Maybe there Is No Bias in the Selection of Disputes for Litigation.

New York closing-statement data provide unique insight into settlement and selection. The distributions of settlements and adjudicated damages are remarkably similar, and the average settlement is very close to the average judgment. One interpretation is that selection effectsmay be small or nonexistent. Because existing litigationmodels all predict selection bias, we develop a simple, no-selection-bias model that is consistent with the data. Nevertheless, we show that the data can also be explained by generalized versions of screening, signaling, and Priest-- Klein models. [ABSTRACT FROM AUTHOR]