The defendant is either innocent or guilty, which she, not the court or prosecutor, knows. The court convicts the defendant whenever its posterior probability of her guilt - which depends on the evidence presented - is greater than the standard of proof. Evidence production by litigating parties is a costly stochastic process. Subsequently, the optimal choice of standard of proof and penalty is analysed. The optimal standard of proof is increasing in the cost of convicting an innocent defendant and decreasing in the cost of acquitting a guilty defendant. Higher penalties may increase probabilities of both false conviction and false acquittal.
ASJC Scopus subject areas
- Economics and Econometrics