signi...cance.<sup>49</sup> Multinomial logit results produce very similar results.<sup>50</sup> Thus far we have not exploited our imputed claims of what the worker would be entitled to given the easily veri...able facts of the case. In table 9, we return to our models of award amounts by adding the log of our imputed claim, assuming the dismissal was not justi...ed. We generally ...nd that neither the claim of the worker nor the imputed claim is signi...cant. In tribunal 15, however, the imputed claim is positively and signi...cantly associated with the amount received when dropped cases are excluded.

In table 10, we estimate the same models as in table 9, but without controlling for mode of termination. If an exaggerated claim a¤ects the probability of the mode of termination, excluding mode of termination may be a better way of estimating the overall e¤ect of an exaggerated claim. Now that we are not controlling for mode of termination, the coe¢ cient on the log of the total claim is negative in all models and statistically signi...cant when dropped cases are excluded.<sup>51</sup> That is, we ...nd some evidence that workers are actually punished for exaggerating their claims. The coe¢ cient on the imputed claim is positive and signi...cant in all models suggesting that it is a good indicator of the strength of the worker’s case.

To further address the point on how an exaggerated claim might a¤ect the mode of termination, we return to logit analyses of the mode of termination in table 11. We include an additional control variable of the log of the ratio between the worker’s claim and our imputed claim assuming an unjusti...ed dismissal. In both tribunals, whether we include dropped lawsuits in the analysis or not, we ...nd that cases involving “excessive”worker claims tend not to be settled.<sup>52</sup> Overall, tables 9-11 present an interesting story. Some workers exaggerate their claims more than others. Additionally, workers who exaggerate their claims settle less often, presumably because they are either aggressive by nature or because they incorrectly estimate the strengths of their cases. In any event, the courts are not fooled by these exaggerated claims. In fact, the courts may punish workers for exaggerating their claims.

# VI Conclusions

Motivated by the previous theoretical and empirical literatures on the resolution of legal disputes, we use data from labor tribunals in Mexico to address three

> 49 When all three modes of termination are considered, we ...nd that cases involving multiple plainti¤s are less likely to be settled and more likely to go to trial, with both results signi...cant at the 10% level. When dropped cases are excluded, we ...nd that cases involving multiple plainti¤ are less likely to settle, but the estimated coe¢ cient is not statistically signi...cant.

> 50 The multinomial logit speci...cation requires the standard "independence of irrelevant alternatives" assumption, which we believe is di¢ cult to defend in our context. Since the multinomial logit produces the same results as separate logit speci...cations on each case outcome, we prefer to report the latter results.

> 51 In tribunal 15 when dropped cases are included, the coe¢ cient on total claim is negative and signi...cant at the 10% level.

> 52 Adding the worker’s claim to these models yields insigni...cant coe¢ cients and does not change the main results.

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