We develop a model with asymmetric information, where the uninformed party makes the offer. When parties proceed to trial, their endogenous expenditures partially determine the outcome. The endogenous spending at trial can either strengthen or weaken the bargaining position of the uninformed...

We introduce self-serving bias into the Bebchuk (1984) model in which trials result from asymmetric information and characterize the equilibrium. An increase in the self-serving bias of a defendant who receives an offer can, under some circumstances, reduce the incidence of trial. More...

We introduce self-serving bias into the Bebchuk (1984) model in which trials result from asymmetric information and characterize the equilibrium. An increase in the self-serving bias of a defendant who receives an offer can, under some circumstances, reduce the incidence of trial. More...

We identify two features of final offer arbitration (FOA) which may impede settlement in a bargaining game where asymmetric information drives the failure to settle. First, under FOA, the informed party has an incentive to conceal private information about the expected outcome in arbitration...