Common Law Efficiency under Haphazard Adjudication
30 Pages Posted: 22 May 2001
Date Written: November 2005
Absent efficiency-cultivating judges, is selective litigation alone enough to drive the common law to efficiency? To address this question, the common law is viewed as an evolving network of precedents. Litigants nominate the most inefficient precedents for re-adjudication and judges modify these precedents haphazardly. I show that in equilibrium every precedent achieves and remains above (except when it is being relitigated) a threshold efficiency score. Above the threshold, any score is equally likely. Therefore, despite haphazard adjudication, selective litigation by itself is enough to drive the common law above a threshold efficiency level. However, haphazard adjudication fails to achieve perfect efficiency - the efficiency distribution above the threshold has nonzero width.
Keywords: common law, evolution, learning, adaptation, networks
JEL Classification: K0, L0, L2, N2, O0, Z0, Z1
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