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Coordinating in the Shadow of the Law: Two Contextualized Tests of the Focal Point Theory of Legal Compliance


Richard H. McAdams


University of Chicago Law School

Janice Nadler


Northwestern University School of Law; American Bar Foundation

May 5, 2008

Law & Society Review, Vol. 42, pp. 865-898, 2008
U of Chicago Law & Economics, Olin Working Paper No. 406
U of Chicago, Public Law Working Paper No. 184
Northwestern Law & Econ Research Paper No. 08-04

Abstract:     
In situations where people have an incentive to coordinate their behavior, law can provide a framework for understanding and predicting what others are likely to do. According to the focal point theory of expressive law, the law`s articulation of a behavior can sometimes create self-fulfilling expectations that it will occur. Existing theories of legal compliance emphasize the effect of sanctions or legitimacy; we argue that, in addition to sanctions and legitimacy, law can also influence compliance simply by making one outcome salient. We tested this claim in two experiments where sanctions and legitimacy were held constant. Experiment 1 demonstrated that a mandatory legal rule operating in a property dispute influenced compliance only when there is an element of coordination. Experiment 2 demonstrated that a default rule in a contract negotiation acted as a focal point for coordinating negotiation decisions. Both experiments confirm that legal rules can create a focal point around which people tend to coordinate in a mixed motive coordination game.

Number of Pages in PDF File: 59

Keywords: expressive law, legitimacy, compliance, coordination, negotiation, mixed motive games, hawk-dove game, chicken game, battle of the sexes game, default rules

JEL Classification: C78, K00, K19

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Date posted: September 24, 2007 ; Last revised: April 1, 2009

Suggested Citation

McAdams, Richard H. and Nadler, Janice, Coordinating in the Shadow of the Law: Two Contextualized Tests of the Focal Point Theory of Legal Compliance (May 5, 2008). Law & Society Review, forthcoming 42; Law & Society Review, Vol. 42, pp. 865-898, 2008; U of Chicago Law & Economics, Olin Working Paper No. 406; U of Chicago, Public Law Working Paper No. 184; Northwestern Law & Econ Research Paper No. 08-04. Available at SSRN: http://ssrn.com/abstract=1016488

Contact Information

Richard H. McAdams
University of Chicago Law School ( email )
1111 E. 60th St.
Chicago, IL 60637
United States
773-834-2520 (Phone)
Janice Nadler (Contact Author)
Northwestern University School of Law ( email )
375 E. Chicago Ave
Unit 1505
Chicago, IL 60611
United States
312-503-3228 (Phone)
312-503-2035 (Fax)
American Bar Foundation ( email )
750 N. Lake Shore Drive
Chicago, IL 60611
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