The Legal Analyst: A Toolkit for Thinking about the Law

By Ward Farnsworth | Go to book overview

19 Acoustic Separation

The many chapters of this book that talk about incentives are built on a simple idea: people know how the courts will react to various things they might do, and they take this into account when they decide how to act. If the courts hold restaurants strictly responsible for bugs and other unwelcome critters that turn up in the food they serve, for example, restaurants will understand this and worry about it when they prepare meals. If courts won’t allow the attorney-client privilege to protect conversations lawyers have with clients in crowded elevators, lawyers will know this and will do their talking elsewhere. But sometimes the situation may be more complicated. Jeremy Bentham suggested that laws might be split into two types of commands—the ones that tell people how to act, called conduct rules, and the ones that tell judges how to decide cases, called decision rules.40 On the surface these two sorts of rules usually look the same. If we say that restaurants will always be held liable for things in their food that don’t belong, we are giving a command to restaurants about how to behave and a command to a judge about what to do when someone comes to grief by eating a bug. The decision rule is the conduct rule; to the restaurant there is no difference, because it decides what to do—at least so far as law enters into it—by asking its lawyers what will happen if someone eats a bug and then brings a lawsuit. We could try making the messages different: telling restaurants they always will lose, so they have a great incentive to be careful, but then quietly letting them win if they come to court and we think they tried their best to keep the food bug-free. But that probably wouldn’t work for long, because restaurants would hear about the quiet decisions (there’s no such thing, is there?) and would realize the strict rule is a sham.

The interesting question is whether there sometimes can be differences between the rules told to people in the world and the rules that courts actually enforce—and whether any such differences are a good thing. Meir Dan-Cohen proposed a thought experiment to illustrate the idea: imagine that the law gave completely different instructions to the public and the courts, and that neither could hear what was said to the other; imagine, in his phrase, acoustic separation between those audiences.41

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The Legal Analyst: A Toolkit for Thinking about the Law
Table of contents

Table of contents

  • Title Page iii
  • Contents v
  • Preface vii
  • Acknowledgments xi
  • Part I - Incentives 1
  • 1 - Ex Ante and Ex Post 3
  • 2 - The Idea of Efficiency 13
  • 3 - Thinking at the Margin 24
  • 4 - The Single Owner 37
  • 5 - The Least Cost Avoider 47
  • 6 - Administrative Cost 57
  • 7 - Rents 66
  • 8 - The Coase Theorem 75
  • Part II - Trust, Cooperation, and Other Problems for Multiple Players 85
  • 9 - Agency with Eric Posner 87
  • 10 - The Prisoner's Dilemma 100
  • 11 - Public Goods 109
  • 12 - The Stag Hunt 117
  • 13 - Chicken 126
  • 14 - Cascades 136
  • 15 - Voting Paradoxes 144
  • 16 - Suppressed Markets with Saul Levmore 152
  • Part III - Jurisprudence 161
  • 17 - Rules and Standards 163
  • 18 - Slippery Slopes with Eugene Volokh 172
  • 19 - Acoustic Separation 182
  • 20 - Property Rules and Liability Rules 188
  • 21 - Baselines 198
  • Part IV - Psychology 207
  • 22 - Willingness to Pay and Willingness to Accept- The Endowment Effect and Kindred Ideas 209
  • 23 - Hindsight Bias 218
  • 24 - Framing Effects 224
  • 25 - Anchoring 230
  • 26 - Self-Serving Bias, with a Note on Attribution Error 237
  • Part V - Problems of Proof 247
  • 27 - Acoustic Separation 249
  • 28 - Standards of Proof 257
  • 29 - The Product Rule 273
  • 30 - The Base Rate 281
  • 31 - Value and Markets 294
  • Notes 305
  • Author Index 329
  • Subject Index 335
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