Abstract
This article shows how game theory can be applied to model good faith mathematically using an example of a classic legal dispute related to rei vindicato. The issue is whether an owner has a legal right to his good if a person has bought it in good faith by using updated probabilities. The article illustrates that a rule of where good faith is irrelevant Pareto dominates a rule where good faith may protect an innocent buyer.
References
Ayres I, Levitt SD (1996) Measuring positive externalities from unobservable victim precaution: an empirical analysis of Lojack. John M. Olin Center for Law, Economics, and Business, Harvard Law School. Discussion paper no 197
Baird D, Gertner RH, Picker RC (1998) Game theory and the law. Harvard University Press, Cambridge
Benson BL, Mast BD (2001) Privately produced general deterrence. J Law Econ 44(2), part. 2, pp 725–746
Cooter R, Ulen T (2000) Law and economics, 3rd edn. Addison-Wesley
Landes WM, Posner R (1996) The economics of arts. In: Ginsburgh VA, Menger PM (eds) Selected essays. Elsevier
Levmore S (1987) Variety and uniformity in the treatment of the good faith purchaser. J Leg Stud XVI:43–65
Mattei U (1996) Property rights in civil law. In: Bouckaert B, De Geest G (eds) Encyclopedia of law and economics. pp 162–165, Edwar Elgar
Rasmussen E (2004) The economics of agency law and contract formation. Am Law Econ Rev 6:369–409
Rose C (2010) The transfer of property rights by theft: an economic analysis. Eur J Law Econ 30:247–266
Rose C (2011) Director’s liability and investor protection: a law and economics perspective. Eur J Law Econ 31:287–305
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2016 Springer Science+Business Media New York
About this entry
Cite this entry
Rose, C. (2016). Good Faith and Game Theory. In: Marciano, A., Ramello, G. (eds) Encyclopedia of Law and Economics. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-7883-6_52-1
Download citation
DOI: https://doi.org/10.1007/978-1-4614-7883-6_52-1
Received:
Accepted:
Published:
Publisher Name: Springer, New York, NY
Online ISBN: 978-1-4614-7883-6
eBook Packages: Springer Reference Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences