Abstract

The purpose of this essay is to outline the core structure of an ordinal economic approach to the study of law. This method does not measure individual preferences in terms of willingness to pay, nor does it assume the maximization of society's well-being as its goal. Instead, it adopts an ordinal conception of utility, it describes voluntary interactions in terms of market transactions and it assumes the protection of consumer's welfare as its goal. Hence, the analysis requires to individuate market failures and to search for counteracting institutions in the legal system. In order to support this approach, it is argued that the maximization of consumer's welfare finds a foundation in economic theory sounder than the maximization of society's welfare. Moreover, this criterion avoids contradictions regarding the evaluation of market power. A discussion on the adoption system is used for comparing the traditional and the ordinal methods of economic analysis of law.