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Evidence Disclosure and Verifiability

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Author Info
Jesse Bull (Florida International University)
Joel Watson (UC San Diego)

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Abstract

We explore the conceptual basis of "verifiability" by explicitly modeling the process of evidence production in contractual relationships of complete information. Evidence is represented by documents, on the submission of which an enforcement authority conditions transfers between the contracting parties. Our analysis includes the opportunity for parties to engage in side-dealing and renegotiation during the enforcement phase. The central contracting problem involves determining whether a contract can be designed to induce given transfers as a function of the outcome of productive interaction. We study how this objective is constrained by the need to motivate parties to disclose documents during the enforcement phase. We prove the Full Disclosure Principle, justifying constraining attention to equilibria in which all documents are disclosed in every contingency. We also obtain insights on the implications of "positive" and "negative" evidence and we briefly discuss the relevance of our results to the design of legal institutions.

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File URL: http://repositories.cdlib.org/cgi/viewcontent.cgi?article=1158&context=ucsdecon
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Publisher Info
Paper provided by Department of Economics, UC San Diego in its series University of California at San Diego, Economics Working Paper Series with number 2000-16.

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Date of creation: 01 Jun 2000
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Handle: RePEc:cdl:ucsdec:2000-16

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Related research
Keywords: verifiability; positive evidence; negative evidence;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Maskin, Eric, 1999. "Nash Equilibrium and Welfare Optimality," Review of Economic Studies, Blackwell Publishing, vol. 66(1), pages 23-38, January. [Downloadable!] (restricted)
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  2. Eric Maskin & John Moore, 1999. "Implementation and Renegotiation," Harvard Institute of Economic Research Working Papers 1863, Harvard - Institute of Economic Research.
    Other versions:
  3. Shin Hyun Song, 1994. "The Burden of Proof in a Game of Persuasion," Journal of Economic Theory, Elsevier, vol. 64(1), pages 253-264, October. [Downloadable!] (restricted)
  4. Jim Brennan & Joel Watson, 2002. "The Renegotiation-Proofness Principle and Costly Renegotiation," University of California at San Diego, Economics Working Paper Series 2002-10, Department of Economics, UC San Diego. [Downloadable!]
  5. Hyun Song Shin, 1998. "Adversarial and Inquisitorial Procedures in Arbitration," RAND Journal of Economics, The RAND Corporation, vol. 29(2), pages 378-405, Summer. [Downloadable!] (restricted)
  6. Lipman Barton L. & Seppi Duane J., 1995. "Robust Inference in Communication Games with Partial Provability," Journal of Economic Theory, Elsevier, vol. 66(2), pages 370-405, August. [Downloadable!] (restricted)
  7. Andrew F. Daughety & Jennifer F. Reinganum, 2000. "Appealing Judgments," RAND Journal of Economics, The RAND Corporation, vol. 31(3), pages 502-526, Autumn.
  8. Bernardo, Antonio E & Talley, Eric & Welch, Ivo, 2000. "A Theory of Legal Presumptions," Journal of Law, Economics and Organization, Oxford University Press, vol. 16(1), pages 1-49, April.
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  9. Okuno-Fujiwara, Masahiro & Postlewaite, Andrew & Suzumura, Kotaro, 1990. "Strategic Information Revelation," Review of Economic Studies, Blackwell Publishing, vol. 57(1), pages 25-47, January. [Downloadable!] (restricted)
  10. Jesse Bull & Joel Watson, 2002. "Hard Evidence and Mechanism Design," University of California at San Diego, Economics Working Paper Series 2002-16, Department of Economics, UC San Diego. [Downloadable!]
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  11. Paul Milgrom & John Roberts, 1986. "Relying on the Information of Interested Parties," RAND Journal of Economics, The RAND Corporation, vol. 17(1), pages 18-32, Spring. [Downloadable!] (restricted)
