Abstract: This article surveys the economic analysis of five primary fields of law: property law; liability for accidents; contract law; litigation; and public enforcement and criminal law. It also briefly considers some criticisms of the economic analysis of law. Keywords adverse possession; asymmetric information; Becker, G.; Bentham, J.; bona fide purchase rule; Coase, R.; collective action; compensated takings; contract formation; contractual interpretation; copyright; corrective tax; criminal law; damage measures; Demsetz, H.; deterrence; direct regulation; disclosure of information; due care; eminent domain; expectation measure of damages; fairness; fault-based liability; finders-keepers rule; fines; first-party insurance; good title; hold-out problem; imprisonment; incapacitation; incomplete contracts; injunction; justice; labels; land registries; law and economics; liability; liability insurance; litigation; moral hazard; negligence rule; original ownership rule; patents; Posner, R.; possessory rights; product liability; property rights; public enforcement of law; public property; punishment; risk; risk aversion; risk-bearing; settlement vs trial; social norms; social welfare; specific performance; strict liability; suit; takings; tort law; trade secret law; trademarks; unilateral accident model; utilitarianism Article Economic analysis of law seeks to identify the effects of legal rules on the behaviour of relevant actors and to determine whether these effects are socially desirable. The approach employed is that of economic analysis generally: the behaviour of individuals and firms is described on the assumption that they are forward looking and rational, and the framework of welfare economics is adopted to assess the social desirability of outcomes. The field may be said to have begun with Bentham (1789), who systematically examined how actors would behave in the face of legal incentives (especially criminal sanctions) and who evaluated outcomes with respect to a clearly stated measure of social welfare (utilitarianism). His work was left essentially undeveloped until four important contributions were made: Coase (1960) on externalities and liability, Becker (1968) on crime and law enforcement, Calabresi (1970) on accident law, and Posner (1972) on economic analysis of law in general. (Calabresi's book was the culmination of a series of articles, the first of which was published in 1961; see Calabresi, 1961.)
Publication Year: 2008
Publication Date: 2008-01-01
Language: en
Type: article
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