MAHLMANN/ZAMIR
THEORY AND PRACTICE OF THE ECONOMIC ANALYSIS OF LAW
POSSIBLE TOPICS FOR SEMINAR PAPERS
1. General Approaches
Overview paper on classical, behavioural, neuro-economical approaches.
2. The Assumption of Economic Rationality
Standard economic analysis assumes that people are rational maximizers
of their own utility. This assumption consists of a cognitive element
(“thin rationality”, the assumption that people’s preferences meet the
requirements of completeness, dominance, invariance, etc.), and a
motivational one (“thick rationality”, the assumption that ultimately
people only care about their own utility). Students should analyze the
fruitfulness and limitations of this assumption, as well as ways to
overcome these limitations.
3. Theories of Human Motivation
Overview about classical and new theories of human motivation,
supplementing and/or challenging the idea of economic rationality as
prime human motivation.
4. Economic Analysis and Commensurability
Much of the attractiveness of economic analysis stems from the
possibility of quantifying people’s preferences in monetary terms, which
in turn facilitates the use of mathematical models to explain and predict
human behavior, as well as to derive normative and policy implications.
This raises the debate about the comparability and commensurability of
values.
5. Economic Analysis of Law and the Endowment Effect
There are competing explanations for the Endowment Effect and some
economists actually doubt its existence. It is relevant for the Coase
theorem as well as to other legal issues. There is some, but not much,
overlap between this topic and the topic of default rules.
6. Economic Analysis of Default Rules (jus dispositivum)
Students may focus on contract default rules, or extend the topic to
default rules in other legal spheres. Since Ayres & Gertner’s seminal
paper, there is much scholarly writing on the subject, ranging from
standard models to behavioral studies of the enormous effect of defaults
on people’s behavior. It is also possible to reformulate the topic as
“Default Rules – Economic and Behavioral Perspectives”
7. Economic Analysis and Redistribution through Private Law
This topic, or a variation thereof, may deal with both economics’ attitude
to distributive issues (a huge subject of its own), and with the more
concrete issue of using private law doctrines – contracts, torts, property
law – to attain redistribution. Kaplow and Shavell’s article should serve
as the starting point for the research.
8. Economic Analysis of the Good Faith Purchaser Doctrine
All legal systems face the question of how to resolve the conflict between
original owners and good faith purchasers. The question arises with
respect to various assets (movables, land, and money), various
circumstances in which the original owner lost the asset, and various
circumstances, in which the purchaser got it (buying from a merchant,
receiving a gift). There is considerable economic analysis of this issue.
9. Economic Analysis of Pre-contractual Disclosure Duties
A classic topic and one in which economic analysis made its first
contributions (Kronman’s seminal article). It would be interesting to ask
the students to examine the extent to which Kronman’s theory can
explain judicial decisions – in this case the decisions of Swiss courts (a
comparable study was made by Krawiec & Zeiler in the US, but the
students obviously need not do a large-scale empirical study).
10. Economic Analysis of Gratuitous Contracts
Gratuitous contracts seem to contradict the assumption that people are
rational maximizers of their own utility. The economic analysis of such
contracts is also influenced by the hostility of the common law to the
enforceability of contracts without “consideration”. There have
nevertheless been economic analyses of such contracts.
11. Enforced Performance (or “Specific Performance”) as a Remedy
for Breach of Contract
This is one of the most controversial issues in economic analysis of
private law, revolving around the notion of ‘efficient breach’. Part of the
debate is within the economic discourse, and part of it has to do with the
tension between economic analysis and the deontological duty to keep
one’s promise.
12. Damages/Compensation for Breach of Contract
There is a vast literature about the efficient measure of monetary relief for
breach of contract. This is a superb demonstration of the crucial insights
of economic analysis, along with its limitations.
13. Fault and No-Fault Tort Liability
Much of the economic analysis of tort law revolves around the choice
between negligence-based and strict liability (with our without
comparative or contributory negligence). While one may be skeptic about
the power of these analyses to explain extant law, they certainly further
our understanding of the pertinent issues.
14. Economic Analysis of Freedom of Speech
There is considerable literature on the subject, some of it by Richard
Posner. This topic highlights the contribution – and limitations – of
analyzing human rights issues from an economic perspective.
15. Private Property Rights – Economic Perspective
There is much literature on the economic justifications for private
property. The positive and negative outcomes of allocating private
property rights in assets (compared to no rights and collective rights),
including the issues of ‘Tragedy of the Commons’ and ‘Anti-commons’.
16. Economic Analysis of Governmental Takings of Private Property
There is considerable economic analysis of the very justification for the
taking of private property for public purposes (hold up and assembly
problems), and the need to compensate for such taking. Michelman’s
seminal article may serve as a starting point for the discussion of
compensation.
17. The Economic Analysis of Deterrence through Criminal Law
A vast literature, stemming from Gary Becker’s seminal article, discusses
the use of criminal law to deter harmful behavior. Many of the normative
implications of this literature are at odds with people’s basic intuitions
and with the existing criminal law system.
18. The Impact of Economic Analysis on Swiss/Continental Law
The role of economic analysis of law is very different in different parts of
the world. There are some analyses of why economic analysis is much
less influential in Europe than in North America. This is a more external
view on economic analysis of law from a cultural or sociological
perspective.