IDEAS home Printed from https://ideas.repec.org/p/ioe/doctra/536.html
   My bibliography  Save this paper

An Integrated Theory of Litigation and Legal Standards

Author

Listed:
  • Álvaro Bustos
  • Nuno Garoupa

Abstract

I propose an integrated understanding of litigation and legal standards that allows us to answer key questions in the functioning of common law legal systems: When do substantive trials occur?; does society face too many or too few of these trials?; and can legal standards be used to correct a potentially inefficient frequency of litigation? I characterize the dynamics of substantive trials and predict their occurrence on an infinite horizon. I show, for three reasons, that private and socially optimal litigation frequencies are not equal, identifying corrections. I also derive state contingent and non-contingent optimal standards, and discuss policy implications.

Suggested Citation

  • Álvaro Bustos & Nuno Garoupa, 2020. "An Integrated Theory of Litigation and Legal Standards," Documentos de Trabajo 536, Instituto de Economia. Pontificia Universidad Católica de Chile..
    • Handle: RePEc:ioe:doctra:536
    as

    Download full text from publisher

    File URL: https://www.economia.uc.cl/docs/doctra/dt-536.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Andrei Shleifer & Florencio Lopez-de-Silanes & Rafael La Porta, 2008. "The Economic Consequences of Legal Origins," Journal of Economic Literature, American Economic Association, vol. 46(2), pages 285-332, June.
    2. Kornhauser, Lewis A., 1992. "Modeling collegial courts I: Path-dependence," International Review of Law and Economics, Elsevier, vol. 12(2), pages 169-185, June.
    3. Giri Parameswaran, 2018. "Endogenous cases and the evolution of the common law," RAND Journal of Economics, RAND Corporation, vol. 49(4), pages 791-818, December.
    4. Alvaro Bustos & Tonja Jacobi, 2019. "Judicial Choice among Cases for Certiorari," Supreme Court Economic Review, University of Chicago Press, vol. 27(1), pages 117-154.
    5. Gely, Rafael & Spiller, Pablo T., 1992. "The political economy of supreme court constitutional decisions: The case of Roosevelt's court-packing plan," International Review of Law and Economics, Elsevier, vol. 12(1), pages 45-67, March.
    6. Rasmusen, Eric, 1994. "Judicial Legitimacy as a Repeated Game," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 10(1), pages 63-83, April.
    7. Anthony Niblett & Richard A. Posner & Andrei Shleifer, 2010. "The Evolution of a Legal Rule," The Journal of Legal Studies, University of Chicago Press, vol. 39(2), pages 325-358.
    8. Álvaro Bustos & Tonja Jacobi, 2014. "Strategic Judicial Preference Revelation," Journal of Law and Economics, University of Chicago Press, vol. 57(1), pages 113-137.
    9. Jeffrey A. Segal & Chad Westerland & Stefanie A. Lindquist, 2011. "Congress, the Supreme Court, and Judicial Review: Testing a Constitutional Separation of Powers Model," American Journal of Political Science, John Wiley & Sons, vol. 55(1), pages 89-104, January.
    10. Landes, William M & Posner, Richard A, 1975. "The Independent Judiciary in an Interest-Group Perspective," Journal of Law and Economics, University of Chicago Press, vol. 18(3), pages 875-901, December.
    11. Giacomo A. M. Ponzetto & Patricio A. Fernandez, 2008. "Case Law versus Statute Law: An Evolutionary Comparison," The Journal of Legal Studies, University of Chicago Press, vol. 37(2), pages 379-430, June.
    12. Segal, Jeffrey A., 1997. "Separation-of-Powers Games in the Positive Theory of Congress and Courts," American Political Science Review, Cambridge University Press, vol. 91(1), pages 28-44, March.
    13. Charles M. Cameron & Lewis A. Kornhauser & Giri Parameswaran, 2019. "Stare decisis and judicial log‐rolls: a gains‐from‐trade model," RAND Journal of Economics, RAND Corporation, vol. 50(3), pages 505-531, September.
    14. Ramseyer, J Mark & Rasmusen, Eric B, 1997. "Judicial Independence in a Civil Law Regime: The Evidence from Japan," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 13(2), pages 259-286, October.
    15. Segal, Jeffrey A. & Cover, Albert D., 1989. "Ideological Values and the Votes of U.S. Supreme Court Justices," American Political Science Review, Cambridge University Press, vol. 83(2), pages 557-565, June.
    16. Scott Baker & Claudio Mezzetti, 2012. "A Theory of Rational Jurisprudence," Journal of Political Economy, University of Chicago Press, vol. 120(3), pages 513-551.
    17. Callander, Steven & Clark, Tom S., 2017. "Precedent and Doctrine in a Complicated World," American Political Science Review, Cambridge University Press, vol. 111(1), pages 184-203, February.
