Disclosure and Legal Advice

Yeon-Koo Che and Sergei Severinov

American Economic Journal: Microeconomics, 2017, vol. 9, issue 2, 188-225

Abstract: This paper examines how the advice that lawyers provide to their clients affects the disclosure of evidence and the outcome of adjudication, and how the adjudicator should allocate the burden of proof in light of these effects. Despite lawyers' expertise in assessing the evidence, their advice is found to have no effect on adjudication if the lawyers follow the strategies of disclosing all favorable evidence. A lawyer's advice can influence the outcome in his client's favor, either if (s)he can credibly advise his client to suppress some favorable evidence or if legal advice is costly. The effect is socially undesirable in the former case, but it is desirable in the latter case. Our results provide a general perspective for understanding the role of private information and expert advice in disclosure.

JEL-codes: C72 D71 D72 D82 (search for similar items in EconPapers)
Date: 2017
Note: DOI: 10.1257/mic.20140272
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Citations: View citations in EconPapers (3)

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