The debate over standards versus rules has been framed as a trade-off between the certainty and lower administrative costs of rules versus the greater flexibility to base decisions on case-specific evidence with standards. In this paper, we argue that even if judges have no ability to directly...

We build a model of innovation and patent adjudication under two forms of uncertainty; uncertainty regarding whether the original invention merits protection (non-obviousness), and uncertainty as to whether a particular competitor's product should be barred (infringement). We find that when it...

In liability insurance, the duty to defend is broader than the duty to cover. Thus it is possible that an insurer that has a duty to defend a suit may not have the duty to cover the policyholder's liabilities in the suit. However, if the penalty for a breach of the duty to defend is limited to...

Imagine a pedestrian and driver both approaching a crosswalk. Both parties can take actions to prevent an accident, and traditional economic analysis of tort law recognizes the importance of making sure that both parties have an incentive to do so. However, traditional negligence rules can...

When liability insurance carries a limit that is smaller than the potential claim of a third party plaintiff, the insurer and the insured can have a conflict of interest as to settlement. The majority of jurisdictions in the United States impose upon insurers a duty to ignore liability limits...

Traditional analyses of competition policy assume that firms operate in perfect credit markets. We argue that imperfections in credit markets should be taken into account, and show one channel by which accounting for financial conditions could alter the welfare effects of a merger. In line with...

Conventional legal doctrine holds that courts should be more willing to find unconscionability in contracts when either one party has monopoly power or the other party was not given a choice of contract terms. This paper suggests that this doctrine is misguided on both points. I argue that the...

In this paper we discuss the disparate treatment of perceptual ("fact") witnesses and expert witnesses in the legal system. We highlight the distinction between the perceptual act of witnessing and the act of testifying, and argue that although there might be good reasons to regulate payments to...