Berkeley Program in Law and Economics

This paper has as main purpose to demonstrate that the economic analysis of law constitutes an objective, efficient and effective tool to the design and valuation of norms. Through the economic analysis of the proposed LP Gas Regulation, we intend to exemplify how a proposition that, in principle, is legally justified and aimed to achieve certain objectives, but economically can raise some issues. In the present analysis are used economic tools such as the identification of incentives for the recipients of the norm, game theory and cost-benefit analysis, in order to conclude that the proposed regulation, far from solving the existent problem with LP Gas, makes it larger and more complex, creating perverse incentives in the recipients of the norm.