We discuss the implications of various models of settlement negotiations for the revelation or suppression of private information held by the parties. This information may be relevant to multiple audiences, including those involved in the instant lawsuit; other potential litigants that may subsequently make use of the information in their own suits against one of the parties; and more distant observers and users of the legal process. We also examine how rules of evidence and rules of civil procedure can sometimes result in different degrees of purposeful or (arguably) unintended information suppression.

We model appeals courts as Bayesian decision makers with private information about a supreme court's interpretation of the law; each court also observes the previous decisions of other appeals courts in similar cases. Such 'persuasive influence' can cause 'herding' behavior by later appeals courts as decisions progressively rely more on previous decisions and less on a court's private information. We provide an example drawn from a recent United States Supreme Court decision finding unconstitutional a basic provision of a law previously found constitutional by six circuit courts. Herding on the wrong decision may remain uncorrected, since review of harmonious decisions is rare.

We develop and explore a new model of the economics of privacy. Previous work has focused on privacy of type, wherein an agent privately knows an immutable characteristic. We consider privacy of action, wherein privacy means that an agent's choice of action is unobservable to others. To show how a policy of privacy can be socially optimal, we assume that an agent derives utility from an action he takes, from the aggregate of all agents' actions, and from other agents' perceptions of the agent's type (that are based on his action). If his action is observable, then he distorts it (relative to his full-information optimal action) so as to enhance the perceptions that others have of him. This contributes to aggregate welfare through increasing the public good, but the disutility associated with the distortion of agents' actions is also a social cost. If his action is unobservable, then he can take his full-information optimal action and still be pooled with other types. When the disutility of distortion is high relative to the marginal utility of the public good, a policy of privacy is optimal. We also consider a policy of waivable privacy, and find that equilibria exist in which some, but not all, types waive privacy. More significantly, if policies of privacy or publicity are costlessly enforceable, then a policy of waivable privacy is never socially preferred. Finally, we consider a number of examples (some of which involve a public bad and/or social disapproval): open-source software development; charitable giving; recycling; consumption of health services; DNA dragnets; student rankings; constraints on information disclosure at trial; electricity and water usage during periods of voluntary rationing; shaming of speeders; and the use of earmarks by Congress.

We develop a dynamic model of the disposition of a criminal case, allowing for the potential discovery of exculpatory evidence by prosecutors (who choose whether to disclose this evidence) and by defendants, as the case proceeds from arrest through plea bargaining and (possibly) trial. We characterize equilibrium behavior by prosecutors and defendants, under three different disclosure regimes: (1) no disclosure is required; (2) disclosure is required before trial; and (3) disclosure is required from the point of arrest onward. A prosecutor who has (resp., has not) privately observed exculpatory evidence is called an “informed” (resp., “uninformed”) prosecutor. When no disclosure is required, an informed prosecutor makes a lower plea offer than one who is uninformed; no case is dropped voluntarily. When disclosure is required only prior to trial, then an informed prosecutor makes the same offer as an uninformed prosecutor, but an informed prosecutor will disclose and drop the case following a rejected plea offer. Finally, when the prosecutor is required to disclose prior to plea bargaining, then an informed prosecutor discloses and drops the case, whereas an uninformed prosecutor makes the same offer as in the no-disclosure regime, and never voluntarily drops the case. In all regimes, some innocent defendants accept the plea offer and others reject it (and similarly for guilty defendants). We find that both regimes requiring some disclosure, as compared with a no-disclosure regime, are (at least weakly) more likely to convict the guilty and less likely to convict the innocent (regardless of whether the prosecutor is informed or uninformed). However, the more-limited disclosure regime, as compared to the more-extensive regime, leads to a higher likelihood of conviction for innocent defendants facing an informed prosecutor, but a lower likelihood of conviction of innocent defendants facing an uninformed prosecutor and a lower likelihood of conviction of guilty defendants.

We draw together concepts from political science, law, and economics to model discretionary actions by agents in a weak hierarchical system, wherein agents at a higher level cannot directly discipline those at a lower level. In particular, we model the decision by an appeals court judge to communicate information to justices on a supreme court (via a written dissent) that a case is worthy of reconsideration, and discretionary decisions by justices on that supreme court to choose whether to formally review the case. In our model, judges and justices receive utility both from the outcome of the case in question and from the breadth of application of the outcome to jurisdictions besides the original source of the case (that is, the precedential value of the case). Action is costly for judges and for justices: for the appeals court judge, producing the dissenting opinion involves effort and may even preclude being able to so promote other cases; for the justices on the supreme court, there are too many such cases to consider, so the decision to review a case implies foregone opportunities to review other cases, cases through which they could also influence the evolution of the law. One very plausible equilibrium in our model predicts that an appeals court judge will find it valuable to communicate information to like-minded supreme court justices. However, a more unexpected type of equilibrium can exist that can best be summarized as an equilibrium with "strange bedfellows": a judge with a particular ideological orientation may choose to communicate and influence a justice (or justices) with different ideological views in order to persuade the justice(s) to vote to review the case in question. Furthermore, we show that by setting a high hurdle for discretionary review, the supreme court justices can capitalize on the desire of appeals court judges to influence law, thereby encouraging enhanced informational effort by the appeals court judges: judges act as screeners of the cases most likely to be of interest to justices.

This chapter provides a survey of much of the recent theoretical analysis of products liability. We start by describing an idealized model and providing the specific economic assumptions which underpin it. Later sections examine the effects of relaxing these assumptions, which has been the focus of much of the theoretical work over the last few decades. These modifications include: informational differences between producers and consumers that arise over the life of a product; incorporation of endogenously-determined costs, such as those that arise from investment in care; and evaluating contractual versus mandatory liability.

We model appeals courts as Bayesian decision-makers with private information about a supreme court's interpretation of the law; each court also observes the previous decisions of other appeals courts in similar cases. Such 'persuasive influence' can cause 'herding' behavior by later appeals courts as decisions progressively rely more on previous decisions and less on a court's private information. We provide an example drawn from a recent U.S. Supreme Court decision finding unconstitutional a basic provision of a law previously found constitutional by six Circuit Courts. Herding on the wrong decision may remain uncorrected, since review of harmonious decisions is rare.

This survey of the modeling of pretrial settlement bargaining organizes current main themes and recent developments. The basic concepts used are outlined as core models and then several variations on these core models are discussed. The focus is on articles that emphasize formal models of settlement negotiation and the presentation in the survey is organized in game-theoretic terms, this now being the principal tool employed by analyses in this area, but the discussion is aimed at the not-terribly-technical non-specialist. The survey also illustrates some of the basic notions and assumptions of information economics and of (cooperative and noncooperative) game theory.