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The lucrative economics of expert witnesses

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Re: The lucrative economics of expert witnesses

#101

Post by lalaithion »

SkyBelow wrote: post #79
LeifCarrotson wrote: post #25

The economics of most employment is a tradeoff between how much value you add to the equation and how much you can extract (you can also participate with resource depletion and leveraging of starting capital, but for most employees value insertion vs value extraction is the main issue). Are you a nontechnical sales drone who can't figure out when your product fits the requirements, but you are a mandatory middleman b…

Is there even a consistent notion to the idea of a person adding a set amount of value? If we take a 3 person company and use a simple system to measure value added, how do you break down the value added by A who is +100k, B who is x2, and C who is x2? If you remove either B or C, half he value of the company is gone, so they each add half. But if you remove A then the entire value of the company disappears. So they…

Luckily, this is a solved problem in economics. You use the Shapley Value (https://en.wikipedia.org/wiki/Shapley_value) of each contributor.

For small groups, you can use http://shapleyvalue.com/index.php, and for the example you gave above, A should get 233k of the total 400k value, and the other two should get 83k of the total 400k value.

Re: The lucrative economics of expert witnesses

#102

Post by pclmulqdq »

PaulDavisThe1st wrote: post #97
anigbrowl wrote: post #83

Earlier quoted context omitted.

The jurors are free to ignore the lawyers and rely on the expert's testimony. But they're also free to conclude that said expert just provides the desired opinions on demand. I would guess the lack of time invested in performing the analysis counted for as much with the jury as the high fee; patent litigation tends to be long and tedious, and a jury is likely to reflect on the fact that they're being asked to spend m…

More generally, lay juries making decisions about patent cases that hinge on arcana like the ways a session could be embedded in a URL and the stateless nature of HTTP is just ... totally fucking absurd. Yes, it's the lawyers' jobs to explain it to the jury so that they can understand it, but sometimes you just have throw you hands up in the air and say "this is absurd, we can't possibly expect you to get this".

Bench trials are honestly equally absurd, particularly when one party is a big tech company. Judges in the 9th circuit (CA) are known to be extremely favorable to big tech, and the conflicts of interest are obvious - big tech controls the judge's reputation and can offer a lot of future opportunities for people who agree with them on the law. It's like what happens when you sue the New York Times in New York.

Juries with competing experts are probably the fairest option, honestly. The people in the jury often don't have a horse in the race. Their job is to go through the elements of the patent and match them up to the supposed infringement and see if everything is there. It's not that hard.

Certain technology patents have also been subject to appeals based on what is patentable and what isn't (see Alice vs CLS Bank which invalidated a ton of patents). Those questions are more about technical issues than following the elements.

Re: The lucrative economics of expert witnesses

#103

Post by [deleted] »

LeifCarrotson wrote: post #86
SkyBelow wrote: post #79

Earlier quoted context omitted.

Is there even a consistent notion to the idea of a person adding a set amount of value? If we take a 3 person company and use a simple system to measure value added, how do you break down the value added by A who is +100k, B who is x2, and C who is x2? If you remove either B or C, half he value of the company is gone, so they each add half. But if you remove A then the entire value of the company disappears. So they…

What do you mean by "B who is x2, and C who is x2?" I think the fundamental insight provided by the model is that each of A, B, and C are human, and have comparable intelligence, skill, and efficiency. But if B draws half the salary of A for 12 hours of sales calls in which he gets a lot of details wrong, while A spends 600 hours customizing the product for the user, that's ridiculous. It's not believeable for one ex…

[deleted]

Re: The lucrative economics of expert witnesses

#104

Post by AlbertCory »

LeifCarrotson wrote: post #25

The economics of most employment is a tradeoff between how much value you add to the equation and how much you can extract (you can also participate with resource depletion and leveraging of starting capital, but for most employees value insertion vs value extraction is the main issue). Are you a nontechnical sales drone who can't figure out when your product fits the requirements, but you are a mandatory middleman b…

If I'm going to look for examples for "the price of hired labor reflects these basic economic principles," expert witness fees are about the last place I'd look.

You're dealing with a very small population of eligible workers, and it's very difficult to join that group (you have to qualify as an "expert" in the subjective opinion of some jurors who are yet to be chosen).

Furthermore, the "value" of an expert witness's report is nearly impossible to quantify (how do you know it's why their side of the case won or lost?).

Finally, the people who pay for those workers are largely immune to price pressures: a law firm hires them and bills it to a wealthy client, who has no say in what they're paid.

Re: The lucrative economics of expert witnesses

#105

Post by antognini »

A friend of mine was an astronomer at Carnegie Observatories and he was telling me about how every now and again lawyers would ask for an astronomer there to be an expert witness in a trial. It was usually traffic accidents where one side wanted to show that the Sun was in a particular place at the time of the accident.

Of course, they could just look it up in any astronomical almanac (which is what the astronomer would do anyway), but getting an official astronomer on the stand to say "the Sun was not in his eyes" gave the jury a better show.

Re: The lucrative economics of expert witnesses

#106

Post by dylan604 »

ksdnjweusdnkl21 wrote: post #84
dylan604 wrote: post #24

Earlier quoted context omitted.

