Unlike earlier models, this version includes strategic pre-trial disclosure. Result? Even with perfect courts, parties may prefer opacity—because ambiguity preserves bargaining power.
Policymakers using AI or algorithmic rules (fintech, gig economy, content moderation) should ask not “what’s fair,” but “what does this rule incentivize parties to reveal or hide?” jle.vi pdf2018
The paper models how different liability standards affect not only precaution levels but also the information parties voluntarily reveal before trial. Under a negligence rule, defendants over-invest in visible safety, while hiding private cost data. Under strict liability, plaintiffs under-invest in evidence gathering. Unlike earlier models