L&E: Economic Tort Law

A mathematical framework to model strategic interactions between rational decision-makers, where each player's outcome depends on the choices of others.

Pricing behaviour in markets dominated by a few sellers; firms are interdependent and may engage in strategic pricing, collusion, or price wars.

A type of information asymmetry where one party has private information relevant to a transaction or contract, often leading to inefficiencies.

A pre-contractual problem where the party with more information (typically the buyer or insured) uses it to their advantage, potentially harming the uninformed party.

A post-contractual problem where one party changes behavior because they are protected from the consequences, such as taking more risks due to being insured.

Applies economic reasoning to political decision-making; assumes politicians and bureaucrats act in their own self-interest, leading to inefficiency or policy failures.

A classic game theory scenario where two rational individuals choose not to cooperate—even when it's in their best interest—due to lack of trust or inability to coordinate.

A negligence test from Judge Learned Hand: a party is liable if the burden (B) of preventing harm is less than the probability (P) of harm multiplied by its severity (L), or B < PL.