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| List of Tables and Figures | |
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| Preface | |
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| Introductory Concepts | |
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| What is Law and Economics? | |
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| Positive and Normative Analysis | |
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| Is Efficiency a Valid Norm for Evaluating Law? | |
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| Efficiency Concepts | |
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| Pareto Efficiency | |
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| Potential Pareto Efficiency, or Kaldor-Hicks Efficiency | |
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| Consensual Versus Nonconsensual Exchange | |
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| The Coase Theorem | |
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| The Law in "Law and Economics" | |
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| The Nature of the Common Law | |
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| The Court System in the United States | |
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| Conclusion | |
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| Discussion Questions | |
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| Problems | |
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| Review of Microeconomics | |
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| The Theory of the Consumer and Market Demand | |
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| The Theory of the Firm and Market Supply | |
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| Market Equilibrium | |
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| Perfect Competition | |
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| Monopoly | |
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| Oligopoly and Game Theory | |
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| Welfare Economics | |
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| Welfare Theorems | |
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| Market Failure | |
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| Uncertainty and Imperfect Information | |
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| Choice Under Uncertainty and Insurance | |
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| Moral Hazard | |
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| Adverse Selection | |
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| An Economic Model of Tort Law | |
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| What Is a Tort? | |
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| The Social Function of Tort Law | |
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| Elements of a Tort Claim | |
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| Cause-in-Fact | |
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| Proximate Cause | |
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| Liability Rules | |
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| An Economic Model of Accidents: The Model of Precaution | |
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| The Unilateral Care Model | |
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| Social Optimum | |
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| Actual Care Choice by the Injurer | |
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| Comparison of Strict Liability and Negligence | |
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| Bilateral Care Model | |
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| No Liability and Strict Liability | |
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| Negligence | |
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| The Hand Rule | |
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| The Reasonable-Person Standard | |
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| Contributory Negligence | |
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| Negligence with Contributory Negligence | |
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| Strict Liability with Contributory Negligence | |
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| Further Topics | |
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| Sequential Care Accidents | |
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| The Injurer Moves First | |
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| The Victim Moves First | |
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| Last Clear Chance | |
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| Comparative Negligence | |
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| Causation and Liability | |
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| Cause-in-Fact | |
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| Proximate Cause | |
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| Res Ipsa Loquitur | |
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| Uncertainty over Causation | |
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| Activity Levels | |
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| Punitive Damages | |
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| The Judgment-Proof Problem | |
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| The Impact of Liability Insurance | |
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| Litigation Costs | |
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| Legal Error | |
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| The Statute of Limitations for Tort Suits | |
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| Intentional Torts | |
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| Valuing Human Life and Safety | |
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| Conclusion | |
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| Discussion Questions | |
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| Problems | |
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| Applying the Economic Model of Tort Law | |
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| Products Liability | |
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| A Brief History of Products Liability Law | |
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| An Economic Model of Products Liability | |
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| Equilibrium Price and Output for a Dangerous Product | |
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| Care Choices by Manufacturers and Consumers | |
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| Consumer Perceptions of Risk | |
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| A Note on Custom as a Defense | |
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| Recent Trends | |
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| Evidence on the Impact of Products Liability Laws | |
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| Concluding Remarks | |
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| Workplace Accidents | |
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| Respondeat Superior | |
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| Accidents in which the Victim Is an Employee | |
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| Workers' Compensation Laws | |
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| Liability for Environmental Damages | |
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| Characteristics of Environmental Accidents | |
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| Multiple Victims | |
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| Causal Uncertainty | |
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| Superfund | |
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| Case Study: Asbestos | |
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| Medical Malpractice | |
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| Customary Practice and Informed Consent | |
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| Do Physicians Practice Defensive Medicine? | |
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| Conclusion | |
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| Discussion Questions | |
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| Problems | |
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| The Economics of Contract Law I: The Elements of a Valid Contract | |
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| Contracts and Efficient Exchange | |
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| The Elements of a Valid Contract | |
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| Reasons for Invalidating Contracts | |
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| Mental Incapacity or Incompetence | |
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| Coercion or Duress | |
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| Mistake and the Duty to Disclose Private Information | |
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| Purely Distributive Information | |
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| Socially Valuable Information | |
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| Casual Versus Deliberate Acquisition of Information | |
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| Disclosure of Unfavorable Information | |
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| Unconscionability | |
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| Conclusion | |
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| Discussion Questions | |
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| Problems | |
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| The Economics of Contract Law II: Remedies for Breach | |
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| The Efficient Breach Model | |
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| Money Damages and Efficient Breach | |
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| Incentives for Efficient Reliance | |
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| Mitigation of Damages | |
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| Impossibility and Related Excuses | |
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| Efficient Risk Sharing | |
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| Commercial Impracticability | |
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| Specific Performance | |
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| Transaction Costs | |
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| Subjective Value and Efficient Breach | |
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| The Value of Consent | |
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| Self-Enforcement of Contracts | |
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| Liquidated Damage Clauses | |
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| Product Warranties* | |
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| Express Warranties | |
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| Implied Warranties | |
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| Long-Term Contracts* | |
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| Conclusion | |
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| Discussion Questions | |
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| Problems | |
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| The Economics of Property Law: Fundamentals | |
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| The Nature and Function of Property Rights | |
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| The Definition of Property Rights | |
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| Property Rights and Incentives | |
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| The Emergency of Property Rights | |
