المؤلفون: Markovits, Richard S.

المصدر: 1999

مستخلص: This Reply responds to various standard arguments economists have made in an attempt to justify their continued use of first-best allocative-efficiency analysis in the face of Second-Best Theory's demonstration that, in our Pareto-imperfect world, all arguments based on first-best analysis are invalid. For example, the Article refutes the claim that Second-Best Theory does not offer a replacement for what it purports to destroy by citing various studies that delineate the structure of the kind of third-best allocative-efficiency analysis that Second-Best Theory implies should be substituted for standard first-best-allocative efficiency analysis. The Article also points out that even if third-best analysis is always impracticable, that fact would not justify continuing to base allocative-efficiency predictions on first-best analysis: even if Second-Best Theory cannot play a constructive role, it would still demonstrate that unless one can generate an appropriate argument to the contrary (which these critics are assuming it will never be allocatively efficient to do) the conclusions of first-best analysis are as likely to be wrong as right (are as likely to be damaging as helpful). The Article also explains why one cannot justify ignoring Second-Best Theory on the ground that it will sometimes be invoked opportunistically by the bad guys to achieve bad results or on the ground that Second-Best Theory will tend in practice to cause decisionmakers to abandon economic analysis in favor of less beneficial analytic approaches. Thus, it points out that all theories can be misused; that Second-Best Theory is not particularly prone to misuse; that "the standard economic approach" is less desirable than many economists assert in that it ignores Second-Best Theory (relatedly conflates micro-economic with allocative-efficiency conclusions and falsely assumes that any choice that is allocatively efficient will be consistent with our moral-rights commitments and socially desirable, rights considerations aside); and that in any event academics are relieved of their obligation to seek the truth only rarely by the possibility that the truth they discover may be misused

المؤلفون: Markovits, Richard S.

المصدر: 1999

مستخلص: The "comparative negligence" doctrine provides that tort-law-covered losses that have been proximately caused by an injurer's negligence and a victim's contributory negligence are to be divided between them proportionate to their "fault." This Article analyzes the allocative efficiency and distributional desirability of shifting to different variants of comparative negligence from contributory negligence (a doctrine that bars any faulty victim from recovering). The Article begins by explaining that comparative-negligence doctrines vary along two dimensions?the circumstances in which they apply and the metric they use to measure the relevant parties' fault (economic metrics, state-of-mind metrics, mixed metrics). Economic fault-metrics measure fault by the misallocation the relevant party's failure to avoid should be deemed to have caused on otherwise-Pareto-perfect assumptions. These metrics vary according to their premises about what each party knew or should have known about the other party's likely response to his non-avoidance at the time at which each party made his decision not to avoid. The Article explains that in practice most economists have premised their analyses of comparative negligence on the assumption that the doctrine employs an economic fault-metric that is based on the often-counterfactual assumption that each party should assume the other will not avoid if he does not. It also explains how the economic fault-metric should be defined?how the ex ante allocative inefficiency of each party's failure to avoid should be assessed. The Article then determines the conditions under which in individual-care cases (in which avoidance by one party is most-allocative-efficient) a shift from a first-best-allocatively efficient contributory-negligence doctrine to the standard economist-defined comparative-negligence doctrine will misallocate resources by deterring most-allocatively-efficient avoidance (on otherwise-Pareto-perfect assumptions) if no surrounding tort-law doctrines are altered. The Article next executes a partial and preliminary third-best-allocative-efficiency analysis that concludes that this misallocative tendency of comparative negligence is not eliminated and may not even be reduced by the other Pareto imperfections in the system. After that, the Article demonstrates that the misallocative tendency of comparative negligence will disappear if another tort doctrine is altered. To explain this last point, some vocabulary must be introduced. Conventional tort-law scholarship uses the expression "cheapest cost-avoider" to refer to the party whose avoidance would be most-allocatively-efficient. This terminology is misleading for two reasons: (1) the party with the lowest cost of avoidance might not be the party whose avoidance-move would generate a reduction in certainty-equivalent accident-costs??[PL+R] where "R" stands for potential victims' risk costs?that most exceeded its private cost to the actor?B?and (2) in a Pareto-imperfect world the avoidance-move for which (?[PL+R]-B) was greatest might not be the most-allocatively-efficient avoidance-move. Nevertheless, the Article continues to employ the standard terminology. In fact, it adds to it a cognate expression?the "second-cheapest cost-avoider." In this somewhat misleading terminology, the expression "second-cheapest cost-avoider" refers to the party whose avoidance would be inferior-allocatively-efficient?i.e., would be more allocatively efficient than no avoidance by anyone though less allocatively efficient than the most-allocatively-efficient avoidance of the "cheapest cost-avoider." In these terms, the Article demonstrates that the misallocative tendency of comparative negligence would be eliminated if tort-law doctrine were altered to entitle second-cheapest cost-avoiders to recover the cost of making an avoidance-move that was rendered ex ante allocatively efficient (on otherwise-Pareto-perfect assumptions) by the cheapest cost-avoider's failure to avoid or faulty creation of a probability of his not avoiding. The Article concludes by executing a third-best analysis of the distributional desirability of shifting from a first-best-allocatively-efficient variant of contributory negligence to a liberal-ideal variant of comparative negligence. This section argues that ours is a liberal, rights-based society; that all members of such a society have a moral duty to treat the equivalent-dollar loss they impose on others in a tort-law context as if it were a loss that they sustained themselves; that although this conclusion does imply that an actor's non-avoidance is faulty if and only if it would be allocatively inefficient (on the assumptions he should make about the Pareto imperfectness of the economy), it does not imply that the fault of a faulty accident-participant is proportionate to the ex ante allocative inefficiency his non-avoidance would generate on those assumptions; that liberalism does imply that a non-avoiding party's fault depends on his state of mind (on whether he did or did not advert to his choice's tendency to harm others, made his choice because he discounted the equivalent-dollar loss it imposed on others though he did not desire to harm others, made his choice because he discounted the equivalent-dollar loss it imposed on others though he did not desire to harm others, or actively desired to harm one or more of his victims as well as on the percent by which he discounted the consequences of his failure to consider the effects of his choice on others or of the impact of his non-avoidance on others); and that, even though the economy contains many other distributional imperfections, their presence does not reduce the distributional desirability from a liberal perspective of the redistribution that would be generated by a shift from a first-best-allocatively-efficient variant of contributory negligence to a liberal-ideal variant of comparative negligence

