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Can markets stimulate rights? On the alienability of legal claims

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  • Daniel L. Chen

Abstract

type="main"> The alienability of legal claims holds the promise of increasing access to justice and fostering development of law. I develop a principal-agent framework where litigation funders provide expertise in reducing uncertainty in agents' disutility of production. The model leads to the counterintuitive prediction that litigation funders prefer cases with novel issues, and social surplus is positively correlated with legal uncertainty. Consistent with the model, court backlog, court expenditures, and a slowing in average time to completion are associated with third-party funding; cases with third-party funding receive more citations and are reversed less often than comparable cases without such arrangements.

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  • Daniel L. Chen, 2015. "Can markets stimulate rights? On the alienability of legal claims," RAND Journal of Economics, RAND Corporation, vol. 46(1), pages 23-65, March.
    • Handle: RePEc:bla:randje:v:46:y:2015:i:1:p:23-65
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    File URL: http://hdl.handle.net/10.1111/1756-2171.12076
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    Cited by:

    1. Adam B. Badawi & Daniel L. Chen, 2017. "The Shareholder Wealth Effects of Delaware Litigation," American Law and Economics Review, Oxford University Press, vol. 19(2), pages 287-326.
    2. Chen, Daniel L., 2023. "Judicial compliance in district courts," International Review of Law and Economics, Elsevier, vol. 74(C).
    3. Chen, Daniel L. & Yeh, Susan, 2016. "How Do Rights Revolutions Occur? Free Speech and the First Amendment," IAST Working Papers 16-51, Institute for Advanced Study in Toulouse (IAST).
    4. Kaspar Wuthrich & Ying Zhu, 2019. "Omitted variable bias of Lasso-based inference methods: A finite sample analysis," Papers 1903.08704, arXiv.org, revised Sep 2021.
    5. Chen, Daniel L. & Levonyan, Vardges & Yeh, Susan, 2016. "Policies Affect Preferences: Evidence from Random Variation in Abortion Jurisprudence," IAST Working Papers 16-58, Institute for Advanced Study in Toulouse (IAST).
    6. Chen, Daniel L. & Sethi, Jasmin, 2016. "Insiders, Outsiders, and Involuntary Unemployment: Sexual Harrassment Exacerbates Gender Inequality," IAST Working Papers 16-44, Institute for Advanced Study in Toulouse (IAST).
    7. Chen, Daniel L. & Frankenreiter, Jens & Yeh, Susan, 2016. "Judicial Compliance in District Courts," IAST Working Papers 16-55, Institute for Advanced Study in Toulouse (IAST).
    8. Chen Daniel L., 2019. "Law and Literature: Theory and Evidence on Empathy and Guile," Review of Law & Economics, De Gruyter, vol. 15(1), pages 1-33, March.
    9. Chen, Daniel L., 2016. "Tastes for Desert and Placation: A Reference Point-Dependent Model of Social Preferences," IAST Working Papers 16-60, Institute for Advanced Study in Toulouse (IAST).

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