Cover: A Suggestion for Improving the Research Methodology of Rule-Based Modeling

A Suggestion for Improving the Research Methodology of Rule-Based Modeling

Published 1981

by Stephen W. Salant

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This paper explains why the methodology proposed by Waterman and Peterson (R-2717-ICJ) to study the process of legal settlements is vulnerable to the same criticism that Lucas has made so forcefully about econometric policy evaluations. It goes on to propose an alternative methodology which does not suffer from this weakness. The alternative involves viewing the settlement process as a game. The paper assumes familiarity with neither Lucas' critique nor the theory of games. A companion paper (P-6809) illustrates how to implement the methodology proposed here. It considers strategic interactions in the settlement of personal injury claims in which information about the severity of the injury is known (and known to be known) only to the injured party.

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