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Full-Text Articles in Law
Statistics, Not Experts, Cass R. Sunstein, William Meadow
Statistics, Not Experts, Cass R. Sunstein, William Meadow
Coase-Sandor Working Paper Series in Law and Economics
The legal system should rely much more than it now does on statistical evidence. It should be cautious about the judgments of experts, who make predictable cognitive errors. Like everyone else, experts have a tendency to blunder about risk, a point that has been shown to hold for doctors, whose predictions significantly err in the direction of optimism. We present new evidence that individual doctors' judgments about the ordinary standard of care are incorrect and excessively optimistic. We also show how this evidence bears on legal determinations of negligence, by doctors and others.
The Assault On Managed Care: Vicarious Liability, Class Actions, And The Patient's Bill Of Rights, Alan O. Sykes, Richard A. Epstein
The Assault On Managed Care: Vicarious Liability, Class Actions, And The Patient's Bill Of Rights, Alan O. Sykes, Richard A. Epstein
Coase-Sandor Working Paper Series in Law and Economics
No abstract provided.
Conjunction And Aggregation, Saul Levmore
Conjunction And Aggregation, Saul Levmore
Coase-Sandor Working Paper Series in Law and Economics
This Article begins with the puzzle of why law does not embrace the "product rule"; a mathematically-inclined judge or jury that thought a defendant .6 likely to have been negligent and .7 likely to have caused plaintiff's harm might conclude that plaintiff had failed to satisfy the preponderance of the evidence standard. Following some discussion of a number of reactions to this puzzle, the Article advances the idea that the process of aggregating multiple jurors' assessments overlooks valuable information. First, following the Condorcet Jury Theorem, agreement among jurors might raise our level of confidence beyond what the jurors themselves report. …
Copyright, Borrowed Images, And Appropriation Art: An Economic Approach, William M. Landes
Copyright, Borrowed Images, And Appropriation Art: An Economic Approach, William M. Landes
Coase-Sandor Working Paper Series in Law and Economics
No abstract provided.
Puzzling Stock Options And Compensation Norms, Saul Levmore
Puzzling Stock Options And Compensation Norms, Saul Levmore
Coase-Sandor Working Paper Series in Law and Economics
Why do so many executives and other employees receive fixed stock options as part of their compensation packages? There is an impressive literature on compensatory options, and yet it raises more puzzles than it solves. Tax law, option theory, and agency theory all suggest that we might have expected to find quite different practices than we do observe. In particular, there is a puzzle in the popularity of conventional fixed options when indexed options would seem to be relatively attractive. The solution or story offered here develops arguments about signaling, in the form of employees' disinclination to be seen as …
Strategic Disclosure In The Patent System, Douglas Gary Lichtman, Scott Baker, Kate Kraus
Strategic Disclosure In The Patent System, Douglas Gary Lichtman, Scott Baker, Kate Kraus
Coase-Sandor Working Paper Series in Law and Economics
Patent applications are evaluated in light of the prior art. What this means is that patent examiners evaluate a claimed invention by comparing it with what in a rough sense corresponds to the set of ideas and inventions already known to the public. This is done for three reasons. First, the comparison helps to ensure that patents issue only in cases where an inventor has made a non-trivial contribution to the public’s store of knowledge. Second, it protects a possible reliance interest on the part of the public since, once an invention is widely known, members of the public might …
The Dormant Commerce Clause And The Internet, Jack L. Goldsmith, Alan O. Sykes
The Dormant Commerce Clause And The Internet, Jack L. Goldsmith, Alan O. Sykes
Coase-Sandor Working Paper Series in Law and Economics
No abstract provided.
