How Can We See “Law” in Economic Perspectives?

Abstract

The purpose of this article is to review how economic approaches have characterized law and to draw some implications for the study of law and society. This article concerns with, among many other schools of economics, so-called “neoclassical economics” and game theory. The strength of economic approaches to law lies in the fact that they enable us to describe the influence of law on people’s behavior and the society in an unambiguous way. We can describe it through abstraction and simplification of reality, usually specifying assumptions about human decision-making. This kind of approach is particularly useful for exploring causal mechanisms that works in legal phenomena (such as legal norms and legal actions), and is therefore also useful for conducting research in the area of law and society. While law is characterized as something given or exogenous in most traditional economic models, new lines of research have recently been initiated: experimental studies on the effect of legal rules on individuals’ decision-making processes or outcomes; theoretical and empirical studies addressing how what we call “law” emerges and sustains itself. This article focuses on the latter studies, and points out that the series of studies will open up the possibility of further interdisciplinary cooperation.