Encyclopedia of Law and Economics
General Characteristics of Rules [статья]
Опубликовано на портале: 05-02-2003Louis Kaplow Encyclopedia of Law and Economics. 1999.
This chapter addresses two fundamental characteristics of rules. The first concerns the degree of precision, detail, or complexity they embody: how finely are different sorts of behavior to be distinguished? A second aspect of legal commands concerns when a given level of detail is provided - at the time of promulgation (rules) or subsequent to individuals actions, in the context of adjudication (standards). These aspects of rules are considered from a perspective that focuses upon information costs and dissemination: different sorts of legal commands involve differing costs of formulation and application by private parties (deciding upon their own conduct) and adjudicators, and the character of laws also influences how well parties actually will understand the law and conform their conduct accordingly. The discussion encompasses related questions involving the role of precedent, the evolution of the law over time, legal uncertainty and accuracy in adjudication. This chapter also addresses the separate problem of how changes in legal rules should apply to prior behavior or preexisting investments - issues of retroactivity and transition.
Institutional Law and Economics [статья]
Опубликовано на портале: 05-02-2003Steven G. Medema, Nicholas Mercuro, Warren J. Samuels Encyclopedia of Law and Economics. 1999.
From its beginnings in the late nineteenth century, institutional economics has been concerned with the analysis of the interrelations between legal and economic processes. The institutional approach to law and economics examines both the influence of economy upon law and legal reasoning and the influence of law and legal change upon economic activity and performance. This essay examines the central tenants of institutional law and economics, dating from the early work of individuals such as Robert Lee Hale and John R. Commons and through its modern manifestations. As such, it emphasizes the evolutionary nature of law and economy, the tension between continuity and change, the problem of order, the reciprocal nature of legal-economic problems and the attendant dual nature of rights, the problematic nature of efficiency, and the need for a comparative institutional approach to the practice of law and economics. By recognizing the multiplicity of potential solutions to legal-economic problems and the underlying value premises attending each, the comparative institutional approach to law and economics attempts to flesh out both what is actually going on within the legal-economic nexus and the alternative possibilities open to society within the legal-economic decision-making process.
New Institutional Economics [статья]
Опубликовано на портале: 06-02-2003Peter G. Klein Encyclopedia of Law and Economics. 1999.
This chapter surveys the new institutional economics, a rapidly growing literature combining economics, law, organization theory, political science, sociology and anthropology to understand social, political and commercial institutions. This literature tries to explain what institutions are, how they arise, what purposes they serve, how they change and how they may be reformed. Following convention, the author distinguishes between the institutional environment (the background constraints, or rules of the game, that guide individuals behavior) and institutional arrangements (specific guidelines designed by trading partners to facilitate particular exchanges). In both cases, the discussion here focuses on applications, evidence and policy implications.
Path Dependence [статья]
Опубликовано на портале: 05-02-2003Stan J. Liebowitz, Stephen E. Margolis Encyclopedia of Law and Economics. 1999.
What role does the past play in current economic conditions? Economic models usually determine equilibrium ending points without concern for intermediate disequilibrium conditions or the prior history of the system. That the past does play some role is obvious, but the nature of its impact requires careful delineation. Some path dependence theorists have argued that past decisions might have locked-in certain inferior outcomes. In making sense of this claim particular attention needs to be paid to the meaning of inferior. Upon investigation, such claims have been found to be without empirical support (in private markets) and based on fairly narrow theoretical assumptions. In nonmarket contexts less is known.
Public Enforcement of Law [статья]
Опубликовано на портале: 05-02-2003A. Mitchell Polinsky, Steven Shavell Encyclopedia of Law and Economics. 1999.
This chapter discusses the theory of the public enforcement of law - the use of public agents (inspectors, tax auditors, police, prosecutors) to detect and to sanction violators of legal rules. Authors first present the basic elements of the theory, focusing on the probability of imposition of sanctions, the magnitude and form of sanctions, and the rule of liability. Then they examine a variety of extensions of the central theory, including accidental harms, costs of imposing fines, mistake, marginal deterrence, settlement, self-reporting, repeat offenses and incapacitation.
Опубликовано на портале: 05-02-2003Francesco Parisi Encyclopedia of Law and Economics. 1999.
Modern legal systems generally recognize customary rules that have emerged either within the confines of positive legislation or in areas that are not disciplined by positive law. Where custom is in direct conflict with legislation the latter normally prevails. In some instances, however, a custom supersedes prior legislation (that is, abrogative custom), and some arguments have been made in support of emerging practices that conflict with obsolete provisions of public international law. The theoretical and practical significance of some forms of spontaneous social order, which compete with enacted law in influencing human choice, are discussed below.
Опубликовано на портале: 11-01-2003Stephen G. Marks Encyclopedia of Law and Economics. 1999.
The separation of ownership and control refers to the phenomenon associated with publicly held business corporations in which the shareholders (the residual claimants) possess little or no direct control over management decisions. This separation is generally attributed to collective action problems associated with dispersed share ownership. The separation of ownership and control permits hierarchical decision making which, for some types of decisions, is superior to the market. The separation of ownership and control creates costs due to adverse selection and moral hazard. These costs are potentially mitigated by a number of mechanisms including business failure, the market for corporate control, the enforcement of fiduciary duties, corporate governance oversight, managerial financial incentives and institutional shareholder activism.
The Theory of the Firm [статья]
Опубликовано на портале: 05-02-2003Nicolai J. Foss, Henrik Lando, Steen Thomsen Encyclopedia of Law and Economics. 1999.
This chapter is a survey of modern theories of the firm. Foss, Lando and Thomsen categorize these as belonging either to the principal-agent or the incomplete contracting approach. In the former category fall, for example, the Alchian and Demsetz moral hazard in teams theory as well as Holmstrшm and Milgroms theory of the firm as an incentive system. Belonging to the incomplete contracting branch are theories that stress the importance of the employment relationship (for example, Coase and Simon) as an adaptation mechanism, theories that stress the importance of ownership of assets for affecting incentives when contracts must be renegotiated (Williamson, Grossman and Hart, Hart and Moore), and some recent work on implicit contracts (Baker, Gibbons and Murphy). Authors argue that these different perspectives on the firm should be viewed as complementary rather than as mutually exclusive and that a synthesis seems to be emerging.
Transaction Costs [статья]
Опубликовано на портале: 05-02-2003Douglas W. Allen Encyclopedia of Law and Economics. 1999.
This chapter addresses the history, use and significance of the term transaction costs. Few words in the economic language have been more abused or fought over and this is shown to result from the emergence of two distinct definitions and uses. The Neoclassical definition rests on the costs of trading across a market, while the property rights definition centers on the costs of establishing and enforcing property rights. In articulating these two separate definitions and in demonstrating their relationship and separate uses, it is hoped that more progress can be made in the field of transaction cost economics.