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Adjudication as a Private Good

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  • William M. Landes
  • Richard A. Posner

Abstract

This paper examines the question whether adjudication can be viewed as a private good, i.e., one whose optimal level will be generated in a free market. Part I focuses on private courts, noting their limitations as institutions for dispute resolution and rule creation but also stressing the important role that the private court, in its various manifestations, has played both historically and today. Part II discusses a recent literature which has argued that the rules generated in the public court system, in areas of the law where the parties to litigation are private individuals or firms and the rules of law are judge-made, are the efficient products of purely private inputs. Our analysis suggests that this literature has overstated the tendency of a common law system to produce efficient rules, although areas can be identified where such a tendency can indeed be predicted on economic grounds. Viewed as a contribution to the emergent literature on the positive economic theory of law, our finding that the public courts do not automatically generate efficient rules is disappointing, since it leaves unexplained the mechanisms by which such rules emerge as they seem to have done in a number of the areas of Anglo-American judge-made law. However, our other major finding, that the practices and law governing private adjudication appear to be strongly influenced by economic considerations and explicable in economic terms, is evidence that economic theory has a major role to play in explaining fundamental features of the legal system.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 0263.

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Date of creation: Jul 1978
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Publication status: published as Landes, William M. and Posner, Richard A. "Adjudication as a Private Good." Journal of Legal Studies, (March 1979).
Handle: RePEc:nbr:nberwo:0263

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Cited by:
  1. Adam Smith & David Skarbek & Bart Wilson, 2012. "Anarchy, groups, and conflict: an experiment on the emergence of protective associations," Social Choice and Welfare, Springer, Springer, vol. 38(2), pages 325-353, February.
  2. Orley Ashenfelter & David Bloom, 1993. "Lawyers as Agents of the Devil in a Prisoner's Dilemma Game," NBER Working Papers 4447, National Bureau of Economic Research, Inc.
  3. Martin Schneider, . "Erfolgsmessung in Gerichten," German Working Papers in Law and Economics, Berkeley Electronic Press 2004-1-1103, Berkeley Electronic Press.
  4. Edward Stringham & Todd Zywicki, 2011. "Rivalry and superior dispatch: an analysis of competing courts in medieval and early modern England," Public Choice, Springer, vol. 147(3), pages 497-524, June.
  5. Orley Ashenfelter & David E. Bloom, 1983. "Models of Arbitrator Behavior: Theory and Evidence," NBER Working Papers 1149, National Bureau of Economic Research, Inc.
  6. Bruce Benson, 1999. "To Arbitrate or To Litigate: That Is the Question," European Journal of Law and Economics, Springer, vol. 8(2), pages 91-151, September.
  7. Field, Barry C., 1985. "The Evolution Of Individual Property Rights In Massachusetts Agriculture, 17th-19th Centuries," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 14(2), October.
  8. Stefan Voigt, 2009. "Does Arbitration Blossom when State Courts are Bad?," MAGKS Papers on Economics, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung) 200906, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  9. Suri Ratnapala, 2001. "Eighteenth-Century Evolutionary Thought and its Relevance in the Age of Legislation," Constitutional Political Economy, Springer, vol. 12(1), pages 51-75, March.
  10. Martin Schneider, 2002. "Judicial Lawmaking in a Civil Law System: Evidence from German Labor Courts of Appeal," IAAEG Discussion Papers until 2011 200202, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
  11. Martin Schneider, 2005. "Judicial Career Incentives and Court Performance: An Empirical Study of the German Labour Courts of Appeal," European Journal of Law and Economics, Springer, vol. 20(2), pages 127-144, September.
  12. Dennis W. Carlton & Randal C. Picker, 2013. "Antitrust and Regulation," NBER Chapters, in: Economic Regulation and Its Reform: What Have We Learned?, pages 25-61 National Bureau of Economic Research, Inc.
  13. Michael Mitsopoulos & Theodore Pelagidis, 2010. "Greek appeals courts’ quality analysis and performance," European Journal of Law and Economics, Springer, vol. 30(1), pages 17-39, August.
  14. Steven Shavell, 1981. "The Social versus the Private Incentive to Bring Suit in a Costly Legal System," NBER Working Papers 0741, National Bureau of Economic Research, Inc.
  15. Jahn, Elke J. & Wagner, Thomas, 2001. "Labour's law?," Discussion Papers 6, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  16. George Halkos & Nicholas Kyriazis, 2003. "Property Rights and Game-Theory Implications of Satellite Communications: The Bilateral Case of Greece and Russia," European Journal of Law and Economics, Springer, vol. 15(3), pages 233-250, May.

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