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Why stare decisis?

Felli, Leonardo, Anderlini, Luca and Riboni, Alessandro (2011) Why stare decisis? CEPR Discussion papers (8266). Centre for Economic Policy Research, London, UK.

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Abstract

All Courts rule ex-post, after most economic decisions are sunk. This might generate a time-inconsistency problem. From an ex-ante perspective, Courts will have the (ex-post) temptation to be excessively lenient. This observation is at the root of the principle of stare decisis. Stare decisis forces Courts to weigh the benefits of leniency towards the current parties against the beneficial effects that tougher decisions have on future ones. We study these dynamics and find that stare decisis guarantees that precedents evolve towards ex-ante efficient decisions, thus alleviating the Courts’ time-inconsistency problem. However, the dynamics do not converge to full efficiency

Item Type: Monograph (Working Paper)
Official URL: https://cepr.org/content/discussion-papers
Additional Information: © 2011 The Authors
Divisions: Economics
STICERD
Financial Markets Group
Subjects: H Social Sciences > HB Economic Theory
JEL classification: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C79 - Other
D - Microeconomics > D7 - Analysis of Collective Decision-Making > D74 - Conflict; Conflict Resolution; Alliances
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D89 - Other
K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior > K40 - General
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L14 - Transactional Relationships; Contracts and Reputation; Networks
Date Deposited: 12 Apr 2011 14:20
Last Modified: 20 Oct 2021 01:12
URI: http://eprints.lse.ac.uk/id/eprint/35485

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