Managerial Judges: An Economic Analysis of the Judicial Management of Legal Discovery
Volume: Volume 30, No. 2
Issue: Summer 1999
Pages: pp. 305-323
Authors: Joel L. Schrag
Title: Managerial Judges: An Economic Analysis of the Judicial Management of Legal Discovery
Abstract: I analyze the effect of procedural rules that permit judges to limit pretrial discovery. In the presence of asymmetric information, a litigant may forgo settlement before discovery if his opponent interprets a serious offer as a sign that her discovery is likely to uncover useful evidence, leading her to invest more in discovery. Furthermore, a litigant may forgo settlement in order to strengthen his or her threat of future discovery. I show that by limiting pretrial discovery, the judge can simultaneously increase the probability of early settlement and reduce expected litigation costs, without reducing potential injurers' incentives to take care.
JEL Classification
Legal Procedure, the Legal System, and Illegal Behavior: General
(K400)
Economics of Law and Crime (9160)