Posner's theorem was proposed by the famous legal economist Richard A. Posner. This theorem means that if market transaction costs are too high and inhibit transactions, then rights should be given to those with the most People who value them.
Theorem Research
Hypothesis
The economic analysis approach to law proposed by Richard A. Posner (that is, using economic theories and analytical methods Studying legal issues) is based on the following three assumptions:
(1) The behavior of the actors is the result of their cost-benefit analysis under specific legal conditions. Different valuations of certain rights are the driving force behind their transactions;
(2) The legal system will bring benefits and costs to the parties during its operation, so legal behavior can be evaluated by maximization, balance and efficiency. ;
(3) Clear definition of property rights can reduce transaction costs. By enacting laws that make the cost of transferring rights relatively low, resources can be promoted to the hands of those who use them more efficiently, thereby improving economic efficiency.
Corollary
Posner's theorem also has a corollary, which is its dual form: "Legally, the liability for accidents should be attributed to those who could avoid the accident at the lowest cost but failed to do so. "People." The essence of "Posner's theorem" is that the arrangement of rights and obligations requires the reflection of the "principle of comparative advantage." Economic entities are different in terms of risk preference, information possession, property ownership scale and decision-making ability. These differences serve as constraints that affect the operating costs of rights. Therefore, allocating rights and obligations based on the principle of "equal competition and giving priority to those who are capable" is a rights arrangement that embodies efficiency standards.
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