Don't Apply Risk Analysis To Discounted Settlement Value

Law360, New York (February 3, 2014, 9:49 AM EST) -- In preparing for a course about alternative dispute resolution that I recently taught, I did some research into the relationship between probability theory and the way “decision analysis” (sometimes called “risk analysis”) is sometimes used to try to determine the “discounted settlement value” of civil cases. What I learned was unnerving. I share the products of that research here in the hope that neither defense counsel nor plaintiffs’ counsel will be lead by "decision analysis" into misevaluating their cases.

Why is “decision analysis” not a reliable...
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