Evidentiary Standards and Information Acquisition

This article considers the type of evidence that an overseer (e.g., a court) should require before allowing a government agent to take some proposed action. The court can increase agency research incentives by prohibiting actions unless the agent produces supporting evidence, and/or by permitting action even when the agent uncovers adverse evidence. The court thus faces a trade-off between an evidentiary standard’s ex post effects on the agent’s policy decision and its ex ante effects on the agent’s incentive to do research. An extension allows the court to make research effort a precondition for action, regardless of the evidence produced. (JEL K23, K32, K41) Political and legal systems often divide decision-making responsibility be-tween a primary agent, vested with the power to initiate action, and an independent overseer that reviews the evidence proffered by the primary agent in support of its proposal. For example, a regulatory agency might be charged with deciding whether to ban a potentially dangerous prod-uct, but a court may assess whether such a ban is supported by sufficient evidence. One of the most salient questions raised by this common form of institutional design concerns the type and amount of evidence that a rational overseer should demand as a condition of approving a propose