Primer Parcial - Law and Economics

Act Utilitarianism (Utilitarismo del Acto)

An ethical system that evaluates each individual action to maximize immediate social utility, potentially leading to numerous exceptions and justification of actions that may infringe individual rights if they benefit the majority.

Activity Level (Nivel de Actividad)

An important unobservable precaution referring to the frequency or quantity of an activity.

Adversarial System (Sistema Adversarial)

A legal system, typical of common law, where the judge acts as an arbitrator between two opposing parties who initiate the legal process.

Anarcho-Capitalism (Anarco-Capitalismo)

A libertarian viewpoint positing that government, being coercive, is illegitimate, and that law can effectively develop through a system of decentralized and private courts without state intervention.

Asignación Inicial de Derechos (Initial Delimitation of Rights)

The initial distribution of property rights. In the real world, with high transaction costs, this initial allocation significantly impacts the efficiency of the economic system.

Balance of Probabilities (Balance de Probabilidades)

The standard of proof in civil law cases, where evidence is sufficient if it is more likely than not that the fact occurred.

Beyond a Reasonable Doubt (Más Allá de Toda Duda Razonable)

The standard of proof in criminal law cases, requiring near-total certainty of guilt to convict someone.

Beneficio Externo (External Benefit)

Benefits received by others due to the actions of an individual or enterprise that are not reflected in market prices.

Bundling

In normative evaluation, treating choices as a collective package rather than individual components, often contrasted with the "small unit perspective" and related to rule utilitarianism.

Causación "Pero Por" ("But For" Causation)

A definition of causality where, if a particular act had not occurred, the damage would not have happened.

Causación Coincidente (Coincidental Causation)

A case where an act causes a result indirectly or fortuitously, such as delaying a friend who then dies in an unforeseen accident.

Causación Redundante (Redundant Causation)

A case where multiple factors, each sufficient on its own, contribute to a specific outcome.

Caveat Emptor ("Let the Buyer Beware")

A rule where the buyer accepts a good as they find it, including any defects, thereby absolving the seller of responsibility for unexpected problems.

Caveat Venditor ("Let the Seller Beware")

A rule where the seller is liable if something goes wrong with a product, placing responsibility on the producer for defective products.

Certeza Jurídica (Legal Certainty)

A crucial aspect of the rule of law, enabling individuals to plan their actions long-term with predictable legal rules. While codified law (continental) appears to offer immediate certainty, it is subject to radical changes; common law, based on principles, offers more long-term certainty.

Coase Theorem (Teorema de Coase)

A theory stating that if transaction costs are low and property rights are clearly defined, private negotiations will ensure an efficient market equilibrium even with externalities, rendering the initial assignment of rights irrelevant for efficiency. However, Coase also noted that in the real world, with high transaction costs, the initial allocation of rights *does* matter.

Common Law (Derecho Anglosajón)

One of the two principal legal traditions, primarily based on jurisprudence and judicial precedents. Judges play a central role in creating law, and the system is adversarial. It is characterized by flexibility, casuistic evolution, less regulation, and greater contractual freedom. It tends to operate as a spontaneous order.

Constructivism (Constructivismo)

In legal contexts, the belief that the legislator can centrally plan law, as often seen in continental law systems. This approach is related to "fatal arrogance".

Continental Law (Derecho Continental)

One of the two principal legal traditions, primarily based on written law and codes. Judges apply the law and have a limited role in normative creation. The system is inquisitive and characterized by broad regulation and imperative norms. It tends to operate as a planned order (taxis).

Cosmos (Spontaneous Order/Grown Order)

An "unplanned" or "grown" order emerging from complex natural phenomena or human interaction, resulting from human actions but not from a specific human design.

Costo Externo (External Cost)

Costs imposed on others by the actions of an individual or business.

Costo Privado (Private Cost)

Costs directly borne by the individual or entity undertaking an action.

Costo Social (Social Cost)

The sum of private costs and external costs.

Costes de Transacción (Transaction Costs)

The expenses associated with negotiating, measuring, and enforcing agreements. High transaction costs can make private solutions infeasible, sometimes necessitating state intervention.

Critical/Evolutionary Rationalism (Racionalismo Crítico/Evolutivo)

A form of rationalism, associated with the British tradition, which recognizes the limitations of conscious reason and the importance of spontaneous order and evolution in the development of institutions and law.

Crimen (Crime)

An offense publicly prosecuted by the state, typically leading to penalties such as imprisonment or fines.

Damages (Daños y Perjuicios)

Monetary compensation that a tortfeasor must pay to a victim for harm caused. The traditional aim is to "make the victim whole".

Derecho (Law)

Rules designed to resolve conflicts between individuals, necessary due to the rivalry over economic goods.

Derecho Natural (Natural Law/Jusnaturalism)

An ethical system asserting the existence of immutable and universal individual rights that everyone must respect (i.e., what is "just"). It posits that rules must be inherently just, irrespective of motives or consequences. Positive law that contradicts natural law should not be followed.

