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Rules of procedure determine and reflect the transaction costs of operating a legal system. An efficient procedural system is one that minimizes the sum of the costs of erroneous judicial decisions and the costs of operating the system. However, the rules of procedure are formulated by judges. If the self-interest of those judges conflicts with the efficiency criterion, it would seem plausible that the judges will formulate procedural rules that further their own interests rather than the interests of efficiency.

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