Legal Precedent: A Theoretical and Empirical Analysis

  title={Legal Precedent: A Theoretical and Empirical Analysis},
  author={William M. Landes and Richard A. Posner},
  journal={The Journal of Law and Economics},
  pages={249 - 307}
The use of precedents to create rules of legal obligation has, to our knowledge, received little theoretical or empirical analysis. This paper presents and tests empirically an economic approach to legal precedent that is derived mainly from the analysis of capital formation and investment. We treat the body of legal precedents created by judicial decisions in prior periods as a capital stock that yields a flow of information services which depreciates over time as new conditions arise that… 
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