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Why do states agree to establish legalized dispute resolution mechanisms? One of my arguments about the incentives of legalization is that states intend to reduce the risk/uncertainty involved in dispute settlement, and to increase the utility of dispute outcomes. This paper explores three aspects of risk/uncertainty problems that are related to the legalized dispute settlement (DS) mechanism of the WTO: risk reduction, risk creation, and risk management. Although existing studies have discussed risk/uncertainty problems in the context of international institutions, there has been no systemic analysis regarding the different aspects of risk/uncertainty problems and their relationships with international legalization. The first argument in this paper is that states can reduce risk/uncertainty and increase utility by arranging their relations through international law. Focusing on dispute settlement mechanisms of the WTO, I contend that clarified substantive rules, well-established procedural rules, independent legal bodies, and legal precedents ?the four components of the legalized DS mechanism ?can reduce the risk/uncertainties involved in dispute resolution. As compared with the non-legal bargaining mechanisms of dispute resolution, the legalized DS system tends to produce dispute outcomes with narrow variations and smaller fluctuations. Assuming the risk-averse utility function of rational actors, we can understand how the legalized DS system improves utility among disputing states by reducing uncertainties. [ABSTRACT FROM AUTHOR]