Decisions about intervention can be understood as decisions about tolerance, because an act of tolerance is an act of nonintervention, and, conversely, an act of intervention can be understood as an act of intolerance. But acts of tolerance, typically made under conditions of epistemic...

We present a game-theoretic model of political discourse that explores how strategic incentives to make potentially persuasive arguments vary across different informational contexts. We show that political sophistication of the listeners fundamentally affects the speakers' incentives to make...

This paper analyzes the efficient use of information in an agency relationship with moral hazard, when parties are risk-neutral. We show that, given an arbitrary information system, all relevant information from a mechanism-design point of view can be summarized by a binary statistic. We then...

The information created and disseminated through the litigation process can have social value. Suppose a long-lived plaintiff is suing a defendant for damages sustained in an accident. The plaintiff may suffer similar damages in future accidents involving different defendants. Potential injurers...

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

After discussing some categories and modalities of a designed system change the paper turns to the example of the recent Russian company legislation. The design of two ambitious new company codes for large and small corporations implied a massive transformation of both the underlying economic...

This paper considers settlement negotiations between a single defendant and N plaintiffs when there are fixed costs of litigation. When making simultaneous take-it-or-leave-it offers to the plaintiffs, the defendant adopts a divide-and-conquer strategy. Plaintiffs settle their claims for less...

We consider a principal-multiagent framework with adverse selection when contracting is possible ex ante. However, enforcement of contracts is imperfect, which results in inefficiencies. We study how group contracting may or may not mitigate those inefficiencies.

I examine the case where fulfillment of a contractual commitment is only imperfectly verifiable and ask whether the court should then tell the truth regarding the action in dispute. I show that truth seeking does not maximize the expected surplus from contractual relationships. From the parties'...

This paper studies the constrained efficient intergovernmental transfer contract between the central government and the states in a federal economy. We consider an environment with moral hazard, incomplete enforceability, and date-0 negotiation costs. The interaction of moral hazard and...