Legal Process
Intermediate
Error Costs
The social costs generated when legal institutions make mistaken decisions, including false positives, false negatives, overdeterrence, underdeterrence, and reliance on inaccurate information.
Why It Matters
Error costs are central to litigation, enforcement, and regulatory design because more accurate decision-making often requires additional procedure, investigation, or delay.
Selected Literature
A short list of directly relevant archive entries.
2000
Intermediate
The Economic Theory of Public Enforcement of Law
A. Mitchell Polinsky and Steven Shavell
Journal of Economic Literature
2004
Advanced
2016
Advanced
Related Cases
1980
Securities Regulation
Aaron v. SEC
446 U.S. 680 (1980)
Which antifraud provisions require the SEC to prove scienter when it seeks an injunction.
1976
Securities Regulation
Ernst & Ernst v. Hochfelder
425 U.S. 185 (1976)
Scienter requirement for private damages actions under Section 10(b) and Rule 10b-5.
1994
Securities Regulation
Central Bank of Denver v. First Interstate Bank of Denver
511 U.S. 164 (1994)
Private aiding-and-abetting liability under Section 10(b) of the Securities Exchange Act.
1997
Securities Regulation
United States v. O'Hagan
521 U.S. 642 (1997)
Misappropriation theory of insider trading and tender-offer fraud rules.