Precedents and Timing: A Strategic Analysis of Multi-plaintiff Litigation

We study the decision of when to sue in a game in which multiple plaintiffs have similar cases against a single defendant. Two legal regimes are considered. In one, prior results are binding in all future cases. In contrast, under the prevalent asymmetric regime, adverse results are binding against the defendant in future actions, but a judgement adverse to one plaintiff will not be binding against another plaintiff. Some legal scholars have argued that such a system is unfair to defendants and benefits plaintiffs. Our analysis reveals, however, that an asymmetric regime may actually hurt plaintiffs in equilibrium by inducing them to wait. JEL Classification: C72, K41