How the Law Addresses Uncertainty
Speaker: David Weisbach (University of Chicago)
Occasion: Verification, Validation, and Uncertainty Quantification Across Disciplines
Date: May 10, 2021
Abstract: Legal systems address uncertainty in at least three distinct ways. First, by providing clear rules for interactions among private actors, legal systems can reduce uncertainty in these interactions. For example, property rules provide bright lines regarding the ownership of things reducing uncertainty about the use of things. Second, legal systems must address uncertainty about the effects of changes to legal rules. For example, if we change the content of a legal rule from x (such as “separate but equal education is allowed”) to y (separate but equal is not allowed), the likely effects may be uncertain or hard to predict. Legal systems can partially address this type of uncertainty by moving incrementally, and by experimenting across jurisdictions. Finally, legal systems create incentives on policy makers making choices under uncertainty. For example, a policy maker choosing the time period between COVID vaccine doses must choose in the absence of good information about the effects of the choice. The legal system and the institutional structure in which the decisionmaker operates will affect her choices. The legal system can be designed to help improve choices made in an uncertain environment. This talk will review issues in all three areas.