Laws and Authority

George Mailath, Stephen Morris and Andrew Postlewaite

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: A law prohibiting a particular behavior does not directly change the payoff to an individual should he engage in the prohibited behavior. Rather, any change in the individual’s payoff, should he engage in the prohibited behavior, is a consequence of changes in other peoples’ behavior. If laws do not directly change payoffs, they are “cheap talk,†and can only affect behavior because people have coordinated beliefs about the effects of the law. Beginning from this point of view, we provide definitions of authority in a variety of problems, and investigate how and when individuals can have, gain, and lose authority.

Pages: 25 pages
Date: 2016-11-08, Revised 2016-11-08
New Economics Papers: this item is included in nep-hpe, nep-law and nep-mic
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Laws and authority (2017)
Working Paper: Laws and Authority (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:pen:papers:16-018

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