Economic Analysis of Law
Readings and discussion will deploy microeconomic tools to provide students with a new perspective on law. A main distinction between economic analysis of law and economic analysis of markets is the proportion of relevant phenomena that can be objectively measured. One carload of wheat has just sold on the Chicago Commodities Exchange for some defined number of dollars, so nearly everyone can agree on its value. The law, however, often must ponder a severed arm, sight lost in one eye, exposure to a hazardous chemical that can conclusively be shown to have killed no one but increased the probability of death of a great number of people, and so on. Those things do not trade on markets, so it is much more difficult to value them, and to decide what to do to appropriately govern such risks. The course will focus on selected parts of law --environmental; property; intellectual property; contract; torts; punitive damages; criminal;as well as more specialized topics (e.g., uses & limitations of "value of life" concepts; the influence of law on marginal actors versus the influence of law on average actors & why it matters; law as a prospective tool "efficiencies" versus law as a retrospective tool, equities; subjective values & the jury). The course will not address fields where the relevant economics is well covered in another NULS course (e.g., antitrust; telecommunications). Economic analysis is applicable to instances where people behave rationally (not necessarily or even usually calculatively), given their goals and the information they reasonably choose to possess. Most economists agree that some people are rarely rational, and that none of us are rational all the time. Other fields (e.g., psychology; child studies) are more appropriate for studying irrational or subrational behavior. An unvarying assumption of Economic Analysis of Law will be that social processes rather than arbitrary conventions generate law, and that meaningful laws alter the way at least some individuals behave. If so, economics can be used (1) to identify non-obvious impacts of law and predict the effect of changing a statute or governing precedent in some proposed way, (2) to help understand why law evolved to the form we see and how it is likely to evolve in the future, or, more controversially, (3) to criticize certain statutes or rulings, the emphasis in this course will be on the first two of those. At a few appropriate junctures the application of economic tools to legal questions will be suspended briefly in order to explicate the tools themselves. During those class periods the students will be split into two groups, depending on the level of background knowledge. An additional period on Tuesday evening has been set aside to facilitate that split. On other weeks the Tuesday evening session will be used for optional review sessions, usually dealing with problem sets the class has completed. NOTE: You will notice that we do use economics in this course, but of a level generally covered during a first undergraduate course, and not even all of that. If you the economic content is worrisome for you, you could easily cover some of the background material in David Friedman's Price Theory, available free on line, during the break so that you would be up to speed before the course begins. Grading by examination; periodic team problem sets REQUIRED TEXTS David D. Friedman, Law's Order: What Economics Has to Do with Law and Why It Matters Terry L. Anderson & Fred S. McChesney (eds), Property Rights: Cooperation, Conflict, and Law
Title: Economic Analysis of Law
Faculty: Haddock, David D.
Section: 1 Credits: 4.0
Capacity: 65 Actual: 19