Law and Economics
Course code
old course code
Course title in Estonian
Õigus ja majandus
Course title in English
Law and Economics
ECTS credits
Assessment form
lecturer of 2021/2022  Autumn semester
Phillip W. Graves (language of instruction:English)
lecturer of 2021/2022  Spring semester
lecturer not assigned
Course aims
- To provide students with a broad overview about the interconnections between laws, economics, markets, crime and punishment, and public policy.
- To provide students with an overview of the key concepts and tools used to analyze how legal rules affect the behavior of people and institutions, and how they in turn effect the efficiency of a legal and regulatory system.
Brief description of the course
This course will provide a broad overview of the scholarly field known as “law and economics”. The focus will be on how legal rules and institutions can correct market failures. This course will also give a general overview about the interconnections between Law and Economics in a globalizing world. Discussed are the economic function of contracts and, when contracts are not feasible, the role of default rules and legal remedies to resolve disputes. Also discussed is the choice between encouraging private parties to initiate legal actions to correct externalities and governmental actors, such as regulatory authorities. The economic motive to commit crimes and the optimal governmental response to crime will be studied. Specific topics within the proceeding broad themes include: the tradeoff between certainty and severity of punishment, the choice between ex ante and ex post sanctions, negligence versus strict liability, property rights, remedies for breach of contract, and differences between rules for allocating litigation costs.
The lectures will introduce and discuss the following topics:
1. Economic theory, efficiency, methodology, and the relationship between law and economics.
2. Defining and enforcing rights.
3. Ex post vs. Ex Ante.
4. Coase theorem and nuisance law.
5. The economics of property law.
6. The economics of tort law.
7. Value of life.
8. The economics of contract law.
9. The economics of litigation.
10. The economics of law enforcement, crime and punishment.
11. Policy making.
Learning outcomes in the course
Upon completing the course the student:
- is able to explain the fundamental concepts of Law and Economics;
- is able to explain the allocation of risk in contract;
- is able to explain the economics of liability;
- is able to explain the economics of crime and punishment;
- is able to explain the economics of regulation and public choice;
- understands economic analysis and the relationship to the law making process;
- understands the importance of legal institutions to the functioning of the markets.
Phillip W. Graves