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Cover of: Maybe there Is No Bias in the Selection of Disputes for Litigation
Eric Helland, Daniel Klerman, Yoon-Ho Alex Lee

Maybe there Is No Bias in the Selection of Disputes for Litigation

Section: Articles
Volume 174 (2018) / Issue 1, pp. 143-170 (28)
Published 16.05.2018
DOI 10.1628/093245618X15115174056060
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Summary
New York closing-statement data provide unique insight into settlement and selection. The distributions of settlements and adjudicated damages are remarkably similar, and the average settlement is very close to the average judgment. One interpretation is that selection effects may be small or nonexistent. Because existing litigation models all predict selection bias, we develop a simple, no-selection-bias model that is consistent with the data. Nevertheless, we show that the data can also be explained by generalized versions of screening, signaling, and Priest-Klein models.