Category Archives: Law and Economics

Lemley and Feldman, ‘Is Patent Enforcement Efficient?’

Abstract Traditional justifications for patents are all based on direct or indirect contribution to the creation of new products. Patents serve the social interest if they provide not just invention, but innovation the world would not otherwise have. Non-practicing entities (‘NPEs’) as well as product-producing companies can sometimes provide such innovation, either directly, through working […]

John Yun, ‘Publicity and the Optimal Punitive Damage Multiplier’

Abstract When punitive damage awards create publicity, this could affect the behavior of uncompensated victims, which has implications for the optimal punitive damage multiplier. A new adjusted multiplier is derived that incorporates publicity into the analytical framework. Assuming that all victims receive uniform punitive awards, the result is a lower punitive multiplier relative to the […]

Caleb Fuller, ‘Privacy law as price control’

Abstract The median Internet user is concerned about digital advertisers collecting personal information. To address these fears, the European Union passed the Privacy Directive to regulate the common business practice of information collection. This paper investigates the potential effects of this regulation, finding that the law is likely to generate several unintended consequences. Economists and […]

Porat and Sugarman, ‘Limited Inalienability Rules’

Abstract Most people’s entitlements are protected by a property rule, which means that their holders can sell them for a price. But some important entitlements are protected by an inalienability rule, and hence cannot be sold under any circumstances. For example, people cannot sell their organs. In most jurisdictions, women cannot be surrogate mothers for […]

Guerra and Parisi, ‘Accident Aversion: An Experiment’

Abstract Tort models predict a symmetry in the behavior of tortfeasors and victims when respectively faced by strict liability or no liability. This paper relies upon the standard accident model and uses an original experimental design to investigate whether the prediction of the tort model holds in actual accident situations. Precisely, we study how individual […]

Aluma Zernik, ‘Overdrafts – When Markets, Consumers, and Regulators Collide’

Abstract There is a fierce debate in the United States about whether to regulate overdrafts and, specifically, about whether to limit their use or cap their prices. Proponents of regulation claim that overdrafts are not marginally priced and cause financial harm. Opponents of regulation claim that capping overdraft prices will harm consumers by limiting access […]

Ting Xu, ‘Towards an Evolutionary Theory of Property? A Longitudinal Analysis of Property Regime Transformation in China’

Abstract This article critiques the artificiality of the context-free and a historical approaches to theorising the evolution of property. It starts with an overview of a number of evolutionary accounts, underpinned by different theories of institutions and institutional change, in the ‘old’ and ‘new’ institutional economics. Special emphasis is given to an argument for a […]

Bar-Gill and Persico, ‘Bounded Rationality and the Theory of Property’

Abstract Strong, property rule protection – implemented via injunctions, criminal sanctions and supercomepnsatory damages – is a defining aspect of property. What is the theoretical justification for property rule protection? The conventional answer has to do with the alleged shortcomings of the weaker, liability rule alternative: It is widely held that liability rule protection – […]

Liao and Radhakrishnan, ‘Auditors’ Liability to Third Parties’

Abstract We examine the near-privity rule that increases the auditor’s legal liability exposure by considering a debtholder who can sue the auditor and recover damages when there is an audit failure. We show that the increase in the auditor’s legal liability induces the auditor to choose more informative and conservative efforts. While the increased informative […]

Loibl, Sunstein, Rauber and Reisch, ‘Which Europeans Like Nudges? Approval and Controversy in Four European Countries’

Abstract Policy-makers show an increasing interest in ‘nudges’ – behaviorally motivated interventions that steer people in certain directions but maintain freedom of consumer choice. Despite this interest, little evidence has surfaced about which population groups support nudges and nudging. We report the results of nationally representative surveys in Denmark, Hungary, Italy, and the United Kingdom. […]