Settlement and Trial: Selected Analyses of the Bargaining Environment

Daughety, Andrew F.; Reinganum, Jennifer F.

doi:10.2139/ssrn.2462814

Cited by 2 publications

(3 citation statements)

References 50 publications

(36 reference statements)

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“…A settlement that averts a contested vote is akin to a settlement of litigation prior to going to a trial in court. The literature on the economics of litigation and settlement [see Spier (2007), Wickelgren (2013) and Daugherty and Reinganum (2017) for surveys] provides insights about why and when cases settle.…”

Section: Settlement Theory and Tested Hypothesesmentioning

confidence: 99%

Dancing With Activists

Bebchuk

Brav

Jiang

et al. 2019

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An important milestone often reached in the life of an activist engagement is entering into a "settlement" agreement between the activist and the target's board. Using a comprehensive handcollected data set, we analyze the drivers, nature, and consequences of such settlement agreements. Settlements are more likely when the activist has a credible threat to win board seats in a proxy fight and when incumbents' reputation concerns are stronger. Consistent with incomplete contracting, face-saving benefits and private information considerations, settlements commonly do not contract directly on operational or leadership changes sought by the activist but rather on board composition changes. Settlements are accompanied by positive stock price reactions, and they are subsequently followed by changes of the type sought by activists, including CEO turnover, higher shareholder payouts, and improved operating performance. We find no evidence to support concerns that settlements enable activists to extract rents at the expense of other investors. Our analysis provides a look into the "black box" of activist engagements and contributes to understanding how activism brings about changes in target companies.

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Section: Settlement Theory and Tested Hypothesesmentioning

confidence: 99%

Dancing With Activists

Bebchuk

Brav

Jiang

et al. 2019

View full text Add to dashboard Cite

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“…15 Moreover, an analysis of the bivariate correlations indicates that our estimation does not suffer from multicollinearity problems. 16 14 We refrain from using judge-fixed-effects because this woul d not allow adding other judge-specific variables such as gender or experience to the estimation equation. 15 We conduct the H-L test with 8, 10 and 12 groups .…”

Section: Determinants Of Settlement Probabilitymentioning

confidence: 99%

“…The referring estimation results are shown in table A2 in the Annex. 16 See Table A3 in the Annex. We report the results of a logistic regression with standard errors at the judge level.…”

Section: Determinants Of Settlement Probabilitymentioning

confidence: 99%

Determinants of in-court settlements: empirical evidence from a German trial court

Berlemann

Christmann

2018

Journal of Institutional Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may Zusammenfassung / AbstractBecause verdicts are typically the more costly resolution of legal disputes, most governments are interested in high settlement rates. In this paper, we use a unique dataset of 860 case records from a German trial court to explore which factors have a significant impact on the decision to settle in civil law litigation. We find that case-specific factors, procedural aspects and individual characteristics of the involved judge have a significant impact on settlement probability. Interestingly, we find supporting evidence for the hypothesis that the gender of the involved judge has an impact on settlement probabilities in certain subfields of law. Based on our empirical results, we derive some conclusions for legal policies that aim at increasing settlement rates. To be able to construct legal systems that facilitate early settlements of legal disputes, it is necessary to identify the factors that have a significant impact on settlement probability. 1 However, little empirical knowledge is available on this issue as yet. A major reason for the scarcity of empirical evidence on the determinants of settlement probability is that suitable data to study this issue are often unavailable. Databases on verdicts are often available; however, according to the well-established Case Selection Hypothesis put forward by PRIEST and KLEIN (1984), verdicts (and thus settlements) are not a random draw from the pool of all legal disputes. Empirical evidence that is solely based on verdict databases is thus likely biased. To gain unbiased evidence on the determinants of settlement probability, a random sample of legal disputes that contains both court decisions and settlements is necessary. However, these types of data are mostly unavailable as yet.In this paper, we contribute to filling the described gap in the literature. Using a novel, hand-collected dataset consisting of 860 case records from a German trial court, we employ the logit regression technique to identify factors that influence the probability of 1 Note that we do not argue that promoting settlements is in fact always s ocially efficient. For critical assessments of settlements and judicial discretion to achieve them, see, e.g., RESNIK (2002) The remainder of the paper is structured as follows: Section 2 reviews the related literature. Section 3 introduces and summarizes the dataset. In section 4, we report the empirical results of our analysis ...

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Settlement and Trial: Selected Analyses of the Bargaining Environment

Cited by 2 publications

References 50 publications

Dancing With Activists

Dancing With Activists

Determinants of in-court settlements: empirical evidence from a German trial court

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