Case study 2 | Law homework help

Economic Analysis of Legal Issues CAS EC 337 (A1)
Fall 2023
Boston University

CAS 216
M W F 12:20 – 1:10 pm

Dr. Ben Koskinen
Office: 270 Bay State Rd.

Economics Department, Room 429
Office Hours: F 10:00 – 11:00 am (337 only)

Tu 12:00 – 2:00 pm
and by appointment.

e-mail: [email protected]

T.A.: Laura Aquino
Office: 270 Bay State Rd. B30B
Office Hours: W 10:00 – 11:00 am
e-mail: [email protected]

Course Description

This course examines the importance of law to economic analysis, that is, consider how legal arrangements
enable, impede, and alter the functioning of markets. Using microeconomic theory from other courses, we
will show how choices of individuals, firms, and organizations (including government) are affected by legal
rules. The focus will be on changes economic welfare (consumer and producer surpluses, plus other actors
where relevant), as opposed to fairness or morality, through a common law system: property, contract, and
tort law. We will also discuss criminal law, and use the same economic tools in a slightly different manner
to analyze optimal punishment for crimes, and optimal deterrence.

This course is heavy in qualitative economic analysis, and there is an expectation that students have strong
writing skills. No new economic models will be formulated, everything will be built on microeconomic models
developed in EC201.

Success in this four-credit course is based on the expectation that students will spend a minimum of 9
hours of work per week in preparation for class.

N.B. I am not a lawyer. The course does not provide any legal training.

HUB Learning Outcomes

This class will fulfill the
• Ethical Reasoning I component of the Hub’s Diversity, Civic Engagement, and Global Citizenship

Capacity,
• Writing component of the Communication Capacity,
• Writing, Research, and Inquiry component, of the Intellectual Toolkit Capacity,

Inquiry in the social sciences examines the interplay of factors driving outcomes in the social world. Students
will identify and apply major concepts used in economics to explain individual and collective human behavior
in the legal world, and using this knowledge will explore the factors that shape the creation, adoption, and
modification of laws.

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Ethical Reasoning I

This course discusses legal remedies for environmental externalities specifically, and more generally harm
to third parties, through liability laws and regulations. There is focus on how to use financial incentives
to align legality and morality, as well as its shortcomings. The latter portion of the course discusses
heavily criminal justice and the role of for-profit punitive measures and incentive abuses.

Writing

Four case studies are assigned which tasks students to read actual court filings, find supporting documents
and materials, and qualitatively assess the economic impacts of particular rulings and hypothetical alter-
natives. Case studies are designed to be persuasively written with heavy economic theory about welfare
effects, individual incentive effects, and to consider any unintended consequences of a ruling or policy
change.

Research and Information Literacy

Students are assigned case studies on real legal issues analyzing the economic effects. Students must argue
with economic language on the impacts of a court’s ruling, as well as research supplemental information.

Prerequisites

CAS EC 201 (Intermediate Microeconomics Analysis).

Required Textbooks & Material

Cooter, Robert and Ulen, Thomas, “Law and Economics, 6th edition” (2016). Berkeley Law Books. 2.
Online version 6.0 originally posted July 2016. Print edition published 2012.

Available at: https://lawcat.berkeley.edu/record/1127400

Grading

Homework: 10%
Case Studies: Property, contract, tort 60% (20% each)

Crime and punishment 30%

Blackboard

Zoom links, announcements, course changes, class materials, and grades will all be posted to Blackboard.
Login at http://learn.bu.edu/.

Attendance Policy

You are only responsible for the material in this course. Any missed classes is your responsibility alone.

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Homework

Homework assignments will be select questions from the text book, and will be graded on a scale from 0-3
(none, poor, good, error-free). Homework are to be submitted independently, but you may consult with
other students. Identical assignments will not be accepted, and will result in a zero grade. Homework scores
are not calculated raw, and adjusted relative to the class (scores are roughly equivalent to 0%, 80%, 90%,
100%). Homework assignments must be submitted through Blackboard as a PDF by 11:59 pm on the due
date. Due dates are listed on the course outline below. No late assignments will be accepted.

Case Studies

There will be 4 case studies assigned, each of which looks at a specific legal case or ruling that requires
comprehensive economic analysis. The report should take the evidence from the case as fact, and assume
the law has been ruled on correctly. The report is to provide analysis of the ruling from an economist’s point
of view, with the fundamental goal of economic efficiency trying to be attained. Your primary job will be to
provide evidence to support your economic claims. Please do not reach out to the TA regarding case studies.

