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The Optimal Amount of Falsified Testimony

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  • Emons, Winand
  • Fluet, Claude

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 favour 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 ability to commit to an adjudication scheme makes it more likely that the arbiter requires evidence.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5124.

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Date of creation: Jul 2005
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Handle: RePEc:cpr:ceprdp:5124

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Keywords: adversarial; costly state falsification; evidence production; inquisitorial; procedure;

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References

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  1. Paul R. Milgrom & John Roberts, 1985. "Relying on the Information of Interested Parties," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 749, Cowles Foundation for Research in Economics, Yale University.
  2. Robert Cooter & Winand Emons, 2000. "Truth-Revealing Mechanisms for Courts," Econometric Society World Congress 2000 Contributed Papers 0211, Econometric Society.
  3. Palumbo, Giuliana, 2001. "Trial procedures and optimal limits on proof-taking10," International Review of Law and Economics, Elsevier, Elsevier, vol. 21(3), pages 309-327, September.
  4. Song Shin, H, 1996. "Adversarial and Inquisitorial Procedures in Arbitration," Economics Papers 124, Economics Group, Nuffield College, University of Oxford.
  5. Lacker, Jeffrey M & Weinberg, John A, 1989. "Optimal Contracts under Costly State Falsification," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 97(6), pages 1345-63, December.
  6. Keith J. Crocker & John Morgan, 1998. "Is Honesty the Best Policy? Curtailing Insurance Fraud through Optimal Incentive Contracts," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 106(2), pages 355-375, April.
  7. Froeb, Luke M. & Kobayashi, Bruce H., 2001. "Evidence production in adversarial vs. inquisitorial regimes," Economics Letters, Elsevier, vol. 70(2), pages 267-272, February.
  8. Froeb, Luke M & Kobayashi, Bruce H, 1996. "Naive, Biased, Yet Bayesian: Can Juries Interpret Selectively Produced Evidence?," Journal of Law, Economics and Organization, Oxford University Press, Oxford University Press, vol. 12(1), pages 257-76, April.
  9. Tullock, Gordon, 1975. "On the Efficient Organization of Trials," Kyklos, Wiley Blackwell, vol. 28(4), pages 745-62.
  10. Demski, Joel S. & Sappington, David, 1984. "Optimal incentive contracts with multiple agents," Journal of Economic Theory, Elsevier, vol. 33(1), pages 152-171, June.
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  12. 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, Oxford University Press, vol. 16(2), pages 365-94, October.
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Cited by:
  1. Chopard, Bertrand & Cortade, Thomas & Langlais, Eric, 2010. "Trial and settlement negotiations between asymmetrically skilled parties," International Review of Law and Economics, Elsevier, Elsevier, vol. 30(1), pages 18-27, March.

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