Every lawsuit has a potential Zone of Possible Settlement (ZOPS) — the gap between what the Plaintiff is willing to accept and what the Defendant is willing to pay.
If both sides see the odds the same way, the ZOPS is straightforward: it simply reflects the cost of going to trial. But people rarely see things the same way. Myside bias — the tendency to overestimate your own chances — shrinks the zone, sometimes wiping it out completely.
That’s why cases that should settle often don’t: each side is too optimistic to meet in the middle.
Use the models below to see how changing expectations, costs, and beliefs about winning can expand or destroy the settlement zone.
Basic model with asymmetric perceptions of odds at trial. Here, ZOPS always equals cumulative costs.
A model allowing for asymmetry of beliefs about odds of plaintiff prevailing at trial.