Economic Efficiency in Two Selected Decisions of Czech Courts

The article deals with economic efficiency in court decisions. Two decisions of Czech courts are subjected to analysis. In analysing a decision of the Czech Constitutional Court, the theoretical framework distinguishing between the property rule and the liability rule created by Calabresi and Melamed is applied. The court decision awarding high monetary satisfaction to a person whose right to privacy was infringed by a news publisher publishing her private information is in accordance with the economic recommendation that, under low transaction costs, to achieve efficiency, the property rule should be used. In analysis of the decision of the Czech Supreme Administrative Court, the focus is on the explicit use of economic concepts by the court. Within the assessment of existence of an extraordinary situation on the Prague taxi market, the court asserts that information asymmetry exists on the market leading to an impaired “self-clearing capacity” of the market. Nevertheless, a closer view provided in this article, taking into account the concept of price discrimination, shows that the self-clearing capacity of the market is not impaired, i.e. that the market is not inefficient. The problem addressed in the decision is rather the extraction of the consumer surplus by taxi operators.