Private Law Theory

ABSTRACT
Federal civil litigation is a sequential game of incomplete information, played inside the most completely specified rule structure in American law. This Article builds a unified, operational decision framework for bilateral, primarily monetary federal civil litigation from that observation. Its central prescription is that strategy is not a plan but a policy. At every decision node created by the Federal Rules of Civil Procedure, the party re-estimates the case’s decision tree and updates it to reflect each ruling, document production, and deposition. The party then chooses the move that maximizes the client’s risk-adjusted, time-discounted continuation value, accounting for the predicted best response of a strategic opponent. The Article assembles the policy from its component disciplines: game theory (credibility, signaling, commitment), decision analysis (decision trees, Bayesian updating, sensitivity), real options (litigation stages as compound options; abandonment as insurance; variance as an asset), information economics (discovery priced by the value of information; proportionality read through the value of information), negotiation theory (reservation prices derived from continuation values rather than intuited; settlement timed to repricing events), behavioral psychology (frames, bias patterns, escalation, and their institutional corrections), and agency economics (fee design as the case’s first strategic decision). A single hypothetical – a supply-contract termination case – runs through every Part with computed decision tree values at each stage. A closing assessment of the impact of artificial intelligence argues that increased prediction symmetry should shrink the number of mutual-optimism trials. Artificial intelligence may also improve strategy through a calibration loop that learns from recorded predictions and outcomes. The Article ends by addressing certain objections to and limitations of the framework.

Hickok, Robert L, The Litigation Calculus: A Cross-Disciplinary Framework for Optimizing Strategy in Federal Civil Litigation (September 2, 2026).