Abstract
When a crime has been committed and a suspect (or suspects) apprehended, it is the purpose of the criminal justice system to dispose of the case in the socially optimal manner. Of course, how one should define optimal in this context is subject to debate; in this paper I consider three goals: (1) minimization of the social cost of legal errors; (2) punishment of the truly guilty; and (3) efficient use of the resources needed to operate the system. Considering the first of these, legal errors necessarily result from imperfect information on the part of courts and are generally of two types: incorrect conviction of innocent defendants (type I errors), and incorrect acquittal of guilty defendants (type II errors). Both are assumed to impose some cost on society. On the other hand, society presumably gains from correctly punishing the truly guilty. One reason, of course, is deterrence, although I abstract from this motive here. Additionally, however, I assume that society benefits by matching the punishment of criminals to the crime they have committed (one might call this retribution).2 By the appropriate choice of the variables of the legal process-namely, prosecutorial effort in collecting evi-
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