Reporter's Privilege and Incentives to Leak

21 Pages Posted: 14 Mar 2007 Last revised: 7 Oct 2008

See all articles by Ido Baum

Ido Baum

Haim Striks School of Law - College of Management

Eberhard Feess

Frankfurt School of Finance & Management gemeinn├╝tzige GmbH

Ansgar Wohlschlegel

Portsmouth Business School

Date Written: March 1, 2007

Abstract

Journalists sued for defamation may refuse to reveal their anonymous sources. To escape liability under the traditional English rule, they then need to show proof that the news is correct. By contrast, many US states have switched the burden of proof such that plaintiffs must first present evidence that the news is false. Focusing on the incentives of sources to leak, we find that the American rule reduces the frequency of type I errors (true stories are not learned by the society) at the expense of a higher frequency of type II errors (the society believes wrong stories). The American rule is superior when courts are likely to find the truth without knowing the identity of sources, and when firms can severely punish even honest sources. Furthermore, when courts rule that sources must be revealed, they should ensure a higher compliance rate of journalists under the American rule. Finally, we argue that our model also sheds light on the incentives of firms and of the media.

Keywords: Whistle-blowing, reporter's privilege, burden of proof, errors in court

JEL Classification: D83, K10, K41

Suggested Citation

Baum, Ido and Feess, Eberhard and Wohlschlegel, Ansgar, Reporter's Privilege and Incentives to Leak (March 1, 2007). Available at SSRN: https://ssrn.com/abstract=970885 or http://dx.doi.org/10.2139/ssrn.970885

Ido Baum

Haim Striks School of Law - College of Management ( email )

7 Rabin Blvd.
Rishon Lezion
Tel Aviv, 75190
Israel

Eberhard Feess

Frankfurt School of Finance & Management gemeinn├╝tzige GmbH ( email )

Adickesallee 32-34
Frankfurt am Main, 60322
Germany

Ansgar Wohlschlegel (Contact Author)

Portsmouth Business School ( email )

Portsmouth, PO1 3DE
United Kingdom

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