Derecho Positivo (Positive Law/Man-made Law)

Laws formulated by legislators or an authority, which are contingent, variable, and reflect the political will of a given society. It is often contrasted with natural law.

Deterrence (Disuasión)

A primary objective of criminal punishment, aiming to discourage potential criminals from committing offenses by making such actions against their self-interest.

Doctrina (Doctrine)

In continental law, decisions made by the Supreme Court which, while having less authority than written law, still influence legal interpretation.

Economía (Economy)

The study of rational human action, constrained by available information and driven by the incentives inherent in the operational system.

Economía Normativa (Normative Economics)

Statements and recommendations about what *should* be done based on economic facts, involving value judgments (prescriptions).

Economía Positiva (Positive Economics)

Factual statements about economic phenomena and how things *are* (descriptions), free from value judgments.

Eficiencia (Efficiency)

A useful, though not exclusive, measure for understanding and improving law. Economic efficiency typically refers to maximizing the "size of the pie" or the overall value of production.

Emergent Order (Orden Emergente)

A phenomenon resulting from a complex causal process, where the outcome cannot be predicted by simply summing its constituent parts. This term applies to both human and non-human processes. All spontaneous orders possess emergent qualities, but not all emergent processes are spontaneous orders.

Estándares de Prueba (Standard of Proof)

The minimum level of evidence required to accept a piece of evidence or to declare someone guilty in legal proceedings.

Estigma (Stigma)

A significant form of punishment in criminal law, representing the cost incurred by a convicted individual due to public knowledge of their crime, impacting their reputation and future opportunities (e.g., loss of income).

Ética (Ethics)

A set of established norms or principles intended to resolve conflicts within a society (what is just or legal).

Ética de la Virtud (Virtue Ethics)

An ethical system that focuses on the intentions behind actions, aiming for virtue as an inherent human trait for personal flourishing. A key challenge is potential conflicts between virtues, offering no clear guidance.

Evolucionismo (Evolutionism)

The idea, prominent in common law, that law is continually discovered, and the most efficient rules endure through a decentralized, competitive process.

Externalidad (Externality)

Significant external costs or benefits that are not accurately reflected in market prices. It often describes a reciprocal problem where one party's action harms another, and preventing that harm would, in turn, harm the first party.

Factibilidad (Feasibility)

The distinction between what is possible or achievable versus what is utopian or an excessively ideal wish. It exists on a spectrum rather than being an absolute category.

Fatal Arrogance (Arrogancia Fatal)

The presumption of attempting to redesign society by disregarding the dispersed knowledge accumulated and embodied in existing institutions.

Fórmula Hand (Hand Formula)

A legal criterion used to determine negligence

Incapacitación (Incapacitation)

An objective of criminal punishment that seeks to reduce the harm a criminal can inflict by restricting their opportunities (e.g., through imprisonment).

Incentivos (Incentives)

Motivations that guide human action within a system. Law & Economics analyzes how legal rules create these motivations.

Instituciones (Institutions)

Systems of social norms that structure human interaction by linking specific actions to rewards and sanctions. They can arise either through deliberate design or through the complex interaction of natural phenomena.

Internalizar una Externalidad (Internalizing an Externality)

The process by which economic agents are compelled to consider the external costs or benefits of their actions in their decision-making processes.

Jurisprudencia (Jurisprudence)

In common law, this refers to the principal source of law derived from judicial decisions and precedents. In continental law, it typically refers to the doctrine established by the Supreme Court, which holds a lesser legal rank than written law.

Jurisprudence Constante

A civil law concept where a rule of law, established by repeated decisions over a long series of cases, carries significant weight in subsequent judicial decisions.

Knowledge Problem (Problema del Conocimiento)

The inherent difficulty in centralizing and processing the vast, dispersed, and often tacit information required for effective economic planning or law-making.

Law & Economics (Análisis Económico del Derecho)

An interdisciplinary field that applies economic tools and reasoning to analyze legal rules, with the aim of understanding and improving law by evaluating social utility and incentives.

Legal Inflation

The excessive proliferation of laws, especially in legislative systems, which dilutes the effectiveness of true law, creates uncertainty, and makes compliance difficult.

Legislación (Legislation)

Laws enacted by a legislative body, serving as the primary source of law in civil law systems. It is contrasted with judge-found law.

Local Knowledge (Conocimiento Local)

Specific information pertinent to a particular context, crucial for effective decision-making, especially in decentralized systems.

Moral (Morality)

The individual pursuit of virtue, involving actions believed to lead to personal flourishing and what is considered good or right.

Naive Rationalism (Racionalismo Naif)

A form of rationalism, associated with the French philosophical tradition, characterized by an overconfident belief in human reason's ability to impose laws and centrally plan society, often failing to appreciate spontaneous order.

Negligence (Negligencia)

A legal rule under which a party is held liable for an accident only if they failed to take all cost-justified precautions to prevent it.

