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Research: Game Theory and the Hearsay Rule

News Story

Dyson Professor Mark Weinstock and business economics student Iliana Taormina ’18 are using game theory to help simplify a complicated aspect of the legal system.

“I’ve always thought about behavior and how to find the best way to handle certain situations, and this class showed me there was a way to take every situation that you go through on a day-to-day basis and find your way to get your best outcome,” says Iliana Taormina ’18.

Taormina is talking about Professor Mark Weinstock’s year-long, multi-course series Applied Game Theory I and Applied Game Theory II—a unique offering at Pace, that has had a clear impact on students like herself.

“We’re one of the only schools in the United States that offers two classes for undergraduates in game theory,” says Weinstock. “Normally there’s no class—because it’s too advanced—or there’s only one.”

It was a natural fit for Taormina, a business economics major, who became a teaching assistant for Weinstock’s game theory courses and had the initiative to begin researching with third- and fourth-year students. With game theory emerging as a major part of her academic work at Pace, Taormina wanted to investigate the topic a bit further—which resulted in a student-faculty research grant from the Office for Student Success.

“She told me that she wanted to do more advanced work in game theory,” says Weinstock. “I asked her if she thought it would be interesting to do some analysis of the hearsay rule from common law.”

The hearsay rule is a legal principle that prohibits hearsay (out of court statements) from being admitted as evidence in court, if the person who is supplying those statements can’t be cross-examined or isn’t able to be in court. There are, however, a number of exceptions to the hearsay rule, which can often complicate matters. It’s also where game theory becomes a lot more valuable.

“Some of these exceptions may be counter-productive to obtaining a just verdict. Most of the time, it’s up to the discretion of the judge,” says Taormina. “Game theory is uniquely suited to deal with this, because there’s a whole area in the field dealing with uncertainty and information. What we want to do, is take something that’s outdated or up in the air, and find a way to specifically deal with these exceptions—which will be done by studying various situations, seeing how things played out, setting up different games to determine possible outcomes.”

Taormina and Weinstock’s research deals heavily with the value of asymmetric information, and the value of asymmetric information as it relates to understanding the legal world and how decisions get made.

“Asymmetric information means that anytime people deal with each other, it’s very rare two people in the real world know the exact same thing. Usually one party has more information than the other, or one party may know part of the available information, the other party knows another part,” says Weinstock.

Essentially Weinstock and Taormina hope to use game theory to more accurately predict the outcomes of complicated legal situations related to the hearsay rule—which of course, can have some major implications on legal decisions. As the duo notes, the major goal is to minimize type 1 errors—the conviction of an innocent party. But more broadly, they want to examine the tradeoffs between type 1 and type 2 errors in legal decisions under the rule.

“Hopefully, by exploring this more, whatever our findings are could inspire people to do more research at a higher level, and beyond find a probability distribution that could help balance the presumption of innocence with a just verdict,” says Taormina.

“Even though this is a very important topic, there is a paucity of research,” says Weinstock. “The ultimate goal would be to get this information in front of law professors, who could continue to do research and to motivate them that this is a topic that has a lot of rich potential.”

Through their current research, blog posts, and theory-based simulations, Taormina and Weinstock will be using their research funding to publish a paper determining their findings—and in turn, initiate a movement to help shed more light on the usefulness of game theory in the legal world.

Whatever their findings may be, we’ve learned that a student-faculty research collaboration of this caliber has a strong likelihood of producing a positive outcome for students and professors, as well as the external community.

To read more about Taormina's research, visit her research blog.