Abstract
A method for deriving a risk-adjusted defendant rational settlement ceiling by running a Monte Carlo simulation across a population of hypothetical adverse-judgment outcomes and summing the sampled downstream organizational costs into a per-trial total cost. Each trial samples independently from distributions for reputational damage magnitude, operational disruption duration, and future litigation exposure multiplier. The simulation produces a probability distribution of total organizational cost to the defendant conditional on an adverse judgment, and a specified percentile of that distribution is selected as the risk-adjusted defendant ceiling. The ceiling is written to a structured output field and passed to a bilateral settlement threshold calculation.
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Recommended Citation
Burton, Aaron, "Monte Carlo Simulation of Downstream Organizational Cost for Deriving a Risk-Adjusted Defendant Ceiling in Bilateral Settlement Analysis", Technical Disclosure Commons, (April 21, 2026)
https://www.tdcommons.org/dpubs_series/9861