Judicial mechanism design

This paper proposes a mechanism-design approach to study criminal justice systems. We derive properties of optimal mechanisms for two notions of welfare distinguished by their treatment of deterrence. These properties provide insights into the effects of defendants’ private information about their guilt; highlight forces that may underlie certain features of existing systems, such as plea bargaining and binary verdicts and the separation of fact-finding and sentencing; and indicate directions for possible improvements of criminal trials, such as varying the standard for conviction across crimes. (JEL D82, K41, K42)