And? Your comment could almost be intriguing, but as you left it is almost meaningless. Here's personA acting as a witness, but the counter witness is personA's ex-boss just isn't too usefull. Have you 100% always agreed lock-step with whatever your boss has said? Is it impossible that the student becomes the master becoming better than the teacher? I'm just not really sure the point to which you were trying to make.

Maybe his point was that those witnesses would most likely agree on the topic at hand, but are on opposite sides of the argument.

And maybe it wasn't the point. But we'll never know because it was an incomplete thought. Hence the question being asked rather than just making something up

Re: The lucrative economics of expert witnesses

#108

Post by chaps »

devchix wrote: post #59
Enginerrrd wrote: post #44

Earlier quoted context omitted.

That's deeply naive. Incentives matter to humans. A lot in fact. Ask any lawyer that has hired expert witnesses. Over there entire career, ask them how many times the expert witness they hired did not come to conclusions supporting the side they were hired by. Even amongst lawyers that have hired 100's of experts, that number is usually zero. In theory, an expert should be using their expertise to assess the situatio…

Well I went to the same law school my cousin Vinny did, and I'm pretty sure you can disqualify the expert witness by asking questions like, what's the correct ignition timing be on a 1955 Bel Air Chevrolet with a 327 cubic-inch engine and a four-barrel carburetor? You can also have your own expert witness called to directly rebut their expert witness. If expert witnesses are never paid, no one will be an expert witne…

FWIW, I've been able to find an expert witness in my own litigation without paying a penny. Their testimony was excellent and honest. It was for an important (but niche) cause.

Also, many of the expert witnesses I vetted for a different lawsuit of mine were deeply overpriced, and weren't as knowledgeable as they said they were in the specific field I needed them to be (rediscovery, but extremely low level down to file specifications). Being technical and being able to call the other side's bullshit in court docs helped get around hiring one.

Re: The lucrative economics of expert witnesses

#109

Post by robocat »

lalaithion wrote: post #101
SkyBelow wrote: post #79

Earlier quoted context omitted.

Is there even a consistent notion to the idea of a person adding a set amount of value? If we take a 3 person company and use a simple system to measure value added, how do you break down the value added by A who is +100k, B who is x2, and C who is x2? If you remove either B or C, half he value of the company is gone, so they each add half. But if you remove A then the entire value of the company disappears. So they…

Luckily, this is a solved problem in economics. You use the Shapley Value ( https://en.wikipedia.org/wiki/Shapley_value ) of each contributor. For small groups, you can use http://shapleyvalue.com/index.php , and for the example you gave above, A should get 233k of the total 400k value, and the other two should get 83k of the total 400k value.

This problem occurs exactly when founding a business - how do you apportion equity ownership when one central founder is essential, and co-founders have a multiplier effect on profitability? How do you deal with the uncertainty in the multiplier, or the future measurement of the multiplier?

The Shapley Value seems like a perfectly spherical moose optimum. A can create an annual profit of 100k, and A+B+C can create a profit 400k. A will only bring on B or C if A can get more than 100k.

Let us assume B is currently working in Chile and they would accept 40k (better than their current pay), and C works in the US and 120k is their minimum acceptable payoff to change jobs. The potential groups are:

* option X: A profit 100k

* option Y: A+B profit 200k, and A+B could argue over how to split the 60k excess.

* option Z: A+B+C profit 400k, and A+B+C could argue over how to split a 140k excess.

Or A just starts the business and keeps 100% ownership, and A offers B 40k, and offers C 120k, and A pays themselves 240k and A also gets 100% of the market value of the business. B + C complain that’s unfair, but accept the jobs anyway.

Re: The lucrative economics of expert witnesses

#110

Post by lalaithion »

robocat wrote: post #109
lalaithion wrote: post #101

Earlier quoted context omitted.

Luckily, this is a solved problem in economics. You use the Shapley Value ( https://en.wikipedia.org/wiki/Shapley_value ) of each contributor. For small groups, you can use http://shapleyvalue.com/index.php , and for the example you gave above, A should get 233k of the total 400k value, and the other two should get 83k of the total 400k value.

This problem occurs exactly when founding a business - how do you apportion equity ownership when one central founder is essential, and co-founders have a multiplier effect on profitability? How do you deal with the uncertainty in the multiplier, or the future measurement of the multiplier? The Shapley Value seems like a perfectly spherical moose optimum. A can create an annual profit of 100k, and A+B+C can create a…

Right, this is why Shapley value is not the market value.

One could also imagine a world in which A is a software engineer who can make 100k at his day job, but B and C are experts in a little-known, poorly paying, field with the potential to revolutionize the world, and they’re looking for a software engineer to help them build a product. B and C can then offer A 110k, while each pocketing 145k.

Also note that the scenario above is not the scenario I worked out in my original post. If the software engineer makes 120k and the Chilean makes 20k on their own, then the Shapley value is actually

A = 166k

B = 86k

C = 146k

Shapley value != market value, but in many cases, it’s usually fairer than market value.

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