Posner's Efficiency Criterion

Posner's Efficiency Criterion is a guideline used to evaluate legal rules or decisions based on their ability to promote overall social welfare. It suggests that a rule is preferable if it leads to the most efficient outcome—maximizing benefits and minimizing costs—by encouraging behaviors that are beneficial and discouraging those that are harmful. Essentially, it emphasizes choosing rules that produce the greatest net positive effect for society as a whole, balancing fairness, incentives, and economic impacts to achieve optimal social well-being.