Civil disputes feature parties with biased incentives acquiring evidence with costly effort. Evidence may then be revealed at trial or concealed to persuade a judge or jury. Using a persuasion game, we examine how a litigant’s risk preferences influence evidence acquisition incentives. We find that high risk aversion depresses equilibrium evidence acquisition. We then study the problem of designing legal rules to balance good decision making against the costs of acquisition. We characterize the optimal design, which differs from equilibrium decision rules. Notably, for very risk-averse litigants, the design is “over-incentivized” with stronger rewards and punishments than in equilibrium. We find similar results for various common legal rules, including admissibility of evidence and maximum awards. These results have implications for how rules could differentiate between high risk aversion types (e.g., individuals) and low risk aversion types (e.g., corporations) to improve evidence acquisition efficiency.
IN THE MID-SEVENTEENTH CENTURY, the artist Giovanni Battista Braccelli (ca. 1584-1650) created an etching of the bronze Saint Peter cult statue at the Vatican surrounded by devotees and votives (fig. 1). 1 This previously unpublished print, titled The Bronze Saint Peter with Votives, offers a detailed representation of the devotional object in its early modern location (figs. 2-3): against the northeast pier of the crossing of Saint Peter's Basilica, where Pope Paul V Borghese (r. 1605-21) had installed it on May 29, 1620 (still in situ today). The print details a group of early modern visitors gathered around the sculpture-well-dressed men, women, and children to the left of the composition, and an assortment of humbler lay and religious personages to the right. At the center, two pilgrims with walking sticks in hand and broad-brimmed hats slung over their shoulders approach the foot of the sculpted Saint Peter with great reverence. The first of the two bows down to touch the top of his head to the underside of the sculpted foot in an act of extreme humility, bracing himself against the sculpture's base as the crowd looks on with approval. Emanating up from the devotees, a series of ex-voto offerings blanket the flanking pilasters of Saint Peter's. One can make out the barest references of standard votive imagery and objects on the sketchily rendered plaques-kneeling figures and canopied beds before floating apparitions-accompanied by
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