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The assignment of rights under economic or legal uncertainty

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  • Zerbe, Richard

Abstract

This paper explores the relationship between law and applied welfare economics, BCA, and indicates how they are mutually enhancing. A definition of underlying principles for benefit cost analysis is given, from which rules for its application are derived. These rules are useful in considering arguments and outcomes in legal cases and for legal reasoning. I invoke norms, reference points, and legal right uncertainty, along with the role of sentiments and compensation for losses. In doing this the foundations of BCA are explicated and the interrelationship between law and applied welfare economics is made clearer.

Suggested Citation

  • Zerbe, Richard, 2023. "The assignment of rights under economic or legal uncertainty," MPRA Paper 121295, University Library of Munich, Germany, revised Jun 2024.
    • Handle: RePEc:pra:mprapa:121295
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    References listed on IDEAS

    as
    1. Zerbe, Richard Jr. & Bauman, Yoram & Finkle, Aaron, 2006. "An aggregate measure for benefit-cost analysis," Ecological Economics, Elsevier, vol. 58(3), pages 449-461, June.
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    3. Frank, Robert H, 2000. "Why Is Cost-Benefit Analysis So Controversial?," The Journal of Legal Studies, University of Chicago Press, vol. 29(2), pages 913-930, June.
    4. Zerbe, Richard O. & Anderson, C. Leigh, 2001. "Culture And Fairness In The Development Of Institutions In The California Gold Fields," The Journal of Economic History, Cambridge University Press, vol. 61(1), pages 114-143, March.
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    6. Meeks, Thomas J., 1990. "The Economic Efficiency and Equity of Abortion," Economics and Philosophy, Cambridge University Press, vol. 6(1), pages 95-138, April.
    7. Nussbaum, Martha C, 2000. "The Costs of Tragedy: Some Moral Limits of Cost-Benefit Analysis," The Journal of Legal Studies, University of Chicago Press, vol. 29(2), pages 1005-1036, June.
    8. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    9. Daniel Kahneman & Jack L. Knetsch & Richard H. Thaler, 1991. "Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 193-206, Winter.
    10. Richard Easterlin, 2005. "Diminishing Marginal Utility of Income? Caveat Emptor," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 70(3), pages 243-255, February.
    11. Kimbrough, Erik O. & Smith, Vernon L. & Wilson, Bart J., 2010. "Exchange, theft, and the social formation of property," Journal of Economic Behavior & Organization, Elsevier, vol. 74(3), pages 206-229, June.
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    Keywords

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    JEL classification:

    • K0 - Law and Economics - - General
    • K1 - Law and Economics - - Basic Areas of Law
    • K10 - Law and Economics - - Basic Areas of Law - - - General (Constitutional Law)

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