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Law and Economics

Environmental Law

2007

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Full-Text Articles in Law

Are All ‘Legal Dollars’ Created Equal?, Doron Teichman, Yuval Feldman Feb 2007

Are All ‘Legal Dollars’ Created Equal?, Doron Teichman, Yuval Feldman

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For several decades law and economic scholars have employed the tools of price theory in order to evaluate an array of legal questions ranging from criminal sanctions to contract remedies. This vast body of literature implicitly assumed that all payments made through the legal system are fungible. In other words, just as a dollar paid for a tomato is identical to a dollar paid for a cucumber, so are a dollar paid as a pollution tax to the government and a dollar paid as compensation to the party injured by the pollution. In this study we challenge this assumption, and …