The Information Dynamics of Vertical Stare Decisis

Abstract

Based on well-established informational attributes of principal-agent theory, we argue that lower court treatment of existing Supreme Court precedent provides useful information regarding the actual, as opposed to expected, policy consequences of that precedent. Thus, conditional on ideological bias, the Court’s subsequent treatment of precedent should reflect the information it is receiving from the lower courts. Based on a study of over 6,000 Supreme Court opinions spanning 60 years, we show that the Court’s behavior appears responsive to lower court signals, albeit in a nuanced manner. These findings have significant implications for the study of the judicial hierarchy, legal change, and even ideological decision-making on the Court.

Keywords: courts, judicial hierarchy, precedent, principal-agent