Economic Analysis of Law

This chapter offers a synthesis of the employed law and economics methodology and provides an overview of the concepts of rationality, risk-aversion, transaction cost phenomena and investigates the nature of economic reasoning. It also offers a brief historical narrative of the employed methodology and investigates the relationship between the positive and normative analysis. Moreover, this chapter also provides a brief summary on the rational and irrational human decision-making process, maximization of utility and welfare, on notion of behavioural law and economics and offers a general implication and evidences of boundedly rational and non-rational human behaviour.