Category Archives: Law and Economics
John DeVadoss, ‘AI Liability and Industry Funded Compensation: Deployment Responsibility and the Economics of paid Model Supply’
ABSTRACT Commercial AI can generate liabilities that exceed the assets committed to paying them. This paper develops a deployment-based compensation mutual subject to two constraints: no public financial support and no admission of exposure whose credible losses exceed secured private resources. Commercial deployers remain accountable for operations; paid model suppliers contribute directly; genuinely free publication […]
Imran Hossain, Rahman and Neupane, ‘When Critics Can Speak: Anti-SLAPP Laws and Product Quality Failures’
ABSTRACT We examine whether legal protection for public criticism affects corporate product quality. Strategic lawsuits against public participation (SLAPPs) can deter employees, customers, journalists, and other stakeholders from communicating unfavorable information, even when the underlying claims lack merit. State anti-SLAPP laws reduce this threat by providing expedited dismissal procedures and, in many states, fee shifting. […]
Chen, Huson and Meng, ‘As Bad News Spreads: Anti-SLAPP Laws and Scale-Dependent Transparency Costs’
ABSTRACT Using the staggered adoption of anti-SLAPP laws across US states, we find that firms increase cash holdings when negative firm-specific information becomes easier to disseminate. Cross-sectional evidence points to competitive pressure rather than stakeholder scrutiny: the increase is concentrated in more competitive industries and in settings with greater predation risk. We also document within-industry […]
Jarosław Bełdowski, ‘Economic Contract Theory and Law and Economics of Contracts: Are they twins or separate approaches? Selected overview of literature in the last decade’
ABSTRACT This paper takes a closer look at the divergence of economic approaches towards contracts (agreements) with various developments of Economic Contract Theory and Law and Economics of Contracts. In order to observe the multifaceted nature of Economic Contract Theory, its three main directions are discussed, namely incentive theory, incomplete theory and transaction cost theory. […]
Pecorino, Solomon and van Boening, ‘The Screening Model of Litigation with a Continuum of Types: An Experimental Analysis’
ABSTRACT We conduct a laboratory experiment using a stylized model of civil litigation bargaining. This is a screening model with a continuum of types based on Bebchuk (1984). Most previous experimental work on the screening model has utilized two-type models. In a screening model, the recipient of the settlement offer is informed, but the party […]
Gonçalo Melo de Magalhães, ‘The Design of Private Property – From Fixed Coordinates to Intelligent Matter’
ABSTRACT Private property organizes who may inhabit, exclude, transform, transfer and benefit from resources. Housing gives these powers unusual force because private life depends on continuous access to a structure, a location and essential services. Five millennia of recorded arrangements show repeated changes in the distribution of those powers across households, rulers, markets, states, cooperatives […]
Keiichi Ito, ‘Reconstructing the Doctrine of Permitted Risk in the Age of Autonomous Driving: A Case for Shifting Liability to Public Authorities’
ABSTRACT This paper argues that the German-originated doctrine of permitted risk (erlaubtes Risiko) – historically the theoretical basis for individualizing negligence liability in traffic accidents – contains a structural asymmetry: society has tolerated the existence of risk from motor vehicle use for the sake of its own benefit, while the burden of that risk’s realization […]
‘“Incomplete Contracts and the Theory of Contract Design”, by Robert Scott and George Triantis’
Economists and lawyers know that almost every contract is incomplete. Contracts routinely omit or leave undefined important terms, and they rarely anticipate every circumstance that might frustrate performance. The reason is simple: It makes little sense to spend $1,000 drafting a provision that has an expected value of only $100. Parties therefore leave lower-value contingencies […]
Simon Landuyt, ‘The Pari Passu (and Other) Puzzle(s): Towards A More General Theory of (Business) Risk Allocation’
ABSTRACT In a ‘perfect’ world, all types of legal mechanisms which displace the equality of creditors in a concurrence (samenloop) – such as statutory privileges (voorrechten) and security rights – would be pointless. After all, parties who cannot enjoy a priority (whether de jure or de facto) will raise their ex ante ‘price’ for contracting […]
Peter O’Loughlin, ‘Economic Analysis within Law’
ABSTRACT Traditionally understood as methodological substitutes, doctrinal analysis and economic analysis have operated as separate perspectives on law and legal systems. Most conceptions and iterations of their debates, however, have manifested at law’s substantive periphery, like its purpose or its normative goals. This has been at the expense of situating and examining these methodologies in […]