Playing Games with the Law

Abstract

* Assistant Professor, Northwestern University School of Law; Research Fellow, American Bar Foundation. B.A., Yale University; J.D., Yale Law School; Ph.D. (Economics), Massachusetts Institute of Technology. Avery Katz and Daryl Warder provided helpful comments. 1. Franklin M. Fisher, Games Economists Play. A Noncooperative View, 20 RANDJ. ECON. 113, 113 (1989). Fisher's description of the ascendancy is echoed by other economists. See, e.g., Carl Shapiro, The Theory of Business Strategy, 20 RANDJ. ECON. 125, 125 (1989) (This new wave of [industrial organization] research consists almost exclusively of game-theoretic studies of behavior and performance in imperfectly competitive markets.). 2. A casual glance at any issue of the leading microeconomic journals such as RandJournal of Economics or Review of Economic Studies will reveal several game theory articles. See, e.g., Joseph Farrell & Garth Saloner, Standardization, Compatibility, and Innovation, 16 RANDJ. ECON. 70 (1985); Drew Fudenberg & Jean Tirole, Sequential Bargaining with Incomplete Information, 50 REV. ECON. STUD. 221 (1983). 3. Nobel Prize winning economist Paul Anthony Samuelson formalized the marginalist method of utility and profit maximization. See PAUL ANTHONY SAMUELSON, FOUNDATIONS OF ECONOMIC ANALYSIS (1947). 4. The new game theory is dominated by a closely knit group of co-authors which includes David Kreps, Eric Maskin, Roger Myerson, Garth Saloner, Jean Tirole, and Robert Wilson. These theorists often collaborate, and the history of game-theoretic advances turns on the axes of their academic institutions: Stanford, M.I.T., Northwestern, and Harvard. See, e.g., David M. Kreps, Paul Milgrom, John Roberts & Robert Wilson, Rational Cooperation in the Finitely Repeated Prisoners' Dilemma, 27J. ECON. THEORY 245 (1982); Eric Maskin & Jean Tirole, Correlated Equilibria and Sunspots, 43 J. ECON. THEORY 364 (1987).