The Economics of Class Actions and Class Action Waivers

35 Pages Posted: 11 Jun 2013 Last revised: 18 Mar 2015

Keith N. Hylton

Boston University - School of Law

Date Written: January 1, 2015

Abstract

Class action litigation has generated a series of recent Supreme Court decisions imposing greater federal court supervision over the prosecution of collective injury claims. This group of cases raises the question whether class action waivers should be permitted on policy grounds. I examine the economics of class actions and waivers in this paper. I distinguish between the standard one-on-one litigation environment and the class action environment. In the standard environment, waivers between informed agents enhance society’s welfare. In the class action environment, in contrast, not all waivers are likely to enhance society’s welfare.

Keywords: class action, class action waivers, economics of class actions, economics of class action waivers

JEL Classification: K00, K13, K49

Suggested Citation

Hylton, Keith N., The Economics of Class Actions and Class Action Waivers (January 1, 2015). Forthcoming, Sup. Ct. Econ. Rev.; Boston Univ. School of Law, Law and Economics Research Paper No. 13-22. Available at SSRN: https://ssrn.com/abstract=2277562 or http://dx.doi.org/10.2139/ssrn.2277562

Keith N. Hylton (Contact Author)

Boston University - School of Law ( email )

765 Commonwealth Avenue
Boston, MA 02215
United States
617-353-8959 (Phone)
617-353-3077 (Fax)

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