ECONOMICS 604 Law and Economics
Winter 2012-13 Instructor: Ram Singh
Office: 122, Department of Economics;
Email: [email protected]
Office Hours: Will be announced shortly.
Course Description
This course provides an introduction to how legal rules play important role in shaping and coordinating of economic activities. The course discusses the ef- ficiency implications of various branches of the law. The focus of the course will be on the economic analysis of the contract law, the law of torts including acci- dent and product liability laws, the property law including the power of eminent domain, and the litigation.
The reading material and classroom lectures will use mathematical tools of economic analysis, especially the optimization techniques, and some elementary applications of game-theory. The models of analysis make use of legal concepts.
Teaching and examination will NOT be based on legal facts.
We will use two textbooks:
1. Robert Cooter and Thomas Ulen , Law and Economics, latest or avialable edition.
2. Steven Shavell (1987), Economic Analysis of Accident Law, Harvard Uni- versity Press.
3. Miceli, Thomas J. (1997) The Economic of the Law, Oxford University Press.
The first one is an introductory book on Law and Economics. We will use the last two books in parts. The first one covers economic analysis of contract law, accident law, and product liability, property law and the litigation. While the second book focuses on the economic analysis of accident law, liability, etc. We will use some research papers as well. The relevant papers will be made available as pdf files.
The structure of the course is as follows:
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1. Law and Economics:
Introduction to Law and Economics; Efficiency criteria in Welfare Eco- nomics; Coase theorem.
2. Contract Law:
Need for a contract; Legal contract; Contracts and Economics; Efficient contracts; Complete and Incomplete Contracts; Reliance; Damages mea- sures and their efficiency properties; Contracts and Courts.
3. Tort Law/Liability Rules:
Tort law; liability rules versus property rights; accident law; product liabil- ity; efficiency properties of liability rules; efficiency-compensation trade-off.
4. Property Law:
Property Rights and their role in resource allocation; Transaction costs and Coase theorem; Legal remedies for breach of property rights; Eminent Domain.
5. Litigation:
The nature of litigation; litigation over compensation under eminent do- main.
Exams and Grading: One Term-Paper or a Mid-term exam (30 marks), and the final exam (70 marks). The issue of Term-Paper Versus Mid-term exam will be settled shortly.
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