Adversarial Decision-Making: Choosing Between Models Constructed by Interested Parties
Vanderbilt University - Strategy and Business Economics
University of Texas at Dallas - School of Management - Department of Finance & Managerial Economics
Vanderbilt University - Department of Mathematics
March 28, 2016
Vanderbilt Owen Graduate School of Management Research Paper No. 2371768
Vanderbilt Law and Economics Research Paper No. 14-13
In this paper, we characterize adversarial decision-making as a choice between competing interpretations of evidence ("models'") constructed by interested parties. We show that if a court cannot perfectly determine which party's model is more likely to have generated the evidence, then adversaries face a tradeoff: a model further away from the best (most likely) interpretation has a lower probability of winning, but also a higher payoff following a win. We characterize the equilibrium of such a game of persuasion, in which both adversaries construct optimal models, and use the characterization to compare adversarial decision-making to an inquisitorial benchmark. We find that adversarial decisions are biased, and the bias favors the party with the less-likely, and more extreme, interpretation of the evidence. Court bias disappears when the court is better able to distinguish between the likelihoods of the competing models, or as the amount of evidence grows.
Number of Pages in PDF File: 46
Keywords: adversarial justice; evidence-based decision-making; expert testimony; inquisitorial justice; litigation; persuasion games; science vs. advocacy
JEL Classification: C72, D72, K41
Date posted: December 25, 2013 ; Last revised: June 3, 2016
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