المؤلفون: Markovits, Richard S.

المصدر: 1999

مستخلص: Economists and lawyers who know some economics readily admit that the decision to place a particular product inside or outside a market may be arbitrary. However, they insist that no such arbitrary decision will ever be critical in the sense of determining the conclusion of any policy or legal issue. Unfortunately, one cannot argue against this contention by responding to the claims made to justify it because its supporters have never in fact offered an explicit justifactory argument for their position. In oral discussions, economists have repeatedly insisted that regardless of whether one assesses a series of market definitions in ideal-type or functional terms, markets can be defined non-arbitrarily. Thus, economists have told me that if market definitions are to be assessed by the extent to which the product-placements they generate satisfy certain popular and professional assumptions about (1) the competitiveness of products placed within a given market, and (2) the difference between the competitiveness of products placed in the same market versus the competitiveness of products placed in different markets, it will in principle be possible to establish an optimal set of market definitions non-arbitrarily. And again, economists have insisted that if market definitions are to be assessed functionally by their ability to perform a useful role in a market-oriented approach to predicting the economic efficiency or competitive impact of some behavior or practice it will be possible to select non-arbitrarily a series of market definitions that is best for this purpose. This Article demonstrates that regardless of whether markets are to be defined as ideal types or functionally market definitions are arbitrary at their core. The Article begins by delineating five definite reasons why it will not be possible and two additional reasons why it may not be possible to define markets non-arbitrarily in the "ideal type" way. Most of these reasons relate to ambiguities in the concepts of "competitiveness" or "differences in competitiveness" that cannot be resolved non-arbitrarily and whose resolution will often be critical. The Article then explains why markets cannot be defined non-arbitrarily if the criterion for their assessment is functional on the assumption that the task at hand is predicting the competitive impact of a horizontal merger. In part, this explanation focuses on the fact that market-oriented approaches to this task cannot be cost-effective--that the data these approaches use to define markets have more predictive power than the market-aggregated data that the market definitions they produce are used to generate. The Article also develops two examples whose examination reveals why no market-oriented approach to predicting the competitive impact of a horizontal merger can be cost-effective. These examples are also used to illustrate the difference between traditional, seller-oriented market definitions and the kind of buyer-oriented market definitions that the Justice Department is now employing whose use represents a kind of half-way move from traditional market-oriented approaches to the type of non-market-oriented approach to competitive-impact prediction that I believe is ideal

المؤلفون: Markovits, Richard S.

