Equity can be defined as the use of a more flexible, morally judgmental, and subjective mode of legal decision making that roughly corresponds with historical equity. This Element presents a simple contracting model that captures the role of equity as a safety valve, and shows how it can solve problems posed by opportunists–agents with unusual willingness and ability to take advantage of necessary imperfections in the law. In this model, a simple but imperfect formal legal regime is able to achieve first best in the absence of opportunists. But when opportunists are added, a more flexible regime (equity), can be preferred. However, equity is also vulnerable to being used opportunistically by the parties it intends to protect. Hence, the Element shows that it is often preferable to limit equity, reserving it for use only against those who appear sufficiently likely to be opportunists.

Lobbying competition is viewed as a delegated common agency game under moral hazard. Several interest groups try to influence a policy-maker who exerts effort to increase the probability that a reform be implemented. With no restriction on the space of contribution schedules, all equilibria perfectly reflect the principals' preferences over alternatives. As a result, lobbying competition reaches efficiency. Unfortunately, such equilibria require that the policy-maker pays an interest group when the latter is hurt by the reform. When payments remain non-negative, inducing effort requires leaving a moral hazard rent to the decision maker. Contributions schedules no longer reflect the principals' preferences, and the unique equilibrium is inefficient. Free-riding across congruent groups arises and the set of groups active at equilibrium is endogenously derived. Allocative efficiency and redistribution of the aggregate surplus are linked altogether and both depend on the set of active principals, as well as on the group size.

Do US Circuit Courts' decisions on criminal appeals influence sentence lengths imposed by US District Courts? This Element explores the use of high-dimensional instrumental variables to estimate this causal relationship. Using judge characteristics as instruments, this Element implements two-stage models on court sentencing data for the years 1991 through 2013. This Element finds that Democratic, Jewish judges tend to favor criminal defendants, while Catholic judges tend to rule against them. This Element also finds from experiments that prosecutors backlash to Circuit Court rulings while District Court judges comply. Methodologically, this Element demonstrates the applicability of deep instrumental variables to legal data.

A vexing problem in contract law is modification. Two parties sign a contract but before they fully perform, they modify the contract. Should courts enforce the modified agreement? A private remedy is for the parties to write a contract that is robust to hold-up or that makes the facts relevant to modification verifiable. Provisions accomplishing these ends are renegotiation-design and revelation mechanisms. But implementing them requires commitment power. Conventional contract technologies to ensure commitment – liquidated damages – are disfavored by courts and themselves subject to renegotiation. Smart contracts written on blockchain ledgers offer a solution. We explain the basic economics and legal relevance of these technologies, and we argue that they can implement liquidated damages without courts. We address the hurdles courts may impose to use of smart contracts on blockchain and show that sophisticated parties' ex ante commitment to them may lead courts to allow their use as pre-commitment devices.

The past decade has witnessed a worldwide explosion of work aimed at illuminating judicial-behavior: the choices judges make and the consequences of their choices. We focus on strategic accounts of judicial-behavior. As in other approaches to judging, preferences and institutions play a central role but strategic accounts are unique in one important respect: They draw attention to the interdependent - i.e., the strategic - nature of judicial decisions. On strategic accounts, judges do not make decisions in a vacuum, but rather attend to the preferences and likely actions of other actors, including their colleagues, superiors, politicians, and the public. We survey the major methodological approaches for conducting strategic analysis and consider how scholars have used them to provide insight into the effect of internal and external actors on the judges' choices. As far as these studies have traveled in illuminating judicial-behavior, many opportunities for forward movement remain. We flag four in the conclusion.