Case studies may be done in groups of up to five students, composed of a well-balanced mix of students with
different strengths in mathematics, writing, and analytic skills. Groups will compose a report of around
2,000 words. Ensure that all the questions asked are thoroughly answered.

Reports should be free of grammatical errors, typos, spelling mistakes, and poor formatting. Failure to
meet professional standards of organization, composition, editing, and proofreading can result in up to a
10% grade deduction. You must cite all external sources! Any data, numbers, or facts must be cited so that I
can verify them! Failure to do so is plagiarism, and will be penalized accordingly (see next page for rubric).
You may reach out to the TA regarding questions

Case studies must be submitted on Blackboard as a PDF as a group. Please format file as (last names
alphabetically) (space) CS#.pdf, and title the paper with all contributors listed in alphabetical order. For
instance, if Steve Rogers, Clint Barton, Tony Stark, and Natasha Romanova work together on case study 2,
please submit the file as Barton Rogers Stark Romanova CS2.pdf, and the heading of the paper should look
like the sample below. This will ensure that all students in the group are credited.

Tentative due dates are listed on the outline below and on Blackboard. No late case studies will be ac-
cepted.

Formatting sample:

Barton Rogers Romanova Stark CS2.pdf

Clint Barton
Steve Rogers
Natasha Romanova
Tony Stark

Question 1: Hi, I’m Captain America here to talk to you about one of the most valuable traits a
soldier or student can have. Patience. Sometimes patience is the key to victory. Sometimes it leads to
very little, and it seems like it’s not worth it, and you wonder why you waited so long for something so
disappointing.

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Case Study Rubric

There is no need to explain basic economic theory. You may assume the reader understands basic economic
terminology and theory.

Poor Acceptable Excellent
Economic Analysis
Welfare Misunderstanding or incorrect

application of individual’s val-
uation, surplus or economic
profit. Ignores a relevant party
in calculation of social welfare.

All relevant parties correctly
identified and sources of valu-
ation/surplus recognized (per-
haps incomplete).

All relevant parties correctly
identified and all sources of val-
uation/surplus accounted for
properly. Shows understanding
of the difference between social
welfare and individual welfare.

Incentives Incorrectly identifies what each
party is seeking to maximize,
and how law changes affect be-
havior. Assumes individuals
can be told what to do and they
do it.

Demonstrates understanding
that laws are not followed
because they are the law, but
individuals make cost-benefit
decisions.

Recognizes each individual’s
utility or profit function
components, recognizes that
individuals optimize where
marginal cost is equal to
marginal benefit. Shows un-
derstanding of social versus
individual optimal choice.

Inefficiency Claims zero of anything is effi-
cient; does not demonstrate un-
derstanding of the source of the
inefficiency.

Can show source of inef-
ficiency, and understands
how a law may promote
efficiency/inefficiency. Cites
social marginal cost does not
equal social marginal benefit.

Fully sources the cause of in-
efficiency and identifies how to
reduce it. Able to identify
marginal costs and benefits and
show why inequality exists.

Legal Analysis
Law Applies irrelevant legal rules,

cites irrelevant cases. Does
not demonstrate understanding
how the law affects economic
incentives. Misidentifies proper
plaintiff and defendant.

Applies proper legal rules, un-
derstands relevant parties. Un-
derstands how the law is ap-
plied.

Applies proper legal rules, un-
derstands relevant parties. Un-
derstands how the law is ap-
plied, connection between law
and economic incentives.

Facts Argues findings of the case, ar-
gues ruling of the court, incon-
sistent analyses with facts of
case.

Understands all facts of case. Understands all facts of case,
and why particular rulings are
of importance.

Writing
Grammar Typos, poor sentence struc-

ture and paragraph organiza-
tion. Excessively wordy.

Free of typos, well-written. Free of typos, well-written.
Concise.

Flow Reads like each group member
wrote a separate section. Ex-
cessively wordy. Redundant.

Reads as if there is one author. Reads easily. Concise.

Tables &
Figures

Poorly aligned, no title or cap-
tion. Not references in body of
text.

Fits in with text, includes at
least a title. Is referred to in
body of text.

Looks like part of the report. Is
a self-contained part of the pa-
per (descriptive title and cap-
tion). Makes text abundantly
more clear.

Citations No citations (plagiarism): au-
tomatic zero.

All facts and quotes cited. Ref-
erences page.

All facts and quotes cited using
MLA, APA, or Chicago style.
References page.

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Learning Assistance

If you have a documented disability on record with Boston University that may have some impact on your
work for which you may require accommodations, please contact me immediately. No class material can be
retroactively graded.

