Doctoral Dissertation Research in Economics: An Experimental Analysis of Settlement Delay in Tort Litigation

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This award funds laboratory experiments on the determinants of delayed settlements in tort ligation.In the United States, tort cases often exhibit protracted delay between the time of injury and settlement of a dispute. Parties to a dispute tend to agree on settlement conditions only after engaging in lengthy legal procedures. Resources spent on settlement negotiation are large and econonomically inefficient. The research tests the popular hypothesis that differences in the kinds of information available to the disputants results in delay. The experiments examine two questions. First, does asymmetric information lead to lengthy settlement delays? Second, what policies help mitigate settlement delay? The experiments involve real-time negotiation between participants in a series of mock lawsuits. The experimental design allows for estimation of important treatment effects while controlling for individual differences and for learning behavior.With the social cost of the U.S. tort system estimated at $250 billion per year, better understanding of why tort cases reach delayed settlements may have substantial societal benefts. The results of this project will help us to evaluate the effects of proposed reforms of the tort system.