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The competitive equilibrium is thusfair.A gap also exists between the design aim of policy analysis and thedesign claim. And, if Liza’s moral views changed, shewould revert to eating meat.

Richard Posner [1973] brought economic analysis of law to the attention of the general legal academy; by the late 1970s, his work had provoked a vigorous controversy. This coincidence between the moral and prudentialresults from the coincidence of interests of all agents.Second, the selection procedure for judges does not identifyindividuals with the appropriate training and background to makeaccurate calculations of social welfare. One might ask the parallel question concerningthe obligation to obey the law of public officials. This knowledge of private citizens mightamount simply to the knowledge of what consequences follow from eachpossible action the agent might take. I also thank Robert Cooter for hispersistent questioning during a seminar we co-taught on these topicsat NYU in spring 2015.Richard Posner [1973] brought economic analysis of law to theattention of the general legal academy; by the late 1970s, his workhad provoked a vigorous controversy. Environmental regulation, however, also clearlyimplicates questions of autonomy. Can the economic theory of behavioraccommodate the requisite normative behavior?“Accommodation” in this context means that economic theorycan generate models that predict the behavior that legal obligationinduces. Second,individuals with identical characteristics for which they are notresponsible should receive identical compensation for their losses.The first condition addresses option luck; the second brute luck.The section then focuses on two of those concepts, identified in thenext subsection as the doctrinal and sociological (or socialscientific) concepts of law. Indeed, most of the criticisms of doctrinalanalysis reduce, in one way or another, either to a claim that itfails to satisfy transparency or that, as discussed above, it fails toaccount for the bilateral nature of private law.Aggregate rationality imposes two constraints on the construction ofcollective preference over policies. The question of compatibility between economicrationality as preference and obligation then reduces to the questionof whether obligations may be integrated with the other concerns ofthe agent into an all-things-considered ranking that satisfies thepreference axioms.Finally, in many instances, rational agents need to coordinate theiractions. But typically the legalprofession and the public may think the different forms have differentbehavioral consequences. Second, onemight more fundamentally design the judicial system from scratch. As socialgroups grow more numerous and their environment becomes more volatile,governance structures become more complex.Similarly, we may understand conflicts over the appropriate tax andsocial welfare policy as raising questions not only of efficiency butalso of autonomy as responsibility. A relatedapproach to this problem suggests that the answer to this questiondepends on the structure of the norm. Afterall the decision at issue depends on a mass of technical data that isnot easily assimbilable or manipulable. Second, when two individuals haveunequal talents, they face different sets of feasible options. In this section, Iconsider the theory of adjudication implicit in each of the other twostrands of economic analysis of law.Before identifying further concepts of law, it is important tounderstand how the taxonomic and the sociological concepts of lawdiffer. A traffic sign designating a street aswithin a school zone both indicates that children may dart into thestreet and sets a reduced speed limit. The lesstalented may envy them. This analytic strategy precludesa Hartian account of law; legal rules cannot play any role in theexplanation of behavior of either private individuals or publicofficials because no agent has the relevant internal attitude towardsthe rule. Again the Pareto criterion conflicts witha (minimal) requirement of communal self-governance or autonomy.Economic analysis of law seeks primarily to explain how people behavein response to legal rules and institutions.

An agent may have theright (or in Hohfeldian terms a privilege) to determine a socialdecision. This section seeksfirst to disentangle the various questions that have been conflatedwithin a single concept of law.Framed this way, it is not clear that economic analysis of law doesprovide a comprehensive theory of law.

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