The Evolution of Precedent

Gennaioli, Nicola; Shleifer, Andrei

doi:10.2139/ssrn.687801

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The Evolution of Precedent

39 Pages Posted: 14 Apr 2005

See all articles by Nicola Gennaioli

Nicola Gennaioli

Bocconi University - Department of Finance

Andrei Shleifer

Harvard University - Department of Economics; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)

There are 2 versions of this paper

Date Written: March 2005

Abstract

We evaluate Richard Posner's famous hypothesis that common law converges to efficient legal rules using a model of precedent setting by appellate judges. Following legal realists, we assume that judicial decisions are subject to personal biases, and that changing precedent is costly to judges. We consider separately the evolution of precedent under judicial overruling of previous decisions, as well as under distinguishing cases based on new material dimensions. Convergence to efficient legal rules occurs only under very special circumstances, but the evolution of precedent over time is on average beneficial under more plausible conditions.

Keywords: Precedent, common law

JEL Classification: K13, K4

Suggested Citation: Suggested Citation

Gennaioli, Nicola and Shleifer, Andrei, The Evolution of Precedent (March 2005). Available at SSRN: https://ssrn.com/abstract=687801 or http://dx.doi.org/10.2139/ssrn.687801