Journal article
BARGAINING WITH OPTIMISM: IDENTIFICATION AND ESTIMATION OF A MODEL OF MEDICAL MALPRACTICE LITIGATION
International economic review (Philadelphia), v 60(3), pp 1029-1061
Aug 2019
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
We study a model of bargaining with optimism where players have heterogeneous beliefs about the final resolution. Beliefs and bargaining surplus are identified from the settlement probability and the distribution of accepted transfers. Using data from medical malpractice lawsuits in Florida, we estimate doctor and patient beliefs and the distribution of potential compensation. We find that patients are more optimistic and doctors more pessimistic when the severity of injury is higher, and the joint optimism diminishes as severity increases. We quantify the increase in settlement probability and the reduction in accepted settlement offers under counterfactual caps on the total compensation.
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Details
- Title
- BARGAINING WITH OPTIMISM: IDENTIFICATION AND ESTIMATION OF A MODEL OF MEDICAL MALPRACTICE LITIGATION
- Creators
- Antonio Merlo - Rice UniversityXun Tang - Rice University
- Publication Details
- International economic review (Philadelphia), v 60(3), pp 1029-1061
- Publisher
- Wiley
- Number of pages
- 33
- Grant note
- SES-1448257 / NSF; National Science Foundation (NSF)
- Resource Type
- Journal article
- Language
- English
- Web of Science ID
- WOS:000481785000001
- Scopus ID
- 2-s2.0-85062791352
- Other Identifier
- 991022026960204721
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- Web of Science research areas
- Economics