Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • 2018
  • Working Paper

Buying the Verdict

By: Lauren H. Cohen and Umit G. Gurun
  • Format:Print
  • | Language:English
ShareBar

Abstract

We document evidence that firms systematically increase specialized, locally targeted advertising following the firm being taken to trial in that given location—precisely following initiation of the suit. In particular, we use legal actions brought against publicly traded firms over the 20-year sample period that progress to trial from 1995–2014. In terms of magnitude, the increase is sizable: targeted local advertising increases by 23% (t=4.39) following the suit. Moreover, firms concentrate these strategic increases in locations where the returns on their advertising dollars are largest: in smaller, more concentrated advertising markets where fewer competitor firms are advertising. They focus their advertisement spikes specifically toward jury trials and, in fact, specifically toward the most likely jury pool. Lastly, we document that these advertising spikes are associated with verdicts, increasing the probability of a favorable outcome.

Keywords

Lawsuits and Litigation; Advertising; Geographic Location; Outcome or Result

Citation

Cohen, Lauren H., and Umit G. Gurun. "Buying the Verdict." NBER Working Paper Series, No. 24542, April 2018.
  • Find it at Harvard
  • Read Now

About The Author

Lauren H. Cohen

Finance
→More Publications

More from the Authors

    • September 2023
    • Faculty Research

    Diamond Standard

    By: Lauren H. Cohen, Zhaoheng Gong and Grace Headinger
    • July 2023
    • Faculty Research

    Clair

    By: Lauren Cohen, Grace Headinger and Marcos Quirno
    • June 2023
    • Faculty Research

    Block: Creating an Ecosystem of Ecosystems

    By: Lauren Cohen, Richard Ryffel, Grace Headinger and Ruoshi Qi
More from the Authors
  • Diamond Standard By: Lauren H. Cohen, Zhaoheng Gong and Grace Headinger
  • Clair By: Lauren Cohen, Grace Headinger and Marcos Quirno
  • Block: Creating an Ecosystem of Ecosystems By: Lauren Cohen, Richard Ryffel, Grace Headinger and Ruoshi Qi
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College