The Questionable Efficiency of the Efficient-Breach Doctrine
AbstractThe doctrine of efficient breach is based on the belief that the risk of postcontractual bargaining failure under property rules is greater than the risk of the courts' miscalculation of damages under liability rules. The article presents the findings of two experiments that challenge this belief and suggest that courts systematically undercompensate promisees. Implementation of the efficient-breach doctrine might therefore lead to underdeterrence and inefficiency.
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Bibliographic InfoArticle provided by Mohr Siebeck, Tübingen in its journal Journal of Institutional and Theoretical Economics.
Volume (Year): 168 (2012)
Issue (Month): 1 (March)
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Web page: http://www.mohr.de/jite
Postal: Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany
Find related papers by JEL classification:
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- D60 - Microeconomics - - Welfare Economics - - - General
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- K11 - Law and Economics - - Basic Areas of Law - - - Property Law
- K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
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