Academic Conduct

Students are responsible for understanding and adhering to the CAS Academic Conduct Code (available in
room CAS 105 and online at http://www.bu.edu/academics/cas/policies/academic-conduct/). Cases
of misconduct will be referred to the Dean’s Office. Plagiarism and cheating will be penalized with a failing
grade.

Classroom Behavior

I reserve the right to dismiss any student who is disruptive from the class. As a courtesy to your fellow
students and your professor, please turn off all cell phones and mute all laptops prior to the beginning of
class.

Calendar & Outline

Below is a tentative guideline for the material we will be covering. All dates subject to change. Any changes
will be announced during the lectures.

Monday Wednesday Friday

Sep. 4th Sep. 6th 1

Ch. 2
Micro Review

Bargaining theory & externalities

Sep. 8th 2

Ch. 2
Micro review

Game Theory & Uncertainty

Sep. 11th 3

Ch. 3
Legal systems

Civil & Common Law

Sep. 13th 4

Ch. 3
Legal systems

U.S. legal process

Sep. 15th 5

Ch. 4
Economic Theory of
Property

Objectives & legal terminology

Sep. 18th 6

Ch. 4
Property Rights

Assignment of rights

Sep. 20th 7

Ch. 4
Property Rights

Coase theorem
HW1 due

Sep. 22nd 8

Ch. 5
Property Rights

Coase theorem

Sep. 25th 9

Ch. 5
Property Rights

Verification and enforcement

Sep. 27th 10

Ch. 5
Property Rights

Use of private property
HW2 due

Sep. 29th 11

Ch. 5
Property Rights

Collectively held rights

5

Monday Wednesday Friday
Oct. 2nd 12

Ch. 5
Property Rights

Eminent domain: legal theory

Oct. 4th 13

Ch. 5
Property Rights

Eminent domain: means-ends
economic justification

Oct. 6th 14

Ch. 5
Property Rights

Remedies and protection of prop.
rights

Oct. 9th 15

Indigenous Peoples’ Day
no class

no office hours

Tuesday (Monday schedule)

Oct. 10th

Ch. 8
Economic Theory of
Contract Law

Objectives & legal terminology

Oct. 11th 16

Ch. 9
Contract Law

Invalidating contracts

HW3 due

Oct. 13th 17

Ch. 9
Contract Law

Information disclosure
Case study 1 due

Oct. 16th 18

Ch. 8
Contract Law

Efficient breach

Oct. 18th 19

Ch. 8
Contract Law

Efficient reliance
HW4 due

Oct. 20th 20

Ch. 8
Contract Law

Optimal reliance

Oct. 23rd 21

Ch. 8
Contract Law

Damages and rational breach

Oct. 25th 22

Ch. 9
Contract Law

Rational gaps

Oct. 27th 23

Ch. 9
Contract Law

Default rules

Oct. 30th 24

Ch. 9
Contract Law

Efficient default rules

Nov. 1st 25

Ch. 6
Economic Theory of Tort
Law

Objectives & legal terminology

Nov. 3rd 26

Ch. 6
Tort Law

Economic model of accidents

Nov. 6th 27

Ch. 6
Tort Law

Unilateral & bilateral precaution

Nov. 8th 28

Ch. 7
Tort Law

Computing damages
HW5 due

Nov. 10th 29

Ch. 7
Tort Law

Value of statistical Life
Case study 2 due

Nov. 13th 30

Ch. 7
Tort Law

Liability & negligence Rules

Nov. 15th 31

Ch. 7
Tort Law

negligence Rules

Nov. 17th 32

Ch. 7
Tort Law

Punitive damages

Nov. 20th 33

Ch. 10
Economic Theory of Legal
Process

Class action suits

Nov. 22nd

Thanksgiving recess
no class

no office hours

Nov. 24th

Thanksgiving recess
no class

no office hours

6

Monday Wednesday Friday
Nov. 27th 34

Ch. 11
Economic Theory of Crime
& Punishment

Legal procedure

Nov. 29th 35

Ch. 11
Crime & Punishment

Theory and objectives
HW6 due

Dec. 1st 36

Ch. 11
Crime & Punishment

Economic theory of rational crime
Case study 3 due

Dec. 4th 37

Ch. 11
Crime & Punishment

Efficient crimes

Dec. 6th 38

Ch. 12
Crime & Punishment

Efficient punishment

Dec. 8th 39

Ch. 12
Crime & Punishment

Addictive goods & bads
HW7 due

Dec. 11th 40

Ch. 12
Crime & Punishment

Drugs or guns

Dec. 13th

—— Study Period ——

Dec. 15th

Dec. 18th Dec. 20th

Case Study 4 due

Dec. 22nd

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