Economic Analysis of Law

Posner, Richard A.

doi:10.2307/1227682

Cited by 223 publications

(277 citation statements)

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“…Distinguishing is bene…-cial even when it introduces no new information, because it ensures the inclusion of a variety of perspectives into the law (Cardozo, 1921). In a setting of imperfect information, the process involves long-run randomness and the possibility of errors, but it also induces convergence toward more e¢ cient rules, in accordance with Posner's ([1973] 2007) hypothesis.…”

mentioning

confidence: 87%

“…Nor can it achieve …rst-best e¢ ciency in the absence of information about the second informative dimension. Despite the never-ending randomness, which entails the possibility of occasional worsening of case law, the convergence of this stochastic process embodies Leoni's (1961) view of the long-run certainty of judge-made law and Posner's ([1973] 2007) hypothesis of its evolution towards greater e¢ ciency. The exante variance of legal rules decreases over time, possibly to an arbitrarily low level, thereby increasing expected social welfare.…”

Section: The Model Of Legal Rulesmentioning

confidence: 99%

“…Such a mechanism of careful and predictable marginal innovation drives the welfare-increasing development of case law that the legal realist tradition emphasizes (Holmes, 1897;Cardozo, 1921;[1932] 1947; Radin, 1925;Frank, 1930;Llewellyn, 1930;1960;Posner, [1973Posner, [ ] 2007. Proposition 1 accounts for this process by recognizing that all legal innovation is not equally costly, and that each judge faces a marginal trade-o¤ between bringing legal rules into closer alignment with his own preferences and having to expend personal e¤ort in order to do so.…”

Section: Counterfactual Models Of Distinguishingmentioning

confidence: 99%

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Stare Decisis: Rhetoric and Substance

Fernández

Ponzetto

2008

SSRN Journal

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Stare decisis allows common law to develop gradually and incrementally. We show how judge-made law can steadily evolve and tend to increase e¢ ciency even in the absence of new information. Judges'opinions must argue that their decisions are consistent with precedent: this is the more costly, the greater the innovation they are introducing. As a result, each judge e¤ects a cautious marginal change in the law. Alternative models in which precedents are either strictly obeyed or totally discarded would instead predict abrupt large swings in legal rules. Thus we …nd that the evolution of case law is grounded not in binary logic …xing judges'constraints, but in costly rhetoric shaping their incentives. We apply this …nding to an assessment of the role of analogical reasoning in shaping the joint development of di¤erent areas of law.

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mentioning

confidence: 87%

Section: The Model Of Legal Rulesmentioning

confidence: 99%

Section: Counterfactual Models Of Distinguishingmentioning

confidence: 99%

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Stare Decisis: Rhetoric and Substance

Fernández

Ponzetto

2008

SSRN Journal

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“…The foundations of the proposition that the common law will beget comparative advantage to the administration of competition policy programs lies with the general thesis that the common law could best be understood as a set of rules designed to maximize economic efficiency---the joint value of interacting activities, a thesis that originates with Posner in the early 1970s (Posner, 1992). As a result, the common-law process is capable of generating efficient competition rules (Priest 1973;Rubin, 1973).…”

Section: Explaining the Performance Gapmentioning

confidence: 99%

“…There are many distinguishing elements particular to the common law: it constitutes the fields of laws that have been created largely by judges as the by-product of deciding cases rather than by legislatures (Posner, 1992); reliance on precedent, the doctrine of stare decisis; the reliance on earlier decisions of other courts; the incorporation or adoption of new precedents to the stock of legal capital through litigation; its adversarial constitution; its reliance on experts to assist the trier-of-fact; differing and shifting burdens of proof.…”

Section: Introduction and Overviewmentioning

confidence: 99%

Does Legal Tradition Affect Competition Policy Performance?

Rodriguez

2007

The International Trade Journal

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During the early 1990's, in the early days of the worldwide competition policy boom, Spencer Waller and Joshua Newberg argued that difficulties inherent in grafting common law concepts---such as antitrust---onto non common law traditions would undermine the administration of competition law in non common law tradition countries. Recent independent survey data on the performance of competition programs in 102 nations shows deplorable differences in performance, lending some weight to the WallerNewberg thesis.This article tests whether differences in legal tradition contributes to the observed variance in competition agency performance.A careful understanding of the influence of legal tradition and other factors underscoring the relevance, shortcomings and problems of competition policy performance are useful for determining whether competition programs should be at all reproduced elsewhere, whether they should be modified prior to adoption or whether they should be adopted verbatim. Familiarity with performance factors is also useful both for program administration and program sequencing. Comparative examinations of competition programs enable decision-makers to properly allocate resources and to address policy issues.

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Market Institutions and Judicial Rulemaking

Arruñada¹,

Andonova²

Handbook of New Institutional Economics

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Assuming that the degree of discretion granted to judges was the main distinguishing feature between common and civil law until the 19 th century, we argue that constraining judicial discretion was instrumental in protecting freedom of contract and developing the market order in civil law. We test this hypothesis by analyzing the history of Western law. In England, a unique institutional balance between the Crown and the Parliament guaranteed private property and prompted the gradual evolution towards a legal framework that facilitated market relationships, a process that was supported by the English judiciary. On the Continent, however, legal constraints on the market were suppressed in a top-down fashion by the founders of the liberal state, often against the will of the incumbent judiciary. Constraining judicial discretion there was essential for enforcing freedom of contract and establishing the legal order of the market economy. In line with this evidence, our selection hypothesis casts doubts on the normative interpretation of empirical results that proclaim the superiority of one legal system over another, disregarding the local conditions and institutional interdependencies on which each legal system was grounded.

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Economic Analysis of Law

Cited by 223 publications

References 0 publications

Stare Decisis: Rhetoric and Substance

Stare Decisis: Rhetoric and Substance

Does Legal Tradition Affect Competition Policy Performance?

Market Institutions and Judicial Rulemaking

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