Legal Precedent: A Theoretical and Empirical Analysis

95 Pages Posted: 18 Jun 2004 Last revised: 8 Dec 2008

See all articles by William M. Landes

William M. Landes

University of Chicago Law School; National Bureau of Economic Research (NBER)

Richard A. Posner

University of Chicago Law School; National Bureau of Economic Research (NBER)

Date Written: August 1976

Abstract

The use of precedents to create rules of legal obligation has, to our knowledge, received little theoretical or empirical analysis. This paper presents and tests empirically an economic approach to legal precedent that is derived mainly from the analysis of capital formation and investment. We treat the body of legal precedents created by judicial decisions in prior periods as a capital stock that yields a flow of information services which depreciates over time as new conditions arise that were not foreseen by the framers of the existing precedents. New (and replacement) capital is created by investment in the production of precedents.

Suggested Citation

Landes, William M. and Posner, Richard A., Legal Precedent: A Theoretical and Empirical Analysis (August 1976). NBER Working Paper No. w0146. Available at SSRN: https://ssrn.com/abstract=260335

William M. Landes (Contact Author)

University of Chicago Law School ( email )

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Richard A. Posner

University of Chicago Law School ( email )

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Chicago, IL 60637
United States
773-702-9608 (Phone)
773-702-0730 (Fax)

National Bureau of Economic Research (NBER)

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United States

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