【Brownbag】Third-Party Litigation Funding on Settlement: An Experimental Study
2025/01/10
研討會日期 : 2025-01-10
時間 : 12:10
主講人 : Professor Wei James Chen (陳暐)
地點 : Conference Room B110
演講者簡介 : Professor Wei James Chen received his Ph.D. from The Ohio State University in 2017. He is currently an Assistant Professor at National Taiwan University. His research fields are Behavioral Economics, Experimental Economics, Neuroeconomics, and Decision Theory.
演講摘要 : This study examines the impact of third-party litigation funding (TPLF) on settlement rates through a controlled experimental design inspired by Daughety and Reinganum's (2014) theoretical framework. While concerns persist that plaintiff legal funding may discourage settlement, the model predicts that TPLF can, under certain conditions, increase settlement rates and potentially achieve full settlement efficiency. The experiment replicates a bargaining environment where a plaintiff (Player A) proposes a settlement offer to a defendant (Player B) under asymmetric information about case strength (High or Low). Treatments include scenarios with no funding, lawyer contingency fees, low funding with capped debt repayment, and high funding. Results show that carefully designed TPLF treatments outperform no funding in promoting settlement, although optimal TPLF does not fully restore efficiency. Patterns reveal that plaintiffs with strong cases tend to propose less favorable offers, while defendants often accept these offers sub-optimally. The findings underscore predictable deviations from equilibrium behavior, with a strong correlation between beliefs and offers. This research provides valuable insights into human behavior in settlement bargaining and highlights the potential role of TPLF in resolving legal disputes. Future work can further refine settlement theory and explore policy implications.