    18. Gely, Rafael & Spiller, Pablo T, 1990. "A Rational Choice Theory of Supreme Court Statutory Decisions with Applications to the State Farm and Grove City Cases," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 6(2), pages 263-300, Fall.
    19. Kornhauser, Lewis A, 1992. "Modeling Collegial Courts. II. Legal Doctrine," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 8(3), pages 441-470, October.
    20. Spiller, Pablo T. & Tiller, Emerson H., 1996. "Invitations to override: Congressional reversals of supreme court decisions," International Review of Law and Economics, Elsevier, vol. 16(4), pages 503-521, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bernardo Guimaraes & Bruno Meyerhof Salama, 2023. "Permitting Prohibitions," The Journal of Legal Studies, University of Chicago Press, vol. 52(1), pages 241-271.
    2. Guimaraesy, Bernardo & Meyerhof Salama, Bruno, 2017. "Contingent judicial deference: theory and application to usury laws," LSE Research Online Documents on Economics 86146, London School of Economics and Political Science, LSE Library.
    3. Guimarães, Bernardo de Vasconcellos & Salama, Bruno Meyerhof, 2017. "Contingent judicial deference: theory and application to usury laws," Textos para discussão 440, FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil).
    4. Clark, Tom S. & Montagnes, B. Pablo & Spenkuch, Jörg L., 2022. "Politics from the Bench? Ideology and Strategic Voting in the U.S. Supreme Court," Journal of Public Economics, Elsevier, vol. 214(C).
    5. Karakas, Leyla D., 2017. "Political rents under alternative forms of judicial review," International Review of Law and Economics, Elsevier, vol. 52(C), pages 86-96.
    6. Anderlini, Luca & Felli, Leonardo & Riboni, Alessandro, 2020. "Legal efficiency and consistency," European Economic Review, Elsevier, vol. 121(C).
    7. Pablo T. Spiller & Rafael Gely, 2007. "Strategic Judicial Decision Making," NBER Working Papers 13321, National Bureau of Economic Research, Inc.
    8. Raphaël Franck, 2018. "Judicial impartiality in politically charged cases," Constitutional Political Economy, Springer, vol. 29(2), pages 193-229, June.
    9. Chen, Ying & Eraslan, Hulya, 2018. "Learning While Setting Precedents," Working Papers 18-001, Rice University, Department of Economics.
    10. Anthony Niblett, 2013. "Case-by-Case Adjudication and the Path of the Law," The Journal of Legal Studies, University of Chicago Press, vol. 42(2), pages 303-330.
    11. Hoon Lee & Joseph L. Staats & Glen Biglaiser, 2012. "The importance of legal systems for portfolio investment in the developing world," International Area Studies Review, Center for International Area Studies, Hankuk University of Foreign Studies, vol. 15(4), pages 339-358, December.
    12. Ryan J. Owens, 2010. "The Separation of Powers and Supreme Court Agenda Setting," American Journal of Political Science, John Wiley & Sons, vol. 54(2), pages 412-427, April.
    13. Tom S Clark, 2016. "Scope and precedent: judicial rule-making under uncertainty," Journal of Theoretical Politics, , vol. 28(3), pages 353-384, July.
    14. Nicola Gennaioli & Enrico Perotti, 2009. "Standardized enforcement: Access to justice vs contractual innovation," Economics Working Papers 1329, Department of Economics and Business, Universitat Pompeu Fabra, revised Jun 2012.
    15. Gilat Levy, 2005. "Careerist Judges," RAND Journal of Economics, The RAND Corporation, vol. 36(2), pages 275-297, Summer.
    16. Lars P. Feld & Stefan Voigt, 2004. "Making Judges Independent – Some Proposals Regarding the Judiciary," CESifo Working Paper Series 1260, CESifo.
    17. Anthony Niblett, 2017. "On the efficiency of the common law: an application to the recovery of rewards," European Journal of Law and Economics, Springer, vol. 43(3), pages 393-417, June.
    18. Mario Bergara & Barak Richman & Pablo T. Spiller, 2002. "Modeling Supreme Court Strategic Decision Making: Congressional Constraint," Documentos de Trabajo (working papers) 1402, Department of Economics - dECON.
    19. Adam B. Badawi & Scott Baker, 2015. "Appellate Lawmaking in a Judicial Hierarchy," Journal of Law and Economics, University of Chicago Press, vol. 58(1), pages 139-172.
    20. Assaf Meydani & Shlomo Mizrahi, 2010. "The Relationship Between the Supreme Court and Parliament in Light of the Theory of Moves: the Case of Israel," Rationality and Society, , vol. 22(1), pages 55-82, February.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ioe:doctra:536. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jaime Casassus (email available below). General contact details of provider: https://edirc.repec.org/data/iepuccl.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.