Yk. Che et D. Earnhart, OPTIMAL USE OF INFORMATION IN LITIGATION - SHOULD REGULATORY INFORMATION BE WITHHELD TO DETER FRIVOLOUS SUITS, The Rand journal of economics, 28(1), 1997, pp. 120-134
We examine the value of incorporating regulatory information into the
court liability decision and making it publicly available, when the ca
usality of harm is uncertain. Public access to regulatory information,
coupled with its use in a liability decision, not only improves the a
ccuracy of court adjudication but also guides victims to more informed
decisions about their lawsuits, when victims' private information on
causality of harm is verifiable to the court. When victims' informatio
n is unverifiable, however, withholding regulatory information until a
fter victims bring lawsuits induces them to utilize their private info
rmation better in their litigation decisions, and thus may be socially
desirable.