On the Economics of Trials: Adversarial Process, Evidence and Equilibrium Bias

Abstract

The adversarial provision of evidence is modeled as a game in which two parties engage in strategic sequential search. An axiomatic approach is used to characterize a court's decision based on the evidence provided. Although this process treats the evidence submissions in an unbiased way, the equilibrium outcome may still exhibit bias. Bias arises from differences in the cost of sampling or asymmetry in the sampling distribution. In a multi-stage model, a pro-defendant bias arises in the first stage from a divergence between the parties' stakes. Finally, the adversarial process generates additional costs which screen out some otherwise meritorious cases.

Note: Previously Vanderbilt University, Economics Working Paper No. 98-W02

JEL Classification: K41, C72, D83