Abstract and Keywords
Sometimes the sequence of events is important for establishing rights and obligations, and sometimes it is not. For example, if a nuisance was there before the neighbouring residences arrived, the nuisance is sometimes allowed to continue in the same location under the doctrine of coming to the nuisance. When and why should the doctrine be (or not be) upheld? While many concepts in law and economics do not explicitly have a time dimension, once we start thinking about ex ante versus ex post, a large number of seemingly unrelated areas of the law involve similar issues of sequence. When new regulations are imposed, sometimes pre-existing businesses are exempt and sometimes not. In accident law, negligent behaviour by the first actor may require the second actor to take action beyond the ordinarily efficient actions as can be seen in the doctrine of last clear chance. What is the underlying rational for the application of this rule? Rights typically go to the highest bidder, but at 4-way stop signs, rights are granted according to who was there first. In other areas involving traffic, being first accedes to other criteria such as majority rule. As a final example, priority in bankruptcy gives the right to the first creditor of the same secured debt, but not to the first creditor of unsecured debt. Why? This article presents an efficiency-based framework for answering these questions.
Access to the complete content on Oxford Handbooks Online requires a subscription or purchase. Public users are able to search the site and view the abstracts and keywords for each book and chapter without a subscription.
If you have purchased a print title that contains an access token, please see the token for information about how to register your code.