Ignorance Is Bliss? Information Avoidance in Litigation

This paper examines defendants’ choice to learn about their fault level and its impact on litigation outcomes. Fault-level information is free of cost and has a positive instrumental value for defendants. However, identity concerns can induce defendants to avoid the information. Information avoidance favors settlement relative to trial. Conversely, reputation concerns tend to increase the likelihood of trial and do not cause information avoidance. Public awareness of the incident makes trial more likely, particularly when the public interprets a settlement as a signal of high fault.