Application of Economics to Law How will rational individuals act in response to legal rules? Provides a way of evaluating,hence designing,rules Possibly a way of understanding the rules that exist If they were designed or evolved to achieve some purpose ·Economic efficiency ·Putting content in“size of the pie?” The degree to which everyone gets what he wants To add everyone up,we need some way of doing interpersonal comparisons By willingness to pay-dollars not utiles One reason a utilitarian might not see efficiency as the objective And not everyone is even a utilitarian The Posner Conjecture:Common law is as if designed to maximize efficiency Alternatively,if efficiency is what you want,what legal rules would get it? Application of Economics to Law • How will rational individuals act in response to legal rules? • Provides a way of evaluating, hence designing, rules • Possibly a way of understanding the rules that exist • If they were designed or evolved to achieve some purpose • Economic efficiency • Putting content in “size of the pie” • The degree to which everyone gets what he wants • To add everyone up, we need some way of doing interpersonal comparisons • By willingness to pay–dollars not utiles • One reason a utilitarian might not see efficiency as the objective • And not everyone is even a utilitarian • The Posner Conjecture: Common law is as if designed to maximize efficiency • Alternatively, if efficiency is what you want, what legal rules would get it?