Category Archives: Law and Economics
Enrico Baffi, ‘The Regulation of Contracts Entered under Coercion: Positive Law in the Light of Efficiency and Fairness’
ABSTRACT This Article examines the regulation of contracts formed under coercive conditions, focusing on cases in which consent is formally voluntary but substantively constrained by duress, necessity, or dependence. It argues that doctrines traditionally justified in terms of fairness or protection of the weaker party are best understood, and more coherently interpreted, through the lens […]
Lev Goukassian, ‘TML Smart Contracts: Automating Ethics and Accountability on the Blockchain’
ABSTRACT This whitepaper details the economic and operational enforcement layer of the Ternary Moral Logic (TML) framework. Addressing the ‘Implementation Gap’ in AI ethics, this paper demonstrates how to replace voluntary compliance with automated, smart-contract-based enforcement mechanisms. The analysis defines the economic game theory behind: The Penalty Enforcement Contract: A deterministic mechanism for executing financial […]
Engstrom and Holland-Stergar, ‘Competition and Contingency Fees’
ABSTRACT A debate has long raged concerning whether the contingency fee market for legal services is or is not competitive. The debate has been fierce because its stakes are sky high. If the market is competitive, current efforts to cut or cap contingency fees are clearly wrong-headed. If the opposite, then at least some efforts […]
Singh and Schaefer, ‘A new case for a higher standard of care: The uncompensated tertiary and third-party costs’
ABSTRACT The standard economic analysis of liability rules mainly focuses on the direct accident costs. However, accidents often create other costs which are often as large as the direct accident costs and occasionally much higher. In this note, we present a simple model of the tertiary and third-party costs created by accidents. We show that […]
Houba and Motchenkova, ‘Personalized pricing and consumer privacy’
ABSTRACT Advances in data collection enable firms to use consumer information for personalized pricing. In Clavorà Braulin’s (2023) symmetric two-dimensional model, this reduces prices and profits, while partial privacy yields the highest profits. Extending the model to asymmetric firms and vertically differentiated products, we show that these results are not robust under sizable asymmetries. Partial […]
Enrico Baffi, ‘Public Standard Contract as Benchmark and Informed Opt-Out’
ABSTRACT This article proposes a market design mechanism for standard contracts in relationhips between firms and consumers, based on the preparation, by a public authority, of a sectoral standard contract intended to serve as a benchmark. The standard is constructed in such a way as to maximize the expected surplus for the majority of consumers, […]
Dari-Mattiacci, Onderstal, Parisi and Singh, ‘The Value of Silence: Optimal Disclosure Default Rules in Contract Law’
ABSTRACT Sellers are generally required to disclose ‘negative’ information about hidden defects of the products they sell. By contrast, buyers are generally under no comparable duties to disclose ‘positive’ information about hidden qualities of the products they buy. The leading explanation for the law’s disparate treatment of buyers and sellers is that imposing disclosure duties […]
Sergio Mittlaender, ‘Contractual Interests, Ranked’
ABSTRACT Traditional legal scholarship and Law & Economics posit that all contractual interests are, and should be, protected by contract law. This article challenges this notion by examining whether public perceptions align with legal doctrine. In an experiment, respondents report their perceived social appropriateness of breach and the appropriate level of damages considering different types […]
Guichardaz, Lefebvre, Igersheim and Pénin, ‘Personality, creativity and adherence to intellectual property: a lab experiment on copyright’
ABSTRACT This paper presents an original experiment to test a key prediction of the personalist rationale for copyright, which argues that intellectual property is morally justified because creative works are extensions of the creator’s personality. According to this theory, people should adhere more strongly to copyright when a creation reflects a higher degree of personal […]
Lucian Bebchuk, ‘Suing Solely to Extract a Settlement Offer’
ABSTRACT In many disputes, the expected value to the plaintiff from going to trial is negative, either because the chances of winning are small or because the litigation costs are large. While such a plaintiff would not go to trial, he might sue in the hope of extracting a settlement offer: the defendant might make […]