Volume 15, Issue 2 - Special Issue: Asian Law and Economics Association 20th Anniversary; Edited by Masaki Iwasaki (Seoul National University)

We discuss a central question in the study of courts: What do judges want? We suggest three different domains that might serve as the basic preferences of a judge: case dispositions and rules, caseloads and case mixes, and social consequences. We emphasize preferences over dispositions on the grounds of plausibility and tractability. We then identify desireable properties of dispositional utility functions and the relationship between dispositional utility and expected utility for rules. We examine the impact on expected rule utility from case distributions that are sensitive to the enforced rule. We illustrate how to combine dipositional utility with efforts costs and time constraints. We provide examples of case spaces, dispositional utility functions, and expected utility functions for enforced rules. This essay is an early draft of a chapter of a book-in-progress on the positive political theory of courts.

This essay argues that a purely objective economic theory of crime (i.e., one devoid of moral or ethical judgments) is impossible. The basis for this claim is the reciprocal nature of causation in externality settings as first pointed out by Coase (1960), which renders the definition of harm indeterminate. At most, economic theory can prescribe an efficient pricing scheme once the direction of causation, and hence the nature of harm, has been defined. The essay concludes by discussing the implications of this idea for civil disobedience, cancel-culture, and victimless crimes.

The common argument to explain codification of criminal sanctions is departing from arbitrary sentencing. By limiting judicial discretion, sentencing codification should reduce disparity. By a simple theoretical model, we show that strategic judicial behavior can actually undermine statutory sentencing, thus producing more rather than less variance in severity of punishment.

This paper extends the traditional rent-seeking model to consider contests in which the effects of the contestants’ efforts are externally unproductive (i.e., redistributive) but internally productive (i.e., with positive spillover effects on other contestants). Our results show that when players act sequentially, the presence of positive spillovers on other contestants may reduce, or even reverse, the first-mover’s advantage. A second-mover advantage is very likely to arise. Notably, in contests with multiple players, the second-mover advantage does not unravel into a last-mover advantage. Players want to be second, but not last. The comparative statics analysis shows how the strength of positive spillovers affects contestants’ equilibrium expenditures and payoffs, and aggregate rent dissipation.

This article generalizes the analysis of settlement under joint and several liability from lawsuits involving one plaintiff and two defendants to those involving n  ≥ 2 defendants. We demonstrate that, depending upon the correlation of outcomes among the defendants, but regardless of the distribution of liability shares, joint and several liability may encourage plaintiffs to select some defendants for litigation while settling with those remaining. In particular, under joint and several liability, when each defendant is grouped with others sharing correlated outcomes, and the plaintiff’s probability of success against any defendant is sufficiently high, we show that, in all Nash equilibrium, the plaintiff litigates against the defendant from each group with the smallest share and settles with all other defendants. There are a continuum of equilibria but they are all payoff-equivalent up to permutation. Plaintiff’s payoff is identical in all equilibria; only the payoffs of the members with the smallest share within a group are permuted. We also show that, for sufficiently high plaintiff’s probability of success, this result holds even when the defendants are allowed to form coalitions, and derive the set of offers in the behaviorally unique coalition proof Nash equilibrium; as before, these offers induce litigation against the defendant with the smallest share in each group and settlement with all other defendants.

This article explores, first, what the central tenet of law and economics is and uses an example to illustrate. Then I turn to discussing behavioral law and economics and empirical law and economics. In the final section, I consider three topics that are likely to be central to the next era of law and economics–data collection, constitutional law and economics, and artificial intelligence.