Pre-trial bargaining and litigation: The search for fairness and efficiency

The formal literature on pre-trial bargaining offers considerable insight o n how different bargaining procedures asymmetric information affect efficie ncy. Less attention has been paid to fairness, despite the fact that fairne ss is an essential component of any system of justice. We address this stat e of affairs by analyzing the equilibria of a pre-trial bargaining model fo r both fairness and efficiency. This analysis invokes ascertaining whether fair and efficient equilibria are possible and 'whether they occur for comm on parameter values, and characterizing their behavioral and distributional properties. We conclude that fairness is a paramount concern to litigants and society and that fair and efficient equilibria are possible.