Bargaining in the Shadow of the Law: A Testable Model of Strategic Behavior

Cooter, Robert D.; Marks, Stephen P.; Mnookin, Robert H.

doi:10.1086/467699

Cited by 194 publications

(64 citation statements)

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“…A good deal of sociolegal scholarship considers how individuals use law-and nonenforcement specificallyas a strategic resource for the management of their institutional and interpersonal relationships. This dynamic is often called "bargaining in the shadow of the law" (Mnookin and Kornhauser 1979;Cooter et al, 1982). The basic premise is that formal enforcement-"taking someone to court"-is only one way in which people choose to enforce their legal obligations to one another, and is often not the best way.…”

Section: Strategic Nonenforcement and The Shadow Of The Lawmentioning

confidence: 99%

Book-Smart, Not Street-Smart: Blockchain-Based Smart Contracts and The Social Workings of Law

Levy

2017

Engaging STS

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This paper critiques blockchain-based "smart contracts," which aim to automatically and securely execute obligations without reliance on a centralized enforcement authority. Though smart contracts do have some features that might serve the goals of social justice and fairness, I suggest that they are based on a thin conception of what law does, and how it does it. Smart contracts focus on the technical form of contract to the exclusion of the social contexts within which contracts operate, and the complex ways in which people use them. In the real world, contractual obligations are enforced through all kinds of social mechanisms other than formal adjudication-and contracts serve many functions that are not explicitly legal in nature, or even designed to be formally enforced. I describe three categories of contracting practices in which people engage (the inclusion of facially unenforceable terms, the inclusion of purposefully underspecified terms, and willful nonenforcement of enforceable terms) to illustrate how contracts actually "work." The technology of smart contracts neglects the fact that people use contracts as social resources to manage their relations. The inflexibility that they introduce, by design, might short-circuit a number of social uses to which law is routinely put. Therefore, I suggest that attention to the social and relational contexts of contracting are essential considerations for the discussion, development, and deployment of smart contracts.

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Section: Strategic Nonenforcement and The Shadow Of The Lawmentioning

confidence: 99%

Book-Smart, Not Street-Smart: Blockchain-Based Smart Contracts and The Social Workings of Law

Levy

2017

Engaging STS

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“…12 The dummy variable ORAL reports whether at least one oral hearing between the involved parties took place. 13 We also control for the number of hearing days H_DAYS and the total duration of the legal case (DURATION). …”

Section: Datamentioning

confidence: 99%

Determinants of in-court settlements: empirical evidence from a German trial court

Berlemann

Christmann

2018

Journal of Institutional Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may Zusammenfassung / AbstractBecause verdicts are typically the more costly resolution of legal disputes, most governments are interested in high settlement rates. In this paper, we use a unique dataset of 860 case records from a German trial court to explore which factors have a significant impact on the decision to settle in civil law litigation. We find that case-specific factors, procedural aspects and individual characteristics of the involved judge have a significant impact on settlement probability. Interestingly, we find supporting evidence for the hypothesis that the gender of the involved judge has an impact on settlement probabilities in certain subfields of law. Based on our empirical results, we derive some conclusions for legal policies that aim at increasing settlement rates. To be able to construct legal systems that facilitate early settlements of legal disputes, it is necessary to identify the factors that have a significant impact on settlement probability. 1 However, little empirical knowledge is available on this issue as yet. A major reason for the scarcity of empirical evidence on the determinants of settlement probability is that suitable data to study this issue are often unavailable. Databases on verdicts are often available; however, according to the well-established Case Selection Hypothesis put forward by PRIEST and KLEIN (1984), verdicts (and thus settlements) are not a random draw from the pool of all legal disputes. Empirical evidence that is solely based on verdict databases is thus likely biased. To gain unbiased evidence on the determinants of settlement probability, a random sample of legal disputes that contains both court decisions and settlements is necessary. However, these types of data are mostly unavailable as yet.In this paper, we contribute to filling the described gap in the literature. Using a novel, hand-collected dataset consisting of 860 case records from a German trial court, we employ the logit regression technique to identify factors that influence the probability of 1 Note that we do not argue that promoting settlements is in fact always s ocially efficient. For critical assessments of settlements and judicial discretion to achieve them, see, e.g., RESNIK (2002) The remainder of the paper is structured as follows: Section 2 reviews the related literature. Section 3 introduces and summarizes the dataset. In section 4, we report the empirical results of our analysis ...

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“…The possibility of settlement bargaining could have an effect on the quantitative results derived in the analysis, but not on the validity of the irrelevance proposition. Specifically, what determines the value of the settlement the rightholder will be able to extract are the expected judgment (i.e., the value of the right), the parties' litigation costs in light of the fee shifting rules, and the division of bargaining power in settlement negotiations (Cooter et al, 1982). Thus, the degree of opportunism that the rightholder will have to tolerate may be different than established above.…”

Section: How Litigation Costs Affect Performancementioning

confidence: 99%

Rights Eroding by Past Breach

Ben-Shahar

1998

SSRN Journal

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Legal rights may erode as a result of past, uncontested, breach. In light of ongoing violations, the rightholder's lackluster enforcement may result in the loss of the entitlement. The doctrines of course of performance in contract law and adverse possession in property law are prominent examples of this widespread erosion phenomenon. In analyzing the effects of such laws, the Article confronts two conflicting intuitions. On the one hand, the "licence" to continue breach prospectively encourages opportunism. On the other hand, the risk of erosion may reinforce the rightholder's motivation to take anti-erosion measures, bolstering the credibility of the threat to enforce, thus better preserving the entitlement. The article proves that these two effects of erosion rules always balance out. The same amount of value will be extracted from the rightholder irrespective of the law's erosion doctrine. The article also demonstrates the limits of this "irrelevance" claim and the factors that may lead to its collapse. It applies the analysis to offer new perspectives on various prominent legal rules.-3-

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Bargaining in the Shadow of the Law: A Testable Model of Strategic Behavior

Cited by 194 publications

References 0 publications

Book-Smart, Not Street-Smart: Blockchain-Based Smart Contracts and The Social Workings of Law

Book-Smart, Not Street-Smart: Blockchain-Based Smart Contracts and The Social Workings of Law

Determinants of in-court settlements: empirical evidence from a German trial court

Rights Eroding by Past Breach

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