Category Archives: Law and Economics

Emanuel Towfigh, ‘An Economic Analysis of the Preventive Administration of Justice in Civil Law Countries’

ABSTRACT This Expert Opinion examines the preventive administration of justice in civil law countries from an economic point of view. In many countries with a civil law tradition, the role of the judiciary is not confined to solving conflicts after they occur. Instead, courts and other government actors assist individuals in structuring their legal relationships […]

Hoffman and Hwang, ‘The Social Cost of Contract’

ABSTRACT When private parties perform contracts, the public bears some of the costs. But what happens when society confronts unexpected contractual risks? During the COVID-19 pandemic, completing particular contracts – such as following through with weddings, conferences, and other large gatherings – will greatly increase the risk of rapidly spreading disease. A close reading of […]

‘Limits of Personalization of Default Rules – Towards a Normative Theory’

“Some scholars today praise a personalization of the law due to new technological possibilities such as algorithmic analysis of Big Data. When companies personalize their advertisement, why should the legislator refrain from doing the same? Especially default rules seem to be particularly apt for personalization, because they are – at first glance – supposed to […]

Givati and Kaplan, ‘Harm Displacement and Tort Doctrine’

ABSTRACT A large literature in law and economics analyzes the phenomenon of crime displacement and its implications for criminal law. Yet a similar phenomenon of harm displacement in the tort context has been ignored by scholars. We develop a simple model of bilateral accidents that allows for harm to be displaced by the victim. We […]

Bar-Gill and Porat, ‘Disclosure Rules in Contract Law’

ABSTRACT How does the prospect of sale affect the seller’s incentive to investigate – to acquire socially valuable information about the asset? How do the disclosure rules of contract law influence the investigation decision? Research has shown that if sellers and buyers are symmetrically informed at the preinvestigation stage, then a mandatory disclosure rule leads […]

Stone and Stremitzer, ‘Promises, Reliance, and Psychological Lock-In’

ABSTRACT We obtain experimental evidence that suggests that promisors are more likely to keep promises the more they were relied on by a promisee; that this effect is anticipated by promisees, who accordingly strategically overinvest to lock promisors into keeping their promises (psychological lock-in); and therefore that legal enforcement can reduce overinvestment as promisees do […]

De Mot, Depoorter and Miceli, ‘Filtering Tort Accidents’

ABSTRACT Conventional wisdom in the economic analysis of tort law holds that legal errors distort incentives, causing behavior to depart from the optimum. If potential injurers know that courts err, they may engage in less or more than optimal precaution. This article revisits the effect of judicial error on the incentives of potential injurers by […]

‘Tort Rules Versus Tort Practice: The Products Liability Controversy That Wasn’t’

Aaron D Twerski, An Essay on the Quieting of Products Liability Law, 105 Cornell Law Review 101 (forthcoming, 2020), available at SSRN. Over and over, legal scholars have revealed situations in which different legal rules do not produce the different legal outcomes they portend. When states limit juries’ power to award punitive damages, juries instead […]

Jacob and Orset, ‘Innovation, information, lobby and tort law under uncertainty’

ABSTRACT Recent environmental policies favour the ’pollutant-payer’ Principle. This principle points out the pollutant financial liability for potential incidents induced by its activities. Investing in technological innovations generates uncertainty on the future returns, as well as on the damages that such innovations could involve and on the cost to reimburse in the event that of […]

Michael Pressman, ‘Hedonic-Loss Damages that Optimally Deter: An Alternative to “Value of a Statistical Life” that Focuses on Both Decedent and Tortfeasor’

ABSTRACT Plaintiffs in wrongful-death suits typically are unable to recover for the decedent’s ‘hedonic loss’ – the loss of happiness (or wellbeing) incurred as a result of the lost life-years themselves. Although this omission might not be a mistake on a backward-looking account of tort law (because the decedent is dead and arguably cannot be […]