David D. Friedman
- I. Mechanics of Course:
- II. Sketch of course:
- III. What is economics?
- IV. What is the Economic Analysis of Law?
- V. What is economic analysis of law good for? Why should
people study it?
- VI. What is the relation between economics defined in that
way and economics more narrowly defined-what you find in the
typical micro text?
- VII. What is economic efficiency? (Posner calls it "Wealth
- I. Externalities: The conventional analysis
- II. Externalities in the law
- III. Coasian critique of externality theory: An argument in
- IV. Some further implications:
- V. Damages vs fines:
- VI. Fines vs Damage Payments in summary:
- VII. Other Coasian stories:
- VIII. Coase vs Pigou-a summary:
- IX. Another take: It's all a matter of information
2/4/97: Strategic Behavior
- I. Insurance: why it is interesting:
- II. Why insure?
- III. The economics of risk aversion:
- IV. Von Neumann and Morgenstern formalized this argument in
the form of Von Neumann utility.
- V. One problem with insurance: Moral Hazard.
- VI. The other problem with insurance: Adverse
- VII. Application to product liability. Who is liable for
damage done by exploding Coke bottles?
- VIII. We have been running through arguments about how to
decide whether or not the law should force Coke to "insure" its
customers against exploding Coke bottles. Why doesn't the law make
these calculations for ordinary insurance, deciding for you
whether you are insured or not?
- IX. Why not apply the same analysis to tort
- I. Strategic behavior: The problem (see my webbed
- II. Examples:
- III. Ex Ante, ex Post:
- IV. Bright lines: Rules v Standards.
- VI. "Impossible attempts": Should there be a penalty for
attempting to kill someone by a method that cannot work?
- VII. Property rules vs liability rules:
- I. What is economics?
- II. What is economic efficiency (aka "wealth
- III. Externalities: Why inefficiency happens and what to do
- IV. Insurance: A way of thinking through issues of risk and
- V. Strategic behavior: See my Price Theory Chapter for
- VI. Ex Post/ Ex ante, bright line rules vs fuzzy
- VII. Property rules (allocation by consent of the owner) vs
liability rules (allocation by someone else taking, owner suing
for damages). Why each makes sense for some problems.
- I: What is property?
- II: Determining property rules involves a set of
- III. Property rules--including Intellectual Property (I.P.),
primitive societies, et multae caetera:
- IV. Intellectual Property Law: What the law is.
- V. The Economics
- VI. Coase Article: Classic article that laymen, or at least
econ majors, can read.
- O. Digression on simplified pictures.
- I. Contract law: Why have it?
- II. Why should we or shouldn't we enforce contracts if we
- III. Is there a contract there to enforce?
- IV. If we do want to enforce the contract, how do you fill
in the details?
- V. The Marriage Contract:
- VI. Why does it exist: The reason for long term
- VII. What happened?
- III. The economics of wedding rings-argument from an article
by Margaret Brinig (not in the packet):
- IV. Adoption market:
- V. 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.
- I. Tort Law:
- II. "Wrongful"
- III. Causation complications:
- IV. Liability
- V. Complications in tort damage analysis.
- VI. Liability alternatives
- VII. Summary of implications:
- VIII. Amount of damage payment awarded:
- IX. My Explanation 1: Punitive damages are for very
- X. My explanation 2: Punitive damages are for strategic
- XI. Why pay tort damages to the victim instead of as fines
to the state?
- XII. The problem of measuring and compensating damages for
loss of earning capacity, death, injury.
- XIII. Criminal Law:
- XIV. Why benefits to criminals count:
- XV. Rich vs Poor--should they pay the same fines? In some
cases yes, but in others no, because:
- XVI. Marginal deterrence: My article (with William Sjostrom)
is accessible from the web page.
- XVII. The Paradox of Efficient Punishment:
Review for Midterm
- I: Determining property rules involves a set of
- II. Coase Article: Explains the bicausal problem, the "all
alternatives imperfect" problem, argues that the common law courts
got things about right.
- III. Contract Law
- IV. The Marriage Contract:
- V. Tort Law: Four issues arise:
- VI. Criminal Law
- VII. The Paradox of Efficient Punishment:
- I. Antitrust Law
- II. The civil/Criminal puzzle: Again.
- III. The Rest of the Icelandic Case
- IV. The rest of the 18th century case: Punishments.
- V. Norms as a substitute for laws: The Ellickson
- VI. Summary of last week:
Summary of the Course
Back to the class home page
- I. Three projects:
- II. Ideas:
- III. Coaseian lessons: A way of thinking about these
- IV. We should be thinking in terms of three mechanisms for
dealing with problems:
- V. Insurance issues: allocation of risk runs through much
of the law.
- VI. Ex ante/Ex Post another issue that runs through the
- VII: Property:
- VIII: Contract
- IX. Tort Law
- X. Crime:
- XI. Antitrust law
- XII. Alternative institutions:
- XIII. Is the common law efficient? The draft of my Posner
article is available to any of you who are interested.