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Law & Economics (LAW-632-001)
First-year elective. FAQs Is this class only suited for students with undergraduate or career background in economics, business, or finance? No. It is intended to be accessible to students without a prior background in these subjects. It is likely an easier class if one has had basic microeconomics and is conversant in the way of “thinking” in economics lingo, but it is intended for the broad range of WCL students. Is there math? There is arithmetic, and problems/examples in the text that require basic arithmetic. There are graphs and tables that have to be worked through. There is no finance math such as present value or statistics formulas; any relevant ideas are presented purely as concepts, in language and some graphs. Again, if you understand the basic logic of supply-demand graphs, that is useful but not essential. Is this class about legal doctrine? Only indirectly. We are studying a way of thinking about the law – a way of looking at it as though we were social scientists studying the “law” from the outside. Practicing lawyers, judges, clients, etc., are what we study – trying to explain their behavior using the criteria and methods of economics. We look at some basic legal doctrines, such as contract damages, in order to apply economics concepts, but we are not engaged in a study of doctrine as such. This is a course in the intellectual methods of the study of law, and only indirectly a study of law as doctrine. That is why the course starts out with a broader discussion of jurisprudence and the intellectual history of how to study law as a social enterprise, in which law and economics is just one approach. Is there any practical value to law and economics in the real world of practice? Not directly. Law and economics is not the study of finance or business law; most of the topics used as material in this course are about traditional common law subjects such as tort or contract. This is a course in the intellectual methods by which law professors study the law and its actors. Law is the raw material to which we bring the methods of economics – but studying it as a phenomenon, viewed from the outside. If you are on the “inside” of law, the rat being studied in the maze, you have to know and obey the rules as they exist, and this will not likely to help you very much in any direct way. If you look very hard for practical applications in the sense of helping you litigate cases or do business deals, you are likely to be frustrated. If, on the other hand, you are trying to figure out how to structure rules, regulations, and doctrine in order to make them efficient, effective, and avoid unpleasant unanticipated consequences, these are useful ideas, because they are the tools of public policy in law. If it’s not practical, why spend my tuition dollars? Quite possibly you shouldn’t. This is unabashedly abstract intellectual stuff, without apology. However, keep in mind that this kind of “consequences,” “incentives,” etc., thinking permeates the law as an intellectual enterprise, including the way in which practicing lawyers, judges, rule-makers and regulators (especially regulators, who write rules and have to think about effectiveness and unintended consequences) think about contemporary legal issues. In today’s world, all these real-world actors speak this kind of language of “consequences.” They use this kind of shorthand taken from their own courses in law and economics, and doctrinal courses in their legal education that taught them to speak in this kind of jargon. There are reasons why you don’t want to be left out of that conversation. Ask yourself, can I explain why this very question – “why should I take this course?” – involves “information asymmetry”? Can I explain the “risks” involved in taking, or not taking, this course? In today’s world, many lawyers, judges, and regulators speak this language as though breathing. And yet it is not practical law. How will I be graded? In a standard proctored final exam, two hours, on the same grading basis as the other 1L electives. There is fair amount of abstract reading that requires close attention and often pencil and paper to work through the numbers in the problems. There will be occasional in class quizzes or homework assignments – short, but important – graded on a pass/not pass basis. The exam will be mostly problem-based, although there might be one “think” question drawing on deeper intellectual ideas in the course materials. Will there be assigned reading for the first class? Yes, it will be posted in December, but it is also on the syllabus that has already been posted.
Overview of basic microeconomics, including assessment of efficiency and equity logic; Coase Theorem; evaluation of incentive models, risk allocation, and aversion. Applications of economic analysis to diverse legal fields.
Textbooks and Other Materials
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First Class Readings
Not available at this time.
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