Category Archives: Law and Economics

Hovenkamp and Salop, ‘Strategic Incentives in Non-Coasean Litigation’

ABSTRACT We consider strategic behavior in non-Coasean litigation: private disputes such that the court’s judgment may influence the final allocation of rights even if transaction costs are zero. This occurs when the law prohibits otherwise-profitable efforts to contract around the court’s judgment. This constraint arises in myriad contexts, including antitrust, labor law, unfair competition, and […]

Bertolini and Riccaboni, ‘Grounding the case for a European approach to the regulation of automated driving: the technology-selection effect of liability rules’

ABSTRACT In the current paper, we discuss the need for regulation at EU level of Connected and Automated Driving solutions (henceforth CAD) based on multiple considerations, namely (i) the need for uniformity of criteria across European Member States, and (ii) the impact that regulation – or the absence of it – has on the proliferation […]

Mayol and Staropoli, ‘Giving consumers too many choices: a false good idea? A lab experiment on water and electricity tariffs’

ABSTRACT Electricity and water tariffs are undergoing significant changes due to smart metering, retail competition, and regulatory changes. Consumers now have to choose between different tariffs which are getting more and more complex. Theoretically, these new tariffs aim to use more cost-reflective pricing to incentivise consumers to adopt the right behaviours. However, empirical evidence from […]

Gong, Guo and Wang, ‘Shareholder Litigation and Workplace Safety’

ABSTRACT Using the staggered state adoption of Universal Demand (UD) law that lowers shareholder derivative litigation risk to identify the impact of shareholder litigation on workplace safety, we find that weakened shareholder litigation rights compromise workplace safety. The impact is more pronounced for firms with weak governance, in less competitive, low union coverage, or low […]

Alexandra Foulkes de la Parra, ‘Genetic Villains’

ABSTRACT When a little boy’s doctors relied on his genetic test results to guide their treatment, they opted for medicines that eventually killed him. The lab that generated the genetic test results knew, at the time of the report, that these results might have meant something other than what was communicated to the doctors. Had […]

Martha McCluskey, ‘Law and Economics Against Feminism’

ABSTRACT This chapter analyzes feminism in legal theory in relation to the rise of ‘law and economics’ during the late twentieth century. Building on other accounts, I trace how non-academic organizations invested heavily in developing and institutionalizing law and economics as a seemingly neutral methodology that could build academic credibility for anti-egalitarian ideology and legal […]

Glick and Lozada, ‘The Erroneous Foundations of Law and Economics’

ABSTRACT The fundamental originating principle of law and economics (L&E) is that legal decisions should be (and are) based on maximizing efficiency. But L&E proponents do not define ‘efficiency’ in the way agreed to by most economists, as Pareto Efficiency. A Pareto optimal condition is obtained when no one can be made better off without […]

Ozdogan and Barlo, ‘Inducing Good Behavior via Reputation’

ABSTRACT This paper asks whether or not it is possible to induce agents to good behavior permanently via regulators’ reputations and attain perpetual social efficiency. We propose and analyze a repeated incomplete information game with a suitable payoff and monitoring structure between a regulator possessing a behavioral type and an agent. We provide an affirmative […]

Massenot, Maraki and Thöni, ‘Litigation Spending and Care under the English and American Rules: Experimental Evidence’

ABSTRACT We investigate the effects of fee-shifting in an experimental litigation game. In our setup, a defendant may cause harm to a plaintiff. The defendant can take precautions to lower the probability of harm at a personal cost. In case of harm, the parties go to court, where the winner is determined by a rent-seeking […]

Chaudhury, Rai, Wang and Banerjee, ‘Consent v Welfare: On the Optimal Penalty for Harassment’

ABSTRACT The economic approach to determine optimal legal policies involves maximizing a social welfare function. We propose an alternative: a consent-approach that seeks to promote consensual interactions and deter non-consensual interactions. The consent-approach does not rest upon inter-personal utility comparisons or value judgments about preferences. It does not require any additional information relative to the […]