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Full-Text Articles in Law
Reference Points And Contract Interpretation: An Empirical Examination, Doron Teichman
Reference Points And Contract Interpretation: An Empirical Examination, Doron Teichman
Doron Teichman
This Article focuses on the influence of framing on contract-interpretation decisions. A large body of both psychological and economic studies suggests that people treat payoffs framed as gains and payoffs framed as losses distinctly. Building on these studies, we hypothesize that contract interpretation decisions will be affected by the way in which they are framed. More specifically, we expect that promisors will tend to adopt a more self-serving interpretation when they are making decisions in the domain of losses. To test this prediction, we run a series of three experiments that are all based on a between-subject design. The first …
Are All Contractual Obligations Created Equal?, Doron Teichman, Yuval Feldman
Are All Contractual Obligations Created Equal?, Doron Teichman, Yuval Feldman
Doron Teichman
At the core of the economic analysis of contract law lies the concept of options. According to this concept, parties are expected to perform their contractual duties if, and only if, the legal price of breach (i.e. damages) is lower than the cost of performance. This Article challenges this concept, and shows that peoples’ performance decisions are driven by non-instrumental forces such as moral commitments, social norms, and motivated reasoning. To demonstrate this point, this Article presents a series of three experimental surveys that measure and compare participants’ attitudes toward breaching a contract. Participants answered questions in the context of …
Are All Legal Probabilities Created Equal?, Doron Teichman
Are All Legal Probabilities Created Equal?, Doron Teichman
Doron Teichman
At the core of the economic analysis of law lies the concept of expected sanctions, which are calculated by multiplying the sanction that is applied to wrongdoers by the probability that it will be applied. This probability is a result of several sequential probabilities that involve the different actors responsible for sanctioning wrongdoers (e.g. police, prosecutors, judges, jurors, etc.). Generally, legal economists treat different legal probabilities as fungible and simply multiply them much like any other sequential probabilistic situation. In this paper we challenge this assumption, and demonstrate that different types of legal probabilities are perceived by people as different …
Outsourcing And Insourcing Crime: The Political Economy Of Globalized Criminal Activity, Doron Teichman, Tomer Broude
Outsourcing And Insourcing Crime: The Political Economy Of Globalized Criminal Activity, Doron Teichman, Tomer Broude
Doron Teichman
This Article presents a novel theory of the political economy surrounding the regulation of crimes that can travel across international borders. Profit-driven crime (e.g., patent and copyright infringement, money laundering, and the production of and trade in illegal narcotics) responds – much like other forms of economic activity – to local regulation, by shifting to the territorial jurisdictions in which it incurs lower expected sanctions, making it most profitable for criminals. Given this reality, the Article argues that local crime control efforts of states are designed while taking into account the policies of other states. More specifically, it points out …
Old Habits Are Hard To Change: Evidence From Israeli Real Estate Contracts, Doron Teichman
Old Habits Are Hard To Change: Evidence From Israeli Real Estate Contracts, Doron Teichman
Doron Teichman
This paper presents a unique case study on the persistent dollarization norm in Israeli real estate contracts. Using an array of theoretical tools from both psychology and economics, it explains this puzzling phenomenon, and demonstrate why persistent inefficient contracting norms may remain surprisingly stable within contracting communities. Finally, the paper will address some of the general policy recommendations that can be learned from this case study.