There is a remarkable tendency in modern legal systems to increasingly use carrots. This trend is not limited to legal systems but can also be observed in, for instance, parenting styles, social control mechanisms, and even law schools' teaching methods. Yet, at first glance, sticks appear to be...

Reducing income inequality is, in the eyes of many, one of the major political issues of this time. The conventional political approach to reduce income inequality is to raise taxes for the wealthy and redistribute the proceeds to the poor. This approach finds support in the economic literature,...

A fundamental scholarly norm holds that those who make normative statements should reveal their normative framework. I argue that all those who reject Kaldor-Hicks as the fundamental framework violate this fundamental scholarly norm by being non-transparent in some way."Kaldor-Hicks efficiency"...

Most people sign standard term contracts without reading them. This gives drafters an incentive to insert one-sided, inefficient terms. This problem can be solved directly by giving the drafter a duty to draft efficient terms, or indirectly by giving the signer a duty to read (which may remove...

This chapter, written for the forthcoming Oxford Handbook of Law and Economics (Francesco Parisi, ed.) draws a general picture of the differences between carrots and sticks. We discuss incentives effects (in principle, a $100 carrot creates the same incentives as a $100 stick, but there are...

Although a punishment can be applied only once, the threat to punish can be repeated several times. This is possible because, when parties comply, the punishment is not applied and can thus be used to support a new threat. We refer to this feature of sticks as the "multiplication effect". The...

This short chapter, written for The New Palgrave Dictionary of Economics and the Law (1998), offers an economic analysis of quasi contracts, in their broad, civil-law definition. All quasi-contractual exchanges can be seen as coerced transactions between private parties, either in the form of...

This working paper contains the introduction and first chapter of a forthcoming book on the relationship between marketing and inequality. I argue that the dramatic rise of income inequality since 1970 has largely been caused by advances in marketing. Marketers have become better at creating and...