On being asset-constrained in litigation contests

In: Public choice, Band 147, Heft 3-4, S. 277-284

Abstract

This paper establishes that being asset-constrained may be advantageous for defendants in litigation contests. An active asset constraint of defendants (i) may increase (decrease) defendant (plaintiff) contest effort, (ii) may lower the sum of plaintiff and defendant contest effort, (iii) lowers expected defendant payment, and (iv) makes a symmetric contest asymmetric. Adapted from the source document.