The Evolution of a Legal Rule
Efficient legal rules are central to efficient resource allocation in a market economy. But the question whether the common law actually converges to efficiency in commercial areas has remained empirically untested. We create a data set of 461 state court appellate decisions involving the economic loss rule in construction disputes and trace the evolution of this law from 1970 to 2005. We find that the law did not converge to any stable resting point and evolved differently in different states. Legal evolution is influenced by plaintiffs' choice of which legal claims to make, the relative economic power of the parties, and nonbinding federal precedent.
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.:
- Gomez, Fernando & Schafer, Hans-Bernd, 2007. "The law and economics of pure economic loss: Introduction to the special issue of the International Review of Law and Economics," International Review of Law and Economics, Elsevier, vol. 27(1), pages 1-7, March.
- Goldberg, Victor P, 1994. "Recovery for Economic Loss following the Exxon Valdez Oil Spill," The Journal of Legal Studies, University of Chicago Press, vol. 23(1), pages 1-39, January.
- Kessler, Daniel & Meites, Thomas & Miller, Geoffrey P, 1996. "Explaining Deviations from the Fifty-Percent Rule: A Multimodal Approach to the Selection of Cases for Litigation," The Journal of Legal Studies, University of Chicago Press, vol. 25(1), pages 233-59, January.
- Dari-Mattiacci, Giuseppe & Schafer, Hans-Bernd, 2007.
"The core of pure economic loss,"
International Review of Law and Economics,
Elsevier, vol. 27(1), pages 8-28, March.
- Eric A. Posner, 2010. "Professionals or Politicians: The Uncertain Empirical Case for an Elected Rather than Appointed Judiciary," Journal of Law, Economics and Organization, Oxford University Press, vol. 26(2), pages 290-336.
- Nicola Gennaioli & Andrei Shleifer, 2007.
"The Evolution of Common Law,"
Journal of Political Economy,
University of Chicago Press, vol. 115, pages 43-68.
- 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.
- Robert Cooter & Lewis Kornhauser & David Lane, 1979. "Liability Rules, Limited Information, and the Role of Precedent," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 366-373, Spring.
- 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.
- Theodore Eisenberg & Henry S. Farber, 1996. "The Litigious Plaintiff Hypothesis: Case Selection and Resolution," NBER Working Papers 5649, National Bureau of Economic Research, Inc.
- Guiseppe Dari-Mattiacci & Hans-Bernd Schäfer, 2006.
"The Core of Pure Economic Loss,"
Tinbergen Institute Discussion Papers
06-068/1, Tinbergen Institute.
When requesting a correction, please mention this item's handle: RePEc:ucp:jlstud:doi:10.1086/652908. 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: (Journals Division)
If references are entirely missing, you can add them using this form.