Economic Analysis of Topics in Law

Introduction

How should contracts be optimally designed? What is a good litigation strategy? How should you do business in countries with dysfunctional courts? What is the economic rationale behind our existing legal rules?

In this course, you will learn to use economic theory to analyze a business case involving legal institutions. We will analyze how firms can best adapt to the legal environment and how markets are affected by legal institutions. We will also use economic theory to explain why our legal rules exist. Economic analysis is a powerful tool to understand and interpret the law and can be used to formulate convincing legal arguments.

Course content

• Contracts. How can we design effective contracts? How can you do business in countries where contracts are difficult to enforce? How can economic analysis help us to understand contract law?
• White-collar crimes. How does the legal system affect incentives to commit crimes such as tax evasion, money laundering, fraud, and corruption? How can companies avoid being involved in crimes? What is the economic rationale behind criminal law?
• Tort law. When should you sue? How much are you entitled to in damages? How can tort law be explained by economic theory?
• The legal process. Is it too expensive to file a lawsuit? When should you settle? How do rules governing the legal process shape actors' incentives to comply with laws and contracts? What is the economic rationale behind our procedural rules?