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Recent US federal court rulings have provided new guidance on the use of economic models of bargaining in estimating reasonable royalty damages in patent cases. After reviewing relevant case law and providing an overview of the bargaining range approach, we describe one analytic method (the Rubinstein Bargaining Model) for developing a quantitative starting point with which to divide a bargaining range and explain how it can be tied, at least in part, to the facts and circumstances of the parties around the time of the Hypothetical Negotiation. We also describe how this approach can be used in conjunction with an analysis of other quantitative and qualitative factors related to the bargaining power of the parties, to help estimate reasonable royalty damages.

This chapter focuses on dispute resolution in French labor courts. We empirically investigate the forces that shape decision-making in the pretrial conciliation phase. For that purpose, we compiled a new database from legal documents. The results are twofold. First, conciliation is less likely when plaintiffs are assisted by a lawyer. Although this result might be interpreted in various ways, further analysis shows that the lawyers’ remuneration scheme is the most likely cause of this effect. Second, we find that the likelihood of settlement decreases as the amount at stake increases. These results contribute to the ongoing debate about French labor court reform.

This article responds to James Keyte, Paul Eckles, and Karen Lent’s article “From Hydrogen Peroxide to Comcast: The New Rigor in Antitrust Class Actions” (“The New Rigor”). It argues that The New Rigor offers valuable strategic advice to defense counsel – and insight into defense counsel’s strategic thinking – but is much less effective as an objective statement of the law or a normative argument for legal reform. In the parlance that I adopt, The New Rigor succeeds in the role of coach but much less so in the roles of commentator and critic.

This issue of Research in Law and Economics covers several areas of important research by a variety of international scholars. It contains technical papers on the appropriate way to estimate damages in patent disputes, as well as methods for evaluating relevant markets and vertically integrated firms when determining the competitive effects of mergers and other actions. There are also papers on the implication of different legal processes, regulations, and liability rules on consumer welfare, which range from the impact of delays in legal decisions in labor cases in France to issues of criminal liability related to the use of artificial intelligence.

We assess the impact of labor litigations on the ex post performance of firms. Using a sample of 44 French labor litigation cases, our empirical results confirm that the compensation amount requested by an employee has a significant and negative influence on the firm financial performance. Although that effect fades over time, it still remains significant four years after the employee has initiated the legal procedure. In addition, firms that have opted for a trial rather than a conciliation procedure improved their financial performance only in the first two years following the triggering of the litigation. That effect can be mainly explained by the long delays in the judgment of French labor courts. Our results contribute to the debate on the labor litigation impacts by assessing the financial opportunity of enacting pro-worker labor legislation dealing with employment redundancies.

The economic doctrine of market efficiency plays an essential role in securities fraud litigation. In lawsuits alleging violations of SEC Rule 10b-5, the plaintiffs typically must argue that the market for the relevant security is efficient, and therefore that the “fraud on the market” doctrine applies. However, the term “market efficiency” is often applied imprecisely. In this chapter, we discuss properties of efficient markets that have been proposed in academic research, legal scholarship, and case law. We explore what must be assumed about capital markets for each of these properties to hold. We then ask how, in practice, each property could be rebutted.

In recent years, the European Commission and various Member States, citing increasingly integrated markets and higher levels of cross-border activity within the European Union (“E.U.”), have called for the adoption of effective collective redress mechanisms for victims of violations of E.U. law. Although many Member States have already adopted collective action procedures under national law, these procedures have been ineffective in stimulating private enforcement of E.U. law and are often divergent in their approach to consolidating claims. E.U. lawmakers, after a lengthy period of investigation and study, have identified a set of guiding principles for the Member States to use in enacting new collective redress procedures within their national systems. The studies and papers solicited from the public during the Commission’s deliberations are explicit in their rejection of the U.S.-style opt-out class action mechanism. In their effort to avoid similarly calamitous results, European lawmakers propose that Member States adopt “opt-in” class actions, while rejecting many of the economic incentives that some believe lead to filing nonmeritorious claims, such as punitive damages and contingency fee arrangements. The European proposal is unlikely in the authors’ view to stimulate private enforcement of European law or increase victims’ access to compensation, given the flaws inherent in the opt-in class action device. Instead of looking to adopt a “U.S.-lite” approach to victim redress which is fundamentally incompatible with many judicial systems within the E.U., the authors propose that Europeans consider adopting a regulatory administered compensation system, modeled after such U.S. examples as the Securities and Exchange Commission Fair Funds and the September 11th Victim Compensation Fund. The authors also propose that regulatory administered funds can provide more effective and efficient restitution to victims than traditional litigation.

This experiment analyzes multi-offer versions of the signaling and screening litigation games, as well as a bilateral multi-offer litigation game. A plaintiff has either a low or a high claim on an uninformed defendant, and the two negotiate in an attempt to reach a pre-trial settlement. Trial is costly, and settlement generates surplus over which the two parties can bargain. In the signaling game, the defendant has the power to make the offer, while the plaintiff makes the offer in the screening game. Previous experiments on single-offer games find that disputes occur even when offers contain surplus not predicted under the theory, and fairness appears to be important in explaining deviations from theory. This research examines whether renegotiation in the form of successive sequential offers can yield efficiency gains via lower dispute rates. There are four main findings. One, under the one-sided multi-offer structure the excess dispute rate is 23 percentage-points lower in the screening game, and the high-offer dispute rate is 31 percentage-points lower in signaling game. The bilateral game yields an additional 15 percentage-point reduction in the high-offer dispute rate, but excess disputes persist. Two, in these games, proposers take advantage of the multi-offer opportunity and make around three to four offers per negotiation. Three, across games the surplus in a fair offer remains constant at about one-sixth of the surplus, but the empirical benchmark from which this is measured varies according to which player has the power to make the offer. In the one-sided games, the benchmark is the respective zero-surplus endpoint, but in the bilateral game the benchmark is the surplus midpoint. Fourth, dynamic behavior plays an important but complex role in observed outcomes. Multi-offer mechanisms may be alternatives to costly information transmission mechanisms like disclosure or discovery.