Some Notes on Property Rules, Liability Rules, and Criminal Law
RESEARCH HANDBOOK ON THE ECONOMICS OF CRIMINAL LAW, A. Harel, K. Hylton, eds., Edward Elgar, 2011
35 Pages Posted: 27 Jul 2010 Last revised: 9 Jul 2011
Date Written: July 27, 2010
The property-liability rules framework, which offers a robust positive theory of criminal law, has come under attack in recent years. One critique, which I label the Indifference Proposition, argues that property rules and liability rules are equivalent in low transaction cost settings. In this paper I examine the conditions under which the Indifference Proposition is valid. In several plausible low transaction-cost settings the proposition is not valid.
Keywords: property rules, liability rules, criminal law, transaction costs, bounded rationality, predation, defensive conduct
JEL Classification: K00, K11, K14, K39, K42
Suggested Citation: Suggested Citation