Daughety, Andrew F.; Reinganum, Jennifer F. --- "Settlement" [2012] ELECD 103; in Sanchirico, William Chris (ed), "Procedural Law and Economics" (Edward Elgar Publishing, 2012)

Book Title: Procedural Law and Economics

Editor(s): Sanchirico, William Chris

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781847208248

Section: Chapter 15

Section Title: Settlement

Author(s): Daughety, Andrew F.; Reinganum, Jennifer F.

Number of pages: 86

Extract:

15 Settlement
Andrew F. Daughety and Jennifer F.
Reinganum*


1. Introduction
This survey, which updates and expands upon an earlier Encyclopedia
entry1 on the modeling of pretrial settlement bargaining, organizes current
main themes and recent developments.2 The basic concepts used are
outlined as core models and then several variations on these core models
are discussed. As with much of law and economics, a catalog of even
relatively recent research would rapidly be out of date. The focus here is
on articles that emphasize formal models of settlement negotiation and
the presentation is organized in game-theoretic terms, this now being the
principal tool employed by analyses in this area. The discussion is aimed
at the not-terribly-technical nonspecialist. In this survey some of the basic
notions and assumptions of game theory are presented and applied, but
some of the more recent models of settlement negotiation rely on rela-
tively advanced techniques; in those cases, technical presentation will be
minimal and intuition will be emphasized.3


*
We thank the Division of Humanities and Social Sciences, Caltech; the
Berkeley Center for Law, Business and the Economy, Boalt Law School, the
University of California, Berkeley; and NYU Law School for providing a sup-
portive research environment. We also thank Jeremy Atack, A. Mitchell Polinsky,
Richard Posner, Robert Rasmussen, David Sappington, Steven Shavell, John
Siegfried and Kathryn Spier for helpful comments and suggestions on the previous
version of this chapter.
1
Daughety (2000).
2
There has now been a sequence of surveys ...