The Concise Encyclopedia of Economics
FEATURED TOPIC

Law and Economics

Paul H. Rubin

Law and economics, also known as the economic analysis of law, differs from other forms of legal analysis in two main ways. First, the theoretical analysis focuses on efficiency. In simple terms, a legal situation is said to be efficient if a right is given to the party who would be willing to pay the most for it. There are two distinct theories of legal efficiency, and law and economics scholars support arguments based on both. The positive theory of legal efficiency states that the common law (judge-made law, the main body of law in England and its former colonies, including the United States) is efficient, while the normative theory is that the law should be efficient. It is important that the two theories remain separate. Most economists accept both....

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ALSO OF INTEREST

Agricultural Subsidy Programs

Daniel A. Sumner

Fiscal Sustainability

Laurence J. Kotlikoff

Industrial Revolution and the Standard of Living

Clark Nardinelli

Standards of Living and Modern Economic Growth

John V. C. Nye

Public Choice

William F. Shughart II

Immigration

George J. Borjas

Health Care

Michael A. Morrisey

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FEATURED BIOGRAPHY

John Nash

(1928-2015)

John Nash, John Harsanyi, and Reinhard Selten shared the 1994 Nobel Prize in economics "for their pioneering analysis of equilibria in the theory of non-cooperative games." In other words, Nash received the Nobel prize for his work in Game Theory...

Nash introduced the distinction between cooperative and noncooperative games. In cooperative games, players can make enforceable agreements with other players. In noncooperative games, enforceable agreements are impossible; any cooperation that occurs is self-enforced. That is, for cooperation to occur, it must be in each player's interest to cooperate.

Nash's major contribution is the concept of equilibrium for noncooperative games, which later came to be called a Nash equilibrium....

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