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Laws and Authority

Author

Listed:
  • George J. Mailath

    (University of Pennsylvania)

  • Stephen Morris

    (Princeton University)

  • Andrew Postlewaite

    (University of Pennsylvania)

Abstract

A law prohibiting a particular behavior does not directly change the payoff to an individual should he engage in the prohibited behavior. Rather, any change in the individual’s payoff, should he engage in the prohibited behavior, is a consequence of changes in other peoples' behavior. If laws do not directly change payoffs, they are "cheap talk," and can only affect behavior because people have coordinated beliefs about the effects of the law. Beginning from this point of view, we provide definitions of authority in a variety of problems, and investigate how and when individuals can have, gain, and lose authority.

Suggested Citation

  • George J. Mailath & Stephen Morris & Andrew Postlewaite, 2016. "Laws and Authority," Working Papers 082_2016, Princeton University, Department of Economics, Econometric Research Program..
    • Handle: RePEc:pri:metric:082_2016
    as

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    File URL: http://detc.princeton.edu/wp-content/uploads/2016/11/wp082_2016_Mailath_Morris_Postlewaite_Laws-and-Authority.pdf
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    Other versions of this item:

    • George J. Mailath & Stephen Morris & Andrew Postlewaite, 2016. "Laws and Authority," PIER Working Paper Archive 16-018, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 08 Nov 2016.

    References listed on IDEAS

    as
    1. Joseph Farrell & Matthew Rabin, 1996. "Cheap Talk," Journal of Economic Perspectives, American Economic Association, vol. 10(3), pages 103-118, Summer.
    2. Basu,Kaushik, 2015. "The republic of beliefs : a new approach to ?law and economics?," Policy Research Working Paper Series 7259, The World Bank.
    3. Kim, Yong-Gwan & Sobel, Joel, 1995. "An Evolutionary Approach to Pre-play Communication," Econometrica, Econometric Society, vol. 63(5), pages 1181-1193, September.
    4. Basu, Kaushik, 2003. "Prelude to Political Economy: A Study of the Social and Political Foundations of Economics," OUP Catalogue, Oxford University Press, number 9780199261857.
    5. Ken Binmore, 1994. "Game Theory and the Social Contract, Volume 1: Playing Fair," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262023636, December.
    6. Farrell Joseph, 1993. "Meaning and Credibility in Cheap-Talk Games," Games and Economic Behavior, Elsevier, vol. 5(4), pages 514-531, October.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Andrew Postlewaite, 2007. "Courts of Law and Unforeseen Contingencies," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 23(3), pages 662-684, October.
    2. Mariano Tommasi, 2006. "The Institutional Foundations of Public Policy," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Spring 20), pages 1-36.
    3. Lecce, Giampaolo & Ogliari, Laura, 2019. "Institutional Transplant and Cultural Proximity: Evidence from Nineteenth-Century Prussia," The Journal of Economic History, Cambridge University Press, vol. 79(4), pages 1060-1093, December.

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    More about this item

    JEL classification:

    • K00 - Law and Economics - - General - - - General (including Data Sources and Description)

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