Description
Book SynopsisThis book considers three relationships: law and economics; economics and game theory; and game theory and law. Economists teach lawyers that economic principles cut across and integrate seemingly different legal subjects such as contracts, torts, and property. Correspondingly, lawyers teach economists that legal rationality is a separate and distinct decision-making process that can be formalized by behavioral rules that are parallel to and comparable with the behavioral rules of economic rationality, that efficiency often must be constrained by legal goals such as equal protection of the laws, due process, and horizontal and distributional equity, and that the general case methodology of economics vs. the hard case methodology of law for determining the truth or falsity of economic theories and theorems sometimes conflict.Economics and Game Theory: Law and economics books focus on economic analysis of judges' decisions in common law cases and have been mostly limited to contracts, to
Trade ReviewLaw and Economics is an important field by now. Law students, judges, lawyers, legal commentators cannot understand the law without being familiar with Law and Economics. This books provides for a very useful introduction to the subject with two important twists. First, it uses the rigor and sophistication of Game Theory to survey the main areas of the common law from the perspective of Law and Economics. Second, it illustrates the technical aspects with actual caselaw, thus helping the reader to relate Game Theory and legal decisions. Professor Cirace makes Law, Economics and Game Theory a friendly reading to everyone with an interest in legal policymaking. -- Nuno Garoupa, Texas A&M University
Table of ContentsAcknowledgments Illustrations Introduction Part I: When are Thinking like an Economist and Thinking like a Lawyer Consistent? Chapter 1: Pareto Efficiency and Kaldor-Hicks Criterion Compared Chapter 2: Rational Economic Behavior and Logic Defined Chapter 3: Judicial Use of Economic Rationality (Efficiency) Chapter 4: Equal Protection and Lexical Constraints on Efficiency Chapter 5: Legal Rationality and Logic Defined Chapter 6: When are Law and Economics Consistent (Isomorphic)? Part II: Providing Infrastructure and Controlling Externalities Requires Resolving Conflicts between Individual Self-Interest and Cooperation Chapter 7: Prisoners’ Dilemma and Introduction to Game Theory Chapter 8: Market and Government Failures as Prisoners’ Dilemmas Chapter 9: Five Requirements for Competitive Markets Chapter 10: In the Long Run We Are All Dead Part III: General Case vs. Hard Case Methodologies: Rottenberg, Coase, Calabresi, and Posner Chapter 11: Rottenberg’s Theorem: Effect of a Change in Property Rights on Free Markets Chapter 12: Coase’s Theorems: Effect of Property Rights and Liability Rules on Mutually Interfering Activities Chapter 13: Calabresi’s Criteria for Allocating Accident Costs Common to Several Activities Chapter 14: Posner’s Economic Analysis of the Common Law Part IV: Risk, Insurance, and Incomplete Information Chapter 15: Risk, Insurance, Judge Hand Test, and Value of a Statistical Life Chapter 16: Incomplete Information: Adverse Selection, Moral Hazard, and Principal-Agent Problem Part V: Law and Economics of Civil Obligation Chapter 17: Game Theoretic Framework for Law and Economics of Civil Obligation Chapter 18: Torts: Negligence and Products Liability Chapter 19: Strict Rules, Competitive Market Contract Model Chapter 20: Discretionary Standards, Imperfect Competition Contract Model Chapter 21: Decision Theory, Suit, and Settlement Bibliography About the Author
