We investigate whether individuals’ self-stated privacy behavior is correlated with their reservation price for the disclosure of personal and potentially sensitive information. Our incentivized experiment has a unique setting: Information about choices with real implications could be immediately disclosed to an audience of fellow first semester students. Although we find a positive correlation between respondents’ willingness to accept (WTA) disclosure of their private information and their stated privacy behavior for some models, this correlation disappears when we change the specification of the privacy index. Independent of the privacy index chosen we find that the WTA is significantly influenced by individual responses to personal questions, as well as by different decisions to donate actual money, indicating that the willingness to protect private information depends on the delicacy of the information at stake.

This article analyzes the workings of liability when harm-inflicting consumers are present biased and both product safety and consumer care influence expected harm. We show that present bias introduces a rationale for shifting some losses onto the manufacturer, in stark contrast with the baseline scenario in which strict consumer liability induces socially optimal product safety and precaution levels. In addition, we establish that strict liability with contributory negligence may induce socially optimal product safety and precaution choices.

Dans cet article, nous considérons une action en responsabilité civile dans laquelle les parties prenantes au litige (demandeur et défendeur) sont potentiellement victimes du biais d’immédiateté. Il s’agit d’étudier, dans ce cadre, l’effort de précaution de l’auteur du dommage et les incitations des demandeurs, d’une part, à intenter une action en justice et, d’autre part, à être conciliants lors d’un éventuel règlement amiable. Les principaux résultats montrent que la présence d’un tel biais chez les demandeurs les rend moins enclins à aller en justice et plus modérés quant à leur demande d’indemnisation lors de la négociation avant procès. Le défendeur est ainsi incité à réduire son effort de précaution ex ante , ce qui augmente la probabilité d’occurrence d’un accident à l’équilibre. Nous supposons par ailleurs que le demandeur peut être naïf ou sophistiqué quant à la manière dont il appréhende son biais. Le degré de sophistication augmente alors la distorsion de la probabilité d’accident d’équilibre.

This article analyzes pretrial bargaining between litigants with reference-dependent preferences. We build on Bebchuk (1984, “Litigation and Settlement under Imperfect Information,” 15 Rand Journal of Economics 404–15) and, motivated by empirical evidence, assume that the referent is based on expectations. We find that reference dependence on behalf of plaintiffs increases the settlement probability. The fact that preferences are reference-dependent meaningfully influences comparative statics predictions. In our extensions, we discuss the role of fee shifting, the effect of having the referent based on the status quo instead of on expectations, and risk aversion.

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