Category Archives: Law and Economics
Grenadier and Grenadier, ‘Third-Party Litigation Financing Under a Veil of Secrecy: The Equilibrium Consequences of Disclosure Requirements’
ABSTRACT Third-party litigation finance is an increasingly popular practice in commercial litigation. Despite calls for mandated disclosure, litigation funders are mostly anonymous to defendants, judges, and juries. We first present an equilibrium model of litigation, with endogenous settlement and trial, where plaintiff financing is private information. Defendants use the plaintiff’s response to settlement offers to […]
Alexander Arnold, ‘“Ye Shall Know the Truth”: Truth-Seeking, Judicial Economics, and the Transformation of Civil Procedure’
ABSTRACT Federal civil procedure has undergone two major revolutions over the last century. The first occurred with the promulgation of the Federal Rules of Civil Procedure (FRCP) in 1938. The second occurred over the last forty years, with the emergence of what scholars call our ‘new era’ of civil procedure. This Article argues that both […]
Enrico Baffi, ‘Modular Default Rules: Hadley v Baxendale and the Theory of Contractual Defaults’
ABSTRACT The economic theory of contracts treats the rule of Hadley v Baxendale as the paradigmatic example of a penalty default rule: a rule deliberately not wanted by the majority of contracting parties, conceived for the sole purpose of forcing the informed party to disclose private information through opt-out. This article argues that this account […]
David Fox, ‘The law’s creation myth for money’
ABSTRACT Paul’s telling of the ‘money from barter’ story in Digest 18.1.1. is indeed a myth. Rather as early thinkers told their mythoi, Paul retells a traditional narrative about events in the remote past to establish his idea about the essential legal characteristics of money. His story lies somewhere between philosophical demonstration and historical speculation. […]
Kyle Logue, ‘Operationalizing Tort Theory’
ABSTRACT Forty years ago, in Distributing Risk: Insurance, Legal Theory, and Public Policy, Kenneth Abraham examined how the law and institutions of insurance further, and sometimes impede, the public policy goals of legal systems. This essay, written for a symposium marking the book’s fortieth anniversary, argues that Distributing Risk also did something beyond its stated […]
Thomas Haley, ‘Copyright Disincentives’
ABSTRACT Over the last decade, a spate of high-profile copyright infringement lawsuits rattled the music industry. Controversy followed in the wake of multi-million-dollar damages awards, with criticism emanating from courts, scholars, and musicians alike. The basic logic of the critique is sound: the specter of such massive liability for small and inadvertent similarities disincentivizes the […]
Kantorowicz-Reznichenko, van Heusden and Kantorowicz, ‘Consumers’ Rights in the Shadow of the Brand: A Conjoint Experiment on the Valuation and Trade-Offs of Contractual Rights’
ABSTRACT With the rise of standard contracts, tensions persist between protecting consumers from unfair terms and preserving freedom of contract. A key concern is that consumers may waive legal rights, often unknowingly, particularly when dealing with trusted brands. To address this, we conducted a conjoint experiment with a representative US sample to evaluate how consumers […]
Takala and Häyry, ‘Justainability’
ABSTRACT Sustainability, properly understood, is an existential moral ideal. The United Nations, however, defines it in terms of 17 indivisible sustainable development goals. This definition changes the core idea of the concept. It turns sustainability from a moral ideal into a set of economy-based political aspirations. The European Union’s bioeconomy strategy demonstrates the shift aptly […]
Kevin Davis, ‘Inequality and the Regulation of Contracting’
ABSTRACT A long line of scholars and jurists have proposed to use laws that regulate contracting to combat economic inequality. This chapter examines the justifications that have been offered in support of these proposals and how they might be implemented in various areas of contract law. The discussion emphasizes that law may influence inequality by […]
Abrams and Baker, ‘Don’t Go Chasing Litigation Funding Waterfalls’
ABSTRACT Proponents of third-party litigation funding argue that it is socially beneficial, helping parties bring meritorious litigation that otherwise would not be possible, due in part to the ability of the plaintiff to share risk with funders. But the reality of how some third-party funding contracts are structured belies this theory. Many such contracts include […]