NCJ Number
143591
Journal
Journal of Legal Studies Volume: 22 Issue: 1 Dated: (January 1993) Pages: 135-159
Date Published
1993
Length
25 pages
Annotation
An experimental design was used to test the Priest- Klein model of dispute settlement, according to which parties to a lawsuit possess imperfect information and thus err in their estimates of the case's value.
Abstract
The analysis focused on two psychological factors that challenge the central assumptions of the Priest-Klein model. These factors are egocentricity, which tends to bias estimates in a self-serving fashion, and perceptions of fairness instead of an exclusive focus on money. The experiment involved a simulation of pretrial negotiations in a dispute arising from a motor vehicle accident. The participants were undergraduates and law students at two universities. Findings demonstrated the importance of both of the psychological factors. Contrary to the explicit assumptions in the Priest-Klein model, predictions of the value of the claim and judgments of what settlement would be fair were both biased in a self-serving manner. Moreover, the magnitude of the bias was a strong predictor of nonsettlement. Thus, the disputants seemed more concerned with achieving what they considered to be a fair settlement of the case than maximizing their own expected value. Findings reveal the shakiness of the assumption that exchanges of information are not in themselves necessarily conducive to settlement and that mechanisms for alternative dispute resolution should be directed partly at making parties less biased. Tables, footnotes, and appended summary of case used in the study