IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Uncertainty of Law and the Legal Process

  • Giuseppe Dari-Mattiacci
  • Bruno Deffains

There is extensive literature on whether courts or legislators produce efficient rules, but which of them produces rules efficiently? The law is subject touncertainty ex ante; uncertainty makes the outcomes of trials difficult to predict and deters parties from settling disputes out of court. In contrast, thelaw is certain ex post: litigation fosters the creation of precedents that reduce uncertainty. We postulate that there is a natural balance between the degree of uncertainty of a legal system (kept under control by litigation) and its litigation rate (sustained by uncertainty). We describe such equilibrium rates in a model of tort litigation, study how they are affected by different policies, and compare the costs and benefits of the legislative and the judicial process of lawmaking..

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.ingentaconnect.com/content/mohr/jite/2007/00000163/00000004/art00005
Download Restriction: Fulltext access is included for subscribers to the printed version.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Mohr Siebeck, Tübingen in its journal Journal of Institutional and Theoretical Economics.

Volume (Year): 163 (2007)
Issue (Month): 4 (December)
Pages: 627-656

as
in new window

Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200712)163:4_627:uolatl_2.0.tx_2-z
Contact details of provider: Web page: http://www.mohr.de/jite

Order Information: Postal: Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany
Email:


References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Kaplow, Louis, 1994. "The Value of Accuracy in Adjudication: An Economic Analysis," The Journal of Legal Studies, University of Chicago Press, vol. 23(1), pages 307-401, January.
  2. Jennifer F. Reinganum & Andrew F. Daughety, 2004. "Secrecy and Safety," Econometric Society 2004 North American Summer Meetings 53, Econometric Society.
  3. Jennifer F. Reinganum & Louise L. Wilde, 1986. "Settlement, Litigation, and the Allocation of Litigation Costs," RAND Journal of Economics, The RAND Corporation, vol. 17(4), pages 557-566, Winter.
  4. 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.
  5. Rubin, Paul H & Curran, Christopher & Curran, John F, 2001. " Litigation versus Legislation: Forum Shopping by Rent Seekers," Public Choice, Springer, vol. 107(3-4), pages 295-310, June.
  6. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert W., 1998. "Law and Finance," Scholarly Articles 3451310, Harvard University Department of Economics.
  7. repec:van:wpaper:0508 is not listed on IDEAS
  8. Hanssen, F Andrew, 1999. "The Effect of Judicial Institutions on Uncertainty and the Rate of Litigation: The Election versus Appointment of State Judges," The Journal of Legal Studies, University of Chicago Press, vol. 28(1), pages 205-32, January.
  9. Png, I. P. L., 1986. "Optimal subsidies and damages in the presence of judicial error," International Review of Law and Economics, Elsevier, vol. 6(1), pages 101-105, June.
  10. Baye, M.R. & Kovenock D. & De Vries, C.G., 2000. "Comparative Analysis of Litigation Systems: an Auction-Theoretic Approach," Purdue University Economics Working Papers 1137, Purdue University, Department of Economics.
  11. Kennan, John & Wilson, Robert, 1993. "Bargaining with Private Information," Journal of Economic Literature, American Economic Association, vol. 31(1), pages 45-104, March.
  12. Rubin, Paul H & Bailey, Martin J, 1994. "The Role of Lawyers in Changing the Law," The Journal of Legal Studies, University of Chicago Press, vol. 23(2), pages 807-31, June.
  13. Louis Kaplow & Steven Shavell, 1991. "Private Versus Socially Optimal Provision of Ex Ante Legal Advice," NBER Working Papers 3868, National Bureau of Economic Research, Inc.
  14. 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.
  15. Rosenberg, D. & Shavell, S., 1985. "A model in which suits are brought for their nuisance value," International Review of Law and Economics, Elsevier, vol. 5(1), pages 3-13, June.
