My economics PhD dissertation related to this. I proposed that if asymmetric information is a cause of parties failing to settle a lawsuit they could both improve their position using lotteries. Consider a simple example: I know that if we went to trial I would win at least $1 million, but trial would cost us both 200k. You don’t accept my settlement offer of $1 million because you think I’m lying about the strength of my case. So I propose the following, we flip a coin and if the coin comes up heads we settle for $1 million, whereas if it comes up tails we go to trial and if I fail to win at least $1 million I pay you a big penalty.
But then my dissertation concluded by saying that our failure to observe litigants using such lotteries is evidence against asymmetric information being a cause of parties failure to settle lawsuits.
But then my dissertation concluded by saying that our failure to observe litigants using such lotteries is evidence against asymmetric information being a cause of parties failure to settle lawsuits.
My inner Yudkowsky says “or maybe it just hasn’t occurred to them”.
Did you ever ask anyone in a position to use a lottery why they wouldn’t? “People aren’t trying my idea” is evidence that it’s a bad idea, but weak evidence, preferably replaced by “People say they aren’t trying my idea because X” or “People aren’t trying my idea but can’t articulate why not” when possible.
I asked judge Richard Posner (one of my dissertation advisers) if he would be willing to use lotteries as a judge and he said no, it would get him impeached.
Interesting idea. Brazilian law explicitly admits lottery as a form of settling, but I’m not sure if that example with a penalty for not winning a lawsuit would be admissible.
The legal system is based on the legal fiction that the judge can infallibly make a decision. If the judge makes a decision in a way which is guaranteed to be fallible in a certain percentage of cases, he violates this assumption, even if the guaranteed fallibility from randomness is less than his normal fallibility when not using randomness.
My economics PhD dissertation related to this. I proposed that if asymmetric information is a cause of parties failing to settle a lawsuit they could both improve their position using lotteries. Consider a simple example: I know that if we went to trial I would win at least $1 million, but trial would cost us both 200k. You don’t accept my settlement offer of $1 million because you think I’m lying about the strength of my case. So I propose the following, we flip a coin and if the coin comes up heads we settle for $1 million, whereas if it comes up tails we go to trial and if I fail to win at least $1 million I pay you a big penalty.
But then my dissertation concluded by saying that our failure to observe litigants using such lotteries is evidence against asymmetric information being a cause of parties failure to settle lawsuits.
My inner Yudkowsky says “or maybe it just hasn’t occurred to them”.
But I published my result in a prestigious journal in 1997 and told lots of high status people about it, and still no lotteries.
Did you ever ask anyone in a position to use a lottery why they wouldn’t? “People aren’t trying my idea” is evidence that it’s a bad idea, but weak evidence, preferably replaced by “People say they aren’t trying my idea because X” or “People aren’t trying my idea but can’t articulate why not” when possible.
I asked judge Richard Posner (one of my dissertation advisers) if he would be willing to use lotteries as a judge and he said no, it would get him impeached.
Interesting idea. Brazilian law explicitly admits lottery as a form of settling, but I’m not sure if that example with a penalty for not winning a lawsuit would be admissible.
The legal system is based on the legal fiction that the judge can infallibly make a decision. If the judge makes a decision in a way which is guaranteed to be fallible in a certain percentage of cases, he violates this assumption, even if the guaranteed fallibility from randomness is less than his normal fallibility when not using randomness.