This paper studies markets plagued with asymmetric information on the quality of traded goods. In Akerlof's setting, sellers are better informed than buyers. In contrast, we examine cases where buyers are better informed than sellers. This creates an inverse adverse selection problem: The market...

Various reformulations of the Coase theorem have developed normative corollaries on the choice of optimal remedies in the presence of positive transaction costs. In this article, we consider the extent to which these propositions are affected by the presence of asymmetric transaction costs, and...

In an economic perspective, punitive damages and class actions can be viewed as sharing a common economic function – creating optimal deterrence. Building on Parisi and Cenini (2010), we study the effect of alternative procedural regimes on the effectiveness of punitive damages and class...

Customary 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...

In the field of comparative law, the use of economic analysis has been at the same time fashionable and controversial. Notwithstanding its controversial acceptance in the discipline, the so-called comparative law and economics method is an important example of the application of economics to...

The optimal scope of legal harmonization and the desirable patterns of lawmaking vary according to current legal, social and economic conditions. In this paper we specify a positive and testable hypothesis according to which legal systems respond to exogenous changes in the external environment...

This paper is about the incentive effects of legal presumptions. We analyze three interrelated effects of legal presumptions in a tort setting: (1) incentives to invest in evidence technology; (2) incentives to invest in care-type precautions; and (3) incentives to mitigate excessive activity...

Parties often exchange promises of future performance with one another. Legal systems frame and regulate contracts involving the exchange of bilateral promises of future performance differently from one another. Two conceptual and practical questions often arise in these bilateral situations....