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The Essential Role of Empirical Analysis in Developing Law and Economics Theory

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Throughout its history, the development of theoretical law and economics has depended on, and been shaped by, empirical analyses of law. Theoretical law and economics scholars cannot draw persuasive positive or normative conclusions about legal rules unless the models employed accurately capture the factors affecting people’s responses to legal rules. Models thus must accurately describe […]

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The Economics of Class Action Waivers

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Many firms require consumers, employees, and suppliers to sign class action waivers as a condition of doing business with the firm, and the U.S. Supreme Court has endorsed companies’ ability to block class actions through mandatory individual arbitration clauses. Are class action waivers serving the interests of society or are they facilitating socially harmful business […]

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Economic Analysis in Law

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This Essay explores the relationship between normative law and economics and legal theory. We claim that legal theory must account for law’s coerciveness, normativity, and institutional structure. Economic analyses that engage these features are an integral part of legal theory, rather than external observations about law from an economic perspective. These analyses, or economic analysis […]

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Remixing Resources

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This Essay argues for an approach to resource access that connects rather than separates questions of efficiency and distribution. It proceeds from the premise that putting together the most valuable combinations of resources—including human capital—is of central and increasing normative importance. Structuring law to facilitate these combinations should be a primary task for property scholars […]

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Transactions Benefits

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At least since Ronald Coase, law and economics has been deeply engaged with transactions costs. These frictions can prevent resources from being efficiently deployed in production and goods from reaching their highest-valuing users. The systematic study of how to reduce or minimize transactions costs has yielded explanations, for example, of the boundary between the firm […]

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The Boundaries of Normative Law and Economics

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Normative law and economics remains controversial decades after its emergence despite its successes in legal scholarship and its similarity to influential approaches in economics. The reason is that many of its proponents have exaggerated its value for policy while discounting other methods, tainting the enterprise. Normative law and economics as a method of policy analysis […]

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Economic Challenges for the Law of Contract

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This Essay introduces general equilibrium theory (GET) and mechanism design theory (MD) in a general sense (rather than in piece meal applications) to the study of contract law. As a positive matter, this introduction reveals three understudied areas: (i) when the equilibrium contract is individually rational but collectively irrational; (ii) the role of courts in […]

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What Do Lawyers Contribute to Law and Economics?

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The law-and-economics movement has transformed the analysis of private law in the United States and, increasingly, around the world. As the field developed from 1970 to the early 2000s, scholars have developed countless insights about the operation and effects of law and legal institutions. Throughout this period, the discipline of law-and-economics has benefited from a […]

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Towards an Administrative Law of Central Banking

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A world in turmoil caused by Covid-19 has revealed again what has long been true: the Federal Reserve is arguably the most powerful administrative agency in government, but neither administrative-law scholars nor the Fed itself treat it that way. In this Article, we present the first effort to map the contours of what administrative law […]