Why stare decisis?

Luca Anderlini, Leonardo Felli, Alessandro Riboni

Research output: Contribution to journalArticlepeer-review

Abstract

All Courts rule ex-post, after most economic decisions are sunk. This can 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 rule of precedent, known as 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.
Original languageEnglish
Pages (from-to)726-738
Number of pages13
JournalReview of Economic Dynamics
Volume17
Issue number4
Early online date20 Feb 2014
DOIs
Publication statusPublished - Oct 2014

Keywords

  • stare decisis
  • dynamics of precedents
  • time-inconsistency
  • Case Law

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