THE CONSTITUTION ALRIGHT TO DUE PROCESS AND THE EIGHTH AMENDMENT'S PROTECTION AGAINST CRUEL AND UNUSUAL PUNISHMENT ARE INHERENTLY SUBJECTIVE CONCEPTS THAT CAN BE DIFFICULT TO APPLY IN SPECIFIC SITUATIONS. AN ECONOMIC ANALYSIS IS PROPOSED TO CLARIFY THE NORMATIVE ISSUES INVOLVED IN INDIVIDUALIZED SENTENCING AND TO REVEAL A RATIONALE THAT CLOSELY CORRESPONDS TO THE RESULTS AND REASONING ACTUALLY USED BY THE COURT. THE DIFFICULTY IN GATHERING AND DISSEMINATING INFORMATION ON THE CONSEQUENCES OF COMMITTING A CRIME AS A CENTRAL PROBLEM IN THE SENTENCING PROCEDURE IS ADDRESSED BY ECONOMIC ANALYSIS. THIS APPROACH TO CONSTITUTIONAL ANALYSIS REQUIRES A FRESH PERSPECTIVE ON THE ECONOMICS OF LEGAL INSTITUTIONS IN GENERAL. THE PAPER SETS FORTH COGNATE MODELS OF THE EXTERNAL COSTS IMPOSED BY TORTIOUS AND CRIMINAL ACTIVITIES AS A DEMONSTRATION THAT MARKETS WILL GENERALLY FAIL TO DEFINE PUNISHMENT PRICES SUFFICIENT TO PERMIT THE COMPLETION OF EFFICIENT TRANSACTIONS. THE WAY IN WHICH AMERICAN LEGAL INSTITUTIONS HAVE EVOLVED TO FULFILL THIS ROLE IS EXAMINED. RECENT DEATH PENALTY CASES (MCGANTHA V. CALIFORNIA AND FURMAN V GEORGIA) ARE INTERPRETED AS AN ATTEMPT TO LESSEN INFORMATIONAL PROBLEMS AND TO FACILITATE A SENTENCING PROCEDURE THAT WILL ENCOURAGE EFFICIENT CRIMES. THE PAPER CONCLUDES WITH A BRIEF DISCUSSION OF THE POSITIVE AND NORMATIVE ASPECTS OF THESE ISSUES AND THE ROLE OF THE CRIMINAL PROCESS IN A LARGER SOCIAL CONTEXT. FOOTNOTES ARE PROVIDED. (AUTHOR ABSTRACT MODIFIED).