Methodology of Law and Economics

Bart van Klink and Sanne Taekema (Eds.), Law and Method. Interdisciplinary research into Law (Series Politika, nr 4), Tübingen: Mohr Siebeck 2011, pp. 85-107

16 Pages Posted: 3 May 2013  

Alessio M. Pacces

Erasmus School of Law, Erasmus University Rotterdam - Rotterdam Institute of Law and Economics; European Corporate Governance Institute

Louis T. Visscher

Erasmus University Rotterdam (EUR) - Rotterdam Institute of Law and Economics; Erasmus University Rotterdam (EUR) - Erasmus School of Law

Date Written: 2011

Abstract

In this chapter, written for the book 'Law and Method. Interdisciplinary Research info Law', we describe the methodology of Law and Economics. We start by discussing the mainstream economic approach to law, including the topics of rationality, the use of (sometimes unrealistic) assumptions, the distinction between positive and normative Law and Economics,and the concept of efficiency. Subsequently we describe the viewpoint that law can be seen as a way to correct different types of market failures (market power, externalities, collective goods and information asymmetry). Then we analyze the case for regulatory intervention and its limits, spending attention to the Coase theorem and the importance of transaction costs. Next we discuss insights from Behavioural Law and Economics and in our conclusion state why Law and Economics is useful to lawyers.

Keywords: Law and Economics, Methodology, Rational Choice Theory, Behavioural Economics, Efficiency, Market Failure

JEL Classification: B00, B40

Suggested Citation

Pacces, Alessio M. and Visscher, Louis T., Methodology of Law and Economics (2011). Bart van Klink and Sanne Taekema (Eds.), Law and Method. Interdisciplinary research into Law (Series Politika, nr 4), Tübingen: Mohr Siebeck 2011, pp. 85-107. Available at SSRN: https://ssrn.com/abstract=2259058

Alessio Maria Pacces (Contact Author)

Erasmus School of Law, Erasmus University Rotterdam - Rotterdam Institute of Law and Economics ( email )

Burgemeester Oudlaan 50
P.O. Box 1738
Rotterdam, Zuid Holland 3000 DR
Netherlands
+31-(0)10-4081613 (Phone)
+31-(0)10-4089191 (Fax)

HOME PAGE: http://www.esl.eur.nl/profile_az/?tx_eurliaatmetismis_pi1%5Bmetis_id%5D=1050049

European Corporate Governance Institute ( email )

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Louis T. Visscher

Erasmus University Rotterdam (EUR) - Rotterdam Institute of Law and Economics ( email )

Burgemeester Oudlaan 50
PO box 1738
Rotterdam, 3000 DR
Netherlands

Erasmus University Rotterdam (EUR) - Erasmus School of Law ( email )

3000 DR Rotterdam
Netherlands
+31 (10) 408 1833 (Phone)
+31 (10) 408 9191 (Fax)

HOME PAGE: http://frg.sin-online.nl/staff/index.html?lia=227

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