The vanishing trial: a dynamic model with adaptive agents

In recent years, trial waivers (plea bargains in the United States) have been introduced into many legal systems around the world. Once trial waivers (TW) were introduced, most—if not all—of these legal systems witnessed a steep increase in the usage of TW, to the extent that trials are virtually disappearing. Our model explains why introducing TW into a legal system would almost inevitably trigger a dynamic process whose ultimate result is that all defendants choose the TW. The crux of the idea is that defendants who choose the TW option impose a negative externality on other defendants: the former help the prosecution save resources, thus forcing the latter to face stronger prosecution if they choose to go to trial. This further explains the observed increase in conviction rates in trials. We also show that the introduction of TW increases total sanctioning and reduces the welfare of many, if not all, defendants. The intuition for this is that a harsh punishment in a TW, which initially attracts only the most risk-averse defendant, becomes over time attractive to more and more defendants as the expected sanction in trial becomes more severe.