Steven Shavell's Foundations of Economic Analysis of Law (Harvard University Press, 2004) is a major theoretical contribution to “law and economics,” the applied field of economics that studies the economic properties and consequences of legal doctrines and institutions. It is a field of immense practical importance, but unfamiliar to many economists—a situation that Shavell's book bids fair to rectify. This review essay situates Shavell's book in the history of economic scholarship about law and uses the book as a springboard for speculation about new directions in that scholarship.

By social (norm for short) I shall mean a rule that is neither promulgated by an official source, such as a court or a legislature, nor enforced by the threat of legal sanctions, yet is regularly complied with (otherwise it wouldn't be a rule).' The rules of etiquette, including norms of proper dress and table manners; the rules of grammar; and customary law in prepolitical societies and private associations are all examples of norms in my sense. A full understanding of law requires consideration of norms. Law is older than political society, which means that it originates as a set of norms-as it remains in the case of public international law because there is no world government. Even in societies that have strong governments, norms are both a source of law and often a cheap and effective substitute for law -and sometimes they are an antagonist to law. The incentives for obeying law are clear enough, but what about the incentives for obeying norms? The answer to this question will help toward an understanding of the relation between law and norms. There are four incentives for obeying norms: (i) Some norms are self-enforcing (the incentive to obey comes from the fact that obedience confers private benefits) because they are constitutive of advantageous transactions. If you don't speak the language, you can't make yourself understood. If you don't play chess by the rules, you're not playing it at all, so if you enjoy playing chess, you will not cheat unless the net expected gain is great.2 This point bears on the norms governing judicial behavior of judges-not those norms backed by law, such as the rule against taking bribes, but those subtler norms that adjure the judge to lay aside personal or partisan sympathies, disregard public blame or praise, follow precedent rather than his own values-in short, adhere to the traditional virtues. Compliance with these norms is far from uniform, because there are incentives to deviate, and the costs of deviation are small. But why is there any compliance? The answer is that the private costs of compliance are low because the law-backed rules of judicial behavior' make it difficult for the judge to profit from partiality, while the private benefits are substantial because the rule-of-law norms are the constitutive rules of the practice of judging; if you don't obey them, you're not playing the judicial game. Law school and the judiciary teach the game to new lawyers, while judicial selection procedures select for persons who want to play the judicial game rather than some other game, such as partisan politics. Even when judicial appointments are elective rather than appointive or when appointments are based on patronage or ideology rather than merit, self-selection is present, in the decision to seek or accept appointment. (ii) Some norms are enforced by the emotions, a point vital to understanding the emergence of law. The honor code of the Old South (see Jack K. Williams, 1980) will illustrate. The code, which required a man to challenge to a duel any man who infringed his dignity, was a survival of a revenge-based system of law (more precisely, pre-law). Before there were governments, what is now called law was * U.S. Court of Appeals for the Seventh Circuit, and University of Chicago Law School, 1111 E. 60th St., Chicago, IL 60637. I thank Gary Becker, Dan Kahan, Lawrence Lessig, Martha Nussbaum, Eric Posner, Eric Rasmusen, Cass Sunstein, and Yuval Tal for many helpful comments on a previous draft. ' I do not require, however, that it be internalized as a preference, as in the definition of norm in Gary Becker (1996 p. 225). 2 These are examples of compensated norm-imposed constraints (Becker, 1996 p. 228). 'Not only must the judge not take bribes, but he must not sit in cases in which he or his relatives might derive a pecuniary benefit from his decision.

The advance of economics into the traditional domains of other social sciences has thus far largely overlooked anthropology. In this review article on Frederic Pryor's The Origins of the Economy I argue that economics has many fruitful applications to the study of primitive society. I fault Pryor's book for its lack of a theoretical framework and argue that such a framework can be derived from the economics of information and uncertainty. In particular, it can be argued that many primitive social institutions are substitutes for formal markets in insurance.

The advance of economics into the traditional domains of other social sciences has thus far largely overlooked anthropology. In this review article on Frederic Pryor's The Origins of the Economy I argue that economics has many fruitful applications to the study of primitive society. I fault Pryor's book for its lack of a theoretical framework and argue that such a framework can be derived from the economics of information and uncertainty. In particular, it can be argued that many primitive social institutions are substitutes for formal markets in insurance.

This paper presents a model and some highly tentative empirical estimates of the social costs of monopoly and monopoly-inducing regulation in the United States. Unlike the previous studies, it assumes that competition to obtain a monopoly results in the transformation of expected monopoly profits into social costs. A major conclusion is that public regulation is probably a larger source of social costs than private monopoly. The implications of the analysis for several public policy issues, such as appropriate policy toward mergers and price discrimination, are also discussed.

We review the recent but growing economic literature on the worldwide growth of obesity, relating the review to a recent anthology of articles—Obesity, Business and Public Policy. We discuss the competing explanations for the growth of obesity as well as the role of governments in attempting to limit it.