The Cathedral: An Economic Survey of Legal Remedies

77 Pages Posted: 13 Feb 2008

Date Written: January 2008

Abstract

The law is about designing as well as enforcing rules. While economists put emphasis on the optimal design of norms, less attention is paid to understanding how the law actually enforces rules. An economic survey of legal remedies must necessarily begin with the work of Calabresi and Melamed (1972) on property rules and liability rules. In the cathedral (as the work is universally known) the two authors laid a transactional theory of remedies that captures the characteristics of most remedies across different branches of the law and that has powerful positive as well as normative implications. Since the original sketch, the literature has largely expanded the scope and applicability of the Calabresi and Melamed framework and has proven to be one of the most florid streams of literature in the law and economics field. In recent years the theory has been applied to some distant branches of the law and it has been enriched by the optional approach that borrows from the theory of financial derivatives.

Keywords: property rules, liability rules, inalienability rules, optional law, remedies, sanctions, kicker

JEL Classification: K1, K4

Suggested Citation

Rizzolli, Matteo, The Cathedral: An Economic Survey of Legal Remedies (January 2008). Available at SSRN: https://ssrn.com/abstract=1092144 or http://dx.doi.org/10.2139/ssrn.1092144

Matteo Rizzolli (Contact Author)

LUMSA University ( email )

Via Pompeo Magno
Roma, Rome 00191
Italy

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