Uncertainty of Law and the Legal Process - Archive ouverte HAL
Article Dans Une Revue Journal of Institutional and Theoretical Economics Année : 2005

Uncertainty of Law and the Legal Process

Résumé

There is extensive literature on whether courts or legislators produce efficient rules, but which of them produces rules efficiently? The law is subject to uncertainty ex ante; uncertainty makes the outcomes of trials difficult to predict and deters parties from settling disputes out of court. In contrast, the law is certain ex post: litigation fosters the creation of precedents that reduce uncertainty. We postulate that there is a natural balance between the degree of uncertainty of a legal system (kept under control by litigation) and its litigation rate (sustained by uncertainty). We describe such equilibrium rates in a model of tort litigation, study how they are affected by different policies, and compare the costs and benefits of the legislative and the judicial process of lawmaking.

Dates et versions

hal-00279241 , version 1 (14-05-2008)

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Bruno Deffains, Giuseppe Dari-Mattiacci. Uncertainty of Law and the Legal Process. Journal of Institutional and Theoretical Economics, 2005, 163 (4), pp.627-656. ⟨10.1628/093245607783242990⟩. ⟨hal-00279241⟩
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