Politics, Markets, and Dispute Resolution

14 Pages Posted: 12 Mar 2014

See all articles by Richard E. Wagner

Richard E. Wagner

George Mason University - Department of Economics; George Mason University - Mercatus Center

Date Written: March 10, 2014


In bringing economic analysis to bear on whether a dispute is settled without trial, the presumed institutional setting is typically one of private property where the parties are residual claimants to their legal expenses. Many disputes, however, are between private and public parties. In these disputes there is a conflict between substantive rationalities because public parties are not residual claimants. Just as the substantive content of action can vary depending on whether the actor operates within a context of private or common property, so can the substance of dispute settlement vary. While a public actor cannot pocket legal expenses that are saved through settlement, the expenses of trial can serve as an investment in pursuing future political ambitions.

Keywords: dispute resolution; substantive rationality; private vs. public ordering; market conformability

JEL Classification: D23, D74, K40

Suggested Citation

Wagner, Richard E., Politics, Markets, and Dispute Resolution (March 10, 2014). GMU Working Paper in Economics No. 14-08, Available at SSRN: https://ssrn.com/abstract=2407004 or http://dx.doi.org/10.2139/ssrn.2407004

Richard E. Wagner (Contact Author)

George Mason University - Department of Economics ( email )

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HOME PAGE: http://mason.gmu.edu/~rwagner/

George Mason University - Mercatus Center ( email )

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HOME PAGE: http://ppe.mercatus.org/scholars/richard-wagner

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