Game theory and the law

This book is the first to apply the tools of game theory and information economics to advance our understanding of how laws work. Organized around the major solution concepts of game theory, it shows how such well known games as the prisoner's dilemma, the battle of the sexes, beer-quiche, and the Rubinstein bargaining game can illuminate many different kinds of legal problems. Game Theory and the Law highlights the basic mechanisms at work and lays out a natural progression in the sophistication of the game concepts and legal problems considered.

• Preface
• Introduction: Understanding Strategic Behavior
• Bibliographic Notes
• Simultaneous Decisionmaking and the Normal Form Game
• The Normal Form Game
• Using Different Games to Compare Legal Regimes
• The Nash Equilibrium
• Civil Liability, Accident Law, and Strategic Behavior
• Legal Rules and the Idea of Strict Dominance
• Collective Action Problems and the Two-by-Two Game
• The Problem of Multiple Nash Equilibria
• Summary
• Bibliographic Notes
• Dynamic Interaction and the Extensive Form Game
• The Extensive Form Game and Backwards Induction
• A Dynamic Model of Preemption and Strategic Commitment
• Subgame Perfection
• Summary
• Bibliographic Notes
• Information Revelation, Disclosure Laws, and Renegotiation
• Incorporating Beliefs into the Solution Concept
• The Perfect Bayesian Equilibrium Solution Concept
• Verifiable Information, Voluntary Disclosure, and the Unraveling Result
• Disclosure Laws and the Limits of Unraveling
• Observable Information, Norms, and the Problem of
• Renegotiation
• Optimal Incentives and the Need for Renegotiation
• Limiting the Ability of Parties to Renegotiate
• Summary
• Bibliographic Notes
• Signaling, Screening, and Nonverifiable Information
• Signaling and Screening
• Modeling Nonverifiable Information
• Signals and the Effects of Legal Rules
• Information Revelation and Contract Default Rules
• Screening and the Role of Legal Rules
• Summary
• Bibliographic Notes
• Reputation and Repeated Games
• Backwards Induction and Its Limits
• Infinitely Repeated Games, Tacit Collusion, and Folk Theorems
• Reputation, Predation, and Cooperation
• Summary
• Bibliographic Notes
• Collective Action, Embedded Games, and the Limits of Simple Models
• Collective Action and the Role of Law
• Embedded Games
• Understanding the Structure of Large Games
• Collective Action and Private Information
• Collective Action Problems in Sequential Decisionmaking
• Herd Behavior
• Summary
• Bibliographic Notes
• Noncooperative Bargaining
• Modeling the Division of Gains from Trade
• Legal Rules as Exit Options
• Bargaining and Corporate Reorganizations
• Collective Bargaining and Exit Options
• Summary
• Bibliographic Notes
• Bargaining and Information
• Basic Models of the Litigation Process
• Modeling Separate Trials for Liability and Damages
• Information and Selection Bias
• Discovery Rules and Verifiable Information
• Summary
• Bibliographic Notes
• Conclusion: Information and the Limits of Law
• Notes
• References
• Glossary
• Index