Antitrust In The New Economy, Richard A. Posner
Antitrust In The New Economy, Richard A. Posner
Coase-Sandor Working Paper Series in Law and Economics
Concern has been expressed recently that U.S. antitrust law may not be well suited to regulating the "new economy." Doctrines developed to deal with competition and monopoly in smokestack industries is not well adapted, it is argued, to dealing with the dynamic economy of the twenty-first century. What I shall argue is that there is indeed a problem with the application of antitrust law to the new economy, but that it is not a doctrinal problem; antitrust doctrine is supple enough, and its commitment to economic rationality strong enough, to take in stride the competitive issues presented by the new …
Moral And Legal Rhetoric In International Relations: A Rational Choice Perspective, Eric A. Posner, Jack L. Goldsmith
Moral And Legal Rhetoric In International Relations: A Rational Choice Perspective, Eric A. Posner, Jack L. Goldsmith
Coase-Sandor Working Paper Series in Law and Economics
Critics of realist and rational choice approaches to international law argue that if nations were motivated entirely by power or self-interest, their leaders would not make moral and legal arguments because no one would believe them. Thus, the prevalence of moral and legal rhetoric on the international stage refutes the behavioral assumptions of realism and rational choice. This paper argues that even if nations are not motivated by a desire to comply with morality or law, the use of moral and legal arguments could occur in equilibrium. Signaling and cheap talk models show that nations may engage in talk in …
Cost-Benefit Default Principles, Cass R. Sunstein
Cost-Benefit Default Principles, Cass R. Sunstein
Coase-Sandor Working Paper Series in Law and Economics
In an important but thus far unnoticed development, federal courts have created a new series of "default principles" for statutory interpretation, authorizing regulatory agencies, when statutes are unclear, (a) to exempt trivial risks from regulation and thus to develop a kind of common law of "acceptable risks," (b) to take account of substitute risks created by regulation, and thus to engage in "health-health" tradeoffs, (c) to consider whether compliance with regulation is feasible, (d) to take costs into account, and (e) to engage in cost-benefit balancing, and thus to develop a kind of common law of cost-benefit analysis. These cost-benefit …
Law And The Emotions, Eric A. Posner
Law And The Emotions, Eric A. Posner
Coase-Sandor Working Paper Series in Law and Economics
No abstract provided.
Cost-Benefit Analysis And Relative Position, Cass R. Sunstein, Robert H. Frank
Cost-Benefit Analysis And Relative Position, Cass R. Sunstein, Robert H. Frank
Coase-Sandor Working Paper Series in Law and Economics
No abstract provided.
Harmless Error, Richard A. Posner, William M. Landes
Harmless Error, Richard A. Posner, William M. Landes
Coase-Sandor Working Paper Series in Law and Economics
This paper presents an economic model of the harmful error rule in criminal appeals. We test the implications of the model against legal doctrines governing reversible and nonreversible error of criminal convictions and on a sample of more than 1000 criminal defendants who appealed their convictions in the U.S. courts of appeals between 1996 and 1998. Among the more important theoretical and empirical findings of the paper are the following. Intentional prosecutor and judge errors are more likely to be found harmful and lead the appellate court to reverse the defendant’s conviction than are inadvertent errors. Prosecutor errors are more …
Human Behavior And The Law Of Work, Cass R. Sunstein
Human Behavior And The Law Of Work, Cass R. Sunstein
Coase-Sandor Working Paper Series in Law and Economics
The most fundamental issues in labor and employment law involve the choice among three alternatives: waivable employers' rights, waivable employees' rights, and nonwaivable employees' rights. By combining standard contract analysis with a perspective informed by behavioral economics, it is possible to obtain a much better understanding of the underlying issues. Contrary to the conventional view: workers are especially averse to losses, and not so much concerned with obtaining gains; workers often do not know about legal rules, including key rules denying them rights; workers may well suffer from excessive optimism; workers care a great deal about fairness, and are willing …
Solidarity In Consumption, Cass R. Sunstein, Edna Ullmann-Margalit
Solidarity In Consumption, Cass R. Sunstein, Edna Ullmann-Margalit
Coase-Sandor Working Paper Series in Law and Economics
Contrary to a common picture of relationships in a market economy, people often express communal and membership-seeking impulses via consumption choices, purchasing goods and services because other people are doing so as well. Shared identities are maintained and created in this way. Solidarity goods are goods whose value increases as the number of people enjoying them increases. Exclusivity goods are goods whose value decreases as the number of people enjoying them increases. Distinctions can be drawn among diverse value functions, capturing diverse relationships between the value of goods and the value of shared or unshared consumption. Though markets spontaneously produce …
