Both Richard Posner, in his recent article An Economic Approach to the Law of Evidence,1 and Craig Callen, in Costs,Benefits, Hearsay and Evidence,2 stress a possible important justification for admissibility rules (and hearsay rules in particular): their relationship to the efficiency of interpersonal transactions. Posner endeavors to demonstrate a partial correspondence between the law of evidence and economic efficiency. Many rules of evidence, he asserts, are meant to repair identifiable market failures typical of the adversarial system, where the process of searching information relevant in the decision making is largely privatized. Considering the aggregate social value of a correct judgment on the one hand, and the costs of processing information on the other, the parties in an adversarial system may expend too many resources in gathering and presenting evidence in some cases, and too few in others. The law of evidence is therefore called upon to decrease incentives for excessive search of evidence in the former cases, and to increase such incentives in the latter. Callen corroborates and extends Posner’s insight by using findings of cognitive sciences and studying the efficient exploitation of limited cognitive resources.
KeywordsUtility Function Supra Note Internal Conflict Small Reward Time Consistency
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