Economic Foundations of Law and Organization

This book serves as a compact introduction to the economic analysis of law and organization.

Donald Wittman (Author)

9780521859172, Cambridge University Press

Hardback, published 26 June 2006

402 pages, 2 tables 74 exercises
25.4 x 17.8 x 2.2 cm, 0.91 kg

'Donald Wittman has produced a well-written book, which does what often seems impossible, in that it explains economic terms in a thoroughly straightforward manner. … this is a book that will prove useful to those who want to acquire some very basic economic language in a clear format. For this alone it would be a useful product.' Industrial Relations Journal

This book serves as a compact introduction to the economic analysis of law and organization. At the same time it covers a broad spectrum of issues. It is aimed at undergraduate economics students who are interested in law and organization, law students who want to know the economic basis for the law, and students in business and public policy schools who want to understand the economic approach to law and organization. The book covers such diverse topics as bankruptcy rules, corporate law, sports rules, the organization of Congress, federalism, intellectual property, crime, accident law, and insurance. Unlike other texts on the economic analysis of law, this text is not organized by legal categories but by economic theory. The purpose of the book is to develop economic intuition and theory to a sufficient degree so that one can apply the ideas to a variety of areas in law and organization.

1. Introduction
Part I. Economic Fundamentals - Rationality and Efficiency: 2. Rational behavior, preferences and prices
3. Pareto optimally versus utilitarianism
4. Cost-benefit analysis
Part II. Transaction Costs and the Coasean Revolution: 5. Transaction costs
6. Fencing in and fencing out
7. Coase versus Pigou
Part III. Cost-Benefit Analysis and the Law: 8. How to think like an economist: two hawks and a fence
9. Smoking regulations: market solutions
10. Rules of thumb: sports and driving rules
Part IV. Rights: 11. The protection of entitlements
12. Property rights or communal rights in knowledge?
13. Liability for harm or restitution for benefit
14. Takings: should there be compensation for regulation
Part V. Torts and Crimes: Liability Rules and Punishments: 15. Cost minimization and the role of liability rules
16. Negligence rules
17. Crime and criminal law
Part VI. The Role of Sequence: 18. Mitigation of damages and last clear chance
19. The Good Samaritan rule
20. The role of being first in allocating entitlements
Part VII. Contracts and Breach of Contract: 21. Default rules and breach of contract
22. When is a handshake a contract and when is a contract not a contract
23. Marriage as contract: family law
Part VIII. Harms Arising Between Contracting Parties: 24. Exploding coke bottles
25. The role of asymmetric information
26. Consumers and producers cause damage: lawnmowers
Part IX. Insurance and the Law: 27. The market for insurance
28. Royalties for artists and insurance for investors
29. Regulating automobile insurance
30. Bankruptcy
31. Deposit insurance and banking crises
Part X. Governance and Organization: 32. The governance of organization
33. Corporate law and agency problems
34. Insider trading
35. Organizational response to opportunism
36. The organization of legislatures
37. Federalism
38. The internal organization of the family
Part XI. Bargaining in the Shadow of a Trial: 39. Settlement of cases
Table of cases.

Subject Areas: Law [L], Organizational theory & behaviour [KJU], Business & management [KJ], Political economy [KCP], Economic theory & philosophy [KCA], Economics [KC], Political science & theory [JPA]