FOUNDATIONS OF ECONOMIC ANALYSIS OF LAW

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Harvard University Press, 2004 - Business & Economics - 737 pages
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In this book Steven Shavell provides an in-depth analysis and synthesis of the economic approach to the building blocks of our legal system, namely, property law, tort law, contract law, and criminal law. He also examines the litigation process as well as welfare economics and morality. Aimed at a broad audience, this book requires neither a legal background nor technical economics or mathematics to understand it. Because of its breadth, analytical clarity, and general accessibility, it is likely to serve as a definitive work in the economic analysis of law.
  

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Contents

Introduction
1
PROPERTY LAW
7
Definition Justification and Emergence of Property Rights
9
2 Justifications for Property Rights
11
3 The Emergence of Property Rights
23
Division of Property Rights
27
2 Social Advantages and Disadvantages of Division of Possessory Rights
28
3 Social Advantages and Disadvantages of Separation of Posessory Rights from Transfer Rights
30
7 Duress
335
Production Contracts
338
2 Remedies for Breach and Incomplete Contracts
342
3 Reliance
355
4 Renegotiation
362
Other Types of Contract
368
2 Donative Contracts
380
LITIGATION AND THE LEGAL PROCESS
387

4 The Socially Optimal Division of Property Rights Their Actual Division and the Law
31
Acquisition and Transfer of Property
33
2 Loss and Recovery of Property
38
3 Sale of Property In General
45
4 Sale and Theft of Property in the Presence of a Registration System
46
Sale and Theft of Property in the Absence of a Registration System
52
Constraints on the Sale of Property Imposed by the State
55
7 Gifts
58
Bequests
59
The Dead Hand
67
Adverse Possession
72
Conflict and Cooperation in the Use of Property The Problem of Externalities
77
2 Socially Optimal Resolution of External Effects
80
3 Resolution of Externalities through Frictionless Bargaining
83
4 Why Bargaining May Not Occur and If It Does Why It May Fail to Result in Mutually Beneficial Agreements
87
5 Resolution of External Effects through Legal Rules in the Absence of Successful Bargaining
92
Resolution of External Effects through Legal Rules Given the Possibility of Bargaining
101
Public Property
110
By Purchase and by Power of Eminent Domain
123
Property Rights in Information
137
Property Rights in Information of Repetitive Value
138
2 Property Rights in Other Types of Information
166
Property Rights in Labels
168
ACCIDENT LAW
175
Liability and Deterrence Basic Theory
177
1 Unilateral Accidents and Levels of Care
178
2 Bilateral Accidents and Levels of Care
182
Levels of Care ad Levels of Activity
193
Levels of Care and Levels of Activity
199
Liability and Deterrence Firms
207
1 Victims Are Strangers to Firms
208
2 Victims Are Customers of Firms
212
Extensions of the Analysis of Deterrence
224
2 Why Negligence Is Found and Implications of Findings of Negligence
229
The JudgmentProof Problem
230
4 Vicarious Liability
232
5 Damages and the Level of Losses
236
6 Damages and the Probability of Losses
237
7 Damages and Courts Uncertainty about the Level of Losses
240
8 Damages and pecuniary versus Nonpecuniary Losses
242
Punitive Damages
243
10 Damages and Victims Opportunities to Mitigate Losses
248
11 Causation
249
Liability RiskBearing and Insurance
257
1 Risk Aversion and the Socially Ideal Solution to the Accident Problem
258
2 The Accident Problem in the Absence of Liability and Insurance
259
3 The Accident Problem Given Liability Alone
260
4 The Accident Problem Given Liability and Insurance
261
5 The Purpose of Liability
267
Nonpecuniary Losses
269
The JudgmentProof Problem
275
Liability and Administrative Costs
280
2 Socially Desirable Use of the Liability System Given Administrative Costs
283
3 Private versus Social Incentive to Use the Liability System Given Administrative Costs
285
CONTRACT LAW
