Negative-expected-value suits
By: Lucian Bebchuk and Alon Klement.
Contributors: Klement, Alon.; John M. Olin Center for Law, Economics, and Business.
Series: Discussion paper -- no. 656; Discussion paper (John M. Olin Center for Law, Economics, and Business : Online) -- no. 656.
Publisher: Harvard Law School
Published: 2009
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Law and economics; Costs (Law); Costs (Law) -- Mathematical models; Compromise (Law) -- Economic aspects
Other titles: Negative expected value suits
Description: "Abstract:We review the literature on negative-expected-value suits (NEV suits)--suits in which the plaintiff would obtain a negative expected return from pursuing the suit all the way to judgment.  We discuss alternative theories as to why, and when, plaintiffs with NEV suits can extract a positive settlement amount.  In particular, we explain how such a plaintiff can extract a positive settlement due (i) asymmetry of information between the parties, (ii) divisibility of the plaintiff's litigation costs, (iii) upfront costs that the defendant must incur before the plaintiff incurs any costs; (iv) expectation that the arrival of information during the course of the litigation may turn the suit into a positive-expected-value one, (5) reputation that enables the plaintiff to bind itself to going to trial if the defendant refuses to settle; or (6) the plaintiff's having a contingency fee or retainerarrangement with its lawyer"--John M. Olin Center for Law, Economics, and Business web site.
Notes: Title from PDF file as viewed on 1/14/2010.

Includes bibliographical references.

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