Economic efficiency and the common law.: An article from: Atlantic Economic Journal
Book Details
Author(s)Thomas J. Webster
PublisherAtlantic Economic Society
ISBN / ASINB00082EDJY
ISBN-13978B00082EDJ6
MarketplaceFrance 🇫🇷
Description
This digital document is an article from Atlantic Economic Journal, published by Atlantic Economic Society on March 1, 2004. The length of the article is 5748 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.
From the author: Do legal rules based on the common law in the U.S. result in economically efficient outcomes? Beginning with Posner and Rubin, a substantial amount of literature supports the hypothesis that there is a natural tendency for common law to evolve over time so as to yield economically efficient court rulings. According to this view, disputants will litigate whenever the existing rules are inefficient. If the rules are efficient then no such incentive exists, in which case the legal rules are affirmed. By respecifying the Rubin model as a two-person, non-cooperative, simultaneous-move game, the analysis presented in this paper appears to support the arguments put forth by Landes, Gould, Tullock, and others that there is a general tendency for the disputants to pursue an out-of-court settlement. The analysis also suggests that it may also be in the litigant's best interest to negotiate an out-of-court settlement when the legal rules are efficient if the expected net present value of accident and avoidance costs is less than the litigants' court costs. Finally, it may pay to litigate even when the legal rules are efficient if the expected net present value of accident and avoidance costs is greater than the sum of the litigants' court costs. (JEL K00, K41, D61, C71, C72)
Citation Details
Title: Economic efficiency and the common law.
Author: Thomas J. Webster
Publication:Atlantic Economic Journal (Refereed)
Date: March 1, 2004
Publisher: Atlantic Economic Society
Volume: 32 Issue: 1 Page: 39(10)
Distributed by Thomson Gale
From the author: Do legal rules based on the common law in the U.S. result in economically efficient outcomes? Beginning with Posner and Rubin, a substantial amount of literature supports the hypothesis that there is a natural tendency for common law to evolve over time so as to yield economically efficient court rulings. According to this view, disputants will litigate whenever the existing rules are inefficient. If the rules are efficient then no such incentive exists, in which case the legal rules are affirmed. By respecifying the Rubin model as a two-person, non-cooperative, simultaneous-move game, the analysis presented in this paper appears to support the arguments put forth by Landes, Gould, Tullock, and others that there is a general tendency for the disputants to pursue an out-of-court settlement. The analysis also suggests that it may also be in the litigant's best interest to negotiate an out-of-court settlement when the legal rules are efficient if the expected net present value of accident and avoidance costs is less than the litigants' court costs. Finally, it may pay to litigate even when the legal rules are efficient if the expected net present value of accident and avoidance costs is greater than the sum of the litigants' court costs. (JEL K00, K41, D61, C71, C72)
Citation Details
Title: Economic efficiency and the common law.
Author: Thomas J. Webster
Publication:Atlantic Economic Journal (Refereed)
Date: March 1, 2004
Publisher: Atlantic Economic Society
Volume: 32 Issue: 1 Page: 39(10)
Distributed by Thomson Gale
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