Essays in law and economics: Applications of economic theory to franchise law, medical malpractice insurance, and antitrust law

This dissertation contains three essays that apply economic concepts to franchise law, medical malpractice insurance law, and antitrust law. The first essay examines the law and economics of franchise quality assurance mechanisms such as tying, penalty clauses, and termination agreements. The economic nature of the franchisor-franchisee relationship is explained and the sometimes divergent interests of franchisors and franchisees are illustrated. The essay explains that certain mechanisms are effective means of assuring product quality through the reduction of policing, agency and transactions costs. The essay also demonstrates that these mechanisms are legally suspect despite economic justifications for assuring product quality. The essay recommends that courts and policy makers institute reforms in areas such as tying, penalty clauses, and termination agreements.; The second essay assesses the claim that the recent medical malpractice crisis in Florida is a result of collusion among insurers. The essay discusses structural conditions in the medical malpractice insurance market that might permit or prevent collusion. The essay examines the requirements for, and consequences of, successful collusion and examines Florida's medical malpractice insurance market in an effort to determine whether premium increases are attributable to high levels of concentration, barriers to entry, or other imperfections in market structure. The essay concludes that collusion among insurers in Florida is unlikely and that regulators should avoid structural modifications to existing insurance markets.; The third essay presents an economic and legal critique of the essential facility doctrine and its application in the health care industry. The doctrine requires the owner of an "essential facility" to provide its business rivals with access to the facility on fair terms. The essay reviews and critiques the legal development of the doctrine. The essay discusses how the concepts of natural monopoly, economies of scale and scope, and vertical integration may explain the doctrine. The essay concludes by applying the doctrine to hospitals, exclusive supply contracts, and staff privileges. The essay suggests that the doctrine should apply only where an "essential facility" exhibits the characteristics of a natural monopoly such that rivals cannot replicate the facility and must have access in order to compete.