Putting the Trial Penalty on Trial

“Trial penalty” is the notion that criminal defendants receive substantially longer sentences at trial than they would through bargaining because prosecutors want to induce settlement and thereby manage their immense caseloads. An analysis rooted in economic thought dispels the trial penalty and embraces the “shadow of the law” concept, whereby the prosecutor and defense use the threat of trial as a bargaining chip to arrive at a sentence that would be the same as that received at trial. Instrumental to a defendant’s decision is expected value—the value of an outcome weighted by its probability. Comparing the calculation of likely sentencing outcomes to guessing the value of a draw in a card game, economists predict a defendant’s expected sentence by considering the circumstances. When deciding whether to accept a proffered sentence, a defendant who has not yet been convicted or who has been offered a plea deal must determine his unconditional expected sentence, which takes into account the substantial likelihood that there will be no prison sentence at all. In contrast, a defendant who has been found guilty must determine a conditional expected sentence. A regression analysis of over 42,000 cases from Cook County, Illinois, revealed that plea bargains actually result in longer expected sentences than trials—directly contradicting the trial penalty theory. Defendants’ risk aversion, availability heuristic, and imperfect principal-agent relationship with their attorney likely explain this phenomenon.

“[T]he difference between the trial penalty perspective and the shadow of the law perspective comes down to a comparison between the conditional and unconditional expected sentence. The mistake that is frequently made is considering the conditional expected sentence in the context of a defendant with a plea offer, a setting where the unconditional expected sentence is the appropriate one.” p. 779–80