Thursday, March 4, 2010
Posted by D. Daniel Sokol
Bruce Lyons (School of Economics and ESRC Centre for Competition Policy, University of East Anglia), Gordon Menzies (School of Finance and Economics, University of Technology Sydney) and Daniel Zizzo (School of Economics, ESRC Centre for Competition Policy and Centre for Behavioural and Experimental Social Science, University of East Anglia) explain Professional Interpretation of the Standard of Proof: An Experimental Test on Merger Regulation.
ABSTRACT: There is considerable debate about the alternative economic approaches to merger control taken by competition authorities. However, differences in economic analysis are not the only reason for alternative decisions. We conduct an experiment in decision making in the context of merger appraisal, identifying the separate influences of different standards of proof, volumes of evidence, cost of error and professional training. The experiment was conducted on current practitioners from nine different jurisdictions, in addition to student subjects. We find that legal standards of proof significantly affect decisions, and identify specific differences due to professional judgment. We are further able to narrow the range of explanations for why professionalization matters.