Category Archives: Law and Economics
Friehe and Teitelbaum, ‘Background Risk and Optimal Liability Rules’
ABSTRACT We study how background risk affects optimal liability rules in a unilateral accident model with risk-averse parties. Under negligence, background risk borne by a prudent victim raises the optimal due-care standard relative to the benchmark case without background risk. Under strict liability, the optimal level of damages is higher when the prudent victim faces […]
Call for submissions: Association of Law and Political Economy (ALPE), Annual Meeting, Boston MA, 9-10 June 2027
ALPE invites proposals for our second annual meeting, to be held on June 9-10, 2027, in Boston, MA. Panels, roundtables, and individual paper proposals are welcome. We encourage submissions by academics, organizers, practitioners, policy professionals, and others engaged in research that examines the relationship between law and political economy … (more)
Christopher Yoo, ‘Market Dilution, Fair Use, and AI’
ABSTRACT Generative artificial intelligence has brought renewed urgency to the question whether using copyrighted works to train large language models constitutes fair use. A 2025 US Copyright Office Report and dicta in Kadrey v Meta Platforms proposed a broad theory of ‘market dilution’: even when particular outputs are not substantially similar to works in the […]
Kneller, Papadakis and Wu, ‘IP Enforcement Costs and International Trade’
ABSTRACT We study how legal institutions affect international trade. Intellectual property enforcement applies to all firms serving a market, regardless of where production occurs, implying that changes in enforcement create destination-specific litigation trade costs. We identify these effects using reforms to the UK intellectual property court system between the end of 2010 and 2013 that […]
‘Wherein Lies Contemporary Law and Economics?’
In their recent paper ‘Contemporary Law and Economics’, Adam Chilton, Joshua Macey, and Mila Versteeg argue that LPE critics of the Law and Economics movement are attacking a straw man. The authors claim that although Law and Economics once stressed efficiency goals, which they defined as ‘wealth maximization’, contemporary practitioners simply endorse the use of […]
Urs Schweizer, ‘Damages Rules Implementing Desired Outcomes’
ABSTRACT This paper deals with tort relationships where some parties are directly involved, others indirectly. Only directly involved parties choose actions relevant for the case. The desired outcome reflects concerns also of indirectly affected parties and, for that reason, need not maximize welfare of the directly involved parties. Damages rules compensatory relative to such a […]
Dawid, Kashefi and Muehlheusser, ‘Platform Liability, Product Safety and Optimal Pricing’
ABSTRACT Should platforms be held legally responsible for harm caused by products or services offered by third-party sellers? We address this question in a novel setting in which product safety (the likelihood of accidents) is determined by third-party sellers, while the consumer price is set by a monopolistic platform that pays sellers a commission. Relevant […]
deHaan, Wang, Zhou and Zhou, ‘Non-Disclosure Agreements and the Market for Talent’
ABSTRACT We examine whether state laws restricting employers’ use of non-disclosure agreements (NDAs) improve labor-market efficiency. Employers use NDAs to suppress negative workplace information to appear more attractive to job seekers. However, widespread suppression degrades the labor-market information environment, potentially creating a market failure that disincentivizes workplace improvements and worsens firms’ recruiting outcomes. Using a […]
Rauterberg and Sanga, ‘No Limited Liability for AI’
ABSTRACT Frontier AI labs should not have limited liability for torts. When a company commits a tort it cannot pay for, limited liability caps shareholders’ losses at the value of their shares and lets the rest fall on the public. In effect, this makes limited liability a subsidy for risks borne by others. Scholars have […]
‘The Economics of the Marriage Contract: Theories and Evidence, by Niko Matouschek and Imran Rasul’
Marriage is a natural subject for law & economics scholars. From Gary Becker’s A Treatise on the Family (1981) to Margaret Brinig’s From Contract to Covenant (2000), scholars have expanded our understanding of romantic love by examining it through an economic lens. Some object that bringing law & economics into marriage risks coarsening and cheapening […]