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Samuel Hammond's avatar

Other types of economic analysis use a spectrum between "free market" and central planning/monopoly, as if taking a simple physics model and adding frictions. This is of course incredibly simplistic. In a strict sense, there is no such thing as a "free market" per se. All markets function under some legal and normative framework, from direct regulations to the type of property regime, etc. Adam Smith saw the invisible hand as being aligned with the general good only under a narrow set of circumstances - namely, with the right the rules of the game. Law and Economics is fruitful because it does away with the silly idealized spectrum and lets researchers play with the background machinery that determines the basic rules of the market.

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Overcoming Bias Commenter's avatar

Robin:I disagree that most people in most fields preder to avoid technical arguments. The insiders always prefer the esoteric knowledge that sets them apart from outsiders. Arguments from law and economics are more likely to be presented to a judge, who is not an insider and will not be terribly impressed by an insider's status. That creates an incentive for the simple expression of non-obvious insights.Another way of saying this is that I think the difference is not that non-obvious insights that could be expressed simply are more common in law and economics; rather, I think that the difference is that the incentives to express the non-obvious insights simply result in more non-obvious insights being expressed simply in law & economics.Max

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