Abstract

The Value of Accuracy in Adjudication: An Economic Analysis

Highlights

  • C_ONCERNfSor the accuracy of adjudication permeate analyses of procedural rules and aspects of substantive law

  • This article presents an economic analysis of the value of accuracy in adjudication

  • Posner,EconomicAnalysisof Law ? 4.9 (4th ed. 1992);Lucian Arye Bebchuk & Steven Shavell, Informationand the Scope of involve, for example, the measurement of expectation damages.) note that parties often provide for alternative dispute resolution in their contracts

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Summary

INTRODUCTION

C_ONCERNfSor the accuracy of adjudication permeate analyses of procedural rules and aspects of substantive law. This article presents an economic analysis of the value of accuracy in adjudication It focuses primarily on three considerations: the effect of inaccuracy on implementation of substantive legal norms (individuals' incentives to comply with the law and proper assignment of future rights and obligations), the administrative costs of inaccuracy and attempts to reduce it, and costs arising from the imposition of sanctions. Mation concerning damages in adjudication are socially excessive or inadeianqcetPusdaaictrseat.uoIInsIienagidndhwraehrsimsceh-srteahfceecrrureermdacayytiobneadesertrtehorerms:"inigniundigilvtlyiid"aubaiflolistryw.choTnohveterncuoileynntcceoexm3t-mmexiataytmedmistakenly be exonerated (false negatives), and not commit tioned (false harmful acts-the positives) Such "innocent"-may errors reduce the those who did mistakenly be sanclaw's deterrent effect. The discussion in this part is incomplete, in part by design, as the focus of this article is on economic effects, and in part by necessity, as frequently invoked concerns about fairness are rarely sufficiently specified to allow them to be applied and assessed

ACCURACIYN THEASSESSMENOTFDAMAGES
Accuracy and Ex Ante Information5
Compensatory Objectives and Risk Aversion
Variation:Reductionof ErrorThat Is Costly to Predict36
Applications
Generalitywith Regardto Areas of Law and Types of Rules
FormulatingLegal Commands
Inquiries about Ex Ante Knowledge versus Ex Post Consequences
Market-Share Liability
ACCURACIYN THEDETERMINATIOOFNLIABILITY
Accuracy and Deterrence
Accuracy and Sanction Costs
Accuracy and Precision in Controlling Behavior
Relationship between Burden of Proof and Accuracy
Civil Cases and Private Dispute Resolution
Liability versus Regulation
ACCURACIYN ESTABLISHINFGUTURERIGHTSANDOBLIGATIONS
Adjudicationabout FutureEntitlements
The Value of Accuracy181
The Effect of Remedies SpecifyingFutureConduct on PriorConduct
The Value of Accuracy with Regard to Future Conduct
OTHER VALUES OF ACCURACY
Fairness and the Accuracy of Compensation
Ex Post Incentives to Present Information in Adjudication
Accuracy in the Determination of Liability
How a Greater Concern for Sanctioning the Innocent Would Affect the Analysis
The Right to Appear
Appearances and Legitimacy261
Abuse of Power
Findings
CONCLUSION

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