Category Archives: Law and Economics
Christopher Jaeger, ‘A Two-System Theory of Negligence’
ABSTRACT Tort law’s broad reliance on the ordinary reasonable person standard blurs meaningful distinctions between different types of negligence cases and between the different criteria used to resolve them. Drawing on psychology’s two-system theory of cognition, this Article identifies and describes two distinct types of negligence claims, formulating a two-system theory of negligence. This theory […]
Robert Hickok, ‘The Litigation Calculus: A Cross-Disciplinary Framework for Optimizing Strategy in Federal Civil Litigation’
ABSTRACT Federal civil litigation is a sequential game of incomplete information, played inside the most completely specified rule structure in American law. This Article builds a unified, operational decision framework for bilateral, primarily monetary federal civil litigation from that observation. Its central prescription is that strategy is not a plan but a policy. At every […]
Kelsey, Chakravarty, Kim and Melkonyan, ‘Investment Incentives under Contractual Unawareness’
ABSTRACT We study investment incentives when contracts do not cover all payoff-relevant contingencies. In a principal-agent model with moral hazard, the agent’s non-contractible investment changes both the distribution over contracted contingencies and the probability of an unforeseen contingency governed by legal default and ex post negotiation. First, we develop a framework separating awareness effects across […]
Keith Hylton, ‘Patents and Incentives to Assign, License, or Litigate’
ABSTRACT This paper presents a model of the activity of patent intermediaries and potential infringers in a system of costly patent litigation. Because the intermediary, in comparison to the inventor, has a more credible threat to sue, both the revenue from infringement litigation and the intrinsic value of the patent are greater in the intermediary’s […]
Enrico Baffi, ‘To Provide for Damages Is Not to Authorize: Property Rules, Liability Rules, and Tort Law in Italy’
ABSTRACT This paper examines whether Italian tort law can properly be described through the liability rule model developed by Calabresi and Melamed. It argues that the conventional law-and-economics view of tort liability as a system that permits harmful conduct subject to the payment of damages does not accurately describe the structure of Italian law. The […]
Eric Alston, ‘Whom Do You Sue? – Bonded Penalties for AI Agents Beyond the Reach of Civil Liability’
ABSTRACT When an AI agent creates harm, the law will reach for a defendant. Sometimes it can find one in the deployer who ignored warnings or the developer who shipped a defect. But a growing class of AI agents will cause harms that cannot be attached to a specific defendant: some because the harm emerges […]
Carter, Deakin, McCormack and Pourkermani, ‘On the Economic Consequences (and Causes) of Labour Laws: Estimating the Impact of the Employment Rights Act 2025’
ABSTRACT This article examines the legal and economic effects of the Employment Rights Act 2025. It applies the Cambridge Centre for Business Research Labour Regulation Index (CBR-LRI), together with newly developed subindices, to measure the Act’s effect on the strength of labour law protections in the UK, and to benchmark those changes against OECD countries. […]
Wickelgren and Ayres, ‘An Economic Analysis of Contractual Conditions’
ABSTRACT Law and economics has produced a vast literature on the efficient design of contract damages, but almost none on the defensive counterpart to damages: the contractual condition that lets a promisee withhold its own performance when the performance it was promised falls short. This article supplies that missing analysis. Contracts protect entitlements through a […]
Kingsley-Williams, Tallon and Juric Williams, ‘Reconsidering Coase in the Age of AI: Why the Boundary of the Firm Is Eroding, with Legal Services as the Worked Example’
ABSTRACT Coase explained the firm as the answer to transaction costs. Work stays inside when specifying, verifying and directing outsiders costs more than hiring employees. This note argues that AI erodes the assumptions behind that answer, rather than merely lowering the costs. Engineered systems known as harnesses largely complete contracts in real time, make external […]
Dharmapala and Garoupa, ‘The Law of Restitution for Void Contracts: An Economic Analysis’
ABSTRACT This paper develops an economic analysis of the application of the law of restitution to the case of void contracts, when agreements may be unenforceable due to legal invalidity. It develops a simple model in which contracting parties’ agreements potentially impose external harms. The analysis focuses on how alternative restitution regimes affect contracting incentives […]