The Dynamics of the Legal System
27 Pages Posted: 7 May 2009 Last revised: 30 Mar 2011
Date Written: June 24, 2009
We present a dynamic model of noncontractual litigation in which the parties' decision whether to litigate depends on information produced by courts and, vice versa, the courts' involvement in the lawmaking process depends on the cases proposed by the parties. Thereby, we integrate in one model the two main functions of the judiciary (adjudication and lawmaking) and study their interplay. Our model offers a dynamic, cyclical perspective on the evolution of the legal system over time and sheds new light on the causes for high litigation rates and on judge-made law versus statutes.
Keywords: incompleteness of law, litigation, legislation, adjudication, judge-made law
JEL Classification: K10, K40, K41
Suggested Citation: Suggested Citation