STRATEGIC DECISIONS ON LAWYERS' COMPENSATION IN CIVIL DISPUTES |
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| Authors: | KYUNG HWAN BAIK IN-GYU KIM |
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| Affiliation: | Baik:;Professor, Department of Economics, Sungkyunkwan University, Seoul 110-745, Korea. Phone 82-2-760-0432, Fax 82-2-744-5717, E-mail Kim:;Associate Professor, Department of Economics, Hallym University, Chunchon 200-702, Korea. Phone 82-33-248-1817, Fax 82-33-256-3424, E-mail |
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| Abstract: | We study a model of civil dispute with delegation in which a plaintiff's lawyer works on a contingent-fee basis but a defendant's lawyer on an hourly fee basis. We first derive the condition under which delegation to the lawyers brings both litigants more payoffs compared with the case of no delegation. We then show that under this profitable delegation condition, the contingent-fee fraction for the plaintiff's lawyer is about one-third. Next, allowing the plaintiff to choose between the two fees, we show that under the profitable delegation condition, the plaintiff chooses the contingent fee, given that the defendant adopts the hourly fee. ( JEL K41, K13, D74, D72) |
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