Abstract:
Richard Posner’s influence on the field of law and economics cannot be overstated. Among his many contributions, Posner offered an early conjecture that remains fascinating and controversial to this day: the idea that common law rules are more likely than legislative codes to be concerned with efficiency. In this paper, I compare the efficiency of a common law rule of contracting to the efficiency of a civil law rule. In common law jurisdictions, claimants must have knowledge of a reward in order to recover. In civil law jurisdictions, however, no such knowledge is required. I analyze the efficiency of each rule by examining the incentives created by each rule. In a finding that agrees with Posner’s hypothesis, I argue that the common law rule is more efficient.
The model has a number of applications beyond contract default laws. I use the model to discuss three legal questions previously analyzed by Richard Posner: (1) incentivizing innovation; (2) the finders-keepers rule in property law; and (3) salvage rights in maritime law.
Niblett, Anthony, On the Efficiency of the Common Law: An Application to the Recovery of Rewards (November 12, 2015). European Journal of Law and Economics, forthcoming.
First posted 2015-11-17 07:07:36
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