The George Washington University Department of Economics
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1 Pelzman: Econ Law & Economics 1 The George Washington University Department of Economics Law and Economics Econ Spring 2008 W 5:10 7:00 Monroe 351 Professor Joseph Pelzman Office Monroe 319 Office Hours By Appointment Office Phone jpelz@gwu.edu COURSE DESCRIPTION: This course is a graduate seminar focusing on the economic analysis of law. The readings draw heavily from both the traditional casebooks as well as from selected readings that lay out the history of study in this field and that focus more on contextual explanations than on mathematical proof. Law and economics has achieved prominence if not dominance within most of the legal academic world and certainly in the "high-brow" legal academic world. There is good reason for this. It provides an extremely compelling paradigm from which to understand the law. It provides normative and positive bases from which to evaluate the law and to suggest its reform. The domain of law and economics has expanded greatly over the past twenty years from its origins in economic efficiency and antitrust law to the entire spectrum of the law curriculum. One of its earlier expansions was in what one might call the first year curriculum: contracts, torts, property, and procedure. We're going to cover most of this. The concepts of a competitive general equilibrium, welfare optimality (including Pareto and Kaldor Hicks efficiency), game theory and the problems posed by market failure via externalities, monopolies and public goods are emphasized. REQUIRED TEXT: The books assigned for this class are essential and should be read thoroughly. Cooter, Robert and Thomas Ulen. Law and Economics. Addison Wesley Fourth Edition. (2004). Hereinafter (CU). Posner, Richard A. (Judge). Economic Analysis of Law. Aspen Publishers Sixth Edition (2003). Hereinafter (Judge P).
2 Pelzman: Econ Law & Economics 2 Shavell, Steven. Foundations of Economic Analysis of Law. Harvard University Press. (2004). Hereinafter (S). Wittman, Donald A., (ed.) Economic Analysis of the Law: Selected Readings. Blackwell Publishing. (2003). Hereinafter (W). REQUIREMENTS FOR THE COURSE: The grade for this course is based on 20% class participation and 40% on a mid-term exam and 40% on a term paper (maximum of 50 pages), applying one of the 5 topic areas listed in the syllabus to a particular legal case. Prior approval of your paper topic is required. I will distribute case material after the first week. The deadline for that approval is February 13, The Final paper will be due both in paper and electronic format on the date of your final exam. PDF copies of all readings, other than textbooks, will be placed on BB. READINGS AND LECTURE LIST: The dates to the right represent the dates when the material will be discussed in class. The dates on the syllabus are planned presentation dates. We may be able to speed up or slow down depending on the complexity of the topic.
3 Pelzman: Econ Law & Economics 3 READINGS INTRODUCTION 1/16 1/23 CU Ch. 1. Judge P Chs. 1 and 2. Thomas S. Ulen, Rational Choice Theory in Law and Economics, Encyclopedia of Law and Economics. Louis Kaplow, General Characteristics of Rules, Encyclopedia of Law and Economics. Margaret Brinig, Parent and Child, Encyclopedia of Law and Economics. Richard A. Posner, Values and Consequences: An Introduction to the Economic Analysis of Law, Chicago Law and Economics Working Papers (January, 1998). REVIEW OF MICROECONOMIC THEORY 1/30 2/6 CU Ch. 2. Katz, (ed) Foundations of The Economic Approach to Law, Steven E. Landsburg, The Armchair Economist: Economics and Everyday Life. Chs. 1 and 4 (1994). The Arrow Impossibility Theorem. Louis Kaplow & Steven Shavell, Fairness v. Welfare, 114 Harv. L. Rev. 961 (2001). Mathew Adler & Eric Posner, Rethinking Cost Benefit Analysis, 109 Yale L.J. 165 (1999). AN INTRO TO LAW AND LEGAL INSTITUTIONS 2/13 2/20 CU Ch. 3. W Part I Coase Theorem Ronald H. Coase, The Problem of Social Cost, 3 J. L. & Econ. 1 (1960). Ronald H. Coase, The Nature of the Firm, 4 Economica, pp Ronald H. Coase, Law and Economics and A. W. Brian Simpson, 25 J. Legal Stud. 103 (1996).
