Chapter 19. Law and Economics

  1. Dennis Patterson Professor4,5,6
  1. Jon Hanson1,
  2. Kathleen Hanson2 and
  3. Melissa Hart Associate Professor3

Published Online: 27 JAN 2010

DOI: 10.1002/9781444320114.ch19

A Companion to Philosophy of Law and Legal Theory, Second edition

A Companion to Philosophy of Law and Legal Theory, Second edition

How to Cite

Hanson, J., Hanson, K. and Hart, M. (2010) Law and Economics, in A Companion to Philosophy of Law and Legal Theory, Second edition (ed D. Patterson), Wiley-Blackwell, Oxford, UK. doi: 10.1002/9781444320114.ch19

Editor Information

  1. 4

    European University Institute, Florence, Italy

  2. 5

    Rutgers University School of Law, Camden, New Jersey, USA

  3. 6

    Swansea University, Wales, United Kingdom

Author Information

  1. 1

    Alfred Smart Professor of Law, Harvard Law School, Cambridge, Massachusetts, USA

  2. 2

    contributes to and helps direct the Project on Law and Mind Sciences, Harvard Law School, Cambridge, Massachusetts, USA

  3. 3

    University of Colorado Law School, Boulder, Colorado, USA

Publication History

  1. Published Online: 27 JAN 2010
  2. Published Print: 19 MAR 2010

ISBN Information

Print ISBN: 9781405170062

Online ISBN: 9781444320114

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Keywords:

  • law and economics;
  • economic analysis of law - pervasive interdisciplinary field of legal studies in history of American law;
  • American appellate court decisions - and testing “theory of negligence”;
  • “Hand Formula” - efficiency goal of minimizing total cost of accidents;
  • economic model of Carroll Towing - simple model using the facts in Carroll Towing;
  • Risk - neutral individuals - caring about expected value of an option;
  • introduction to game theory - assessing what the tug owner and barge owner will do;
  • efficient level of activity - net marginal gains of additional unit of activity are no longer positive;
  • positivist hypothesis and courts applying Hand Formula - with “reasonable care”;
  • efficiency as a norm - successfully promoting efficiency in tort cases

Summary

This chapter contains sections titled:

  • An Economic Model of Carroll Towing

  • Relaxing the Model's Initial Assumptions

  • Efficiency as a Norm

  • Some Limitations of Law and Economics

  • Conclusion

  • References