Normas (Norms/Rules)

Prescriptions or proscriptions (obligations or prohibitions) that define expected behavior under certain conditions (e.g., "if X, then Y"; "if X, then not Z").

Observable Precautions (Precauciones Observables)

Actions taken to prevent harm that a court can verify and assess, known to both the court and the parties involved.

Order (Orden)

A state of affairs where various elements are related in such a way that one can form reliable expectations about the system based on knowledge of its parts.

Panglossian View (Visión Panglossiana)

The extreme assertion that all observed outcomes are inherently efficient.

Precedentes (Precedents)

Previous judicial decisions that serve as authoritative guides for similar future cases in common law systems.

Preference Temporal (Time Preference)

The psychological or economic tendency to prefer immediate satisfaction or goods over future ones. Lower time preference, often fostered by legal certainty, encourages long-term planning and investment.

Product Liability (Responsabilidad por Productos)

The legal question of who bears responsibility when unexpected issues arise from the use of a defective product.

Property Rights (Derechos de Propiedad)

Legal entitlements that define ownership and the permissible uses of assets. Their clear demarcation is fundamental to market functioning and the Coase Theorem.

Punitive Damages (Daños Punitivos)

Damages awarded in excess of actual losses, intended to punish the tortfeasor and express public condemnation, or to act as a probability multiplier for poorly detected offenses.

Regla de Propiedad (Property Rule)

A legal rule setting damages high enough to deter almost all involuntary transactions, thus eliminating litigation costs.

Regla de Responsabilidad (Liability Rule)

A legal rule setting damages roughly equal to the harm caused, aiming to internalize externalities.

Rule of Law (Estado de Derecho)

A principle requiring that government power be exercised in accordance with established, clear, and predictable laws, ensuring legal certainty and protecting individual liberty.

Sistemas Éticos (Ethical Systems)

Various frameworks for answering the fundamental question of what is just and why, including virtue ethics, utilitarianism (act and rule), and natural law.

Sistema Inquisitivo (Inquisitive System)

A legal system, typical of continental law, where the state (e.g., through public prosecutors or judges) can initiate legal proceedings.

Small Unit Perspective (Perspectiva de Unidad Pequeña)

Evaluating choices based on their smallest components, such as a single individual's action, often associated with act utilitarianism.

Social Utility (Utilidad Social)

A central concept in Law & Economics referring to the collective well-being or welfare of society, which is sought to be maximized.

Sovereign Immunity (Soberanía Inmune)

A doctrine protecting the government from lawsuits unless it grants explicit permission, often precluding punitive damages.

Spontaneous Order (Orden Espontáneo)

Regularities in society or events that arise from human actions but are not the result of deliberate human design or intention. Its complexity often exceeds human comprehension, and while it lacks a particular purpose, it serves various individual objectives. It emphasizes human "interactive purposivity" and is a subset of emergent orders.

Stare Decisis

A principle in common law systems mandating adherence to prior judicial decisions on similar facts to ensure legal stability and consistency.

Stigmergy

A term for logistical traits in social species or software platforms where individuals or users contribute simultaneously and separately to outcomes more complex than their individual actions, without conscious collective agreement.

Strict Liability (Responsabilidad Estricta)

A legal rule where a party is held responsible for harm caused, regardless of their negligence.

Subsidio Pigouviano (Pigouvian Subsidy)

An optimal subsidy that lowers the market price of goods with significant external benefits, thereby aligning market prices with true social benefits and costs.

Tacit Knowledge (Conocimiento Tácito)

Knowledge that is acquired through experience and practice, difficult to articulate or formalize, and often crucial for navigating complex systems.

Taxis (Planned Order/Organizations)

An order that is "made" or "designed" deliberately by human action with a specific purpose, often by an authority or designer (e.g., a corporation, an army, a building). It is a type of planned order.

Time Consistency (Consistencia Temporal)

A problem arising when an optimal plan decided *ex ante* (before an event) becomes suboptimal *ex post* (after the event), leading to potential policy reversals that can undermine long-term expectations and incentives.

Tort (Daño Civil)

A private wrong, distinct from a crime, typically prosecuted privately for damages (compensation). It involves obligations imposed by law rather than voluntarily agreed to by contract.

Transaction Costs (Costes de Transacción)

The expenses involved in negotiating, measuring, and enforcing agreements. High transaction costs can make private market solutions impractical, potentially necessitating government intervention.

Unobservable Precautions (Precauciones No Observables)

Actions taken to prevent harm that a court cannot easily verify or assess, such as an individual's "activity level" or internal thought processes.

Utilitarismo de la Regla (Rule Utilitarianism)

An ethical system that evaluates the utility of following general rules, focusing on maximizing societal well-being in the long term through rules whose indirect consequences are beneficial.

Utilitarianism (Utilitarismo)

An ethical system that judges actions as good or bad based on their consequences, aiming to maximize overall social utility or well-being for the greatest number of people.

Victimless Crime (Delito sin Víctima)

Offenses where the primary harm falls on the person committing the act (e.g., drug use), although others might perceive negative externalities.