Economic Analysis of Law
Economics 3339 Instructor: Barry Hirsch Phone: 999-8112
Spring 2007, MW 2:30-3:45 e-mail: bhirsch@trinity.edu
Chapman 105 Homepage: www.trinity.edu/bhirsch
Office: Chapman 419 Office hours: Wed 9:00-11:00am or by appt.
Other required readings, consisting primarily of legal cases and journal articles, are posted on Blackboard. Articles on current legal issues from the New York Times, Wall Street Journal, and other periodicals will be distributed and discussed in class as they appear. Links to several Internet law and legal studies sites are listed on my homepage.
Economics 3339 uses economic analysis to understand and interpret the evolution and application of legal principles. The defining characteristic of Economic Analysis of Law is that it uses a common framework and set of principles to analyze seemingly disparate areas of the law. Familiar economic concepts such as economic efficiency, opportunity costs, externalities, transaction costs, allocation of risk, and the law of demand shed considerable light on the application and effects of the law.
The course applies economic principles to five main areas of law: Property, Contracts, Torts, Legal Procedure, and Criminal Law. Analysis of court cases is used to facilitate the learning of economics and law. The Economic Analysis of Law will provide you with the foundation to use economics to understand law and the legal system. This course is especially valuable for students considering law school. All leading law schools have integrated economic analysis into their curriculum.
Course Requirements, Grading, and Honor Policy
Grades will be based on a weighted average of two in-class exams (23 percent each), a paper as described below (23 percent), a comprehensive final exam (25 percent), and a grade for class “queries” and participation (6 percent). Exams will consist exclusively of essay questions.
In general, all work and exams must be completed as scheduled. In the event of an emergency, a schedule change must be approved by me prior to the exam time or due date. Regular attendance, reading of assigned materials prior to class, and participation in class discussions are expected.
All students are covered by a policy that prohibits dishonesty in academic work. The Academic Integrity Policy (AIP) covers all students who entered Trinity before the fall of 2004. The Academic Honor Code covers all those who entered the fall of 2004 or later. All students are expected to behave with honor and not tolerate dishonesty by others. Any violation of academic integrity will be addressed using University procedures.
Exam and Assignment Schedule
Exam 1: Wednesday, February 21 (Sections 1-2)
Paper proposal: Wednesday, February 28
Exam 2: Wednesday, April 4 (Sections 3-4)
Paper due: Wednesday, April 25
Final exam: Wednesday, May 2, 2:00-5:00
Paper Assignment
Changes in technology and the emergence of the Internet have introduced a host of new legal questions, most involving traditional issues or principles in a new form or context. Your research paper should examine the economics of a current economic/legal issue involving intellectual property (IP) rights (i.e., patents, copyright, and trademark), technology, and/or the Internet. The paper should be approximately 6-8 pages. Although the exact form your paper takes will depend on the topic, most papers should take the following approach:
a) Identify the economic and legal issues to be analyzed.
b) Use economic theory and analysis to examine the economic and legal principles involved.
c) Describe past, present, and proposed law and legal principles that apply.
d) Based on economic and legal analysis, make a reasoned argument for what legal principles ought to apply with respect to the technology or intellectual property being studied.
At a later date, you will be further guidance on identifying and selecting a topic. I must approve your topic, as outlined in a paper proposal due at the beginning of class, Wednesday, February 28.
Course Outline
1. Economic Principles and an Introduction to Law and Economics
Dnes:
Posner, Economic Analysis of Law, 6th ed., 2003, Chs. 1-2.
MacFarquhar, “The Bench Burner,” New Yorker, Dec. 10, 2001.
“20 Questions for Judge Richard Posner,” How Appealing’s 20 Questions Site, Dec. 1, 2003.
2. Economics of Property Rights and Property Law
Dnes:
Demsetz, “Toward a Theory of Property Rights,” American Economic Review, May 1967.
Merrill, “Introduction: The Demsetz Thesis and the Evolution of Property Rights,” Journal of Legal Studies June 2002 (pt. 2). [Special issue devoted to “Evolution of Property Rights”]
Coase, “Problem of Social Cost,” Journal of Law and Economics, 1960.
Cases: Bryant v. Lefever, Sturges v. Bridgman, and Bass v. Gregory (all in Coase)
Fountainebleau v. Forty-Five Twenty-Five
Boomer v. Atlantic Cement
Spur v.
Ploof v. Putnam
Vincent v.
Optional (may be helpful for paper assignment):
Khan and Sokoloff, “The Early Development of Intellectual Property
Institutions in the
Gallini, “The Economics of
Patents: Lessons from Recent
Landes and Lichtman, “Indirect Liability for Copyright Infringement: Napster and Beyond,” Journal of Economic Perspectives, Spring 2003.
Exam 1: Wednesday, February 21 (Sections 1-2)
3. Contracts: Theory and Applications
Dnes:
Cases:
Sherwood v.
Williams v. Walker-Thomas Furniture
Peevyhouse v.
Hadley v. Baxendale
Jarvis v. Swans Tour
Dr. Thomas v.
Brubad v.
4. Tort Law, Accidents, and Products Liability
Dnes:
Cases:
Butterfield v. Forrester / Davies v. Mann /
Palsgraf v.
Union Oil v. Oppen
Escola v. Coca-Cola
Messick v. General Motors
Hersch and Viscusi, “Punitive Damages: How Judges and Juries Perform,” Journal of Legal Studies, January 2004.
White, “Asbestos and the Future of Mass Torts,” Journal of Economic Perspectives, Spring 2004.
Exam 2: Wednesday, April 4 (Sections 3-4)
5. Economics of Criminal Activity and Criminal Law
Dnes:
Miron and Zwiebel, “The Economic Case Against Drug Prohibition,” Journal of Economic Perspectives, 1995.
6. Legal Process and the Common Law: A Summing Up
Dnes:
Final exam: Wednesday, May 2, 2:00-5:00