المصدر: 1999

مستخلص: After operationalizing the concept of "the effect of a choice on economic efficiency," this Article explains the basis of its author's conclusion that ours is a liberal, rights-based society as well as the implications of that conclusion for the structure and content of the analysis of moral rights in our culture, the analysis of what an individual or the State ought to do when the relevant choice is neither required nor prohibited by our society's moral-rights commitments, and the analysis of various types of legal rights?legal rights that are based on moral rights, legal rights that arise from legislation that is designed to secure various legitimate social goals, or legal rights that are created by legislation designed to further the narrowly-defined self-interest of its supporters. The Article then explains that economic efficiency is not an ultimate value (that increasing economic efficiency is not a goal that is desired in itself), that the fact that a choice increases economic efficiency does not guarantee its consistency with our rights-commitments, that the fact that a choice decreases economic efficiency does not guarantee its inconsistency with our rights-commitments, that these last two conclusions partly reflect the inability of economic-efficiency analysis to identify the creatures that are moral-rights' holders and partially reflects the insensitivity of economic-efficiency analysis to many factors that are relevant to the consistency of a choice with the moral rights of moral-rights holders, that the fact that a choice will increase (decrease) economic efficiency is not a necessary or sufficient condition for its desirability (undesirability) from any legitimate personal-ultimate-value perspective (rights-considerations aside), and partly for reasons that relate to the foregoing conclusion that the analysis of economic efficiency is also not an algorithm for the determination of legal rights of any kind (except in the rare instances in which the alleged legal right was created by a statute that contains ambiguous or open-textured language and was passed to achieve the possible proximate goal of increasing economic efficiency)

المؤلفون: Markovits, Richard S.

المصدر: 1998

مستخلص: This Article exemplifies third-best-allocative-efficiency analysis by showing the way in which the allocative (economic) efficiency of shifting from negligence to strict liability will be influenced by the fact that a wide variety of Pareto imperfections will generate divergences between the private profitability and allocative efficiency of avoidance-moves for both potential-avoider injurers and potential-avoider victims under negligence and under strict liability. The Pareto imperfections considered include imperfections generated by tort doctrines that are not first-best-allocatively-efficient; imperfections generated by the private transaction cost of dispute-settling and the possibility that tort participants, judges, and juries may make errors; and imperfections that are not generated by tort law or tort-dispute-processing realities (e.g., imperfections in seller competition, tax law, and "innovation" law). The Article also examines the way in which various Pareto imperfections affect the allocative transaction cost of shifting from negligence to strict liability. In addition, the Article executes partial and preliminary third best-allocative-efficiency analyses of making the decision whether to reject a tort claim on "proximate cause" grounds depend on the standard of injurer liability as well as of the alleged common-law practice of making members of an industry strictly liable in tort when it is in its infancy and liable only if negligent when it is mature. The "proximate cause" analysis criticizes Steven Shavell's study of this issue, including his treatment of the relevance of the "crushing liability" that our law's dichotomous approach to the cause-in-fact issue can generate in some cases. The "infant versus mature industry" analysis comments on and criticizes various aspects of Posner and Landes' study of this issue. Both the critique of Shavell and the critique of Posner and Landes focus in part on their failure to deal adequately with The General Theory of Second Best

المؤلفون: Markovits, Richard S.

المصدر: 1998

مستخلص: According to The General Theory of Second Best, if one or more members of a set of optimal conditions cannot be fulfilled, there is no general reason to believe that fulfilling more of the remaining conditions will bring you closer to the optimum than fulfilling fewer of the remaining conditions. This Article explains that The General Theory implies that unless one can generate an argument to the contrary that focuses on the other Pareto imperfections in the system and the feedback relationships to whose importance it calls attention a policy that reduces the number or extent of Pareto imperfections in the economy without eliminating all such imperfections will be as likely to decrease as to increase allocative (economic) efficiency on that account. After pointing out the dramatic implications of this conclusion for standard law-and-economics analyses of the allocative efficiency of eliminating particular Pareto imperfections, it argues that standard first-best-allocative-efficiency analyses must be replaced with third-best-allocative-efficiency analyses, which take into consideration not only the Pareto-imperfectness and interconnectedness of the economy but also the inevitable cost and inaccuracy of both data and analysis. The Article also lists nine reasons why economists and law-and-economics scholars have failed to switch from first-best to third-best analysis despite the intellectual necessity of doing so

المؤلفون: Markovits, Richard S.

المصدر: 1994

المؤلفون: Markovits, Richard S.

المصدر: Michigan law review : Ann Arbor, Mich. [u.a.], vol 77, issue 3, pg. 567-640. 1979

المؤلفون: Markovits, Richard S.

المصدر: The journal of law & economics : Chicago, Ill., vol 28, issue 2, pg. 387-404. 1985

المؤلفون: Markovits, Richard S.

المصدر: Harvard law review : Cambridge, Mass., vol 89, issue 8, pg. 1815-1846. 1976