[Excerpt] The proposition that the common law tends to evolve in the direction of economic efficiency has been advanced by Posner and others. This proposition implies that, over time, legal precedent which promotes efficiency of exchange in the market, and thus maximizes the wealth of market agents, will displace precedent that is incompatible with this objective. In evaluating market impact, however, it is important to note that legal precedent which is perceived to be compatible with efficient exchange when viewed from the perspective of outmoded economic theory may not be as compatible as it appears.
Johnson, S. B., & Corgel, J. B. (1983). Antitrust immunity and the economics of occupational licensing[Electronic version]. Retrieved [insert date], from Cornell University, School of Hotel Administration site: