Category Archives: Law and Economics

Wyman and Minelli, ‘Propertizing Environmental Attributes’

ABSTRACT Tangible environmental resources such as land and water have been the object of property rights and traded in markets for millennia. In a development largely unnoticed by legal scholars, technology now allows a new class of environmental resources that are much harder to see and touch to be measured, and potentially sold – environmental […]

Eyup Kun, ‘Is Insisting On Specific Performance Under Smart Contracts Desirable? Inflexibilities Of Smart Contracts And Potential Solutions’

ABSTRACT Smart contracts, as written by computer code, would secure the performance of the contract. It is believed that this feature of smart contracts is marketed as the solution to traditional contracts, which can be easily breached. The potential benefits of automated performance, such as certainty, would bring benefits to all parties. However, this idea […]

Call for Papers: ‘Pandemics – Liability and Insurance’: Vienna, 23-24 June 2022

The 19th Joint Seminar of the International Association for the Study of Insurance Economics (The Geneva Association) and the European Association of Law and Economics (EALE) will be hosted by the European Centre of Tort and Insurance Law (ECTIL) in Vienna on 23-24 June 2022. Submissions are invited for papers dealing with any aspect of […]

James McNulty, ‘Consumer Protection Settlements: Theory and Policy’

ABSTRACT Lawsuits have a deterrent effect, but this is mitigated if settlements are routine. Regulators and judges should consider that a firm contemplating predatory activity directed at financially unsophisticated individuals might have built an estimate of settlement costs into their analysis of the net present value of the ‘project’. This suggests that choosing not to […]

Dari‐Mattiacci, Onderstal and Parisi, ‘Non-Disclosure Rules as Penalty Defaults’

ABSTRACT In Akerlof’s 1970 ‘Market for Lemons’, asymmetric information arises because sellers are better informed than buyers. A seller’s informational advantage creates an adverse selection problem. When buyers are better informed than sellers, a mirror-image problem arises. Although both asymmetric information situations lead to inefficiencies in the market, informed buyers are not generally required to […]

Dharmapala and Garoupa, ‘An Economic Analysis of Restitution for Mistaken Payments’

ABSTRACT The law of restitution and unjust enrichment has emerged as an important and independent branch of private law. However, it has attracted relatively little economic analysis. The aim of this paper is to develop a general conceptual framework for the economic analysis of the core example of restitution – mistaken payments. Our framework distinguishes […]

‘Legal Theory Lexicon: Social Welfare Functions’

“One of the key ideas in contemporary economic theory in general and law and economics in particular is the social welfare function. Law students without a background in economics might be put off by the fact that social welfare functions are expressed in mathematical notation, but there is no reason to be intimidated. The basic […]

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, […]