Citation

Sanchirico CW. Int. Rev. Law Econ. 1997; 17(3): 431-447.

Copyright

(Copyright © 1997, Elsevier Publishing)

DOI

10.1016/S0144-8188(97)00020-3

PMID

unavailable

Abstract

The existing literature on the burden of proof has sought the rule's reason for existence solely within the court's problem of decision making under uncertainty. Although this search has yielded many insights, it has been less successful in providing a compelling explanation for why uncertainty in the court's final assessment should act to the detriment of one party rather than the other. By viewing the problem as one of mechanism design, this paper provides one explanation for the asymmetry. A rule resembling the burden of proof emerges from the optimal design of a system of fact-finding tribunals in the presence of: (i) limited resources for the resolution of private disputes; and (ii) asymmetric information--as between the parties and the court--about the strength of cases, before the court expends the resources necessary for a hearing. The paper shows that if the objective in designing a trial court system is the accuracy of recovery granted, the "value" of having heard a case will depend in part on the certainty with which the court makes its final award. An optimally designed court system will then effectively filter out "less valuable" cases by precommitting to a recovery policy in which plaintiffs recover nothing unless they prove their cases with a threshold degree of certainty.