Law and Economics

Econ 321: Law and Economics

Instructor: Dr. Monica Hartmann

Class Information:

Time: TR 9:55; Fall 2015

Location: OEC 206

Contact Information:

Office Hours: M 2-3:30 p.m., T 5-6 p.m., and by appointment in OEC 402

Office Phone: 962-5681

E-mail:

Course Description: Law and economics is a collection of economic research into a wide variety of legal topics. This course is designed to show the intersection of law and economics in the areas of torts, contracts, property, and divorce law. We will examine how these general law and economic principles can be applied to individual court cases and to legal issues currently being debated.

Course Objective: The objectives of this course are for students to understand both the economic principles underlying the legal system and to be able to apply these principles to 'real world' situations where many economic theoretical assumptions do not hold. This would allow you to grasp the advantages and limitations of using economics to analyze a problem.

Because of this objective, demonstrate the relevancy of economics in our livesexamples used in homework assignments and test questions are based on current events. They are not straightforward regurgitation of class material but will require you to think and to make additional simplifying assumptions to answer the question. The grading will be based upon how thoroughly you address all the relevant economic points in the problem.

Prerequisite: Economics 251 and 252

Textbook: The required text, Introduction to Law and Economics, 4th ed., by A. Mitchell Polinsky, is available in the bookstore. Additional required readings can be downloaded from the class website http://courseweb.stthomas.edu/mehartmann/law_econ/law_econ.html

Supplementary References: These books have been placed on reserve at the library.

Case and Fair, Principles of Microeconomics and Principles of Macroeconomics

David D. Friedman, Law's Order: What Economics Has to Do with Law and Why It Matters

Gerrit De Geest, Law and Economics and the Labour Market

Werner Z. Hirsch, Law and Economics: An Introductory Analysis

Nicholas Mercuro, Economics and the law: from Posner to post-modernism

Richard D. Posner, Economic Analysis of Law

Ruth Towse, Copyright in the Cultural Industries

Recommended: Business periodical of your choice such as the Star Tribune, The Wall Street Journal, The Economist, Business Week, etc. You should get in the habit of reading one of these news sources to identify the economic issues underlying current legal news. Seeing the applications to 'real world' situations will help you grasp the economic theory.

Grading: Final 20%

Midterm 20%

Homework 20%

Paper 20%

Effective Class Participation 20%

Each component of your grade is given equal weight to reflect that each activity is an essential part of the learning process. If you have any questions concerning the grading of your work, please come see me. You have two weeks from the date I returned the homework or the exams to the class to ask me to reexamine the grade. After the two weeks, all grades are final.

Important Dates:

· Midterm: Thursday, October 29th

· Paper Due: Friday, December 11th

· Final Exam: 10:30 a.m. on Monday, December 21st

Exam Policy: Make up examinations only will be given in the event of a severe illness, death in the family, or a University sponsored activity. You must speak directly to me at least 24 hours prior to the exam. Leaving a message on my voice mail or sending me email is not sufficient. If approved, we will reschedule the exam at a mutually convenient time. If no arrangements have been made prior to the scheduled exam time, no make-up exam will be given without a note from your Dean and you will receive a zero for that grade. Also note that possessing a refundable plane/train/bus ticket is not a valid excuse for a make-up exam. Exam dates are listed on the course outline. These dates are subject to change, but I will announce in class any change with at least one-week notice.

You are responsible for all material or any announcement given in lecture regardless if present.

Disability Services: Academic accommodations will be provided for qualified students with documented disabilities including but not limited to mental health diagnoses, learning disabilities, Attention Deficit Disorder, chronic medical conditions, visual, mobility, and hearing disabilities. Students are invited to contact the Disability Resources office about accommodations early in the semester. Appointments can be made by calling 651-962-6315 or in person in Murray Herrick, room 110. For further information, you can locate the Disability Resources office on the web at http://www.stthomas.edu/enhancementprog/.

Homework: Homework assignments are given to prepare you for the exams and to provide an opportunity to practice applying economic concepts to business matters. Some of the questions will be computational and others will require written analysis. You will be assigned to a group of students for the purpose of completing homework assignments. Each group should turn in one assignment with the names of each group member; individual papers will not be accepted.

I expect the quality of your work to be better when you have 3-4 individuals collaboratively constructing an answer than if each of you did this alone. This means that you must avoid engaging in “free riding” and make a commitment to your group members to consistently stay on-task, contribute your input in a timely manner, listen to others’ input, and work hard together to write a thorough and well thought out response that shows your accurate understanding of the concepts, theories, and research we are learning in the course. Your homework grade will comprise of the cumulative score on homework assignments plus an evaluation on your contribution in part determined by your fellow group members.

Late Assignments: The policy of this course is that late assignments will be penalized 1/3 of a letter grade each day the assignment is late. But once the key has been distributed to the class no late work will be accepted. No exceptions.

