Abstract
We develop a model that integrates incomplete information in the analysis of multidefendant settlements, and we compare the proportionate rule ( P), the unconditional pro tanto rule ( T) and the conditional pro tanto rule ( C). We show that the well-known results derived under full information do not hold under incomplete information. Under full information, settlements occur under P and C but are discouraged under rule T. We show that this advantage of P and C disappears under incomplete information. Though the plaintiff never prefers to directly litigate both defendants under P, she might offer higher settlement amounts than under T, and this can lead to a higher frequency of litigation. The same holds for the comparison of T and C.
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