An Economic Analysis Of Anti-Tax Avoidance Laws, David A. Weisbach
An Economic Analysis Of Anti-Tax Avoidance Laws, David A. Weisbach
Coase-Sandor Working Paper Series in Law and Economics
This article analyzes the effect of tax law doctrines designed to reduce tax shelters, such as the business purpose doctrine, and the economic substance doctrine. The article analyzes these doctrines as changes to the marginal elasticity of taxable income. As these doctrines are strengthened, the elasticity of taxable income goes down (in absolute value). By reducing the marginal elasticity of taxable income, the doctrines increase the efficiency of the tax system. Because the doctrines cannot perfectly identify tax avoidance, however, they induce a distortionary response by taxpayers, who may structure shelters to avoid the doctrines. This distortionary effect reduces their …
Property Rights In Emerging Platform Technologies, Douglas Gary Lichtman
Property Rights In Emerging Platform Technologies, Douglas Gary Lichtman
Coase-Sandor Working Paper Series in Law and Economics
This paper considers an externality that affects a broad range of markets, specifically markets where one set of firms sells some platform technology like a computer, video game console, or operating system, while another possibly overlapping set of firms sells peripherals compatible with that platform, for example computer software or video game cartridges. The externality causes certain peripheral sellers to charge prices that are unprofitably high. That is, these firms could earn greater profits if only they could coordinate to charge lower prices. In many markets, such coordination is possible; firms can contract, for example, or integrate. In markets based …
Creating And Enforcing Norms, With Special Reference To Sanctions, Eric B. Rasmusen, Richard A. Posner
Creating And Enforcing Norms, With Special Reference To Sanctions, Eric B. Rasmusen, Richard A. Posner
Coase-Sandor Working Paper Series in Law and Economics
Two central puzzles about social norms are how they are enforced and how they are created or modified. The sanctions for the violation of a norm can be categorized as automatic, guilt, shame, informational, bilateral costly, and multilateral costly. The choice of sanction is related to problems in creating and modifying norms. We use our analysis of the creation, modification, and enforcement of norms to analyze the scope of feasible government action either to promote desirable norms or to repress undesirable ones. We conclude that the difficulty of predicting the effect of such action limits its feasible scope.
Boyd's Legacy And Blackstone's Ghost, Robert K. Rasmussen, Douglas G. Baird
Boyd's Legacy And Blackstone's Ghost, Robert K. Rasmussen, Douglas G. Baird
Coase-Sandor Working Paper Series in Law and Economics
No abstract provided.
Deliberating About Dollars: The Severity Shift, Cass R. Sunstein, David Schkade, Daniel Kahneman
Deliberating About Dollars: The Severity Shift, Cass R. Sunstein, David Schkade, Daniel Kahneman
Coase-Sandor Working Paper Series in Law and Economics
No abstract provided.
Simplicity And Complexity In Contracts, Karen Eggleston
Simplicity And Complexity In Contracts, Karen Eggleston
Coase-Sandor Working Paper Series in Law and Economics
Standard economic models of contract imply that contracts should be highly "complex," by which we mean (1) rich in the expected number of payoff-relevant contingencies; (2) variable in the magnitude of payoffs contracted to flow between parties; and (3) severe in the cognitive load necessary to understand the contract. Yet most realworld contracts are simple along all three of these dimensions. We argue that many factors, often neglected in the literature, account for this discrepancy. The factors are categorized as asymmetric information, monitoring dynamics, evolutionary pressures, conventions, reliance on trust and reputation, enforcement costs, bounded rationality, and renegotiation. This positive …
Agency Models In Law And Economics, Eric A. Posner
Agency Models In Law And Economics, Eric A. Posner
Coase-Sandor Working Paper Series in Law and Economics
No abstract provided.
An Economic Analysis Of The Use Of Citations In The Law, Richard A. Posner
An Economic Analysis Of The Use Of Citations In The Law, Richard A. Posner
Coase-Sandor Working Paper Series in Law and Economics
This paper examines the use of citations analysis as an empirical tool for understanding aspects of the legal system and for improving the performance of the system. Emphasis is laid on the use of such analysis as a means to evaluate courts and judges (and therefore as judicial-management tool), to test hypotheses about judicial behavior, and to evaluate and improve legal scholarship. It is argued that economic models, particularly of reputation and of human capital, can frame and guide the use of citiations analysis in law.