Category Archives: Law and Economics
Chen and Hua, ‘Product Safety in the Age of AI: Autonomy, R&D, and AI Liability’
ABSTRACT We study optimal liability for AI-powered products with semi-autonomous capabilities (eg, self-driving vehicles). Like human users, AI can inadvertently cause product failures that harm third parties. Additionally, AI may introduce an extreme risk of large-scale social harm that renders full liability impractical. Raising AI liability for ordinary loss above the actual harm level can […]
Stewart Schwab, ‘Monopsony, Sticky Workers, and Bargaining Power’
ABSTRACT This chapter describes the new monopsony and its implications for employment law. A monopsonistic labour market inefficiently employs too few workers and pays them below their marginal product. Traditionally, monopsony is a single isolated employer, but this does not describe modern, urban labour markets. Labour economists have recently shown that many employers face upward-sloping […]
Bloomfield and Gordon, ‘The Law and Economics of Resilience’
ABSTRACT The field of law and economics has long studied externalities, the costs and benefits actors create and yet fail to internalize. But scholars have largely overlooked a set of externalities that lead firms across the economy to systematically underinvest in resilience, with macroeconomically harmful consequences. In this Article, we address this gap with a […]
Matteo Maria Cati, ‘“Law and …”: a New Perspective’
ABSTRACT This paper revisits the interplay between law and economics from an unconventional perspective, shifting away from the traditional lawyer-economist view to that of an economist-mathematician. Inspired by Calabresi’s seminal 2016 work, The Future of Law and Economics – Essays in Reform and Recollection, it challenges existing interpretations and introduces a novel methodological framework employing […]
Nicola Searle, ‘Uncertainty in Knowledge Value and Employee Restrictions’
ABSTRACT Knowledge held by firms is a driver of firm performance and value. Knowledge protection mechanisms seek to protect this value by imposing restrictions on employees, leading to concerns about the balance between firm interests and employee rights. While past research has investigated this balance, the pivotal role of knowledge value has largely been overlooked. […]
Christopher Jaeger, ‘The Hand Formula’s Unequal Inputs’
ABSTRACT Tort cases often hinge on whether the defendant behaved ‘unreasonably’. Tort theorists have long debated what makes behavior unreasonable, with many seeking answers in economic theory or Kantian philosophy. But the question of whether a tort defendant’s conduct was reasonable or unreasonable is typically a question for the jury. And we know very little […]
Thierry Kirat, ‘Legal Theory in John R Commons’ Legal Foundations of Capitalism’
ABSTRACT Commons occupies a special position in institutionalism for his commitment to understanding the legal embedding of American capitalism and the relationship between the legal and economic orders. The article analyzes Commons’ approach to law and characterizes his levels of analysis. Commons, notably in Legal Foundations of Capitalism, read certain legal writings from which he […]
Kodama, Kambayashi and Izumi, ‘Non-Compete Agreements: Human Capital Investments or Compensated Wages?’
ABSTRACT Non-Compete Agreements (NCAs) restrict workers from joining or forming rival companies, which impacts labor market dynamics. Theoretical perspectives on NCAs are varied: they can lead to increased employer investment and higher wages by reducing labor turnover, or they might simply raise wages to compensate for the restriction on workers’ post-employment choices. Alternatively, NCAs could […]
Bar-Gill, Ben-Shahar and Marotta-Wurgler, ‘A Companion Guide to the Restatement of Consumer Contracts’
ABSTRACT This short Essay, written by the Reporters of the recently published Restatement of Consumer Contracts, is intended as a companion to the Restatement. It highlights three areas, where the Reporters’ ambition was only partially reflected in the final version of the Restatement. The first was to ground the restated rules and principles in a […]
Ronen Perry, ‘Harmful Precautions’
INTRODUCTION According to the conventional definition of reasonableness, commonly known as the Hand formula, a person acts unreasonably (hence negligently) toward another if they fail to take precautions whose cost for the actor is lower than the expected loss for the other that these precautions can prevent. While law-and-economics theorists have advocated and courts have […]