The prosecution of criminals is costly, and subject to errors. In contrast to adversarial court procedures, the prosecutor is regarded as an impartial investigator and aide to the judge in inquisitorial justice systems. We show in a sequential prosecution game of a Bayesian court that a strategic interaction between these two benevolent enforcement agents exists where each player hopes to freeride on the other one ́s investigative effort. This gives rise to inefficient equilibria with excessive operating and error costs. Moreover, we will demonstrate that our results are sensitive to the applied standard of proof and that, more disturbingly, the inefficient outcome becomes more probable when the conviction threshold is raised. Applying the concept of ‘beyond reasonable doubt’, we analyze the impact of the standard of proof and other legal policy instruments on type I and type II errors and operating costs.

The plea bargaining mechanism in criminal procedure serves as a favorable screening device, separating between the guilty and the innocent. Previous literature ignored the impact of asymmetric information on prosecutor performance inside the adversarial court, which degrades his bargaining position. This paper presents a sequential prosecution game with endogenous courts, and shows that the successful conviction in court crucially depends on prosecutor ́s beliefs and incentives. If the prosecutor is sufficiently convinced of the defendant ́s guilt ex-ante, he can commit to trial, and the favorable semiseparating equilibrium is obtained. Applying the first formal model of a hindsight biased prosecutor, we find that the negative impact of uncertainty on prosecutor performance is partly mitigated by hindsight bias, and the self-selection of guilty defendants can even improve. Several caveats, like excessive charges, the nature of the case or the quality of investigations by the police force are discussed.

Court delay frustrates economic behavior. Surprisingly, the impact of a coherent jurisdiction for the timely resolution of legal disputes has so far received little attention in civil law countries. Consequently, this paper examines the nexus between court delay and the availability of legal precedents. We model litigation as a two-stage rent seeking game, and find that precedents curb strategic behavior. Thus, the excessive use of party resources in litigation, such as time, is reduced if a precedent is applicable. Using judge-level data of a German trial court, we provide first empirical evidence on the role of precedents for case disposition time and the probability of reversal in a civil law country. Our results show that the availability of precedents significantly contributes to a reduction in delay, and also decreases the probability of reversal. Interestingly, we find no such influence for the citation of legal literature in verdicts.