FRIVOLOUS SUITS IN THE INFINITELY-REPEATED LITIGATION GAME WITH UNCERTAINTY

Iljoong Kim & Jaehong Kim

Hitotsubashi Journal of Economics2015https://doi.org/10.15057/27196article
ABDC B
Weight
0.26

Abstract

We explain why 'frivolous suits (FS)' occur particularly under complete information. Existing analyses such as the 'traditional' and the 'early-defense-cost' models are not fully robust in that they either drop the plaintiff's withdrawal option or rely on a restrictive assumption that the defendant loses immediately unless he early defends himself at high cost. We pursue a more generalized explanation. We offer an infinite-period litigation model with uncertainty which reflects the reality more consistently. We then show that FS can occur as a subgame perfect equilibrium since the defendant over the pre-trial stage may settle with FS to save future time and/or trial costs. We further demonstrate that FS can occur even under the British rule of fee shifting.

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https://doi.org/https://doi.org/10.15057/27196

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@article{iljoong2015,
  title        = {{FRIVOLOUS SUITS IN THE INFINITELY-REPEATED LITIGATION GAME WITH UNCERTAINTY}},
  author       = {Iljoong Kim & Jaehong Kim},
  journal      = {Hitotsubashi Journal of Economics},
  year         = {2015},
  doi          = {https://doi.org/https://doi.org/10.15057/27196},
}

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Evidence weight

0.26

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.00 × 0.4 = 0.00
M · momentum0.20 × 0.15 = 0.03
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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