Individual skill
jle-theory-model
Use when a The Journal of Law and Economics (JLE) manuscript needs a model of the legal rule — deterrence, liability, contracting, or regulation — to interpret estimates, generate testable predictions, or carry a theory contribution in the Chicago price-theory tradition. Calibrates how much theory belongs and where; it does not design the identification (jle-identification).
Journal-of-Law-and-Economics-Skills/skills/jle-theory-model/SKILL.md
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# Theory & Model of the Legal Rule (jle-theory-model)
## When to trigger
- A referee asks "what is the economic mechanism / what model rationalizes this legal effect?"
- A reduced-form effect of a rule is credible but its economic meaning (deterrence vs. incapacitation, price vs. quality) is ambiguous
- You want a welfare statement about a legal rule, an optimal-penalty result, or a comparative static the raw estimate cannot deliver
- The paper is theoretical and you need its predictions about a legal rule to be recognizable and testable, not decorative
## The JLE theory tradition
JLE's theory is **price theory applied to legal rules** — Becker on crime (expected punishment = probability × severity), Coase on bargaining and entitlements, Calabresi/Posner on liability and least-cost avoidance, Stigler/Peltzman on regulation and capture, the litigation-selection logic of Priest–Klein. Theory earns its place when it **names the mechanism, maps a coefficient to a structural object, delivers a welfare or optimal-rule result, or generates a comparative static you then test**. JLE accepts genuinely theoretical papers, but even pure theory should speak about a *legal institution* a reader can recognize. Pick the lightest tool that does the job; do not let a model silently replace the identification an empirical design provided.
| Theory's job | Right amount of model | Where it goes |