Law and Economics     BEE 3019 2016     Essay
The essay is worth 30% of your grade.
You are expected to use the library to find relevant literature, in addition to the references given. Special credit will be given to people who go significantly beyond the lectures and textbooks.
Length The essay should be between 1,000 words and 2,000 words maximum.
Marks will be deducted for breaking the rules.
Due Date 1st December 2016 (to be confirmed)
Hard copy submission via BART. Please check your student number is on your essay.
Answer one of the following questions
It is often argued that people display behavioural biases which cause them to deviate from the usual economic models of rational behaviour. Which behavioural biases are relevant for Law and Economics. How would allowing for behavioural biases change the main results of Law and Economics.
Arlen, J. (1998): "The Future of Behavioral Economics and the Law," Vanderbilt Law Review , 55, 1765.
Faure, M. G. (2008): "Calabresi and Behavioural Tort Law and Economics," Erasmus Law Review , 1, 75--102.
Jolls, C., Sunstein, and R. Thaler (1998): "Behavioral Economic Analysis of Redistributive Legal Rules," Stanford Law Review , 50, 1471--1550.
Kahneman, D., J. L. Knetsch, and R. Thaler (1990): "Experimental Tests of the Endowment Effect and the Coase Theorem," Journal of Political Economy, 98, 1325--1340.
Korobkin, R., and T. Ulen (2000): "Law and Behavioural Science: Removing the Rationality Assumption from Law and Economics," California Law Review, 88, 1051--1144.
Thaler, R.T., (2015), Misbehaving, Allen Lane. especially ch. 27.
Does the current patent system provide sufficient incentive for useful innovations? Are prizes better than patents? Illustrate your answer with some relevant examples such as the longitude prize.
Arrow, Kenneth J. "Economic Welfare and the Allocation of Resources to Invention," in Essays in the Theory of Risk-Bearing. Chicago: Markham, 1971, pp. 144 - 163.
De Laat, E.A., (1996), "Patents or prizes?", International Journal of Industrial Organisation, 15, 369-390.
Sobel, D., (1995), Longitude: The true story of a lone genius who solved the greatest scientific problem of his time, New York, Walker.
Wright, Brian D., "The Economics of Invention Incentives: Patents, Prizes, and Research Contracts." American Economic Review, September 1983, 73 (4), pp. 691-707.
Shavell, S. and T. van Ypserele, (2001) Rewards versus intellectual property rights", Journal of Law and Economics , 44, 525-547.
Discuss the claim that contract law should facilitate the efforts of contracting parties to maximize the joint gains (the "contractual surplus") from transactions.
Posner, Eric A. "Economic analysis of contract law after three decades: Success or failure?." The Yale Law Journal 112.4 (2003): 829-880.
Shavell, Steven. "On the Writing and the Interpretation of Contracts." Journal of Law, Economics, and Organization 22.2 (2006): 289-314.
Gilson, Ronald J., Charles F. Sabel, and Robert E. Scott. "Braiding: The Interaction of Formal and Informal Contracting in Theory, Practice, and Doctrine." Columbia Law Review (2010): 1377-1447.
Discuss to what extent the general rule in trial court system that the plaintiff has the burden of proof is a good rule.
Daughety, Andrew F., and Jennifer F. Reinganum. "On the economics of trials: adversarial process, evidence, and equilibrium bias." Journal of Law, Economics, and Organization 16.2 (2000): 365-394.
Sanchirico, Chris William. "Games, information, and evidence production: with application to English legal history." American Law and Economics Review 2.2 (2000): 342-380.
Sanchirico, Chris William. "Relying on the information of interested---and potentially dishonest---parties." American Law and Economics Review 3.2 (2001): 320-357.
Cooter, Robert, and Winand Emons. "Truth-revealing mechanisms for courts." Journal of Institutional and Theoretical Economics, 159.2 (2003): 259-279.
Please keep to the following guidelines
The essay should be your own work. It is considered cheating if all or part of an assignment is copied either from another student or from a book or journal. Quota-tions from published material are allowed, provided references are given. Please list references at the end of the essay.
In particular, diagrams must be your own work. Photocopies of diagrams or diagrams electronically cut and pasted from books or journal articles are not acceptable. Please produce your own diagrams. These can be drawn by hand or computer graphics.
Note you are not expected to read everything on the reading list. We have deliberately provided a selection of references for each topic.
You are encouraged to include mathematical derivations where relevant. However it is possible to get a mark over 70 without using any formulae.
In the past I have been asked about the correct format for references. I suggest that you follow the style of one of the major journals. Econometrica is a good example for bibliography style.
Bear in mind that both the essay and your examination papers will be seen by internal and external second markers who will not have attended the lectures. It would be desirable to define terms and explain notation for their benefit.