||Law and Economics||
Office Hours: T, W, Th 2:25-3:25
|Class room: B&E 441
Class time: 3:30-4:45
||Tullock, G. (2005) Law and Economics. Volume
9 of the Collected Works of Gordon Tullock.
Indianapolis: Liberty Fund.
Shavell, S. (2004) Foundations of Economic Analysis of Law. Cambridge: Harvard University Press.
Posner, R. (2011) Economic Analysis of Law. 8th Ed. Aspen Publishers.
other Law and Economics
Law and Economics is an area of study that uses economics to understand why laws look the way they do and how the laws that exist affect the choices of individuals and the society that emerges.
This course provide students with the tools to think systematically about laws, law enforcement, and legal systems using rational choice models from economics, game theory, and public choice.
The course begins with a short
review of key tools from economics and game theory.
Part A focus on the logic and effects of law
enforcement (economics of crime). Part B focuses
on economic explanations of the origin and
economic effects of basic civil laws (property,
contract, and torts). Part C focuses on the
logic and effects of public and regulatory law
(antitrust and patents). Part D, if time allows,
undertakes a short analysis of constitutional law,
focusing, for the most part, on the commerce
|TENTATIVE COURSE OUTLINE|
|Part A: A Short Overview of the
Law, Rational Choice, and Crime
to Economics and the Law
A very short overview of the Long History and Evolution of Laws. Laws, norms, perfect law enforcement as an implicit assumption of neoclassical economics. Law and Economics as a relatively new field.
|Shav: 1, 26
|1/11 - 1/25
I. Introduction: some basic economic tools for economics and the law, the net benefit maximizing model of rational choice, probabilities, expected penalties. Applications to criminal behavior and law enforcement. The prisoner's dilemma game.
|Shav: 1, 5
Tull: 1, 2
|PART B: Civil and Criminal Law|
Rights: Use and Exclusion Rights as Solutions to
Conflict, Commons, and Externalities Problems Economic advantages of rights of exclusion and
use. Two economic explanations
for the origins and limits of property rights. (Commons Worksheet: 123,
WK4, XLS, pdf)
|| Shav: 1, 2, 5, 13,
Tull: 1, 2, 4
|2-8 - 2-15||III. Enforceable Promises
and contracts as devices for extending economic
development. Importance of Law
Enforcement: Enforcement, Morals, and the Extent of
||Shav: 1, 2, 5, 13, 20, 24
Tull: 1, 2, 4
|2/20 - 2/22
||IV. Torts: On Rules for
Dealing with Accidents and Externalities
Legal and ethical differences between crime and torts. Alternative rules for dealing with accidents and other externalities. Strict Liability and Contributory Negligence. Vaughan v Menlove. Learned Hand Decision.
|Shav: 8, 10
Selected Tort Cases
|2/27||Review for First Exam|
|3/1 Exam||First Exam
Review of First Exam
|Part C: On the Public Law
VI. The Politics and
Economics of Public Law: Civil proceedings and
regulations as alternatives.Setting enforcment budgets
and enforcement budgets. Voter and interest group
interests in stronger regulations than provided by
civil law. The Coase Theorem with and without
Transactions Costs--are tort and regulatory law really
| Shav: 6
Tullock: Welfare and the Law
Median voter model (RDC)
|3/27 - 3/29
||Applications: VII. Anti-Trust Law and Patents: On the economics and politics of reducing and creating monopoly power.||Shav: 7
Standard Oil, Alcoa, ATT
|Part D: Constitutional
||Applications: VIII. Constitutional Law and Economic Law: the commerce clause, takings clause, equality before the law, and civil liberties in the United States. Advantages and costs of judicial independence.||Shav: 2, 3, 19
RDC 2003 ch 7-10
|Study Guide II|
Review for Second Exam
Second Exam (Comprehensive)
Review of Second Exam
and class overview: the forest from the trees lecture
RDC and BS (2006: ch 11)
|5/3 Paper||Final Paper Due (by midnite via e-mail)||firstname.lastname@example.org