EC337 – Economic Analysis of Law

Boston University, Spring 2009
Instructor: Sean Horan

Announcements:

Feb. 2, 2009 -- After some deliberation, I have decided to postpone the first midterm until Friday February 20, 2009. The main reason for this is to cover more material before giving an exam. The delay will also allow you more time to review your answers to the second problem set before the exam.

Feb. 13, 2009 -- Here are some Practice Questions for the midterm exam on Friday February 20, 2009.

Mar. 1, 2009 -- Here are the Answers to the midterm exam on Friday February 20, 2009.

Mar. 18, 2009 -- After some deliberation, I have decided to postpone the second midterm until Monday April 6, 2009. The main reason for this is to cover more material before giving an exam. The delay will also allow you more time to review your answers to the third problem set before the exam.

March 31, 2009 -- Here are some Practice Questions for the midterm exam on Monday April 6, 2009.

April 22, 2009 -- Here are the corrected Solutions to the Practice Questions.

April 22, 2009 -- Here are the Answers to the second midterm on Monday April 6, 2009.

April 30, 2009 -- Here are some Practice Questions for the final exam and the Solutions.

Resources:

Encyclopedia of Law and Economics

Becker-Posner Blog

Problem Sets:

Problem Set I (PDF) – As of 6.45 pm on Monday, all typos have been corrected! As you will note, I have also changed the second scenario to be that Bert is "three times as efficient" at baking as Ernie. This simplifies the calculations a lot, particularly for part (e)(iii). But, if you have already done the problem with the original specification, I would be glad to grade that.

Students: If it helps you answer the first question, I strongly encourage you to draw a picture of the utility possibility frontier. From this picture, you should be able to determine the Pareto optimal points as well as the Egalitarian and Utilitarian optima. Remember what I said in class about the Egalitarian optimum. It is the intersection of the Pareto Frontier with the 45 degree line through the origin. Likewise, the Utilitarian optima are the points on the Pareto frontier where the slope is -1.

Problem Set I Solutions (PDF) Note: The problem in question 1 is based on the discussion in a famous paper by James Mirrlees "An Exploration in the Theory of Optimum Income Taxation". That paper actually sparked a subsequent debate about the "strange" outcome advocated by utilitarianism when the agents have different productivities. This issue, known in the literature as the "slavery of the talented", is well illustrated by the answer in part (e)(iii).

Problem Set II (PDF)

Problem Set II Solutions (PDF)

Problem Set III (PDF)

Problem Set III Solutions (PDF)

Problem Set IV (PDF)

Problem Set IV Solutions (PDF)

Cases and Other Additional Reading:

Introduction:

Armory v. Delamirie (PDF)

Property Law:

Pierson v. Post (PDF) -- Please read for Friday Feb. 6

Boomer v. Atlantic Cement Co., Inc. (PDF) -- Please read for Tuesday Feb. 17