4 Pelzman: Econ Law & Economics 4 A. W. Brian Simpson, Coase v. Pigou Reexamined, 25 J. Legal Stud. 53 (1996). Matthew Spitzer & Elizabeth Hoffman, A Reply to Consumption Theory, Production Theory and Ideology in the Coase Theorem, 53 S. Cal. L. Rev (1980). Robert C. Ellickson, Of Coase and Cattle: Dispute Resolution Among Neighbors in Shasta County, 38 Stan. L. Rev. 623 (1986). ECONOMIC THEORY OF PROPERTY 2/27 3/5 CU Chs. 4 and 5. S Part I, pp Judge P Ch. 3. W Part II Property Rights Boudewijn Bouchaert & Ben W.F. Depoorter, Adverse Possession - Title Systems, Encyclopedia of Law and Economics. Guido Calabresi and A. Douglas Melamed, Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, 85 Harv. L. Rev (1972). Harold Demsetz, Toward a Theory of Property Rights, 57 American Economic Review, pp Robert C. Ellickson, Property in Land, 102 Yale L. J (1993). Richard A. Epstein, An Outline of Takings, 41 U. Miami L. Rev. 3 (1986). William E. Landes & Richard A. Posner, An Economic Analysis of Copyright Law, 18 J. Legal Stud. 325 (1989). Jeffrey Evans Stake, Decomposition of Property Rights, Encyclopedia of Law and Economics. MID-TERM EXAM 3/12 THE ECONOMICS OF CONTRACT LAW 3/26 4/2 CU Chs. 6 and 7. S Part III, pp Judge P Ch. 4. W Part IV Contracts and Warranties
5 Pelzman: Econ Law & Economics 5 Ian Ayres and Robert Gertner, Filling Gaps in Incomplete Contracts: An Economic Theory of Default Rules, 99 Yale L. J. 87 (1989). Stewart Schwab, A Coasean Experiment on Contract Presumptions, 17 J. Legal Stud. 237 (1988). Richard A. Posner, Gratuitous Promises in Economics and Law, 6 J. Legal Stud. 411 (1977). Anthony Kronman, Mistake, Disclosure, Information, and the Law of Contract, 7 J. Legal Stud. 1 (1978). Richard A. Epstein, Unconscionability: A Critical Reappraisal, 18 J. L. & Econ. 293 (1975). Melvin A. Eisenberg, The Bargain Principle and Its Limits, 95 Harv. L. Rev. 741 (1982). Paul L. Joskow, Commercial Impossibility, the Uranium Market, and the Westinghouse Case, 6 J. Legal Stud. 119 (1977). Daniel Freidmann, The Efficient Breach Fallacy, 18 J. Legal Stud. 1 (1989). THE ECONOMICS OF TORT LAW 4/9 4/16 CU Chs. 8 and 9. S Part II, pp Judge P Ch. 6. Guido Calabresi, Some Thoughts on Risk Distribution and the Law of Torts, 70 Yale L. J Guido Calabresi & Jon T. Hirschoff, Toward a Test for Strict Liability in Torts, 81 Yale L. J (1972). Robert Cooter, Unity in Tort, Contract, and Property: The Model of Precaution, 73 California Law Review, 1 (1985). Harold Demsetz, When Does the Rule of Liability Matter?, 1 J. Legal Stud. 13. Gary T. Schwartz, Reality in the Economic Analysis of Tort Law: Does Tort Law Really Deter?, 42 UCLA L. Rev. 377 (1994). Steven Shavell, Strict Liability versus Negligence, 9 J. Legal Stud. 1.
6 Pelzman: Econ Law & Economics 6 Steven Shavell, An Analysis of Causation and the Scope of Liability in the Law of Torts, 9 J. Legal Stud W. Kip Viscusi, The Value of Risks to Life and Health, 31 J. Econ. Lit (1993). THE ECONOMICS OF CRIME & PUNISHMENT 4/23 CU Chs. 11 and 12. S Part V, pp Judge P Ch. 7. Patrick van Cayseele & Roger Van den Bergh, Antitrust Law, Encyclopedia of Law and Economic. Wendy J. Gordon & Roger Bone, Copyright, Encyclopedia of Law and Economic. Stan Liebowitz, Path Dependence, Encyclopedia of Law and Economic. William H,. Page & John E. Lopatka, Network Externalities, Encyclopedia of Law and Economics. J. Gregory Sidak, An Antitrust Rule for Software Integration, 18 Yale. J. on Reg. 1 (2001). Michael A. Einhorn, Copyright, Prevention, and Rational Governance: File-Sharing and Napster, 24 Columbia Journal of Law and the Arts (2002) Richard A. Posner, Antitrust in the New Economy, University of Chicago Law & Economics Working Paper No PAPER DUE
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