Category Archives: Law and Economics
Yehonatan Shiman, ‘Expected Bad Moral Luck’
ABSTRACT This Article addresses a fundamental challenge in liability insurance law: distinguishing between injurers who deliberately engage in risky behavior and those who, despite their best efforts, fail to meet the standard of care due to human limitations. The ‘expected or intended harm clause’, a standard provision in commercial general liability policies that excludes coverage […]
Satish Kumar Jain, ‘On the Efficiency Implications of Courts Using Multiple Liability Rules’
ABSTRACT This paper is concerned with the efficiency implications of courts using more than one liability rule in tort cases. A liability rule apportions the accident loss between the victim and the injurer on the basis of negligence and its extent or otherwise of the two parties. A subclass of liability rules is that of […]
Travis Luis Pantin, ‘Premium Justice: An Egalitarian Defense of Risk-Based Insurance Pricing’
ABSTRACT Should insurance companies be allowed to charge different prices based on a policyholder’s likelihood of making claims? This Article challenges the common view that ‘risk-based pricing’ in insurance presents a tradeoff between the twin goals of efficiency and fairness. It argues that the most compelling justification for charging policyholders prices that reflect their individual […]
‘The Case for Retaining Civil Liability in the EU’s Corporate Sustainability Due Diligence Directive: A Law and Economics Perspective’
The European Commission recently introduced the Omnibus Package on 26 February 2025. While presented as a measure to streamline corporate sustainability reporting and reduce regulatory burdens, it risks diluting transparency and weakening the EU’s ambitious sustainability goals. Regarding the Corporate Sustainability Due Diligence Directive (CSDDD), the most alarming watering down of the legislation in the […]
Seidmann and Frones, ‘Why Have Apology Laws Failed?’
ABSTRACT Apology laws, which exclude evidence of an apology from trial, were widely introduced to reduce litigation. The evidence shows, rather, that these laws have been counterproductive: increasing litigation, primarily by discouraging plaintiffs from dropping their claims. We explain this evidence by extending settlement negotiation models to allow the plaintiff to quit at any stage […]
Choi, Gulati, Jennejohn and Scott, ‘Swiss Cheese Contracts: The Costs of Creative Lawyering’
ABSTRACT What value do deal lawyers add? In a classic paper from forty years ago, Ron Gilson described deal lawyers as adding value by reducing transactions costs (lawyers were ‘transaction costs engineers’). In this article, we investigate that story. Using quantitative and qualitative data, we dig into what is one of the fastest growing and […]
Parisi and Bix, ‘The Limits of Efficiency in Regulatory Contract Law’
ABSTRACT While economic approaches to contract law often presume that private ordering yields efficient outcomes and concentrates on crafting optimal remedies to support voluntary exchange and promise-keeping, regulatory contract law starts from a different perspective, recognizing that the core assumptions of the standard economic paradigm break down when contracts produce externalities, are built around information […]
Bishara and Luisetto, ‘Goodbye, Noncompetes? Why Now and Policy Convergence’
ABSTRACT Post-employment non-competition agreements (‘noncompetes’) have been part of the common law dating back to at least 1414. The past 15 years have seen an unprecedented wave of scrutiny that is mostly aimed at curtailing these agreements, culminating in the contentious 2024 Federal Trade Commission’s (FTC) attempted noncompete ban. With the broad FTC ban on […]
Rutkowski and Stremitzer, ‘Plaintiffs Exploiting Plaintiffs Mass Tort Claims v Shareholder Derivative Suits’
ABSTRACT We consider a model of a single defendant and N plaintiffs where the total cost of litigation is fixed on the part of the plaintiffs and shared among the members of a suing coalition. By settling and dropping out of the coalition, a plaintiff therefore creates a negative externality on the other plaintiffs. It […]
Ben Chen, ‘Socially Optimal Ex-ante Adjudication’
ABSTRACT Ex-ante adjudication prospectively ascertains the legality of some proposed conduct. This article studies ex-ante adjudication using a signaling model. An actor may take an action that benefits herself but produces an externality to others. This action attracts a risk of ex-post adjudication and sanction. The actor seeks ex-ante adjudication before deciding how to act. […]