FE486A – Law and Economics Review topics Exam 1
Chapter 1: Introduction to Law and Economics
Chapter 2: A Brief Review of Microeconomics
1) Prisoner Dilemma Games
2) Normal Form games and Nash equilibrium
3) Market failure (monopoly, externalities, public goods and informational asymmetries)
4) Potential Pareto Improvement or Kaldor-Hicks Efficiency
Chapter 3: A Brief Intro to Law and Legal Institutions
1) Common Law versus Civil Law
2) Courts of Record
3) Appellate courts
4) Preponderance of the evidence
5) Beyond a reasonable doubt
Chapter 4: An Economic Theory of Property
1) Problems with weak property rights (externalities)
2) Problems with strong property rights (holdout)
3) Coase Theorem and Bargaining (with and without transactions costs)
4) Efficient bargaining and the role of property rights
5) Normative Coase and Hobbes Theorems
6) Types of transaction costs
7) Compensatory money damages (when efficient – relation to transactions costs)
8) Injunction (when efficient – relation to transactions costs)
Chapter 5: Topics in the Economics of Property Law
1) Intellectual property (IP) law – characteristics (expensive to produce cheap to transmit).
2) Info is a public good (characteristics of a public good)
3) How to encourage IP.
4) Patents (duration and breadth) – economic justification for patents and for limiting years of patent
5) Copy rights – why limit? Tracing… and what reasonable ‘fair use’ protects (and the impact of fair use on transaction costs).
6) Trademarks – why no limit? Why have a trademark (what social value is created)
7) Trade secrets
8) Fugitive property – ownership rules (first possession, tied ownership) – issues of transaction costs and the tragedy of the commons
9) Stolen property – owned by possession or ‘good faith’ and the impact on who bears responsibility to protect property (when should we use which?).
10) Adverse possession – squatters rights (benefits and costs)
11) Estray Statutes – search costs
12) Eminent Domain – requirements (compensation and public use)  may lead to holdout
Five legal cases and four papers may also appear on the exam.