On the New Book Shelf - Game Theory and the Law

By Eric Taylor Rasmusen, Eric B., editor. Game Theory and the Law. Cheltenham, Eng. ; Northampton, Mass.: Edward Elgar Publishing, c2007. 603 p. Call number: K487/E3/G35/2007 Game theory is an economic philosophy that attempts to simplify situations enough to identify the key forces at work. Or as the editor, Eric B. Rasmusen, writes in the introduction: "So it is with game theory models. Stripping a situation down to particular players, actions, and payoffs puts in focus interactions between people or organizations that would otherwise be obscured by reality's details." In law, this type of analysis is key to learning how to think and write like a lawyer. The briefs you present to the court must be succinct as to the facts, rules of law and relief sought. In crafting your arguments, game-theoretical analysis may very well allow you to measure the impacts various players have on situational events based on the strategic choices they've made or did not make to reach the best legal solution to your case. This volume brings together a series of classic articles on the subject and use of game theory in law. The goal is to present a body of literature accessible to lawyers and the layperson alike so we might better understand the way in which laws affect the way people behave. Divided into five parts, the articles presented herein analyze game theory's application and potential contribution 1) to the law in general; 2) bargaining and procedure; 3) contracts; 4) torts, taxes, and crime; and 5) the courts. Individual articles include "Agency Models in Law and Economics" by Eric A. Posner; Keith N. Hylton's article "An Economic Theory of the Duty to Bargain" which examines the interesting dilemma whereby the law requires the union and the employer to bargain in good faith yet there is no set legal requirement that either side make an acceptable offer to the other; and John Prather Brown's seminal article on tort law "Toward an Economic Theory of Liability." As noted in the introduction, Brown's work "precedes the conscious use of game theory in legal research, but follows exactly the same method: establish payoff functions for various players and see what actions they will take to maximize their payoffs." With much the same focus in mind, Douglas G. Baird, co-author of an earlier book of the same title, Game Theory and the Law (Harvard University Press, 1994) writes in a review appearing in The University of Chicago Chronicle (vol. 15, no. 6, Nov. 10, 1994): "It's recognized that the law often merely sets the ground rules for negotiations. Much interaction between individuals in the marketplace and elsewhere takes place in the form of bargaining under the umbrella of the law. To understand how legal rules work, one must also understand the dynamics of bargaining. The formal tools of game theory help us better understand the give-and-take of bargaining." The intent of this growing body of literature regarding game theory and the law is not only to arrive at better legal solutions to the issues of the day, but to make possible the creation of better laws in the future.

Submitted by Bonnie Shucha on April 17, 2008

This article appears in the categories: Law Library

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