DP5124 The Optimal Amount of Falsified Testimony

Author(s):	Winand Emons, Claude Fluet
Publication Date:	July 2005
Keyword(s):	adversarial, costly state falsification, evidence production, inquisitorial, procedure
JEL(s):	D82, K41, K42
Programme Areas:	Industrial Organization
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=5124

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.