3. Suppose that in the punitive damages phase of the next major oil spill case, both sides expect a jury award of $2 billion on appeal, and that if they proceed with the case without settling, the additional fees will be $100 million for the defendant and $50 million for the plaintiffs. 3.1. On a number line similar to those in Figure 15.1, indicate the expected judgment (J), each side's threat point (Tp and Td), and the settlement range. 3.2. What is the bargaining rent? 3.3. What is the most either side should pay for the right to make a credible final offer? 3.4. If the defendant can make a credible (non-sincerity rule) final offer, what should it be? 3.5. If the plaintiff makes a sincerity rule offer, what should it be? These number lines represent possible settlement values, increasing from left to right. Plaintiff is better off going to trial than settling here. SETTLEMENT RANGE Both sides prefer settlement in this range to trial. Defendant is better off going to trial than settling here. Plaintiff's Threat Point Tp=Jp-Fp Expected Jury Award Ja=Jp Defendant's Threat Point Ta=Jd+Fa Plaintiff is better off going to trial than settling here. SETTLEMENT RANGE Defendant is better off going to trial than settling here. Tp=Jp-FpJd Jp Ta=Jd+Fd Plaintiff is better off going to trial than settling here. Defendant is better off going to trial than settling here. Jd Td TP Jp 3. Suppose that in the punitive damages phase of the next major oil spill case, both sides expect a jury award of $2 billion on appeal, and that if they proceed with the case without settling, the additional fees will be $100 million for the defendant and $50 million for the plaintiffs. 3.1. On a number line similar to those in Figure 15.1, indicate the expected judgment (J), each side's threat point (Tp and Td), and the settlement range. 3.2. What is the bargaining rent? 3.3. What is the most either side should pay for the right to make a credible final offer? 3.4. If the defendant can make a credible (non-sincerity rule) final offer, what should it be? 3.5. If the plaintiff makes a sincerity rule offer, what should it be? These number lines represent possible settlement values, increasing from left to right. Plaintiff is better off going to trial than settling here. SETTLEMENT RANGE Both sides prefer settlement in this range to trial. Defendant is better off going to trial than settling here. Plaintiff's Threat Point Tp=Jp-Fp Expected Jury Award Ja=Jp Defendant's Threat Point Ta=Jd+Fa Plaintiff is better off going to trial than settling here. SETTLEMENT RANGE Defendant is better off going to trial than settling here. Tp=Jp-FpJd Jp Ta=Jd+Fd Plaintiff is better off going to trial than settling here. Defendant is better off going to trial than settling here. Jd Td TP Jp