TREBLE DAMAGES AND THE INCENTIVE TO SUE AND SETTLE

We apply Png's (1983) model to antitrust suits to determine the effect s of private suits on government suits and vice versa. In equilibrium, a defendant can probabilistically signal a strong case by nor offerin g to settle. A violator's incentive to signal a strong case to deter a treble damage suit forces the government to pursue more trials than i t would otherwise. Private plaintiffs are more likely to settle follow ing a government suit than otherwise, but they win a trial with the sa me probability regardless of whether there was a previous government s uit. Data on private suits support the latter two contentions.