Business Commons^™

Uncertain Litigation Cost And Seller Behavior: Evidence From An Auditing Game, Ping Zhang, Bryan K. Church, Lucy Ackert

Faculty and Research Publications

Investigates difficulties that arise in estimating expected litigation costs in an auditing game in the United States. Effect of effort level on certain and uncertain costs of performing the engagement; Frequency of observed fee offers below the total expected cost of an engagement; Institutional arrangements and damage-sharing regimes; Theoretical and behavioral predictions.