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| Enforcement of Property Rights | |
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| Fundamentals of the Economics of Property Law | |
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| The Coase Theorem | |
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| The Assignment of Rights and the Distribution of Wealth | |
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| Examples of the Coase Theorem | |
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| The Role of Transaction Costs | |
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| Enforcement of Property Rights | |
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| Property Rules and Liability Rules | |
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| The Choice Between Property Rules and Liability Rules | |
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| Trespass and Nuisance | |
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| The General Transaction Structure | |
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| Consensual Transfers of Property | |
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| The Legal Protection of Ownership | |
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| Should the Law Protect the Possessor or the Claimant? An Analysis of Land Title Systems* | |
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| Land Title Systems: Recording Versus Registration | |
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| Land Title Systems in the United States | |
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| Title Protection and Economic Development | |
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| Limited and Divided Ownership | |
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| Leasing | |
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| The Lease: A Contract or Conveyance? | |
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| Mitigation in Leases | |
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| The Law of Waste | |
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| Sharecropping | |
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| Private Versus Group Ownership | |
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| The Optimal Scale of Ownership | |
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| Public Goods | |
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| The Anticommons Problem and the Right to Partition* | |
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| Time-Limited Property Rights: Intellectual Property | |
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| Patents | |
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| Copyrights | |
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| Conclusion | |
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| Discussion Questions | |
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| Problems | |
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| Involuntary Transfers and Regulation of Property | |
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| Involuntary Transfers and Restrictions on Transfers Between Private Parties | |
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| Adverse Possession | |
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| The Mistaken Improver Problem* | |
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| Inheritance Rules | |
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| Primogeniture | |
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| The Rule Against Perpetuities | |
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| Government Acquisition of Property Under Eminent Domain | |
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| The Eminent Domain Clause | |
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| Public Use and the Scope of the Takings Power | |
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| The Meaning of Just Compensation | |
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| Case Study on the Determination of Just Compensation: "The Assassin's Bequest" | |
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| Eminent Domain and Land Use Incentives | |
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| The No-Compensation Result | |
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| Arguments Against the No-Compensation Result | |
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| Government Regulation of Property | |
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| The Compensation Question | |
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| Tests for Compensation | |
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| An Economic Model of Regulatory Takings | |
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| Implications of the Efficient Compensation Rule | |
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| Investment-Backed Expectations: Does the Market Eliminate the Need for Compensation?* | |
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| Regulation Versus the Common Law | |
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| Conclusion | |
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| Discussion Questions | |
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| Problems | |
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| The Economics of Dispute Resolution | |
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| The Litigation Process | |
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| Why Do Trials Occur? | |
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| The Differing Perceptions, or Optimism Model | |
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| The Asymmetric Information Model | |
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| The Social Versus Private Incentive to Sue | |
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| Procedural Rules and Litigation Costs | |
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| Discovery | |
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| The English Versus American Rule | |
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| The English Rule and Settlement | |
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| The English Rule and the Incentive to File Suit | |
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| Evidence on the Impact of the English Rule | |
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| Rule 68 | |
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| Contingent Fees | |
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| The Benefits of Contingent Fees | |
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| Contingent Fees and Settlement | |
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| Do Contingent Fees Promote Frivolous Suits? | |
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| Frivolous Suits | |
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| Court Delay | |
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| Alternative Dispute Resolution | |
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| Evolution of the Law | |
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| Selection of Disputes for Trial | |
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| Is the Common Law Efficient? | |
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| Empirical Evidence on Legal Change | |
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| Judicial Decision Making and Legal Change | |
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| Decision by Precedent | |
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| An Economic Model of Precedent | |
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| Precedents as a Stock of Knowledge | |
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| Procedural Responses to Legal Errors | |
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| The Standard of Proof | |
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| Appeals as a Means of Error Correction | |
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| What Do Judges Maximize? | |
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| Judicial Self-Interest and the Law | |
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| Pragmatism and the Economic Approach to Law | |
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| Conclusion | |
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| Discussion Questions | |
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| Problems | |
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| The Economics of Crime | |
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| Distinguishing Crimes and Torts | |
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| Crimes Are Intentional | |
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| Other Reasons for Public Enforcement | |
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| Examples of Private Enforcement | |
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| Property Rules, Liability Rules, and Criminal Sanctions | |
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| The Economic Model of Crime | |
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| The Offender's Decision to Commit a Crime and the Supply of Offenses | |
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| Optimal Punishment | |
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| The Optimal Fine | |
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| Gain Versus Harm-Based Fines | |
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| Fines and Imprisonment | |
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| Prison, Probation, and Parole | |
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| The Probability of Apprehension Is Variable | |
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| Why Are Fines Not Equal to Offenders' Wealth? | |
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| Repeat Offenders | |
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| Empirical Evidence on the Economic Model of Crime | |
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| The Death Penalty | |
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| Economics of the Death Penalty | |
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| Constitutional Issues | |
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| The Bail System | |
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| Private Protection | |
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| Plea Bargaining | |
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| Economic Models of Plea Bargaining | |
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| Plea Bargaining and Deterrence | |
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| A Comparative Perspective | |
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| Topics | |
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| Crime and the Business Cycle | |
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| Gun Laws and Crime | |
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| Primitive Law Enforcement | |
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| Some Constitutional Issues | |
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| Free Speech | |
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| The Rule Against Self-Incrimination | |
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| The Right of Privacy | |
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| Conclusion | |
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| Discussion Questions | |
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| Problems | |
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| Answers to In-Chapter Exercises | |
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| Notes | |
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| Works Cited | |
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| Index | |