University of Vermont Department of Economics Course Outline. Professor Catalina Vizcarra

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1 University of Vermont Department of Economics Course Outline EC 135 Professor Catalina Vizcarra Time: M/W/F 12:50-13:40 P.M. 332 Old Mill Spring 2013 Phone: Office Hours: W/F 11:00-11:45 A.M. (or by appointment) Law and Economics The economic analysis of the law is a field of study that applies microeconomic theory to the study of legal rules and procedures. The course focuses on the economic impact of a wide range of legal institutions giving special emphasis to the allocation of property rights. It also discusses various sorts of liability rules, remedies for breach of contract, important criminal law institutions like the death penalty, and whether fines or imprisonment is the most efficient way to deter crimes. Required Textbook Cooter, Robert and Thomas Ulen. Law and Economics. 6 th ed. Addison-Wesley, Inc Course Evaluation Class Participation: 30% TBA Midterm Examination 30% Wed. February 27 th Final Examination: 40% May 10 th (10:30-12:30 P.M.) Class participation will be evaluated through quizzes and participation in class discussions. The final exam is comprehensive.

2 Tentative Course Outline 1. Introduction. What is the Economic Analysis of the Law? (1 class) Cooter & Ulen, Ch Review of Microeconomics (1 week) Maximization, Equilibrium and Efficiency. Market Failures. Game Theory (basic concepts). Cooter & Ulen, Ch.2 3. Introduction to Legal Institutions (1 week) The Civil Law and the Common Law Traditions. Legal Disputes (basic concepts). Cooter & Ulen, Ch.3 Eisenberg, Melvin A., The Nature of the Common Law (1989). Merryman, John H., The Civil Law Tradition: An Introduction to the Legal Systems of Western Europe and Latin America (2 nd. Edition, 1985). 4. Property Rights (3 weeks) a. An Economic Theory of Property. The legal concept of property. Bargaining Theory. The Coase Theorem. Transaction Costs. The Normative Coase and Hobbes Theorems. Remedies. Public vs. Private Goods. Cooter & Ulen, Ch. 4 2

3 b. Topics in Property Law. Establishing and Verifying Property Rights. Transferring Property Rights. Breaks in the Chain of Title. What may owners do with their property? Bequests and Inheritances. Using (somebody else s!) Property. Cooter & Ulen, Ch. 5 Coase, Ronald. The Problem of Social Cost, Journal of Law and Economics (1960). Calabresi and Melamed. Property Rules, Liability rules, and Inalienability: One View of the Cathedral. Harvard Law Review, vol. 85 (1972). Merrill, Thomas W., and Henry E. Smith, What Happened to Property in Law and Economics? 111 Yale L.J. 357 (2001). 5. Contract Law (3 weeks) a. Contract Law. Bargain Theory. An Economic Theory of Contract. Cooter & Ulen, Ch. 8 b. Topics in Contract Law. Remedies as Incentives. Formation Defenses and Performance Excuses. Cooter & Ulen, Ch. 9 Hermalin, Benjamin E., Avery W. Katz, and Richard Craswell. The Law and Economics of Contracts, in A. Mitchell Polinsky and Steven Shavell, eds. Handbook of Law and Economics, v.1 (2007). Posner, Eric. Economic Analysis of Contract Law after Three Decades: Success or Failure. 112 Yale L.J. 829 (2003). 6. Tort Law (3 weeks) 3

4 a. Tort Liability. Economic Essence of Tort Law. The Traditional Theory. Economic Theory of Tort Liability. Cooter & Ulen, Ch.6 b. Topics in Tort Law. Extending the Economic Model. Computing Damages. Tort Law Reform? Cooter & Ulen, Ch.7 Landes, William, and Richard A. Posner. The Economic Structure of Tort Law. (1987). Shavel, Steven. Liability for Accidents, in A. Mitchell Polinsky and Steven Shavell, eds. Handbook of Law and Economics v. 1 (2007). 7. The Economics of Crime (2 weeks) a. En Economic Theory of Crime and Punishment. The Traditional Theory of Criminal Law. An Economic Theory of Crime. b. Topics in the Economics of Crime and Punishment. Crime in the U.S. Imprisonment or Fines? The Death Penalty. Cooter & Ulen, Ch 12, 13 Becker, Gary. Crime and Punishment: An Economic Approach. 76 J. Pol. Econ. 169 (1968). Posner, Richard. An Economic Theory of the Criminal Law. 85 Colum. L. Rev (1985). Note: It is the University policy to allow students to honor their religious holidays. Students should submit in writing by the end of the second full week of classes 4

5 their documented religious holiday schedule for the semester so as to arrange for any necessary make up work in advance. 5