The Review of Economics and Statistics Vol. 78 No. 3 1996
Antitrust Settlements and Trial Outcomes
Abstract
Risk aversion plays an important role in explaining why antitrust cases settle instead of going to trial. Using a jointly estimated model of settlement and trial outcome, the authors find that a one percent increase in the probability that the plaintiff wins at trial raises the probability of a settlement by 0.13 percent. They also find that reputation effects are not a significant factor for defendants, so the risk aversion of the defendants does not play a dominant role in determining whether the parties settle. Plaintiffs are more likely to win in certain jurisdictions, which encourages venue shopping by plaintiffs.
- DOI
- 10.2307/2109787
- Volume
- 78
- Issue
- 3
- Pages
- 401
- Sources
- crossref openalex