ECONOMIC A

NALYSIS

OF

LAW

AMAR, COHEN, D

AWSON, G

LASZ

AGENDA

i. Introduction

ii. Simulation

iii. Economics Analysis of Law Les Avantages Tort Law

iv. Economics & Law – Real World Application Tuition Hikes Chinese Bidding War vs. Evolved Countries

v. Limitations

vi. Conclusion & Discussion Questions

INTRODUCTION

http://www.youtube.com/watch?v=CouzZNjuyRM

http://www.youtube.com/watch?v=8-yWKgZv9JY

SIMULATION

Groups:

1: You have a low income and are willing to spend $1.

2: You have a high income and are willing to spend up to $2, however (1) you would prefer to use an adoption agency, and (2) you would like to spend less than $2 if possible. BUT, you want a baby, regardless of where you get it!

SIMULATION

Scenario 1:

Child Adoption Act: Any person willing to adopt a child must do so (1) in compliance with the CCQ, and (2) must go through a government run non-profit adoption agency.

SIMULATION

Scenario 2:

No Regulation - Free Market.

L’ANALYSE ÉCONOMIQUE DU DROIT: LES AVANTAGES“La compréhension des mécanismes économique est donc

cruciale pour les juristes, les décideurs politiques, les magistrats et les avocats”

 

1. L’analyse économique « construit » le droit.

2. L’analyse économique prend en compte toute option (juridique) possible.

 

Le Droit du Contrat selon l’Analyse Économique

Le Droit de la Responsabilité Civile selon l’Analyse Économique

Application de l’analyse économique sur le Droit de la Famille

ECONOMIC ANALYSIS WITHIN TORT LAW

Economic Analysis of Law, 5th ed (R. Posner)

The Learned Hand Formula for Determining Liability (R. Posner) Liability IF B < PL

B = burden (cost) of adequate precautions P = probability that injury will occur L = gravity of resulting injury

Bolton v. Stone (1951), Overseas Tankship v. Miller Steamship (1967)

No-fault systems

Employer liability

ECONOMICS ANALYSIS OF LAW – REAL WORLD APPLICATION

1. Tuition Hikes

2. Chinese Bidding War

PROPOSED TUITION HIKES

Why did the government want to increase tuition?

P

Q

D2

D1

S

BIDDING WAR IN CHINA – OPPOSITE OF N.A.

LIMITATIONS OF ECONOMICS

LIMITATIONS OF ECONOMICS1. Freedom of Choice

•“Choosing to work below minimum wage”

2. Rationality

•“Identifying items for consumption, calculating their value and then estimating potential risks”

•“Persons have things they care about and will do the best they can to achieve these things”

3. Defining Richness

•“…in a culture like our own, which is so heavily dominated by the motive of self interest [one cannot habitually think of rich as utility] without in fact universalizing the ordinary rather than the technical meaning”

•Risk of defending all transactions including the sale of oneself into slavery

4. Short time horizon

•“Present value of anything that will come into possession very far in the future…is nearly zero”

ALTERNATIVES

Traditional economics; not consistent with  broader society’s view of itself:

Information Economics, Ecological Economics and Behavioral Economics; progress? 

These fields can reveal areas where new laws are needed and how they can be most effective

https://www.youtube.com/watch?v=nUdsTizSxSI#t=4m20s

CONCLUSION & DISCUSSION QUESTIONS

1. What did you think about the adoption simulation? Did you prefer the free market or regulated market, and why?

2. The basic economics behind the Quebec tuition prices are undisputed, however, there are many reasons why the increase did not occur. Community values played a big part in this. What were your thoughts in regards to the proposed increase, taking into account the economics and values of society?

3. As students, what are your thoughts on the bidding war and shortage of young professionals in China, versus the competitive landscape which exists in North America? Which system would you rather be in?