Many law schools in North America, Europe, and Asia have faculty members with a graduate degree in economics. In addition, many professional economists now study and write on the relationship between economics and legal doctrines.
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Anthony Kronman, former dean of Yale Law School, has written that "the intellectual movement that has had the greatest influence on American academic law in the past quarter-century [of the 20th Century]" is law and economics. Despite its influence, the law and economics movement has been criticized from a number of directions.
This is especially true of normative law and economics. Because most law and economics scholarship operates within a neoclassical framework, fundamental criticisms of neoclassical economics have been drawn from other, competing frameworks, though there are numerous internal critiques as well. Critics of the economic analysis of legal questions have argued that normative economic analysis does not capture the importance of human rights and concerns for distributive justice. Some of the heaviest criticisms of law and economics come from the critical legal studies movement, in particular Duncan Kennedy  and Mark Kelman.
Jon D. Hanson, of Harvard Law School , argues that our legal, economic, political, and social systems are unduly influenced by an individualistic model of behavior based on preferences , instead of a model that incorporates cognitive biases and social norms. Additional criticism has been directed toward the assumed benefits of law and policy designed to increase allocative efficiency when such assumptions are modeled on "first-best" Pareto optimal general-equilibrium conditions.
Under the theory of the second best , for example, if the fulfillment of a subset of optimal conditions cannot be met under any circumstances, it is incorrect to conclude that the fulfillment of any subset of optimal conditions will necessarily result in an increase in allocative efficiency. Consequently, any expression of public policy whose purported purpose is an unambiguous increase in allocative efficiency for example, consolidation of research and development costs through increased mergers and acquisitions resulting from a systematic relaxation of antitrust laws is, according to critics, fundamentally incorrect, as there is no general reason to conclude that an increase in allocative efficiency is more likely than a decrease.
Essentially, the "first-best" neoclassical analysis fails to properly account for various kinds of general-equilibrium feedback relationships that result from intrinsic Pareto imperfections.
Another critique comes from the fact that there is no unique optimal result. Warren Samuels in his book, The Legal-Economic Nexus , argues, "efficiency in the Pareto sense cannot dispositively be applied to the definition and assignment of rights themselves, because efficiency requires an antecedent determination of the rights 23—4 ".
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Law and economics has adapted to some of these criticisms and been developed in a variety of directions. One important trend has been the application of game theory to legal problems. Property rights, which are analyzed using economic analysis, are seen as fundamental human rights by defenders of law and economics. From Wikipedia, the free encyclopedia.
Application of economic theory to analysis of legal systems. Index Outline Category. History Branches Classification. History of economics Schools of economics Mainstream economics Heterodox economics Economic methodology Economic theory Political economy Microeconomics Macroeconomics International economics Applied economics Mathematical economics Econometrics.
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Journal of Risk and Uncertainty. Kronman, The Lost Lawyer JAI Press. Publication date: November 21, November 21, Market definition plays a critical role in EC competition law, as the first step of any investigation into the nature of competition in a given industry. This book strives for a greater harmony between law and economics in defining antitrust markets.
Committed to Reform? Malgorzata Sadowska. Publication date: September 11, September 11, This book provides in-depth case studies of EU competition enforcement in the electricity sector. It shows how the European Commission bends and stretches competition law beyond its proper limits to accommodate non-competition goals.
Does Law Matter for Economic Growth? Guangdong Xu.
Publication date: August 31, August 31, This book addresses the role of legal institutions in economic growth. The massive differences in country incomes are largely the product of economic growth, which is in turn shaped, influenced, and determined by the legal infrastructure of a country.
There has been a growing interest in exploring the connection between legal rules and economic growth since the s. Publication date: August 10, August 10, This book investigates to what extent competition goals may influence merger policy by taking a comparative perspective. To address this central research question, this book focuses on four major issues; the legislative history of the Anti-Monopoly Law and merger policy; the evolut Publication date: July 31, July 31, This book proposes a novel way to assess pain and suffering damages.
It is based on specialised scientific information regarding the impact of injuries and investigates the positive legal and economic implications that would result from its implementation compared to current approaches. Publication date: May 6, May 6, The New York Convention is regarded as one of the most successful treaties in the past fifty-five years in the field of transnational business law, more specifically, international commercial arbitration. Its simplicity and brevity in wording but complexity and diversity in application have triggered endless discussions, debates and writings.
Patents as Protection of Traditional Medical Knowledge?
Petra Ebermann. Publication date: May 29, May 29, The protection of the knowledge and practises of local and indigenous groups has been discussed in various forums in recent times.
International agreements such as the Convention on Biological Diversity address the importance of protecting traditional knowledge and practises, This book examines traditional knowledge protection in the area of traditional medical knowledge, often utilised in contemporary medicine, and consequently subject to pat Economic Criteria for Criminalization Katarina Svatikova.
Publication date: January 11, January 11, This book examines the question why — from an economic perspective — society should enforce certain violations through criminal law, while others through private or administrative law. This book deals with the endeavor of national and supranational legislators to develop more attractive corporate legal forms and investment frameworks. It focuses on some recent national corporate law reforms, the newly introduced European legal form Societas Europaea and the choice of law in corporate debt securities.
Publication date: August 24,
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