289
Overview of Contracts
291
2 Contract Formation
294
3 General Justifications for Contracts and for Their Enforcement
296
4 Incompleteness of Contracts
299
5 Interpretation of Contracts
301
6 Damage Measures for Breach of Contract
304
7 Specific Performance as the Remedy for Breach of Contract
312
8 Renegotiation of Contracts
314
9 Legal Overriding of Contracts
320
10 ExtraLegal Means of Contract Enforcement
322
Contract Formation
325
Mutual Assent
327
3 Offer and Acceptance
328
4 Fraud
329
5 Mistake
330
6 Information Disclosure
331
Basic Theory of Litigation
389
2 Fundamental Divergence between the Private and the Socially Desirable Level of Suit
391
3 Settlement versus Trial
401
4 Divergence between the Private and the Socially Desirable Level of Settlement
411
5 Trial and Litigation Expenditure
415
Extensions of the Basic Theory
419
2 Sharing of Information Prior to Trial
423
Discovery
426
4 Shifting of Legal Fee to the Loser at Trial
428
5 Difficulty of Statistical Inference from Trial Outcomes
432
6 Elements of Trial Outcomes Apart from the Judgment
434
7 Role of Lawyers
435
8 Role of Insurers
437
General Topics on the Legal Process
444
1 Public versus Private Legal Systems
445
2 Accuracy of the Legal Process
450
3 Appeals and the Legal System
456
4 Legal Advice
463
PUBLIC LAW ENFORCEMENT AND CRIMINAL LAW
471
Deterrence with Monetary Sanctions
473
Basic Theory of Liability
474
The Optimal Probability and Magnitude of Sanctions
479
3 Synopsis
490
Deterrence with Nonmonetary Sanctions
492
Basic Theory of Liability
493
2 The Optimal Probability and Magnitude of Nonmonetary Sanctions
502
3 When Nonmonetary Sanctions Are Optimal to Employ
509
4 Joint Use of Nonmonetary and Monetary Sanctions
510
5 Different Types of Nonmonetary Sanctions
512
Extensions of the Theory of Deterrence
515
2 Marginal Deterrence
518
3 Costs of Imposing Monetary Sanctions
520
4 SelfReporting of Violations
522
5 General Enforcement
524
6 Insurance against Sanctions
526
7 Sanctions for Repeat Offenders
528
Incapacitation Rehabilitation and Retribution
531
2 Rehabilitation
535
3 Retribution
537
Criminal Law
540
2 Explanation for Criminal Law
543
3 Optimal Use of Imprisonment Reviewed
550
4 Principles of Criminal Law
552
GENERAL STRUCTURE OF THE LAW
569
25 The General Structure of the Law and Its Optimality
571
1 Fundamental Dimensions of Legal Intervention
572
2 Optimal Structure of Legal Intervention
575
3 Optimal Structure of Legal Intervention Illustrated
581
Incompleteness of Analysis
591
WELFARE ECONOMICS MORALITY AND THE LAW
593
Welfare Economics and Morality
595
2 Notions of Morality Described
598
3 Functionality of Notions of Morality
603
4 Origins of Notions of Morality
605
5 Welfare Economics and Notions of Morality
608
Implications for the Analysis of Law
613
2 Optimal Domain of Law and of Mortality
619
3 Optimal Design of the Law Taking Morality into Account
635
4 The Nature of Normative Discourse about Law and Morality
644
Income Distribution Equity and the Law
647
1 The Distribution of Income and Social Welfare
648
2 The Income Tax System Income Distribution and Social Welfare
649
3 Effect of Legal Rules on the Distribution of Income
652
4 Should Income Distributional Effects of Legal Rules Influence Their Selection?
654
Concluding Observations
661
Concerning the Social Desirability of Legal Rules
663
References
675
Author Index
721
Subject Index
733
Copyright

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Page 678 - Anderson, Terry L. and Peter J. Hill. 1990. "The Race for Property Rights".
Page 688 - Expertise, contingent fees, and insufficient attorney effort", International Review of Law and Economics 20:21-33. Emons, W, and J. Sobel (1991), "On the effectiveness of liability rules when agents are not identical", Review of Economic Studies 58:375-390.

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About the author (2004)

Steven Shavell is Samuel R. Rosenthal Professor of Law at Harvard Law School.

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