Economic Analysis of Legal Disputes and Their Resolution

ECONOMIC THOUGHT ABOUT LAW iS old, but the economic analysis of law, which relies on formal models, is new.1 A little over 30 years ago, economics was relegated by lawyers to the technical role of providing expert advice on a relatively narrow set of laws in such fields as antitrust and labor. There were no journals devoted to the economic analysis of law, it had no place in the first-year curriculum at American law schools, and few American law schools allocated a fulltime faculty position to a pure economist.2 From its modest beginnings in the 1960s, the economic analysis of law became an intellectual fad in the 1970s. The fad is over, but the continuing progress of the subject remains impressive. There are now four journals devoted to the economic analysis of law,3 articles using this

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