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Error Costs, Legal Standards Of Proof And Statistical Significance, Michelle Burtis, Jonah B. Gelbach, Bruce H. Kobayashi
Error Costs, Legal Standards Of Proof And Statistical Significance, Michelle Burtis, Jonah B. Gelbach, Bruce H. Kobayashi
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The relationship between legal standards of proof and thresholds of statistical significance is a well-known and studied phenomena in the academic literature. Moreover, the distinction between the two has been recognized in law. For example, in Matrix v. Siracusano, the Court unanimously rejected the petitioner’s argument that the issue of materiality in a securities class action can be defined by the presence or absence of a statistically significant effect. However, in other contexts, thresholds based on fixed significance levels imported from academic settings continue to be used as a legal standard of proof. Our positive analysis demonstrates how a …
The Reduced Form Of Litigation Models And The Plaintiff's Win Rate, Jonah B. Gelbach
The Reduced Form Of Litigation Models And The Plaintiff's Win Rate, Jonah B. Gelbach
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In this paper I introduce what I call the reduced form approach to studying the plaintiff's win rate in litigation selection models. A reduced form comprises a joint distribution of plaintiff's and defendant's beliefs concerning the probability that the plaintiff would win in the event a dispute were litigated; a conditional win rate function that tells us the actual probability of a plaintiff win in the event of litigation, given the parties' subjective beliefs; and a litigation rule that provides the probability that a case will be litigated given the two parties' beliefs. I show how models with very different-looking …