Keywords: Law and Economics; Methodological Individualism; Rational Behaviour; Welfarism; Function of Social Welfare.
The paper discusses the methodological foundations of law and economics. In particular,
it deals with the capacity of economics to properly model and measure laws and
institutions. We argue that contemporary economic analysis of law is generally based
on a simplistic version of mainstream economics. This process of simplification of
both the heterogeneity of methodological approaches and the complexity of reality
have potential important consequences, which are here illustrated. We draw implications
for how law and economics should, or should not, evolve in the future, in order to
guarantee a genuine interdisciplinary approach to the study of legal systems.