Informational externalities in settlement bargaining: confidentiality and correlated culpability

We explore. informational externalities that arise when. multiple plaintiffs are harmed by. the behavior or product of a single defendant. An.-early plaintiff is likely to raise the awareness of a later plaintiff,and the later plaintiff will be able to learn something: about the defendant's culpability by observing the disposition of the early suit: the presence of an early plaintiff provides a benefit to a later plaintiff. The presence of the later plaintiff also confers a potential benefit on the early plaintiff: the early plaintiff has the opportunity to charge the defendant for controlling the flow of information (e.g., through confidential settlement).