“The Psychological Case for Retaining Counsel: The Tipping Point Effect“
John Zhuang Liu, Christoph Engel, Yun-chien Chang
MPI Collective Goods Discussion Paper, No. 2025/1
Available on SSRN: January 2025 (revised in June 2025)
Abstract: Although retaining legal representation generally increases a plaintiff’s chances of success, our analysis of over 9 million civil lawsuits from the United States, mainland China, Taiwan, and Japan reveals that a substantial portion of plaintiffs proceed pro se—even in high-stakes cases. We examine both rational-choice and psychological explanations for this phenomenon. One underexplored motive emerges from survey data: a sizeable fraction of represented plaintiffs report hiring a lawyer primarily to preserve their “peace of mind.” We hypothesize that this motive is influenced by plaintiffs’ subjective assessment of their likelihood of winning. When a case appears one-sided rather than a close call, the role of anticipated regret diminishes, and the incentive to seek legal counsel weakens. We term this the “tipping point effect” and validate it through experimental evidence.
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