Law and Economics: Contexts and Criticisms (original) (raw)
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Economic Analysis of Law & Legal Analysis of Economy [ENG]
European Law & Economics, 2020
These words of Justice Holmes are often quoted on the first pages of textbooks introducing the research program of Law & Economics. Scholars rightly recognizing him as one of the precursors of this interdisciplinary field connecting two disciplines often use this quote as justification for recognizing the maximization of measurable efficiency as the main purpose of the law system. This essay is an attempt to indicate both the correct interpretation of this Holmes’ famous thought and the validity of other values, which must also be recognized as the primary goals of the law.
SSRN Electronic Journal, 2000
Inspired by knowledge of law and economics and competition law, this paper suggests an integrated framework for understanding economic law as an autonomous subject. In developing this framework, this paper first assumes economic law to be an independent body of law comprising various branches of rules to redress market failures. Competition law is placed at its center to describe a general theory concerning the advantages and limits of an ideal market. Each branch of rules then either substitutes or complements competition law to correct market imperfections.
Methodology of Law and Economics
Cerebellum, 2011
Law and economics can be defined as the application of the rational choice approach to law (Kerkmeester 2000, 384; Ulen 2000, 797; Parisi 2004, 262). Under this approach it is assumed that people act rationally. A rational decision consists of three elements: (1) the actor chooses the option which (s)he thinks best meets his/her preferences, given his/her expectations; (2) his/her expectations are based on the information available to him/her, and (3) (s)he gathers an optimal amount of information (not too much and not too little). In short, the actors are assumed to maximize their expected utility. This expected utility is determined by multiplying the probabilities that the different outcomes will occur with the utility they yield if they materialize. The maximization of expected utility takes place under several constraints, such as income and time, but also cognitive resources which are discussed in more detail in Section 5 . The rational choice approach assumes that actors have transitive preferences, meaning that they can order them in the following sense: if the decision-maker prefers A over B and B over C, (s)he also prefers A over C. An additional assumption entails that the actor's preferences are stable over the period of analysis. This is not done out of a belief that preferences would not change, but because without this assumption one could always argue that if behaviour departs from the predictions, the preferences may have changed in the meantime (
An Introduction to Economic Analysis of Law
2020
The purpose of this article is to deal with the introductory aspects of Economic Analysis of Law (AED). To reach the objective, the research started by the interaction between the sciences of Law and Economics, their differences and convergences. Then it was about the origin of the movement, passing to the methodological premises of the economic theory based on the scarcity of resources, the maximizing rationality, the incentive structure and the question of efficiency. The research converges to demonstrate the need for dialogue and cooperation between the disciplines of Law and Economics. It is concluded that the AED, in its pragmatic and consequentialist bias, helps the jurist to understand the application of the legal norm (descriptive sense) providing the keys for understanding the choices made by the legislator on the different themes aiming at the improvement of legislation (predictive sense). The article is inserted in the branch of Legal, Social and Environmental Sciences, i...
Exploring the interaction between law and economics: the limits of formalism
Legal Studies, 1998
As lawyers concerned with the regulation of economic activity, we applaud the recognition in Professor Charles Goodhart's recent Chorley lecture that much of the ‘law and economics’ of the past quarter-century has involved ‘too much one-way traffic’. If the field of law and economics has indeed largely, as Professor Goodhart suggests, consisted of a process of intellectual imperialism, specifically of the colonisation of law by economics, we consider it important to reflect on the reasons for this, and to make some suggestions to improve the collaboration between the two disciplines. In brief, we suggest that this interaction has been bedevilled by its tendency to reproduce the worst aspects of formalism in each discipline.Professor Goodhart shows that the bulk of law and economics has consisted of a fairly unthinking application of standard neo-classical economic assumptions to legal phenomena which have themselves typically been conceived in conventional doctrinal terms.
This chapter aims at providing a definition of this rather new subject, which is situated at the crossroads of two different scholarly traditions, comparative law and economic analysis of the law. Comparative law and economics combines the instruments and methodologies of both these two disciplines because in this way it is possible to better understand the reasons of existing legal rules and institutions and of their evolution. It uses a dynamic approach to law, by focusing on the study of phenomena of legal divergence and convergence. These phenomena may take place within a single legal system, and in this case the analysis of legal formants (a technique created by comparative law) provides the analytical tool for verifying the law in action, which may be hidden behind different formal rules. Interaction may also happen among different legal systems, and we term this latter phenomenon 'legal transplant', which can take place for single rules or institutions or for entire branches of law, and can be determined by different reasons which range from prestige to forced imposition. Economic analysis of law provides further analytical tools that help measure the level and entity of analogy or divergence. Beside the traditional tools of neoclassical economics, useful insights may be gained through the instruments of the new institutional economics, particularly path-dependence, which, through the analysis of the relationship between formal and informal institutions, and of these with organizations, opens new lines of interpretation of legal change. JEL classification: 0560
The Economic Analysis of Law as a Reference for the Grounds of Judicial Decisions
Journal of Management Science & Engineering Research, 2023
The present article aimed to analyze the application of the economic analysis of Law as a reference for the reasoning of judicial decisions. To that end, an analysis was carried out on the definitions of what is hermeneutics and economic analysis of law, based on the construction of the matrix rule of conduct for public administration. The method of the approach followed was empirical-dialectical, using bibliographic, legislative and jurisprudential research, having a reference to the Law and Economics.