ICES Seminar in Experimental Economics and Game Theory
Judicial Interest Rate: Strategic Considerations
Friday, January 31, 2025 12:00 PM to 1:00 PM EST
Vernon Smith Hall (formerly Metropolitan Building), 5183
The ICES Seminar in Experimental Economics and Game Theory of the Spring 2025 semester will feature:
Antonin Scalia Law School, George Mason University
Judicial Interest Rate: Strategic Considerations
Abstract
There remains a lack of consensus on the appropriate method for determining the judicial interest rate. This article contributes to the debate by presenting a model that accounts for the complexities of party incentives and strategic delays in litigation. Additionally, we provide a rational explanation for the widespread use of a party-independent interest rate in many jurisdictions. When a single judicial interest rate is applied uniformly to all litigants, the optimal rate for minimizing delays can be understood as the free-market discount rate, provided that the discount rates of plaintiffs and defendants are independently and identically distributed according to a symmetric distribution.
For more information about the Seminar Series, please visit the Seminar Schedule homepage.
