Emotional Responses in Litigation

Litigation is, by its very nature, an adversarial process. It can result in parties involved feeling aggrieved in response to both the actions chosen by others and the actions that a priori had been expected of others. Parties often want to have their day in court in order to see justice done or to vent a retributive intent. This paper shows that certain emotions can result in a higher frequency of trials occurring in a general class of litigation games than in the absence of such emotional factors. Such emotions usually depend not only on the behavior of another but also on the beliefs over that behavior. Ellickson (1991, 1989, 1987) has criticized law and economics for using a limited notion of what constitutes rational behavior and suggested expanding the rational actor model to incorporate other elements. We begin just such an extension in this paper. There are two central questions about legal disputes: What are the incentives for a plaintiff to sue? What determines the decision of a defendant to settle or go to court? In fact, many suits that could be brought are not, and of those suits that are filed, most do not result in a trial. Theoretical analyses of the litigation process can be divided into three stages. The first stage includes models by Landes (1971), Gould (1973), and Posner (1973), and culminates with Shave11 (1982). Single-person decision theory is used in these studies to describe rational choices by potential litigants. The second stage maintains the symmetric information assumption but explicitly models the strategic interaction of multiple decision-makers. A re-