90354 - Law, Economics And Markets

Learning outcomes

The course offers an introduction to the basic concepts of law and market regulation. It invites students to familiarise with the concepts of property, contract and litigation by emphasising their functions in the market economy. At the end of the course, students should be able to read and understand (basic) legal scholarship and to be aware of the main differences across legal systems.

Course contents

Lesson I
The economic approach to law: review of the fundamental concepts
Bibliographical references:
Parisi, "Positive, Normative and Functional Schools in Law and Economics" European Journal of Law and Economics (2004) ([http://ssrn.com/abstract=586641])
Cooter et al.

Lesson II
Contracts without rights?
Bibliographical references:
Kronman, Contract Law in the Law of Nature (Journal of Law, Economics and Organization, 1985)
Fon, V. and F. Parisi, "Reciprocity-Induced Cooperation" Journal of Institutional and Theoretical Economics (2003) ([http://ssrn.com/abstract=313180])

Lesson III
The Coase theorem: applications and developments
Bibliographical references:
Parisi, “Coase Theorem,” in New Palgrave Dictionary of Economics, 2nd ed. (2010) ([http://ssrn.com/abstract=981282])
Cooter et al.

Lesson IV
The economic functions of contract law
Bibliographical references:
Cooter et al.

Lesson V
An economic model for contract remedies
Bibliographical references:
Cooter et al.
Cenini, M. and F. Parisi, "Positive Interest, Negative Interest and Incentives in Contractual Liability: An Economic and Comparative Analysis" 54 REVIEW OF CIVIL LAW 218-242 (2008)
Parisi, F., B. Luppi and V. Fon, Optimal Remedies for Bilateral Contracts (http://ssrn.com/abstract=1020669)

Lesson VI
Optimal risk allocation in contracts + Contractual remedies: experimental theory
Bibliographical references:
Cenini, M. and F. Parisi, "Risk Allocation between Criminal Clause and Contractual Autonomy" 55 REVIEW OF CIVIL LAW 309-325 (2009)
Bigoni, Maria and Bortolotti, Stefania and Parisi, Francesco and Porat, Ariel, Unbundling Efficient Breach (August 8, 2014). University of Chicago Coase-Sandor Institute for Law & Economics Research Paper No. 695; Minnesota Legal Studies Research Paper No. 14-57. Available at SSRN: http://ssrn.com/abstract=2477973

Lesson VII
Contract and Asymmetric Information
Bibliographical references:
Akerlof, George A. (1970). "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism". Quarterly Journal of Economics (The MIT Press) 84 (3): 488-500
Dari-Mattiacci, Onderstal and Parisi, Inverse Adverse Selection: The Market for Gems (2010) (http://papers.ssrn.com/author=227722)
Parisi, Francesco "The Harmonization of Warranties in European Sales Law: An Economic Analysis" American Journal of Comparative Law (2004) (http://ssrn.com/abstract=276993)

Readings/Bibliography

Parisi (2013), The Language of Law and Economics: a Dictionary, Cambridge University Press.
ROBERT COOTER, UGO MATTEI, PIER GIUSEPPE MONATERI, ROBERT PARDOLESI, THOMAS ULEN (2006), The market of rules. Economic analysis of civil law I. Fundamentals
plus some articles indicated in class.
Non-attending students will find useful the exercises contained in:
ROBERT COOTER, UGO MATTEI, PIER GIUSEPPE MONATERI, ROBERT PARDOLESI, THOMAS ULEN (2006), The market of rules. Economic analysis of civil law II. Applications

To borrow or consult the recommended texts in the library, consult the catalog of the Polo Bolognese of the National Library Service at the web page http://sol.unibo.it/SebinaOpac/SebinaYOU.do

Teaching methods

Lectures and class discussions.

Assessment methods

Written test divided into short or multiple choice questions and short essays in which the student must prove that he has acquired the methodology of economic analysis of contracts, discussing the impact of various contractual forms and clauses on the incentives of the parties.
Duration: 1 hour
Students are reminded that exams passed with positive results can be repeated a maximum of once.

Evaluations:

18-23: the student has sufficient preparation and analytical skills, spread however, over just few topics taught in the course, the overall jargon is correct

24-27: the student shows and adequate preparation at a technical level with some doubts over the topics. Good, yet not to articulate analytical skills with the use of a correct jargon

28-30: Great knowledge about most of the topics taught in the course, good critical and analytical skills, good usage of the specific jargon

30L: excellent and in depth knowledge of all the topics in the course, excellent critical and analytical skills, excellent usage of specific jargon.

Teaching tools

Slides, video projector, blackboard, digital blackboard.

Interactive classroom discussions.

Office hours

See the website of Francesco Parisi