A Fundamental Model of Law & Economics Basing on Verifiability——perspectives of game theory and institution design
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| Title | A Fundamental Model of Law & Economics Basing on Verifiability——perspectives of game theory and institution design
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| Author | Ding Li |
| Organization | School of Law, Sun Yat-sen University |
| Email | fixedpoint@msn.com |
| Key Words | legal institution design; verifiability; incentive; game equilibrium |
| Abstract | This essay tries to give a fundamental model of law and economics from the viewpoint of game theory and institution design. The key notion is that the outcomes to realize in legislator’s plan can’t be enforceable if the corresponding behavioral norm is not the Nash equilibrium or its refinement of the social game including judicial process. It is mainly by changing payoff function of the social game that law gives people behavioral incentive. We demonstrate how to characterize legal inference rule basing on verification technology and legal valuation function, and how to embody them into an extended extensive-form game to change its incentive structure, and then we give the necessary or sufficient conditions to make a behavioral norm enforceable in the reasonable equilibrium. |
| Serial Number | WP698 |
| Time | 2014-09-16 |
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