Contract Law and Markets

Alex Robson ()

Chapter 8 in Law and Markets, 2012, pp 224-245 from Palgrave Macmillan

Abstract: Abstract In Chapter 3 we examined situations in which transactions costs were low. We focused on the ability of parties to bargain around legal rules, which rendered those rules irrelevant for efficiency and, in certain cases, also irrelevant for production decisions (although not irrelevant for the distribution of wealth). In these situations, we assumed that a body of contract law or rules was in place, so that any agreements between the parties were enforceable and were in fact enforced. Under these assumptions, the efficiency properties of economic outcomes are not so much reliant on the nature of legal rules as they are on the existence of some legal framework and some set of rules, as well as a set of rules regarding contracts.

Keywords: Marginal Cost; Legal Rule; Damage Measure; Equilibrium Market Price; Efficient Breach (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-35494-4_8

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DOI: 10.1057/9780230354944_8

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