Law and Economics Outline

 
Look up law and economics outlines online
Print law review article
Look at practice test
 
Intro
·         Posner Preface, Chapter 2
·         Professor’s Supplement A to E
Economic Approach to Legal Analysis
·         Posner, Chpts 1 and 8
·         Professor’s Supplement F to L
Contracts
·         Posner, Chapter 4
·         Professor’s Supplement M to U
Adoption
·         Posner, Chapter 5
·         Professor’s Supplement V to Y
Torts
·         Posner, Chapter 6
·         Professor’s Supplement Z to HH
Working with and against Economists
·         Professor’s Supplement II to WW
Other
·         Professors Supplement XX to BBB
 
 
Point/Counter-point:  smoking ban
Opponent:
Allowing people to smoke in KC will prevent them from driving 30 miles to smoke
Smokers are spending extra gas, time, etc. and will have less money to spend at the restaurant they go to
May increase the drinking and driving
Decreased revenues and profits for bar owners because smokers will find a substitute
Proponent:
o       Can allow someone to start private smoking clubs
o       Lowers health care costs for people who work at bars/restaurants
o       May end up with some smokers in the margins who quit because of it
o       Smoking is an addiction and any market for it is irrational
o       Diminishing instances of lung cancer
§         Also, diminishing amount taxpayers have to spend on Medicaid and Medicare programs because fewer people will have lung cancer
o       Is this an initial allocation of rights – is the ban saying that being free from pollution is the more important right and we should work from there
o       Collective action problem – once one bar is smoking, they all will be, so there is no good chance to have a market for non-smoking bars
 
Fundamental questions for exam:
–         Why do we have a legal rule instead of letting the market take care of something?
–         Once we have a legal rule, what are the externalities involved? 
 
 
Class Highlights
 
4 main tenants
·         Markets clear
·         People maximize
·         Rent seeking behavior
o   Job of lawyer to protect client’s rents from being grabbed by someone else
·         Diminishing marginal returns
·         Repeat transaction vs. one time purchasers
o   Insentives to breach
o   Do peole have the same interests or do people have divergent interests
Main point
·         Common law is best explained as a system for maximizing the wealth of society
Statutory is less likely
·         Statutory is rent seeking behavior by a special interest group
·         Sometimes laws necessary to overcome market failures
·         Common law rules
o   Most like efficient
o   Maximize wealth as a whol