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  12. B. Douglas Bernheim & Michael D. Whinston, 1997. "Incomplete Contracts and Strategic Ambiguity," Harvard Institute of Economic Research Working Papers 1787, Harvard - Institute of Economic Research.
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  13. Hart, Oliver D & Moore, John, 1988. "Incomplete Contracts and Renegotiation," Econometrica, Econometric Society, vol. 56(4), pages 755-85, July. [Downloadable!] (restricted)
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  14. Daughety, Andrew F & Reinganum, Jennifer F, 2000. "On the Economics of Trials: Adversarial Process, Evidence, and Equilibrium Bias," Journal of Law, Economics and Organization, Oxford University Press, vol. 16(2), pages 365-94, October.
  15. Green, Jerry R & Laffont, Jean-Jacques, 1986. "Partially Verifiable Information and Mechanism Design," Review of Economic Studies, Blackwell Publishing, vol. 53(3), pages 447-56, July. [Downloadable!] (restricted)
  16. Legros, Patrick & Matthews, Steven A, 1993. "Efficient and Nearly-Efficient Partnerships," Review of Economic Studies, Blackwell Publishing, vol. 60(3), pages 599-611, July. [Downloadable!] (restricted)
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  17. Cooter, Robert D & Rubinfeld, Daniel L, 1994. "An Economic Model of Legal Discovery," Journal of Legal Studies, University of Chicago Press, vol. 23(1), pages 435-63, January.
  18. Bengt Holmstrom, 1982. "Moral Hazard in Teams," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 324-340, Autumn. [Downloadable!] (restricted)
  19. Daniel L. Rubinfeld & David E.M. Sappington, 1987. "Efficient Awards and Standards of Proof in Judicial Proceedings," RAND Journal of Economics, The RAND Corporation, vol. 18(2), pages 308-315, Summer. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Robson, Alexander R. W. & Skaperdas, Stergios, 2002. "Costly Enforcement of Property Rights and the Coase Theorem," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  2. Joel Watson, 2006. "Contract and Mechanism Design in Settings with Multi-Period Trade," University of California at San Diego, Economics Working Paper Series 2006-02, Department of Economics, UC San Diego. [Downloadable!]
  3. Jesse Bull, 2006. "Costly Evidence Production and the Limits of Verifiability," Working Papers 0611, Florida International University, Department of Economics. [Downloadable!]
  4. C. Manuel Willington, 2004. "Hold-Up under Costly Litigation and Imperfect Courts of Law," Econometric Society 2004 Latin American Meetings 231, Econometric Society. [Downloadable!]
    Other versions:
  5. repec:att:wimass:1920123 is not listed on IDEAS
  6. Joel Watson, 2006. "Contract and Game Theory: Basic Concepts for Settings with Finite Horizons," University of California at San Diego, Economics Working Paper Series 2006-01, Department of Economics, UC San Diego. [Downloadable!]
  7. Elchanan Ben-Porath & Barton L. Lipman, 2009. "Implementation and Partial Provability," Boston University - Department of Economics - Working Papers Series wp2009-002, Boston University - Department of Economics. [Downloadable!]
  8. Dominique Demougin & Claude Fluet, 2007. "Rules of Proof, Courts, and Incentives," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  9. repec:bep:rlecon:1:2007:3:3 is not listed on IDEAS
  10. Shin, Hyun Song, 2002. "Disclosures and Asset Returns," CEPR Discussion Papers 3345, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  11. Evans, R., 2006. "Mechanism Design with Renegotiation and Costly Messages," Cambridge Working Papers in Economics 0626, Faculty of Economics, University of Cambridge. [Downloadable!]
  12. Jesse Bull & Joel Watson, 2002. "Hard Evidence and Mechanism Design," University of California at San Diego, Economics Working Paper Series 2002-16R1, Department of Economics, UC San Diego. [Downloadable!]
    Other versions:
  13. Laffont, Jean-Jacques, 2003. "Incentives and the Search for Unknown Resources such as Water," IDEI Working Papers 2, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
  14. Jim Brennan & Joel Watson, 2002. "The Renegotiation-Proofness Principle and Costly Renegotiation," University of California at San Diego, Economics Working Paper Series 2002-10, Department of Economics, UC San Diego. [Downloadable!]
  15. Jesse Bull, 2006. "Costly Evidence and Systems of Fact Finding," Working Papers 0612, Florida International University, Department of Economics. [Downloadable!]
    Other versions:
  16. repec:bep:thecon:v:2:y:2003:i:1:p:1055-1055 is not listed on IDEAS
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