LAW & ECONOMICS WORKSHOP SERIES
presents
Yun-chien Chang
Institutum Iurisprudentiae, Academia Sinica (Taiwan)
Do Parties Negotiate After Trespass Litigation?
An Empirical Study of Cosaean Bargaining
Tuesday, November 15, 2016
4:10 – 5.45
Solarium (room FA2) - Falconer Hall
84 Queen's Park
The Coase theorem critically depends on the assumption that parties will bargain after litigation and, barring high transaction costs, mis-allocated entitlements by courts will be re-allocated through voluntary exchanges. Behavioral law and economics theory challenges this view. Ward Farnsworth’s 1999 informal small-scale survey lent credence to the claim that parties do not bargain after litigation because of the endowment effect and the animosity created by litigation. Farnsworth’s sample is small and statistically biased. Yet no other article has tested whether parties in the real world would systematically fail to bargain because of behavioral reasons. This paper examines over 300 Taiwanese cases in which the landowner sued the illicit possessor for building a structure on the plaintiff’s property. We studied how often the landowner registered a sale of property to the possessor after the litigation. We found that it happened in about 5% of cases. We apply a logistic regression analysis to the results and are able to identify some factors that make successful bargaining more likely: the values of land and buildings, the number of plaintiffs and defendants, and defendant attorney representation. This suggests that post-litigation bargaining dynamics are at least partly rational — allocative efficiency and transaction costs (conventionally defined) still matter.
Professor Yun-chien Chang is an Associate Research Professor at Institutum Iurisprudentiae, Academia Sinica, Taiwan, and serves as the Co-Director of its Empirical Legal Studies Center. He was a visiting professor at the Hebrew University of Jerusalem, Haifa University, and Rotterdam Institute of Law and Economics. His current academic interests focus on economic, empirical, and comparative analysis of property law and land use law, as well as empirical studies of the judicial system. Prof. Chang’s English articles have appeared in, among others, JLS, JLA, JLEO, JELS, SCER as well as law reviews published by Chicago, Notre Dame and Iowa. He has published a prize-winning monograph, Private Property and Takings Compensation(Edward Elgar) and (co-)edited Empirical Legal Analysis (Routledge), Law and Economics of Possession (Cambridge University Press), Private Law in China and Taiwan (Cambridge University Press). Property and Trust Law in Taiwan (Wolter Kluwers), a co-authored book, will be published in 2016. Prof. Chang received his J.S.D. and LL.M. degree from New York University School of Law. Before going to NYU, Prof. Chang had earned LL.B. and LL.M. degrees at National Taiwan University and passed the Taiwan bar.
For more workshop information, please contact Nadia Gulezko at n.gulezko@utoronto.ca.
