Law and Economics for Civil Law Systems

Law and Economics for Civil Law Systems

Ejan Mackaay

Ejan Mackaay offers a comprehensive look at the essential points of economic reasoning, the Coase Theorem, and legal institutions such as intellectual property, extra-contractual civil liability and contracts. The book’s structure mirrors the way law is taught in civil law countries, with structured presentations, references to civil code articles paired with non-technical explanations, and limited reliance on graphs. This English-language version builds on the success of the author’s 2008 French-language textbook on law and economics from a civil law perspective.

Chapter 1: Individual decision- making

Ejan Mackaay

Subjects: law - academic, comparative law, law and economics


All through our lives we make decisions. Should we accept this job offer or hold out for a better one while continuing to search? Rent a flat or buy a house? Send the children to this school or to that one? Change cars or continue to drive the old one? We must make these decisions because the resources at our disposal are not abundant. In paradise, we could waste anything since as much and as good would be left for all. In the world we live in, our wealth is limited as is our time: we cannot be at several places at once. To choose one thing means giving up another. If, having bought a house, we learn that the real estate market is collapsing – as it was in 2008 in the US and in the UK – we may regret that we wasted our money and resolve to be more careful next time. Could we have done better? The future is largely unforeseeable. Not acting may be cause for regret as much acting in a way that in retrospect looks mistaken. The consequences of our action or inaction often become visible to us only after the fact. Yet we must decide what to do on the basis of the consequences as we can foresee them.

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