Category Archives: Law and Economics

Hans Tjio, ‘Adjudicating Intermediary-Related Losses’

ABSTRACT Three-party situations are problematic due to the agency, information and administrative costs involved. This includes the substitution of parties in relationships characterized as choses in action, which is why we see them as property transfers even if that is not fully accurate. We also create separate personality to help compress the number of parties […]

Gilbert and Hayashi, ‘Do Good Citizens Need Good Laws? Economics and the Expressive Function’

ABSTRACT We explore how adding prosocial preferences to the canonical precaution model of accidents changes either the efficient damages rule or the harm from accidents. For a utilitarian lawmaker, making the potential injurer sympathetic to the victim of harm has no effect on either outcome. On the other hand, making injurers averse to harming others […]

‘Public Goods’

“The government plays a significant role in providing goods such as national defence, infrastructure, education, security, and fire and environmental protection almost everywhere. These goods are often referred to as ‘public goods’. Public goods are of philosophical interest because their provision is, to varying degrees, essential to the smooth functioning of society – economically, politically, […]

Kathryn Sabbeth, ‘Market-Based Law Development’

“Critical scholars have highlighted the role of law in subordination and argued for redirection of energy away from courts, but they have devoted less attention to a more basic problem: The civil justice system supports and depends on market-based development of law. This can be seen in the wide divergence in social investments in the […]

Meli and Spindler, ‘The Promise of Diversity, Inclusion, and Punishment in Corporate Governance’

ABSTRACT Motivated in part by a desire to change corporate behavior in a more pro-social direction, a number of governance inclusion mandates have been proposed that would require a corporate board to include diverse individuals or representatives of a constituency. This article applies the economic insights of the Coase theorem to determine if and how […]

Steven Medema, ‘What Happened on Blackstone Avenue? Exorcising Coase Theorem Mythology’

ABSTRACT The present paper revisits the path by which Coase came to set down the result now generally known as the Coase theorem in his 1960 article. I draw on both the published record and archival resources in an effort to clear away some of the mist and, as it will emerge, dispel some of […]

Christopher Drahozal, ‘Arbitration and Rule Production’

ABSTRACT Arbitration has been criticized as displacing cases from the public courts and thereby reducing the production of court precedent (the ‘displacement hypothesis’). Moreover, while arbitral awards might substitute for court precedent, the standard view is that arbitrators have little incentive to issue awards that produce legal rules because such awards mostly benefit parties to […]

Carter, Mossialos, Redhead and Papalois, ‘Clinical negligence cases in the English NHS: uncertainty in evidence as a driver of settlement costs and societal outcomes’

ABSTRACT The cost of clinical negligence claims continues to rise, despite efforts to reduce this now ageing burden to the National Health Service (NHS) in England. From a welfarist perspective, reforms are needed to reduce avoidable harm to patients and to settle claims fairly for both claimants and society. Uncertainty in the estimation of quanta […]

Saul Levmore, ‘The Evolutionary Force of Behavioral Economics in Law’

ABSTRACT Many of the behavioral insights in economics arise out of experiments or examples in which the conventional claims of economics, and rational choice quite generally, are contradicted by observed results. The conventional view – that people and firms maximize utility and profit, and often do so rather cleverly, even accounting for various feedback effects […]

Lacave and Urtiaga, ‘The Law and Economics of Comparative Corporate Law’

ABSTRACT In this paper, we explain the methodological shifts that have occurred over time in the study of company law. Our hypothesis is that comparative company law has developed and evolved as a bridge between two extremes. On the one hand, the doctrinal, black-letter law approach to company law, dominant in academic commentary at the […]