The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Law and Economics

  • David Friedman
Reference work entry


The economic analysis of law involves three distinct but related enterprises. The first is the use of economics to predict the effects of legal rules. The second is the use of economics to determine what legal rules are economically efficient, in order to recommend what the legal rules ought to be. The third is the use of economics to predict what the legal rules will be. Of these, the first is primarily an application of price theory, the second of welfare economics, and the third of public choice.

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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • David Friedman
    • 1
  1. 1.