Litigation Economics is contingency-fee structures shape which cases get filed. It sits in the Incentives dimension (INC) of the Human Behavior Taxonomy™ as element HBT-INC-0171, within the Law Perverse Pattern family. The core principle: contingency-fee structures shape which cases get filed. In incentive terms, it matters because it changes the payoff people perceive before they choose — which means it can be designed for, or exploited.
Scientific Definition
Contingency-fee structures shape which cases get filed.
Plain-English Definition
Contingency-fee structures shape which cases get filed.
Feynman Explanation
Justice is whatever's economically rational.
Core Principle
Contingency-fee structures shape which cases get filed.
Mechanisms
Pending editorial review.
Contingency-fee structures shape which cases get filed.
Pending editorial review.
Pending editorial review.
Risk profiles shaped by who can afford to sue.
Pending editorial review.
Pending editorial review.
Inputs (Triggers)
Pending editorial review.
Outputs (Behaviors)
Pending editorial review.
Behavioral Signature
Justice is whatever's economically rational.
Examples
- Asymmetric small-claims litigation pressure.
- Risk profiles shaped by who can afford to sue.
Pending editorial review.
Original analysis from The Incentives Lab — how this element behaves inside real payoff structures.
Why this element matters to incentive design
This element is common enough to feel like human nature and specific enough to be engineered around. The mechanism underneath it is straightforward: contingency-fee structures shape which cases get filed. You can recognize it in the field by its signature: justice is whatever's economically rational. Every element in the Incentives dimension changes the perceived payoff of an action before the action happens, which is exactly where incentive design has leverage.
How it gets exploited
Left undesigned, risk profiles shaped by who can afford to sue. It is amplified whenever risk profiles shaped by who can afford to sue. Inside organizations that shows up as risk profiles shaped by who can afford to sue. The pattern is the same one Goodhart's Law describes: the measurable proxy attracts the effort, and the purpose behind it quietly loses funding.
How the Lab designs around it
The redesign move is to loser-pays. Pre-trial cost transparency. Treat it as infrastructure. Once you can see it in your own system, most of the argument about culture resolves itself.
Famous Experiments
Pending editorial review.
Design Principles
- Loser-pays. Pre-trial cost transparency.
Measurement Approaches
Pending editorial review.
Evidence
Pending editorial review.
Pending editorial review.
The Perverse Incentive Lens™
How this behavior is exploited — and how to redesign around it.
- Loser-pays. Pre-trial cost transparency.
Pending editorial review.
Pending editorial review.
Interactive Mini Network
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Knowledge Graph Neighbors
Auto-linked to the rest of the Human Behavior Taxonomy by family, domain, dimension, and shared keywords.
Confidential settlements buy silence and prevent precedent that would deter future harm.
Charging by time rewards inefficiency and prolongs disputes.
Police agencies that keep seized assets gain a direct fiscal interest in seizures.
Fixed compliance costs scale punitively for small firms and entrench large ones.
Compliance programs designed to satisfy regulators, not prevent harm.
Stacking fines on low-income defendants creates debt traps and recidivism.
Decisions made to be defensible, not to be right.
Mandatory federal sourcing from prison factories crowds out small business and entrenches inefficient production.
Fixed sentencing rules remove judicial discretion and inflate incarceration without reducing crime.
Trial penalties pressure even innocent defendants to plead guilty to avoid risk.
Per-inmate funding makes incarceration a budgetary asset for jurisdictions and contractors.
Caseloads far above professional norms guarantee weak defense for the poor.
Where Litigation Economics is cited in the corpus
Essays, field guides, and diagnostics from The Incentives Lab that apply this element.
- Field guideIncentives: definition, types, examples
The parent field guide for this element.
- ReferenceThe laws of incentives
Goodhart, Campbell, and the Cobra Effect.
- CourseIncentives 101
The free ten-part primer on reading a payoff structure.
- ReferenceThe incentive glossary
Definitions for every mental model, bias, and fallacy in the corpus.
- ReferenceThe Periodic Table of Human Behavior
The full 1,267-element map this page belongs to.
Questions about Litigation Economics
- What is Litigation Economics?
- Litigation Economics is contingency-fee structures shape which cases get filed. It sits in the Incentives dimension (INC) of the Human Behavior Taxonomy™ as element HBT-INC-0171, within the Law Perverse Pattern family. The core principle: contingency-fee structures shape which cases get filed. In incentive terms, it matters because it changes the payoff people perceive before they choose — which means it can be designed for, or exploited.
- What is an example of Litigation Economics?
- Risk profiles shaped by who can afford to sue. The Incentives Lab catalogs everyday, organizational, and historical instances of this element on its Human Behavior Taxonomy™ page (HBT-INC-0171).
- How is Litigation Economics exploited?
- Risk profiles shaped by who can afford to sue.
- How do you design around Litigation Economics?
- Loser-pays. Pre-trial cost transparency.
- Which behavioral dimension does Litigation Economics belong to?
- Litigation Economics is classified in the Incentives dimension (INC) of the Human Behavior Taxonomy™, family "Law Perverse Pattern", class "Perverse Incentive". Its permanent identifier is HBT-INC-0171 and its evidence grade is C.