Class Outline: Economic Analysis of Law 1997

School of Law

Santa Clara University

D. Friedman

This outline contains what I said, what I think I said, and what I ought to have said, so discrepancies between what it contains and what you remember are not necessarily due to your poor memory.



1/28/97: Insurance




2/4/97: Strategic Behavior


Second Step

At the bottom of the tree, player 2 on the second round knows that he is better off confessing, so we can eliminate the "don't confess" option (grey on First Step figure), and similarly for player 1. After eliminating those branches, we are left with the Second Step figure, and each party, knowing what will happen at the second play, can calculate he is better off confessing. An example of subgame perfect equilibrium.




Summary before First Midterm





















Forward to
Part II of the Outline

Back to the Table of Contents

Back to the class home page