This grant continues support for a very successful research program in law and economics in which the investigator applies economic models to legal issues. The first topic on patent law and antitrust policy extends the investigator's prior work on joint R&D ventures involving two or more firms. A model has been developed illustrating conditions under which joint ventures which can be protected by joint patents will either be optimal or suboptimal incentives for R&D. The second project studies contingent fees for professional services. The analysis offers a new perspective on this fee system regarding why lawyers do not buy cases from clients and collect 100% of the reward. The third project involves looking at the logic behind the rules of evidence as it relates to ex ante deterrence and protecting the rights of innocent parties who may be accused. The question is asked why, in deciding facts, juries are generally prohibited from considering the accused's criminal record, although judges are not prohibited from considering it in sentencing. The fourth project looks at why the government is so heavily involved in regulatory testing. The analysis will explain when and whether multiple tests should be allowed and why testing fees should sometimes exceed their social costs. All of these topics have broad theoretical and practical implications for both the field of economics and law and social science.
