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This paper studies how litigation and settlement behavior is affected by agents motivated by spiteful preferences under the American and the English fee-shifting rule. We conduct an experiment and find that litigation expenditures and settlement requests are higher for more spiteful participants. The relative increase in litigation expenditures due to spite is more pronounced under the American fee-shifting rule. We further find that the expected payoff for more spiteful societies is lower than for less spiteful societies. This effect is particularly pronounced for low-merit cases under the English rule compared to a constant cost under the American rule.

Understanding the cognitive foundations of decision inertia plays a relevant role in modelling choice behaviour and designing decision support systems. The aim of this study was to investigate mixed findings regarding the influence of framing on the tendency to rely on previous decisions (decision inertia). Furthermore, we hypothesized that inter-individual differences in cognitive reflection, and in abilities of correctly processing Bayesian Information could be further relevant drivers of the inertia phenomenon. A dual-choice belief-updating task was conducted in the laboratory to investigate our hypotheses. Our results showed a significant association of faith in intuition, but no influence of framing or skills in Bayesian Updating. This indicates that existing explanations of decision inertia are not as robust as assumed.