Melissa Hart

Game Theory and the Law

This chapter introduces the history, uses, methods, strengths, and limits of law and economics and game theory as applied to law. Through a game-theoretic analysis of a famous judicial opinion, United States v. Carroll Towing, the chapter describes the efficiency consequences of different potential legal rules and illustrates some of the considerations and challenges inherent in selecting the efficient legal rule. The chapter also highlights some of the trade-offs inherent in the law and economics approach and in employing game theory as a tool for modeling legal problems.