The Legal Economic Analysis Of Encouraging Function Of Law's Rule

The Economic Analysis of Law is the field which develops faster among the fields of the western law science and of the western economics. The most famous contribution of the Economic Analysis of Law is that it believes basic economics concepts are useful to be applied in the understanding and interpreting of law's rules, which provides us with the theory of efficiency to study legal systems and norms. In this thesis, the author uses this way to analyze the law's rule of the article 49 of the PROTECTION CONSUMER. The purpose to select the article 49 of the PTOTECTION CONSUMER for research is that the connection between consumers and dealers is more close to the original condition of free exchange. Also, this law's rule has the Punitive Damages, and so the influence to their actions is helpful to comprehend how the rational people influence their choice by the change of cost and anticipated income. Although the rule has distributed the cost, the lawsuit cost is also one of the important factors that influence the effect of the law's rule which comes into being. In the consumptive marketplace, because the information is asymmetric, the adverse selection often happens and then the transaction cost between consumers and dealers becomes much higher, eventually leading to the legitimate rights and interests of consumers does not get the guaranty. The higher transaction cost has destroyed the normal order of market economy, and also has influenced the health of society economy and the stabilizing development. In　this　thesis,　the　first　part　is　the　theory　core.　The　author　introduces　the　basic　hypothesis　of　Economics:　the　bounded　rationality　and　maximization.　Then,　the　evaluation　norms　of　Economics------efficiency　is　also　the　standard　of　the　Economic　Analysis　of　Law.　Although　Pareto　optimization　does　not　meet　with　general　approval,　we　have　to　use　this　standard　to　judge　if　the　rule　correctly　motivates　people's　action.　　In the rest of parts, the author tries best to explain why the rule exists, calculates what effect the rule will lead to and determines in future what rule should be laid down. We should not only analyze the distribution of cost in the rule, but also pay closer attention to the lawsuit cost. If the lawsuit cost is much higher, the consumer will give up into the procedure of law and decide to settle out of court. For the consumer, maybe the choice is the rational one, but it is not necessary that the individual rationality must initiate the collective rationality. For the whole society, the choice is not rational one. All in all, if we want to decline the cost of consumers, increase their anticipated income, we must not only change the distribution between consumers and dealers from the rule by self, but also decrease the opportunity cost which consumers put into the lawsuit.