We argue that the common-law standard of proof, given the rulesof evidence, does not minimize expected error as usually argued inthe legal literature, but may well be e±cient from the standpointof providing maximal incentives for socially desirable behavior.By contrast, civil law's higher but...

We analyze a two-task work environment with risk-neutral but inequality averse individuals. For the agent employed in task 2 effort is verifiable, while in task 1 it is not. Accordingly, agent 1 receives an incentive contract which, due to his wealth constraint, leads to a rent that the other...

We analyze the design of legal principles and procedures for court decision-making in civil litigation. The objective is the provision of appropriate incentives for potential tort-feasors to exert care, when evidence about care is imperfect and may bedistorted by the parties. Efficiency is shown...