The common law developed over centuries a small set of default rules that courts have used to fill gaps in otherwise incomplete contracts between commercial parties. These rules can be applied almost independently of context: the market damages rule, for example, requires a court only to know...

This paper explores the possibility for efficient long term contracts among traders with changing and privately known incentives for exchange. We analyze a negotiation process that enables parties to adapt the default rules of exchange to changes in their preferences for trade. The selection of...

This Essay briefly reviews where law and economics has been, and then sets out important problems it now faces. My primary theme is that law and economics faces two culture problems: between scholars who self- identify as being in a field - contracts, torts - and who do not use economics in...