Working Paper BETA #2021-40

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Title : Cross-Examination

Author(s) : Claude Fluet , Thomas Lanzi

Abstract : Two opposed parties seek to ináuence an uninformed decision maker. They invest in acquiring information and select what to disclose. The decision maker then adjudicates. We compare this benchmark with a procedure allowing adversarial cross-examination. A cross-examiner tests the opponent in order to persuade the decision maker that the opponent is deceitful. How does the opportunity or threat of crossexamination affect the parties' behavior? How does it affect the quality of decision-making? We show that decision-making deteriorates because parties are less likely to acquire information and because crossexamination too often makes the truth appear as falsehood. Next, we consider a form of controlled cross-examination by permitting the cross-examined to be re-examined by his own advocate, i.e., counterpersuasion. More information then reaches the decision maker. Decision-making may or may not improve compared to the benchmark depending on how examination is able to trade off type 1 and 2 errors.

Key-words : Bayesian persuasion, disclosure game, adversarial, redirect examination, procedural rules.

JEL Classification : C72, D71, D82, D83, K41