Category Archives: Law and Economics

Buccafusco, Hemel and Talley, ‘Price Gouging in a Pandemic’

ABSTRACT The ongoing COVID-19 pandemic has led to acute supply shortages across the country as well as concerns over price increases amid surging demand. In the process, it has reawakened a debate about whether and how to regulate ‘price gouging’. Animating this controversy is a longstanding conflict between laissez-faire economics (which champions price fluctuations as […]

Paul Heaton, ‘The Effect of Mandatory Insurer Reporting on Settlement Delay’

ABSTRACT To improve their fiscal position, Medicare and some state Medicaid programs have recently taken steps to mandate reporting of personal injury awards and thus facilitate subrogation against such awards. Participants in the tort system have argued these additional reporting requirements might delay settlement of claims, harming both plaintiffs and defendants. This article examines this […]

Yong-Shik Lee, ‘Property Rights and Economic Development’

ABSTRACT Formal private property rights (‘FPPRs’) have been advocated as an important prerequisite to economic development: a legal right to property ownership motivates economic players to engage in economic activities when these activities yield property interests, and this, in turn, contributes to economic development. All of the OECD countries today, which are economically advanced, protect […]

‘Keep Your “Invisible Hand” to Yourself: Freeing the Corporation from the Cult of the “Efficient Market”’

“At the turn of the last century, a fantastic characterization of stock exchange efficiency looked to a powerful, supernatural force referred to simply as ‘the market’, which was an oracle of true corporate value and perfect incentive. As prices of shares were assumed precisely to reflect the objective value of the company – because reached […]

Aurelien Portuese, ‘When Law and Economics Violates the Rule of Law: Three Illustrations’

ABSTRACT Law and Economics scholarship movement continues to be an important methodological approach to the positive and normative analysis of law since its inception in the second half of the 20th century. However, Law and Economics has been criticized on various grounds, from its over-reliance on consequentialist arguments against deontological arguments to its indifference towards […]

Lando and Schweizer, ‘Causation and the Incentives of Multiple Injurers’

ABSTRACT Under the but-for requirement of causation, a tort injurer cannot be held liable for more than the difference between the loss the victim would have suffered if the injurer had not been negligent, and the loss that is in reality suffered. We ask whether this causation requirement yields efficient precaution in the context of […]

Sverre Grepperud, ‘Individual or Enterprise Liability? The Roles of Sanctions and Liability Under Contractible and Non-contractible Safety Efforts’

ABSTRACT This paper analyzes the social effectiveness of fines (sanctions) and awards (liability) where accident risks are influenced by decisions made by both the enterprise and the employees of the enterprise (individuals). The regulator observes a proportion of accidents and the safety decision of the individual can be contractible or non-contractible for the enterprise. All […]

Henrik Lando, ‘Two Advantages of the Negligence Rule Over Strict Liability when the Parties are Risk Averse’

ABSTRACT When parties are risk-averse and therefore take out insurance, the efficiency of a tort rule depends on how well the insurance contracts govern incentives, risk allocation and transaction costs under the rule. This article presents two overlooked or discarded advantages of the rule of negligence over strict liability, which appear when insurance contracts are […]

Wm Dennis Huber, ‘Economics, Capitalism, and Corporations: Contradictions of Corporate Law, Economics, and the Theory of the Firm’

ABSTRACT This book is an extension of Corporate Law and the Theory of the Firm: Reconstructing Corporations, Shareholders, Directors, Owners, and Investors, which was an exposé of the contradictions of contract law, property law, agency law, trust law, and corporate law and from which some portions of this book are adopted and summarized with permission. […]

Schwartz and Sepe, ‘Economic Challenges for the Law of Contract’

ABSTRACT This Essay introduces general equilibrium theory (GET) and mechanism design theory (MD) in a general sense (rather than in piece meal applications) to the study of contract law. As a positive matter, this introduction reveals three understudied areas: (i) when the equilibrium contract is individually rational but collectively irrational; (ii) the role of courts […]