The contributory infringement rule assesses liability to a third party that contributes tothe infringement of a patent. Not only are firms that directly infringe liable, those whoindirectly contribute are also liable. We investigate how this rule affects the creation of anetwork of members...

Strict liability is widely seen as the most suitable way to govern highly risky activities, such as environmentally dangerous production or genetic engineering. The reason which is usually given for applying strict liability to these areas, is that not only efficient care is supposed to be...

In an environment where the optimal level of care is unknown, we ask under a state of the art defense which method is better able to induce parties to undertake optimal care. Assuming courts can see a noisy signal of research activities undertaken by a defendant and some of its competitors, we...

A key issue in the debate over gun control is how it will affectthe relative incentives of criminals and law-abiding citizens to acquireguns. We propose a simple model of interaction of criminals and law-abiding citizens as a contest where the parties arm themselves in orderto improve their...

Economists generally assume that the state has sufffcient institutional capacityto support markets and levy taxes, assumptions which cannot be taken forgranted in many states, neither historcally nor in today’s developing world.Our paper develops a framework where "policy choices" in market...

We study the effect of fair institutions on growth. In our model, individuals are endowed with unequal entitlements to theeconomy’s output. They can free-ride or cooperate. Cooperation is individually costly, but increases aggregate output and growth.Experimentally, we observe significantly...

This paper analyzes the relation between the quality of the legal enforcement of loan contracts and the allocation of credit to households, both theoretically and empirically.

This paper analyzes the relation between the quality of the legal enforcement of loan contracts and the allocation of credit to households, both theoretically and empirically. We use a model of household credit market with secured debt contracts, where the judicial system affects the cost...

We exploit a controlled frameless laboratory experiment to study settlement negoti-ations and the plainti¤’s decision to raise a lawsuit in case of an impasse. We …nd thatgreater variance in court outcomes increases the litigation rate and lowers the settlementrate. This latter …nding goes...

The paper attempts to explain the failure of postcommunist traders exemplified by Balkan traders to make use of arbitration courts by means of the rational choice of forum approach offered by the law and economics movement. Conjectures about traders’ behaviour derived by combining this approach...