Litigation funders provide nonrecourse loans to plaintiffs who repay these loans if and only if they prevail. The loan’s interest rate reflects the funder’s information about the strength of the plaintiff’s case. We analyze a monopoly and a two-firm Bertrand model. Bertrand competition does not eliminate funders’ profits or inefficiency. Making the funding contract admissible evidence enables the funder to increase its chance of recovery by reducing the interest rate to signal to the court that the plaintiff has a strong case. Under monopoly, there is only a separating equilibrium without admissible funding. With admissible funding, there is either a pooling equilibrium or a separating equilibrium, but either increases the joint welfare of plaintiffs and funders. Under Bertrand competition, admissible funding increases joint welfare if courts can make adverse inferences from the absence of funding contracts. Plaintiffs are generally better off under admissibility if they discount the future sufficiently.

中文翻译：

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具有信息性信号的第三方诉讼资金：平衡性特征和可接纳性的影响

诉讼出资人向原告提供无追索权贷款的原告，当且仅当它们占主导地位时才偿还这些贷款。贷款的利率反映了出资人关于原告案情的信息。我们分析了垄断和两个公司的Bertrand模型。Bertrand竞争不会消除资助者的利润或效率低下。将资助合同作为可以接受的证据，可以使资助者通过降低利率向法院表明原告有充分的理由，从而增加其追偿的机会。在垄断之下，只有分离的均衡而没有可接受的资金。有了可接受的资金，要么有统筹均衡，要么是分离均衡，但要么增加了原告和出资者的共同福利。在Bertrand的竞争下，如果法院可以通过缺乏资助合同做出不利的推断，则可接受的资助可以增加共同福利。如果原告对未来有足够的重视，他们通常会在可受理的条件下更好。