Law and Economics (BØK501)
Law and Economics is one of many interdisciplinary sciences concerning law (such as Law and Psychology and Law and Philosophy). Law and Economics analyses the law using economic methods. Since the two subjects are so interconnected, Law and Economics gives us a better understanding of both subjects. Law and Economics offers both positive and normative economic analysis of law.
NB! This is an elective course and may be cancelled if fewer than 10 students are enrolled by August 20th for the autumn semester.
Course description for study year 2024-2025. Please note that changes may occur.
Course code
BØK501
Version
1
Credits (ECTS)
10
Semester tution start
Autumn
Number of semesters
1
Exam semester
Autumn
Language of instruction
English
Content
What is economics and what is law? Economic analysis and legal method.
What is money and how is money created? What problems does money solve and what problems can money printing create? Fiat money, CBDC, cryptocurrencies in general and so-called "Shitcoins", the gold standard and the bitcoin standard. Economic and legal analysis of money.
The benefits of capitalism. Disadvantages of socialism. Capital accumulation and the calculation problem.
The broken window fallacy.
What is capital?
Inflation and taxation without representation.
Value is subjective.
Prices.
Deadweight loss.
Any rule of law should be broken if it is in your self-interest to break it.
Criticism of mainstream economics.
The importance of marginal analysis.
Diamond-water paradox.
Economic efficiency.
Democracy and anarchy.
Property rights: Property rights should accrue to those who value them most. Threat values. Non cooperative solution, cooperative surplus, and cooperative solution.The Coase Theorem. Remedies.
Tort law: Different bases of liability, causation, and harm. Utility functions. Minimizing the social cost of damages. Legal standards that miss the efficient amount of precaution. Distribution of responsibilities. Activity levels. The Learned Hand rule. Partial liability.
Contract law: Stanford marshmallow experiment and your most important contract partner.The bargain theory. Why is contract law important? When should a contract be broken? The problems with overreliance. Default rules and mandatory rules. Market failures? Relational contracts and informal devices outside of law. The endgame problem.
Learning outcome
Knowledge:
Students should:
- Have good knowledge of basic microeconomics, especially with regards to the law of supply and demand, as well as in-depth knowledge of economic analysis of property rights, civil liability and contract law.
- Know how supply and demand are affected by legal rules.
- Have knowledge of basic theories of law and economics concerning topics such as property, contract and civil liability.
- Have advanced knowledge of the consequences of legal rules by identifying the incentives created by a legal framework.
Skills:
Students should be able to:
- Have the ability to do basic economic analyzes of law in civil law systems.
- Recognize the economic issues in a legal problem and apply an economic way of thinking to analyse it.
- Conduct a comparative analysis of alternative legal arrangements based on transaction costs, incentives and risk allocation, and assess the efficiency effects of legal rules and policies.
Required prerequisite knowledge
Exam
| Form of assessment | Weight | Duration | Marks | Aid |
|---|---|---|---|---|
| Written exam | 1/1 | 5 Hours | Letter grades | Valid calculator |