Course Page

Law and Economics

Course Number:



Undergraduate Economics


B.A. in Economics, B.S. in Economics, B.S. in Economics and Statistics, B.S. in Economics and Mathematical Sciences, Additional Major in Economics, Additional Major in Economics and Statistics, Minor in Economics

Course Description

INTERMITTENT This course will provide a broad overview of the scholarly field known as "law and economics."  The focus will be on how legal rules and institutions can correct market failures.  We will discuss the economic function of contracts and, when contracts fail or are not feasible, the role of legal remedies to resolve disputes.  We will also discuss at some length the choice between encouraging private parties to initiate legal actions to correct externalities and governmental actors, such aas regulatory authorities.  Extensive attention will be given to the economics of litigation, and to how private incentives to bring lawsuits differ from the social value of litigation.  The economic motive to commit crimes, and the optimal governmental response to crime, will be studied in depth.  Specific topics within the preceding broad themes include: the Coase Theorem; the tradeoff between the certainty and severity of punishment; the choice between ex ante and ex post sanctions; negligence versus strict liability; property rules; remedies for breach of contract; and the American rule versus the English rule for allocating litigation costs. (Lecture, 3 hours). Minimum grade of "C" required in all economics pre-requisite courses.


Lecture: 160min/wk


T. Miceli, "The Economic Approach to Law" (2nd edition), Stanford Economics and Finance, 2008

Learning Objectives


(21120) AND (73160 OR 73230)