Economics 522: Economics of Law Fall 2010 Dan Quint Professor: Dan Quint [email protected] 7428 Social Science, (608) 263-2515 Office hours TBA TA: TBA Class website: http://www.ssc.wisc.edu/~dquint/econ522 (Lecture notes, homeworks, etc. will be posted here) Lectures: Mondays and Wednesdays, 2:30-3:45 p.m., Education L196 Final Exam: Monday, December 20, 12:25-2:25 p.m., location TBA Grades: Grades will be based on occasional problem sets (20%); two in-class midterms (20% each); and a final exam on December 20 (40%). Readings: The “required” (whatever that means) textbook is Law and Economics (Fifth Edition), by Robert Cooter and Thomas Ulen (Addison Wesley 2007), available at the bookstore. Additional material is online at http://www.cooter-ulen.com. I don’t mind if you use an older version of the textbook, although the references in the book to the online material won’t match up. The bit of game theory I’ll use should be covered in whatever textbook you used for Econ 301 – I’ve listed the chapters in Intermediate Microeconomics: A Modern Approach by Hal Varian (W. W. Norton 2005). The papers listed on the outline below are all available online. I’ve placed stars next to those that I feel are most important. Most are listed with links through JSTOR, which requires a subscription and therefore may only work from on-campus computers. The rest will be placed on electronic reserve through the UW library system; starting on the first day of class, you should be able to access them at https://www.library.wisc.edu/course-pages/viewer/show/3656 or through your own My UW page. (Please let me know if you have any problem accessing any of the supplemental readings.) Another excellent book on law and economics is Law’s Order, by David Friedman (Princeton University Press 2001). I will refer to this book several times in lecture; you can think of it as an optional text for the course. It’s much less comprehensive than the textbook, but covers the intuition of what’s going on very well. (It’s also quite funny in places.) It’s a $24 paperback on Amazon, and available for free online as an e-book at http://www.daviddfriedman.com/laws_order/index.shtml Other Sources: Other good books on law and economics include An Introduction to Law and Economics, by Mitchell Polinsky (Aspen 2003), and Game Theory and theLaw, by Douglas Baird, Robert Gertner, and Randal Picker (Harvard University Press 1998). Throughout this course, we’ll be assuming that peoples’ behavior responds to the law. An interesting counterpoint is the view that it is often not the formal law, but informal social norms, which actually govern peoples’ behavior. We won’t get into this, but if you’re interested, check out Order without Law: How Neighbors Settle Disputes, by Robert Ellickson (Harvard University Press 2005); and for an example of such norms in action, see Daniel Nazer (2004), “The Tragicomedy of the Surfers’ Commons,” Deakin Law Review 29 (link). At the end of the semester, we’ll discuss behavioral economics and its interaction with the law. The paper listed on the syllabus (by Jolls, Sunstein and Thaler) is a good starting point; if you want more, check out Behavioral Law and Economics, edited by Cass Sunstein (Cambridge University Press 2000). Policy on joint work: I encourage you to work together on homeworks. However, I ask that each person write up his or her own answers separately. That is, you should feel free to discuss the questions and answers and come to a consensus on what you feel the right answers are; but then each person should go back and write up those answers individually, rather than passing around one set of answers that everyone copies. Also, if you do work with other people, please list who you worked with on the first page of the homework. Course Overview and Readings (stars indicate most important readings) INTRODUCTORY MATERIAL (2 lectures) Course overview, a bit of history (the Common and Civil Law traditions) * Cooter and Ulen ch 3 Robert Ellickson (1989), “A Hypothesis of Wealth-Maximizing Norms: Evidence from the Whaling Industry,” Journal of Law, Economics and Organization 83 (link) Efficiency, should the law be efficient?, introduction to theory of static games * Cooter and Ulen ch 1, ch 2 * Richard Posner (1980), “The Ethical and Political Basis of Efficiency Norm in Common Law Adjudication,” Hofstra Law Review 8 (link to online reserve) Peter Hammond (1982), “Review: The Economics of Justice and the Criterion of Wealth Maximization,” Yale Law Journal 7 (link) Varian ch 28.1 – 28.4 ECONOMICS OF PROPERTY LAW (6 lectures) * Cooter and Ulen ch 4 (theory) and ch 5 (applications)* Ronald H. Coase (1960), “The Problem of Social Cost,” Journal of Law and Economics 3 (link) Garrett Hardin (1968), “The Tragedy of the Commons,” Science 162 (link) * Harold Demsetz (1967), “Toward a Theory of Property Rights,” American Economic Review 57 (link) * Guido Calabresi and A. Douglas Melamed (1972), “Property Rules, Liability Rules, and Inalienability: One View of the Cathedral,” Harvard Law Review 85 (link) Lawrence Blume and Daniel Rubinfeld (1984), “Compensation for Takings: An Economic Analysis,” California Law Review 72 (link to online reserve) Some fun property law-related articles: the amputated leg, squatter’s rights, unbundling ECONOMICS OF CONTRACT LAW (6 lectures) * Cooter and Ulen ch 6 (theory) and 7 (applications) * Ian Ayres and Robert Gertner (1989), “Filling Gaps in Incomplete Contracts: An Economic Theory of Default Rules,” Yale Law Journal 99 (link) Hadley v Baxendale decision (link) A fun contract-related article: British company buying up souls ECONOMICS OF TORT LAW (5 lectures) * Cooter and Ulen ch 8 (theory) and 9 (applications) * Steven Shavell (1980), “Strict Liability versus Negligence,” Journal of Legal Studies 9 (link) Gary Schwartz (1994), “Reality in the Economic Analysis of Tort Law: Does Tort Law Really Deter?” UCLA Law Review 42 (link to online reserve) W. Kip Viscusi (1993), “The Value of Risks to Life and Health,” Journal of Economic Literature 31 (link) THE LEGAL PROCESS AND CRIMINAL LAW (3 lectures) The Legal Process * Cooter and Ulen ch 10 Kathryn Spier (1994), “Pretrial Bargaining and
View Full Document
Unlocking...