Class Participation: Class participation is an important component of learning in this course and thus carries equal weight as the other components. I will call on volunteers who raise their hand to answer the question as well as randomly call on students to answer questions. I usually randomly call on students when either the same students raise their hand over and over to answer questions or when no one raises their hand. When we have many different students volunteering answers all throughout the discussion, enriching the discussion from different people there will be little to no random calling on students. When assigning grades, I weigh more heavily participation that is volunteered than class contribution from random calls.

You will be responsible for keeping track of your contributions to large group discussions on a regular basis, using a record-keeping sheet that I will provide to you. In recording your contributions, you will need to specify the date, a brief description of your contribution, and the category of the contribution (the categories are specified on the record-keeping sheet). You will turn in your record of class contributions a few times throughout the semester so be sure to regularly keep track of your class contributions.

There are several ways you can contribute to class discussions:

(a) Respond to a question asked by the instructor or a student

(b) Ask a question or make a comment that shows you are interested in what another person says

(d) * Build on, or respectfully disagree with, someone else’s comment and explain why based on economic analysis

(e) * Make a comment that underscores the link between two people’s contributions and make this link explicit in your comment

(f) * Make a summary observation that takes into account several people’s contributions and that touches on a recurring theme in the discussion

(g) Make a comment on one of the readings (i.e., something you found interesting, disturbing, humorous, etc.)

(h) Report facts to class about the case or reading.

(i) Report to class a summary of your small group’s discussion or activity to the larger group.

(j) * Bring in a resource (a reading, web link, video) not covered in the syllabus but adds new information / perspectives to our learning

(k) Find a way to express appreciation for the enlightenment you have gained from the discussion (try to be specific about what it was that helped you understand something better)

The items that are starred will be given greater weight because these items are more difficult to do. In the first half of the semester, I would suggest that students get comfortable contributing to class discussions through reporting of facts, answering questions, and summarizing small group work to class. Then for the remainder of the course, students can work on doing the starred items.

A mixture of quantity and quality of participation will be factored into your grade. For example, if you participate in some form more than once every class and also engage in some of the stared activities by the end of the semester, your participation grade would fall in the A range. If you contribute only once a week when called upon and do not engage in any of the stared activities by the end of the semester, your participation grade would fall in the C range. If you know you have problems with this sort of speaking up in front of a large group, let me know within the first two weeks of the semester so that we can discuss strategies for you.

Finally, your participation grade will also be a function of your preparation for class. This grade will be based on quizzes and assignments to be turned in and can be viewed as your nonverbal component of participation. Class preparation will be roughly 50% of your total participation grade.

Why is class participation important? First of all, participation enables students to learn from each other. As intelligent individuals with diverse academic and personal backgrounds, you bring different perspectives on an issue. Through an exchange of ideas we can all learn more. Second, studies show that students who are actively involved in learning are more likely to remember and to assimilate the material and to apply concepts learned in the classroom to other situations. Because the ability to apply the course material to everyday situations is a primary goal of the course, participation in class discussions is an essential part of learning.

As economists, we also can look at the importance of classroom participation in a different way. When a student decides to participate – to share information with the class or ask a question, the student is providing a public good. Other students benefit from the information presented and the answers given to the questions. Unfortunately, the student makes decisions only with respect to his/her own benefit and do not take into account the impact on others. Rewarding classroom participation can help alleviate this market failure in the classroom. Finally, when students are prepared for class, are actively engaged in assignments, and are actively involved in the discussion with the professor and other students, everyone benefits and learning is enhanced.

Attendance Policy: Attendance for this class is imperative for two reasons. First, most of the material taught is given in class lectures. Second, missing multiple classes will drop your participation grade and consequently your overall grade. One cannot expect to earn a good participation grade for those classes one does not attend.

If you are not prepared for lecture this is equivalent to missing a class. It is expected that there may be a class (on a rare occasion) that you cannot be prepared for because of some unforeseen circumstances. If you never miss lecture, are always prepared, and participate in discussions on a regular basis, I will take this into consideration for borderline grades.

Writing Assignment: More details on this assignment will be given in another handout.

Office Hours: If you need to talk with me, you can speak with me just before and after class, or come to my office hours. You may stop by my office during other times as well. If I am not available to talk with you at that time, we can set an appointment for another time.

Prior to each lecture, you are expected to read assigned cases and/or papers. In addition, for each case, you must be able to answer the following questions:

1. Facts: Who are the plaintiffs? The defendants? Make clear which facts are under dispute, and which ones are not. To make things clear, instead of using the name of the parties, use their roles (e.g., the driver, the contractor).

2. Type of court that heard the case and the year. (E.g., state, federal, appeal, …)

3. Rule of law: There may be several rules of law in the case, but one may be the most relevant given the topic currently discussed in class.

4. Issue: This should consist of one question that can be answered by “yes” or “no.”

5. Holding of the case. (“Yes” or “no” decision by the majority.)