Can markets stimulate rights? On the alienability of legal claims

• 成果类型: Article
• 署名作者: Chen, Daniel L.
• 署名单位: Swiss Federal Institutes of Technology Domain; ETH Zurich
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12076
• 发表日期: 2015
• 页码: 23-65
• 关键词: Asymmetric information; gathering information; litigation finance; adverse selection; insurance markets; fees

摘要

The alienability of legal claims holds the promise of increasing access to justice and fostering development of law. I develop a principal-agent framework where litigation funders provide expertise in reducing uncertainty in agents' disutility of production. The model leads to the counterintuitive prediction that litigation funders prefer cases with novel issues, and social surplus is positively correlated with legal uncertainty. Consistent with the model, court backlog, court expenditures, and a slowing in average time to completion are associated with third-party funding; cases with third-party funding receive more citations and are reversed less often than comparable cases without such arrangements.