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Legal change and the social value of lawsuits

  • Miceli, Thomas J.

This paper integrates the literatures on the social value of lawsuits, the evolution of the law, and judicial preferences to evaluate the hypothesis that the law evolves toward efficiency. The setting is a simple accident model with costly litigation where the efficient law minimizes the sum of accident plus litigation costs. The analysis shows that the law will not generally evolve completely toward any one rule, but will reach a steady state equilibrium in which the distribution of rules depends both on the selective litigation effect and the nature of judicial bias. The analysis also links legal change with the social value of lawsuits to allow an explicit evaluation of the lawmaking function of trials.

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Article provided by Elsevier in its journal International Review of Law and Economics.

Volume (Year): 30 (2010)
Issue (Month): 3 (September)
Pages: 203-208

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Handle: RePEc:eee:irlaec:v:30:y:2010:i:3:p:203-208
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  1. Nicola Gennaioli & Andrei Shleifer, 2007. "The Evolution of Common Law," Journal of Political Economy, University of Chicago Press, vol. 115, pages 43-68.
  2. Lucian Arye Bebchuk, 1987. "Suing Solely to Extract a Settlement Offer," NBER Working Papers 2161, National Bureau of Economic Research, Inc.
  3. George L. Priest & Benjamin Klein, 1984. "The Selection of Disputes for Litigation," The Journal of Legal Studies, University of Chicago Press, vol. 13(1), pages 1-56, January.
  4. Gennaioli, Nicola & Shleifer, Andrei, 2007. "Overruling and the instability of law," Journal of Comparative Economics, Elsevier, vol. 35(2), pages 309-328, June.
  5. Keith N. Hylton, 2006. "Information, Litigation, and Common Law Evolution," American Law and Economics Review, Oxford University Press, vol. 8(1), pages 33-61.
  6. Thomas J. Miceli, 2009. "Legal Change: Selective Litigation, Judicial Bias, and Precedent," The Journal of Legal Studies, University of Chicago Press, vol. 38(1), pages 157-168, 01.
  7. Fon, Vincy & Parisi, Francesco, 2003. " Litigation and the Evolution of Legal Remedies: A Dynamic Model," Public Choice, Springer, vol. 116(3-4), pages 419-33, September.
  8. Lucian Arye Bebchuk, 1984. "Litigation and Settlement under Imperfect Information," RAND Journal of Economics, The RAND Corporation, vol. 15(3), pages 404-415, Autumn.
  9. Landes, William M, 1971. "An Economic Analysis of the Courts," Journal of Law and Economics, University of Chicago Press, vol. 14(1), pages 61-107, April.
  10. Miceli, Thomas J. & Cosgel, Metin M., 1994. "Reputation and judicial decision-making," Journal of Economic Behavior & Organization, Elsevier, vol. 23(1), pages 31-51, January.
  11. Whitman, Douglas Glen, 2000. "Evolution of the Common Law and the Emergence of Compromise," The Journal of Legal Studies, University of Chicago Press, vol. 29(2), pages 753-81, June.
  12. Cohen, Mark A, 1991. "Explaining Judicial Behavior or What's "Unconstitutional" about the Sentencing Commission?," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(1), pages 183-99, Spring.
  13. Shavell, Steven, 1996. "Any Frequency of Plaintiff Victory at Trial Is Possible," The Journal of Legal Studies, University of Chicago Press, vol. 25(2), pages 493-501, June.
  14. Vincy Fon & Francesco Parisi & Ben Depoorter, 2005. "Litigation, Judicial Path-Dependence, and Legal Change," European Journal of Law and Economics, Springer, vol. 20(1), pages 43-56, July.
  15. Shavell, Steven, 1999. "The level of litigation: private versus social optimality of suit and of settlement," International Review of Law and Economics, Elsevier, vol. 19(1), pages 99-115, March.
  16. Shavell, Steven, 1997. "The Fundamental Divergence between the Private and the Social Motive to Use the Legal System," The Journal of Legal Studies, University of Chicago Press, vol. 26(2), pages 575-612, June.
  17. Hylton, Keith N., 1990. "The influence of litigation costs on deterrence under strict liability and under negligence," International Review of Law and Economics, Elsevier, vol. 10(2), pages 161-171, September.
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