Young adults ages 18-29 have the lowest insurance rate of any age group in the United States. Part of the reason for this is that many young adults underestimate their risk of facing high medical costs - the risk is low, but not as low as these “young invincibles” believe. To address this,...

Courts frequently say that wilfulness matters when awarding damages for breach of contract. Such thinking is, however, at odds with the basic expectation damages principle: if we are trying to put the injured promisee in the position she would have been in but-for the breach, the promisor's...

James Heckman was the 2000 Nobel Laureate in Economics. This short paper reviews the methodological and substantive contributions Heckman has made to the empirical study of law. Heckman's work is shown to be important because he has developed techniques to address fundamental problems such as...

This paper reviews and evaluates the empirical literature on adverse selection in insurance markets. We focus on empirical work that seeks to test the basic coverage-risk prediction of adverse selection theory--that is, that policyholders who purchase more insurance coverage tend to be riskier....

There is a well-known conflict of interest between liability insurers and policyholders with respect to the decision to settle or litigate a claim. This short note provides a simple graphical explanation for the problem and grounds it in the way the structure of the parties’ payouts drives...

The theory of adverse selection in insurance markets has been enormously influential among scholars, regulators, and the judiciary. But empirical support for adverse selection has been much less persuasive, and several recent studies have found little or no evidence of such selection in...

This article evaluates the cost and crime-reducing potential of prisons and social spending, setting forth the conditions under which a shift in resources from an expanding prison population into social spending would lead to a reduction in total crime. Preschool enrichment programs coupled with...

Warfare is often thought of as the antithesis of Coasean bargaining over entitlements because armed conflicts consume real resources whose destruction could be avoided by negotiated solutions. We argue that fighting and negotiating are not mutually exclusive methods of resolving disputes between...