  16. Steven Shavell, 1989. "Sharing of Information Prior to Settlement or Litigation," RAND Journal of Economics, The RAND Corporation, vol. 20(2), pages 183-195, Summer.
  17. Bailey, Martin J. & Rubin, Paul H., 1994. "A positive theory of legal change," International Review of Law and Economics, Elsevier, vol. 14(4), pages 467-477, December.
  18. Schauer, Frederick, 2005. "Do Cases Make Bad Law?," Working Paper Series rwp05-013, Harvard University, John F. Kennedy School of Government.
  19. Shavell, Steven, 1988. "Legal Advice about Contemplated Acts: The Decision to Obtain Advice, Its Social Desirability, and Protection of Confidentiality," The Journal of Legal Studies, University of Chicago Press, vol. 17(1), pages 123-50, January.
  20. Farmer, Amy & Pecorino, Paul, 1994. "Pretrial negotiations with asymmetric information on risk preferences," International Review of Law and Economics, Elsevier, vol. 14(3), pages 273-281, September.
  21. Bebchuk, Lucian Arye, 1988. "Suing Solely to Extract a Settlement Offer," The Journal of Legal Studies, University of Chicago Press, vol. 17(2), pages 437-50, June.
  22. Andrew F. Daughety & Jennifer F. Reinganum, 1999. "Hush Money," RAND Journal of Economics, The RAND Corporation, vol. 30(4), pages 661-678, Winter.
  23. Peter Aranson, 1992. "The common law as central economic planning," Constitutional Political Economy, Springer, vol. 3(3), pages 289-319, September.
  24. Maskin, Eric & Tirole, Jean, 1999. "Unforeseen Contingencies and Incomplete Contracts," Review of Economic Studies, Wiley Blackwell, vol. 66(1), pages 83-114, January.
  25. White, Michelle J., 1992. "Legal complexity and lawyers' benefit from litigation," International Review of Law and Economics, Elsevier, vol. 12(3), pages 381-395, September.
  26. Katz, Avery, 1990. "The effect of frivolous lawsuits on the settlement of litigation," International Review of Law and Economics, Elsevier, vol. 10(1), pages 3-27, May.
  27. Louis Kaplow & Steven Shavell, 1989. "Legal Advice about Acts Already Commited," NBER Working Papers 3005, National Bureau of Economic Research, Inc.
  28. Craswell, Richard & Calfee, John E, 1986. "Deterrence and Uncertain Legal Standards," Journal of Law, Economics and Organization, Oxford University Press, vol. 2(2), pages 279-303, Fall.
  29. 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.
  30. Lucian Arye Bebchuk, 1984. "Litigation and Settlement under Imperfect Information," RAND Journal of Economics, The RAND Corporation, vol. 15(3), pages 404-415, Autumn.
  31. William M. Landes & Richard A. Posner, 1976. "Legal Precedent: A Theoretical and Empirical Analysis," NBER Working Papers 0146, National Bureau of Economic Research, Inc.
  32. Jean Tirole, 1999. "Incomplete Contracts: Where Do We Stand?," Econometrica, Econometric Society, vol. 67(4), pages 741-782, July.
  33. Bebchuk, Lucian Arye, 1996. "A New Theory Concerning the Credibility and Success of Threats to Sue," The Journal of Legal Studies, University of Chicago Press, vol. 25(1), pages 1-25, January.
  34. I.P.L. P'ng, 1983. "Strategic Behavior in Suit, Settlement, and Trial," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 539-550, Autumn.
  35. Nicola Gennaioli & Andrei Shleifer, 2005. "The Evolution of Precedent," NBER Working Papers 11265, National Bureau of Economic Research, Inc.
  36. Isaac Ehrlich & Richard A. Posner, 1974. "An Economic Analysis of Legal Rulemaking," The Journal of Legal Studies, University of Chicago Press, vol. 3(1), pages 257-286, January.
  37. Spier, Kathryn E, 1992. "The Dynamics of Pretrial Negotiation," Review of Economic Studies, Wiley Blackwell, vol. 59(1), pages 93-108, January.
  38. Francesco Parisi & Vincy Fon & Nita Ghei, 2004. "The Value of Waiting in Lawmaking," European Journal of Law and Economics, Springer, vol. 18(2), pages 131-148, September.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:mhr:jinste:urn:sici:0932-4569(200712)163:4_627:uolatl_2.0.tx_2-z. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Wolpert)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.