Agency Models in Law and Economics

Abstract:     
This lecture is an introduction to the use of agency models in law and economics. It is designed for first year law students with no background in economics. A simple example is used to illustrate the basic tradeoff between incentives and insurance when a principal is unable to observe an agent's level of effort. The example is then generalized, and several complications (multitasking, multiple agents, teams, etc.) are discussed. The agency model is then used to analyze contract remedies, and (very briefly) issues in torts, corporations, civil procedure, administrative procedure, and other important areas of the law.

Working Paper Series