General and Specific Legal Rules
Paul G. Mahoney
University of Virginia School of Law
Chris William Sanchirico
University of Pennsylvania Law School; University of Pennsylvania Wharton School - Business Economics and Public Policy Department
July 16, 2004
U of Penn, Inst for Law & Econ Research Paper 04-13
Legal rules may be general (that is, applicable to a broad range of situations) or specific. Adopting a custom-tailored rule for a specific activity permits the regulator to make efficient use of information about the social costs and benefits of that activity. However, the rule maker typically relies on the regulated parties for such information. The regulated parties may attempt to influence the rule maker, producing rules that reflect their private interests. We show that in some cases limiting the rule maker to a single rule for multiple activities will moderate this influence and maximize welfare.
Number of Pages in PDF File: 29
Keywords: legal rules, general versus specific rules, lobbying, rules versus standards, simple versus complex rules
JEL Classification: D72, H11, K00, K23, K20, K14, K4, L5
Date posted: July 20, 2004
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