“Economic Analysis of Law: Assessing Efficiency, Rational Choice, and Legal Policy-Making - A Study

Abstract

One of the most important Concept Economic Analysis of Law (EAL) represents a profoundly powerful model shift in 20th-century jurisprudence and administration, always everywhere discussing about This.  moving away from traditional views of law as an isolated framework of moral reasoning and precedent This is very discussable issue. Instead, EAL conceptualizes legal rules as structural incentives designed to shape human conduct. In this sense, most importantly By applying microeconomic principles such as price theory, game theory, and welfare economics this paper critically examines the trajectory of the EAL movement, from the foundational Coase Theorem to the Chicago School’s emphasis on Rational Choice Theory this is more weightage. It further explores how economic logic redefines substantive law: framing Property Law as a mechanism to internalize externalities, Tort Law as a strategy to minimize the social costs of accidents, and Criminal Law as a system for pricing anti-social behavior Consequently This is purely instrumental view of love Reduces complex moral and legal dilemmas into more mathematical equation Costs and benefits. While acknowledging EAL as a robust normative and descriptive tool for maximizing social wealth (Kaldor-Hick’s efficiency), the article underscores its fundamental limitations. The hyper-rational assumption of 'Homo Economicus' is increasingly challenged by behavioral economics, and the reduction of 'justice' to mere 'efficiency' often marginalizes distributional equity and human dignity. Ultimately, the study concludes that while economic analysis is indispensable for prospective policy-making and incentive design, it falls short in judicial adjudication, which demands ex-post moral deliberation."