The Evolution of Common Law

We present a model of lawmaking by appellate courts in which judges influenced by policy preferences can distinguish precedents at some cost. We find a cost and a benefit of diversity of judicial views. Policy‐motivated judges distort the law away from efficiency, but diversity of judicial views also fosters legal evolution and increases the law’s precision. We call our central finding the Cardozo theorem: even when judges are motivated by personal agendas, legal evolution is, on average, beneficial because it washes out judicial biases and renders the law more precise. Our paper provides a theoretical foundation for the evolutionary adaptability of common law.