In some exceptional circumstances, a restitution rule entitles parties that unilaterally confer a benefit on another party to recover the estimated value of the benefit. Usually, however, the law applies a mutual consent rule under which providers of a benefit cannot obtain any recovery without...

This paper argues that enforcement of an agreement, reached under a threat to refrain from dealing, should be conditioned solely on the threat's credibility. When a credible threat exists, enforcement promotes social welfare and the threatened party's interests. If agreements backed by credible...

A higher expected sanction lowers the crime rate. This intuitive cornerstone of deterrence theory has garnered extensive theoretical and empirical research. The present study focuses on the opposite effects--the effects of the crime rate on the expected sanction. It turns out that these effects...