Legal Change: Integrating Selective Litigation, Judicial Preferences, and Precedent

The claim that the common law displays an economic logic is a centerpiece of the positive economic theory of law. A key question in this literature is whether this outcome is due to the conscious efforts of judges, or the result of invisible hand processes. This paper develops a model in which to two effects combine to determine the direction of legal change. The main conclusions are, first, that judicial bias can prevent the law from evolving toward efficiency if the fraction of judges biased against the efficient rule is large enough; and second, that precedent affects the rate of legal change but not its direction.

Property Law

This chapter examines the economics of property rights and property law. Property law is a fundamental part of social organization and is also fundamental to the operation of the economy because it defines and protects the bundle of rights that constitute property. Property law thereby creates incentives to protect and invest in assets and establishes a legal framework within which market exchange of assets can take place. The purpose of this chapter is to show how the economics of property rights can be used to understand fundamental features of property law and related extra-legal institutions. The chapter will both examine the rationale for legal doctrine and the effects of legal doctrine regarding the exercise, enforcement, and transfer of rights. It will also examine various property rights regimes including open access, private ownership, common property and state property. The guiding questions are: How are property rights established? What explains the variation in the types of property rights? What governs the use and transfer of rights? And, how are property rights enforced?