Do Parties to Nuisance Cases Bargain After Judgment? A Glimpse Inside the Cathedral

Abstract

Economic analysts of remedies often use nuisance cases as examples to illustrate their models. The illustrations commonly suppose that parties to such cases will be interested in bargaining after judgment if the court fails to award the rights to the party willing to pay the most for them. Professor Farnsworth examines twenty nuisance cases and finds no bargaining after judgment in any of them; nor did the parties' lawyers believe that bargaining would have occurred ifjudgment had been given to the loser. The lawyers said that the possibility of such bargaining was foreclosed not by the sorts of transaction costs that usually are the subject of economic models, but by animosity between the parties and by their distaste for cash bargaining over the rights at issue. Professor Farnsworth suggests that these results raise a number of interesting questions, such as how the obstacles to bargaining in these cases might be related to the absence of markets for the rights at stake, whether animosity or a distaste for bargaining should be considered transaction costs, and whether greater particularity might be needed before economic models can generate advice about remedies reliable enough to be useful to courts.

Costly Enforcement of Property Rights and the Coase Theorem

“…For f (e) = e, it can be shown that going-to-court occurs if and only if 2 < , or when the marginal cost of going to court is not too high and the second period is not discounted too heavily. 17 This result can be shown to be true more generally. Moreover, regardless of whether the two parties go to court,the initial assignment of property rights does not a¤ect total enforcement e¤orts.…”

Behavioral law and economics: Multidisciplinarity in action

“…In the research titled "Do Parties to Nuisance Lawsuits Bargain after Judgment? (Farnsworth, 1999), the author examined about twenty nuisance cases and provided proof that in none of them did the parties even attempt to contract around the court order when transaction costs were low. Moreover, the result was similar even when an impartial third party thought there was a room for mutually acceptable agreement.…”

Inquiring into Communication in Science: Alternative Approaches

“…For instance, some legal scholars appear especially critical in regard to the idea that all rights have a price and, hence, can be bought and sold. When explaining the unwillingness of parties in a number of real-life conflicts to enter into Coasian bargaining, Ward Farsnworth, a legal scholar, assumes that it happens “because they have attitudes toward their rights that make them awkward subjects for cash exchanges” (Farnsworth 1999, 405). In other words, not all social scientists endorse the idea of speaking an economic version of “Esperanto,” which highlights the limits of the “paradigmatic” solution of communication problems in the social sciences.…”