Table of Contents
Lecture Notes
Economic Analysis of Law
Spring 1997
Santa Clara University
Department of Economics
Professor D. Friedman

[These notes will be updated about every week]
0. Course structure
I. What does economics have to do with law?
II. What is the economic analysis of law?
III. What is economic Efficiency
IV. Why markets are efficient:
VI. Systems of private norms
VII. Externalities: The central planning solution:
VII. Externalities, the Pigouvian solution:
VIII. The Coaseian critique: Act I: Nothing Works
IX. Act II: Everything works.
X. It all depends--on transaction costs. Consider one factory and twenty resorts.
XI: Ways in which a court might think about dealing with externalities:
XII: Property Rules vs Liability Rules: An application of the Coasian approach.
XIII: Insurance issues.
XIV: Ex ante/ex post enforcement.
XV: Review:
XVI: Rent Seeking
XVII: Strategic Behavior

Property Law

O. Digression on simplified pictures.
I. Property: The institution, not "vs liability"
II. Costs: Why everything isn't property.
III. Benefits: Why Elasticity Matters
IV. Intellectual Property: The Law
V. Intellectual Property: The Economics
VI. Trade Secrets:
VII. Coase Article

Contract Law

I. Contract Law: General issues
III. Does a contract exist?
VII. What should contract law be like? Filling in the blanks
IV. Consumer fraud, liability, etc.
V. Information and Incentives: Laidlaw v Organ
VI. Contracts, a summary.
VI. The marriage contract
VII. The economics of wedding rings-argument from an article by Margaret Brinig (not in the packet):
VIII. The puzzle of the decline of marriage:
IX. Adoption market:
X. It is often claimed that, when I have a child, I impose net costs on others, so that leaving people free to decide how many children they have will result in overpopulation.
XI. Regulation of Sex. Why do we do it? Adultery laws, fornication laws, ...

Tort Law

I. What is a tort?
II. "Wrongful"
III. Causation complications:
II. What legal rule will get the efficient number of accidents?
VI. Liability alternatives
VII. Summary of implications:
VIII. Coase or Pigou
IX. Why are people sometimes found negligent?
X. Amount of damages That Should be Awarded: Consider the one sided (i.e. Pigouvian) tort for convenience here.
VIII. Amount of damage payment awarded:
IX. My Explanation 1: Punitive damages are for very deterrable torts.
X. My explanation 2: Punitive damages are for strategic torts.
XI. Why pay tort damages to the victim instead of as fines to the state?
XIII. The problem of measuring and compensating damages for loss of earning capacity, death, injury.

Criminal Law

I. Differs from tort law in that:
II. Why Have Criminal Law: First Try
III. The theory of optimal punishment part I: Price+Prodn fn->TC.
IV. Part II: TC ->optimal punishment:
V. The intuition:
VI. Complications.
VII. Taking Account of Marginal Deterrence.
VIII. How many innocents should we convict?
IX. The Paradox of Efficient Punishment:
X. Why benefits to criminals count:
XI. Why have criminal law anyway?
XII. Should we abolish the criminal law?
XIII. A real world example of a pure civil system--more private than ours. For details, see my article
XIV. Eighteenth Century England: The puzzles
XV. Shasta County California:Ellickson Book
XVI. Medieval England:
XVII. The civil/Criminal puzzle: Again.
XVIII. Summary of last week:

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