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dc.contributor.authorHylton, Keith N.
dc.contributor.authorDrahozal, Christopher R.
dc.date.accessioned2013-05-22T14:01:33Z
dc.date.available2013-05-22T14:01:33Z
dc.date.issued2003-06
dc.identifier.citationChristopher R. Drahozal & Keith N. Hylton, The Economics of Litigation and Arbitration: An Application to Franchise Contracts, 32 J. LEGAL STUD. 549-84 (2003).
dc.identifier.urihttp://hdl.handle.net/1808/11193
dc.descriptionFull-text available at SSRN. See link in this record.
dc.description.abstractIf we define the deterrence benefits from contract enforcement as avoided harms net of avoidance costs, we should expect contracting parties to choose the dispute resolution forum that provides the greatest difference between deterrence benefits and dispute resolution costs. We apply this framework to franchise contracts and conduct an empirical analysis of the determinants of arbitration agreements among franchising parties. Although it is obvious that contracting parties have an incentive to choose arbitration in order to reduce dispute resolution costs, there have been no studies of the importance of deterrence concerns. We examine the deterrence hypothesis and find a great deal of support for it. Our results suggest that deterrence factors outweigh litigation costs in the design of dispute resolution agreements. We find that the probability of arbitration is significantly higher when the parties rely on implicit contract terms for governance and compliance with those terms is difficult to ensure.
dc.language.isoen_US
dc.publisherUniversity of Chicago Press
dc.relation.hasversionhttp://ssrn.com/abstract=490401
dc.subjectContract law
dc.subjectTort law
dc.subjectLaw and economics
dc.subjectLitigation
dc.subjectGovernance
dc.subjectFranchising
dc.subjectArbitration
dc.titleThe Economics of Litigation and Arbitration: An Application to Franchise Contracts
dc.typeArticle
kusw.kuauthorDrahozal, Christopher R.
kusw.kudepartmentSchool of Law
kusw.oastatuswaivelicense
kusw.oapolicyThe license granted by the OA policy is waived for this item.
dc.rights.accessrightsopenAccess


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