Do Parties to Nuisance Cases Bargain after Judgment? A Glimpse inside the Cathedral

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 if judgment 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.