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Of hired guns and ideologues: why would a law firm ever retain an honest expert witness?

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  • Martin Richardson

Abstract

We suppose that expert witnesses are, generically, either honest in their assessment of a fact situation or are mercenary ‘hired guns’ that advocate for their retaining party. The type of a witness is known to law firms, who engage with them repeatedly, but not to courts. If the only way an honest witness can credibly reveal their type to a court is by siding with the opposing party then the question arises of why a law firm would ever retain an honest expert. We show that it can act as a signaling device in a game between the law firms to communicate private information regarding a party’s confidence in winning the case. Our results indicate, amongst other things, that the ‘English’ rule of costs allocation can make a socially desirable separating equilibrium less likely, compared to the ‘American’ rule.

Suggested Citation

  • Martin Richardson, 2021. "Of hired guns and ideologues: why would a law firm ever retain an honest expert witness?," ANU Working Papers in Economics and Econometrics 2021-678, Australian National University, College of Business and Economics, School of Economics.
    • Handle: RePEc:acb:cbeeco:2021-678
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    File URL: https://cbe.anu.edu.au/researchpapers/econ/wp678.pdf
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    References listed on IDEAS

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    JEL classification:

    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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