Materials for the course Introduction to Law and Economics.
Cases and Problems
1. Specialization and exchange: The contractual process
- Powerpoint presentation.
- Arruñada, B., “The Role of Institutions in the Contractual Process”, in B. Deffains and T. Kirat, eds., Law and Economics in Civil Law Countries, The Economics of Legal Relationships Series, vol. 6, Elsevier Science, Amsterdam, 2001, 149-167.
Additional materials and cases to be discussed in class:
- Hayek, F. A., “The Use of Knowledge in Society,” The American Economic Review, 35(4), 1945, 519-30.
- On third-party enforcement: Arruñada, B., and V. Andonova, “Market Institutions and Judicial Rulemaking,” in C. Ménard and M. M. Shirley, eds., Handbook of New Institutional Economics, Dordrecht, Springer, 2005, 229-250.
- On second-party enforcement (private legal orders and their interaction with public legal orders):
- Arruñada, B., L. Garicano and L. Vázquez, “Contractual Allocation of Decision Rights and Incentives: The Case of Automobile Distribution,” Journal of Law, Economics, and Organization, 17(1), Spring 2001, 256-283.
- Arruñada, Benito, “The Quasi-Judicial Role of Large Retailers: An Efficiency Hypothesis of their Relation with Suppliers,” Revue d’Economie Industrielle, no. 92, 2nd and 3rd trimesters, 2000, 277-296.
- Arruñada, B., L. Garicano, and L. Vázquez, “Completing Contracts Ex Post: How Car Manufacturers Manage Car Dealers”, Review of Law and Economics, 1(1), 2005, 149-173.
- On first-party enforcement: Arruñada, B. (2009), “The Economic Effects of Christian Moralities”, Economic Journal, forthcoming.
2. Property and business formalization
- Powerpoint presentation.
- Arruñada, B., Building Market Institutions, University of Chicago Press (fothcoming).
- Arruñada, B., “The Law of Impersonal Transactions,” 13th ISNIE Conference, Berkeley, June 2009.
- Arruñada, B., and N. Garoupa, “The Choice of Titling System in Land,” Journal of Law and Economics, 48(2), 2005, 709-27.
- Arruñada, B., “Property Enforcement as Organized Consent,” Journal of Law, Economics, and Organization, 19(2), 2003, 401-44.
3. Behavior: From homo economicus to homo sapiens
- Power Point presentation on "Altrusim and Rationality"
- Power Point presentation on "Human Nature and Institutions"
- Frank, R. H., Microeconomics and Behavior, 5th ed., 2003, McGraw-Hill, New York, chapters 7 & 8.
- Arruñada, B. (2005), "Human Nature and Institutions," UPF Economics and Business Working Paper, 822 (forthcoming in J.-M. Glachant and E. Brousseau, eds., New Institutional Economics, Cambridge University Press).
- Cosmides, L., and J. Tooby (1997), "Evolutionary Psychology: A Primer", CEP, University of California, Santa Barbara.
- An example to discuss: The Milgram experiment: 61-66% of participants are prepared to inflict fatal voltages
- The cognition of judges: Arruñada, B., and V. Andonova (2008), “Judges’ Cognition and Market Order,” Review of Law and Economics, 4(2), 665-92.
- Organized moral enforcement: Arruñada, B. (2009), “Third Party Moral Enforcement: The Rise and Decline of Christian Confession,” Journal for the Scientific Study of Religion, forthcoming.
Application: The use of incentives
- Slides: Psycology of Incentives
- FEHR, E., and A. FALK (2002), “Psychological Foundations of Incentives,” European Economic Review, 46 (4-5), 687-724.
- COWEN, T. (2007), “How to Control the World: The Basics,” Chapter 2 in Discover Your Inner Economist, Penguin, New York, 11-29.
- Doubts on the speed of human evolution: Hawks et al., "Recent Acceleration of Human Adaptive Evolution," PNAS, December 26, 2007, 20753-58.
- A survey of the field: Carr, Geoffrey, “The Proper Study of Mankind”, The Economist, December 20, 2005. Interview with the author (12 minutes).
- A few clips from The Economist: "Bayes Rules" (January 7, 2006, pp. 70-71); "Mind Games: Can Studying the Human Brain Revolutionise Economics?" (January 15th., 2005, 68); "Games People Play" (January 20th., 2005, 73-74).
4. Measuring institutional performance
- Practice exercise: Visit and analyze the World Bank's Doing Business Report. (1) Analyze critically the metholodologies of the indexes "Starting a Business" and "Registering Property". (2) Study the institutional environment of at least one country or region.
- For analyses of Doing Business: Arruñada, B. (2007), “Pitfalls to Avoid when Measuring the Institutional Environment: Is ‘Doing Business’ Damaging Business,” Journal of Comparative Economics, 35(4), 729-47. Doing Business' Response. Blog discussion
5. Cases in business regulation
- Arruñada, B., “Audit Quality: Attributes, Private Safeguards and the Role of Regulation,” The European Accounting Review, 9(2), 2000, 205-224.
- An interesting example: Carmax.
- Arruñada, B., “Quality Safeguards and Regulation of Online Pharmacies,” Health Economics, 13(4), 2004, 329-344.
- Arruñada, B., “Managing Competition in Professional Services and the Burden of Inertia,” in Claus-Dieter Ehlermann and Isabela Atanasiu, eds., European Competition Law Annual 2004: The Relationship between Competition Law and the (Liberal) Professions, Hart Publishing, Oxford and Portland Oregon, 2006, 51-71.
Labor regulation and informality:
- Arruñada, Benito, Manuel González-Díaz, and Alberto Fernández, “Determinants of Organizational Form: Transaction Costs and Institutions in the European Trucking Industry,” Industrial and Corporate Change, 13(6), 2004, 867-882.
- González, M., B. Arruñada and A. Fernández, “Causes of Subcontracting: Evidence from Panel Data on Construction Firms,” Journal of Economic Behavior and Organization, 42(2), April 2000, 167-87.