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Accuracy Versus Falsification Costs: The Optimal Amount of Evidence under Different Procedures

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  • Claude Fluet

Abstract

An arbiter can decide a case on the basis of his priors or he can ask for further evidence from the two parties to the conflict. The parties may misrepresent evidence in their favor at a cost. The arbiter is concerned about accuracy and low procedural costs. When both parties testify, each of them distorts the evidence less than when they testify alone. When the fixed cost of testifying is low, the arbiter hears both, for intermediate values one, and for high values no party at all. The arbiter's ability to remain uninformed as well as sequential testifying makes it more likely that the arbiter requires evidence. (JEL D82, K41, K42) The Author 2007. Published by Oxford University Press on behalf of Yale University. All rights reserved. For permissions, please email: journals.permissions@oxfordjournals.org, Oxford University Press.

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Bibliographic Info

Article provided by Oxford University Press in its journal The Journal of Law, Economics, & Organization.

Volume (Year): 25 (2009)
Issue (Month): 1 (May)
Pages: 134-156

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Handle: RePEc:oup:jleorg:v:25:y:2009:i:1:p:134-156

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Cited by:
  1. Winand Emons & Claude Fluet, 2008. "Non-comparative versus Comparative Advertising as a Quality Signal," Diskussionsschriften dp0805, Universitaet Bern, Departement Volkswirtschaft.
  2. Winand Emons & Claude Fluet, 2011. "Non-Comparative versus Comparative Advertising of Quality," Cahiers de recherche 1139, CIRPEE.
  3. Roland Hodler & Simon Loertscher & Dominic Rohner, 2010. "Biased experts, costly lies, and binary decisions," IEW - Working Papers 496, Institute for Empirical Research in Economics - University of Zurich.
  4. Winand Emons & Claude Fluet, 2011. "Adversarial versus Inquisitorial Testimony," Cahiers de recherche 1122, CIRPEE.
  5. Friehe, Tim, 2009. "Screening accident victims," International Review of Law and Economics, Elsevier, vol. 29(3), pages 272-280, September.

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