Game Theory and the Lawpromises to be the definitive guide to the field. It provides a highly sophisticated yet exceptionally clear explanation of game theory, with a host of applications to legal issues. The authors have not only synthesized the existing scholarship, but also created the foundation for the next generation of research in law and economics."

Game Theory and the Lawis an important book. It is important in the sense that it will serve as a catalyst for an expanded use of game-theoretic models in the study of law. It will be a book that people will one day recognize as having had a considerable influence on its field. And it will receive the praise that accompanies such influence. Happily, such influence will be beneficial to the field of law and such praise will be richly deserved, because Game Theory and the Lawis an extremely intelligent and thoughtful text...One of the features of the book that is most striking (and, for my part, most welcome) is the thoughtful and sensible manner in which they approach the use of game theory. Unlike many proponents of game-theoretic analysis, they do not present it as the only legitimate approach to social-scientific analysis. The authors present game theory as a powerful tool that can be used along with other approaches to enhance our understanding of the role of law in social life...The persuasiveness of their general argument for the utility of game theory derives from a combination of the power of their insights along with the sensibility of their analysis. The book is written in a clear, concise and interesting manner. Its bibliographic references render it a source book for additional research in both game theory and law. This is a book that should be read by scholars of law in particular and scholars of political behavior in particular.

The most comprehensive and encompassing treatment of this approach...[This] is the first nontechnical, modern introduction to how (noncooperative) game theory can be applied specifically to legalanalysis...Game Theory and the Lawis a user-friendly analysis of concrete, numerical examples, rather than a theoretical presentation of abstract concepts. The authors introduce and explain, withactual legal cases or hypotheticals, the salient issues of modern game theory. This breadth of coverage is remarkable. This is not just a textbook; it is also something of a research monograph, introducing many new models attributableto the authors alone.

This book is the first to apply the tools of game theory and information economics to advance our understanding of how law works. The book highlights the basic mechanisms at work and lays out a natural progression in the sophistication of the game concepts and legal problems considered. 47 line illustrations.

Douglas G. Bairdis Dean of the Law School at the <>University of Chicago.Robert H. Gertneris Professor of Economics and Strategy at the <>University of Chicago.Randal C. Pickeris Paul and Theo Leffmann Professor of Law at the <>University of Chicago.

Preface

Introduction: Understanding Strategic BehaviorBibliographic 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