Category Archives: Law and Economics

Griffin Edwards, ‘An Empirical Assessment of the Foreseeability Test’

ABSTRACT This Article provides empirical support for the heavily debated role of foreseeability in tort law. In Palsgraf v Long Island, Judge Cardozo argued that foreseeability is a necessary requirement to establish duty while Judge Andrews dissented on the grounds that duty describes the general relationship that exists in society and that foreseeability should be […]

Shapira, Jacob and Kaplan, ‘An Information-Production Theory of Contract Law’

ABSTRACT Contract law affects behavior not just directly, by ordering damages, but also indirectly, by providing information on how the parties to the dispute behaved. Information from litigation can then help third parties decide whether to do business with the disputants going forward. Contract law thus affects behavior by shaping reputations and facilitating market discipline. […]

Acciarri, Delbianco and Ramírez Muñoz de Toro, ‘Gender Gap and Personal Injury Compensation. Judicial Opacity and Reverse Data Engineering’

ABSTRACT Damages for personal injuries is a field prone to gender biases. Empirical exploration of the issue, however, is far from being simple, especially in Civil Law countries, given a pervasive lack of transparency and explicitness on the details of reasoning and treatment of numerical values. Accounting for that feature, our research sketches a canon […]

Keith Hylton, ‘Tort Theory and the Restatement, in Retrospect’

ABSTRACT This is my third paper on the Restatement (Third) of Torts. In my first paper, ‘The Theory of Tort Doctrine and the Restatement (Third) of Torts’, I offered a positive economic theory of the tort doctrine that had been presented in the Restatement (Third) of Torts: General Principles, and also an optimistic vision of […]

Keith Hylton, ‘Information Costs and the Civil Justice System’

ABSTRACT Litigation is costly because information is not free. Given that information is costly and perfect information prohibitively costly, courts will occasionally err. Finally, the fact that information is costly implies an unavoidable degree of informational asymmetry between disputants. This paper presents a model of the civil justice system that incorporates these features and probes […]

Alessio Pacces, ‘Civil Liability in the EU Corporate Sustainability Due Diligence Directive Proposal: A Law & Economics Analysis’

ABSTRACT The EU Corporate Sustainability Due Diligence Directive (CSDDD) proposal can be interpreted as an attempt to cope with the under-deterrence of negative externalities on human rights and the environment depending on the strategic use of limited liability by corporate groups. This article reviews the civil liability proposals by the Commission, the European Parliament, and […]

Francesco Parisi, ‘Liability or No Liability? Promoting Safety by Shifting Accident Losses onto Third Parties’

ABSTRACT In a recent article, Guerra et al considered the problem of liability for accidents caused by the activity of robots, proposing a novel liability regime, which they referred to as ‘manufacturer’s residual liability’. Under this regime, injurers (robot operators) and victims are liable for accidents due to their negligence (hence, they are incentivised to […]

Mark Giancaspro, ‘“It’s Just Business” … Or Is It? When an Efficient Breach of Contract Becomes Unconscionable Conduct Under the Australian Consumer Law’

ABSTRACT In business it is sometimes more economically viable for a party to intentionally breach their contract with the other party and pay damages than it is to proceed with the agreement. The theory of efficient breach justifies this behaviour on the basis that the innocent party is adequately compensated and the party in breach […]

Shmuel Becher and Uri Benoliel, ‘Hidden Contracts’

ABSTRACT Transparency is a promising means for enhancing democratic values, countering corruption, and reducing power abuse. Nonetheless, the potential of transparency in the domain of consumer contracts is untapped. This Article suggests utilizing the power of transparency to increase consumer access to justice, better distribute technological gains between businesses and consumers, and deter sellers from […]

Hiraiwa, Lipsitz and Starr, ‘Do Firms Value Court Enforceability of Noncompete Agreements? A Revealed Preference Approach’

ABSTRACT We study whether firms value court enforceability of their workers’ noncompete agreements (NCAs), leveraging a 2020 Washington law that made NCAs unenforceable for workers earning less than a threshold of $100k per year (indexed to inflation), covering approximately 79% of Washing-ton workers. If firms value the ability to enforce NCAs in court, then they […]