Faculty of Arts and Social Sciences
The Robustness of Incomplete Codes of Law
London School of Economics
Friday, May 14, 2010
In order to be credible, a code of law must provide the right incentives to the players in every situation, hence define an equilibrium of the game defined by players' preferences. A difficulty in deigning such codes of law is that player's preferences can only be imperfectly known to the law maker. We examine the robustness of complete and incomplete codes of law to idiosyncratic individual preferences and incomplete information. We show that suitable incomplete codes of law are far more robust than complete codes of law.