Publications
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Utilitarianism and Wealth Maximization
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Wealth Maximization Redux: A Defense of Posner’s Economic Approach to Law
AbstractThis article examines the wealth maximization principle, as developed by Richard Posner, and aims to clarify misunderstandings, address criticism, and contextualize its evolution within legal and philosophical analysis. The paper first delineates the distinction between the concepts of experienced utility and decision utility, elucidating how the latter is fundamental to wealth maximization. Next, the paper engages with criticisms of wealth maximization, including issues relating to interpersonal value comparison, the Kaldor-Hicks criterion, and the Pareto criterion, offering rebuttals and arguing that individual rights and distributive justice can be understood as emergent properties of efficiency. The article then presents affirmative arguments for wealth maximization by connecting it to social contract theory and demonstrating its consistency with the tenets of liberal democracy. By analyzing the concept from both Hobbesian and Rawlsian perspectives, the paper illustrates the wealth maximization principle’s merits in relation to the choice of maximand and aggregation method. In conclusion, the article argues that wealth maximization serves as a robust and justifiable framework for legal and philosophical analysis, ultimately offering a better fit with the principles of liberal democracy than competing normative theories.
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Robotic Torts
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The Limits of Behavioral Economics in Tort Law
AbstractSkeptics of rational choice theory have long predicted that behavioral economics would radically transform the legislation, adjudication, and analysis of law. Using tort law as an exemplar, this Article maps out the narrow set of conditions where substantive law can be modified to accommodate irrational decision-makers. Specifically, this Article demonstrates that if injurers are systematically biased, and the due care standard can be expressed quantitatively, and victims are unable to take meaningful precautions, then imposing punitive damages can induce irrational injurers to exercise efficient precautionary care. In all other cases, it is better that the law adopt a presumption of rationality, regardless whether individuals behave rationally in fact.
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Courts as Auditors of Legislation
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Access to Evidence in Private International Law
AbstractThis Article analyzes the interaction between the burden of proof and evidentiary discovery rules. Both sets of rules can affect incentives for prospective injurers to invest in evidence technology (i.e., ex ante investments that increase the quantity and quality of evidence in case an accident occurs). This interaction becomes acutely important in the private international law setting, where jurisdictions are split on the question whether the burden of proof should be treated as a substantive or procedural matter. When a tort occurs in Europe, but the case is litigated in American courts, treating the burden of proof as a procedural matter preserves the complementarity of incentives created by the burden of proof and evidentiary rules. Conversely, treating the burden of proof as a substantive matter creates a mismatch in incentives created by the burden of proof and evidentiary rules.
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Liability for Robots I: Legal Challenges
AbstractIn robot torts, robots carry out activities that are partially controlled by a human operator. Several legal and economic scholars across the world have argued for the need to rethink legal remedies as we apply them to robot torts. Yet to date, there exists no general formulation of liability in case of robot accidents, and the proposed solutions differ across jurisdictions. We proceed in our research with a set of two companion papers. In this paper, we present the novel problems posed by robot accidents, and assess the legal challenges and institutional prospects that policymakers face in the regulation of robot torts. In the companion paper, we build on the present analysis and use an economic model to propose a new liability regime which blends negligence-based rules and strict manufacturer liability rules to create optimal incentives for robot torts.
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Liability for Robots II: An Economic Analysis
AbstractThis is the second of two companion papers that discuss accidents caused by robots. In the first paper (Guerra et al., 2021), we presented the novel problems posed by robot accidents, and assessed the related legal approaches and institutional opportunities. In this paper, we build on the previous analysis to consider a novel liability regime, which we refer to as “manufacturer residual liability” rule. This makes operators and victims liable for accidents due to their negligence—hence, incentivizing them to act diligently; and makes manufacturers residually liable for non-negligent accidents—hence, incentivizing them to make optimal investments in R&D for robots’ safety. In turn, this rule will bring down the price of safer robots, driving unsafe technology out of the market. Thanks to the percolation effect of residual liability, operators will also be incentivized to adopt optimal activity levels in robots’ usage.
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Quantifying Reasonable Doubt
AbstractThis article contributes in three ways to the prior literature on the reasonable doubt standard. First, it synthesizes the insular strands of historical, economic, jurisprudential, and doctrinal scholarship on reasonable doubt. Second, it advances a conception of the criminal standard of proof designed to avoid the various problems affecting earlier attempts to devise meaningful definitions of reasonable doubt. The definition proposed is that “reasonable doubt” be the standard of proof which minimizes the aggregate subjective expected social cost of false conviction and false acquittal. Judicial pronouncements of Blackstonian ratios (for example, that it is better that ten guilty go free than one innocent be convicted) are interpreted as judicial estimates of these variables, from which efficient reasonable doubt standards may be calculated. It is urged that courts adopt the precise numerical measures of certainty in jury instructions (for example, that a juror should only vote to convict if he is more than x% certain of the defendant’s guilt). Judicial pronouncements of Blackstonian ratios are collected from the caselaw of all fifty states and federal courts to encourage practitioners to test the refined conception in their jurisdiction.
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Deterrence of Wrongdoing in Ancient Law
AbstractAncient laws addressed all types of wrongdoing with a single set of remedies that over time pursued a changing mix of retaliatory, punitive and compensatory objectives. In this paper, we consider the historical transition from retaliatory to punitive justice, and the subsequent transition from punitive to compensatory justice. This paper shows how the optimal level of enforcement varies under the three corrective regimes. Crimes that create a larger net social loss require lower levels of enforcement under retaliatory regimes. The optimal level of enforcement is instead independent of the degree of inefficiency of the crime when punitive and compensatory remedies are utilized. The paper provides several historical illustrations and sheds light on some of the legal paradoxes of ancient law.
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Double-Edged Torts
AbstractTraditional economic models of tort law assign determinate roles to parties, modeling their behavior as if parties knew in advance whether fate would cast them in the roles of “tortfeasors” or “victims.” However, for a large class of activities, individuals take precautions ignorant of whether they will be tortfeasors or victims, or indeed whether they will be involved in an accident at all. Further complicating the issue, there exists a category of precautions, which courts have not hitherto recognized, and which we call “hybrid precautions,” that reduce both the probability of being a tortfeasor and the probability of being a victim. In this paper, we extend the standard model to account for such cases of roleuncertainty and hybrid precaution, finding that incentives are not, as previously assumed, simply additive. We analyze and reassess the standard tort regimes under this new framework. From a policy perspective, we find that the traditional formulation of negligence fails to incentivize efficient care levels. We argue instead for a modification that does effect efficient precautionary efforts.
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The Emergence and Evolution of Customary International Law
AbstractCustomary international law is one of the three main sources of international law; lamentably, it has historically received little attention from law and economics scholars, despite providing rich material for economic analysis. In this chapter, we provide a concise overview of recent research on customary international law from a law and economics perspective, summarizing the main results while modestly extending some of the analyses presented.
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The Economic Analysis of International Treaty Law
AbstractIn this chapter, we review some approaches to international treaty law from an economic perspective, offering critical commentary and extensions to those approaches.
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Biasing, Debiasing, and the Law
AbstractIn this essay, we build on the existing literature on the use of legal strategies for addressing problems of biased judgment and behavior, exploring how heuristics and biases may be exploited to foster efficiency in the presence of other incentive alignment problems. We also introduce two new categories: the hitherto unnoticed counterparts to debiasing and insulating strategies, which we will call "benevolent biasing," and "cognitive leveraging" strategies.
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Honor Among Thieves: Enforcing Criminal Contracts