Discussion Papers, Department of Economics, Universität Bern 09-04
An arbiter can decide a case on the basis of his priors, or the two parties to the conflict may present further evidence. The parties may misrepresent evidence in their favor at a cost. At equilibrium the two parties never testify together. When the evidence is much in favor of one party, this party testifies. When the evidence is close to the prior mean, no party testifies. We compare this outcome under a purely adversarial procedure with the outcome under a purely inquisitorial procedure (Emons and Fluet 2009). We provide sufficient conditions on when one procedure is better than the other one.
evidence production procedure costly state falsification adversarial inquisitorial