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Adversarial decision-making: Choosing between models constructed by interested parties

Froeb, Luke M. and Ganglmair, Bernhard and Tschantz, Steven (2016): Adversarial decision-making: Choosing between models constructed by interested parties.

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Abstract

In this paper, we characterize adversarial decision-making as a choice between competing interpretations of evidence ("models") constructed by interested parties. We show that if a court cannot perfectly determine which party's model is more likely to have generated the evidence, then adversaries face a tradeoff: a model further away from the best (most likely) interpretation has a lower probability of winning, but also a higher payoff following a win. We characterize equilibrium when both adversaries construct optimal models, and use the characterization to compare adversarial decision-making to an inquisitorial benchmark. We find that adversarial decisions are biased, and the bias favors the party with the less-likely, and more extreme, interpretation of the evidence. Court bias disappears when the court is better able to distinguish between the likelihoods of the competing models, or as the amount of evidence grows.

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