Council, it estimates that the tort remedy...

This paper explores the evolution of the civil liability regime for insurance claims settlement disputes in the United States, and the ways in which it has affected the incidence of disputes and litigation of insurance claims. The paper first surveys the history of insurance bad faith legal...