The Evolution of a Legal Rule

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The Evolution of a Legal Rule

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Title: The Evolution of a Legal Rule
Author: Shleifer, Andrei; Niblett, Anthony; Posner, Richard A.

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Citation: Niblett, Anthony, Richard A. Posner, and Andrei Shleifer. 2010. The evolution of a legal rule. Journal of Legal Studies 39(2): 325-358.
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Abstract: Efficient legal rules are central to efficient resource allocation in a market economy. But the question whether the common law actually converges to efficiency in commercial areas has remained empirically untested. We create a dataset of 461 state-court appellate decisions involving the economic loss rule in construction disputes and trace the evolution of this law from 1970 to 2005. We find that the law did not converge to any stable resting point and evolved differently in different states. Legal evolution is influenced by plaintiffs’ choice of which legal claims to make, the relative economic power of the parties, and nonbinding federal precedent.
Published Version: doi:10.1086/652908
Terms of Use: This article is made available under the terms and conditions applicable to Open Access Policy Articles, as set forth at
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