Principles and Methods of Law and Economics: Enhancing Normative Analysis

Principles and Methods of Law and Economics: Enhancing Normative Analysis

by Nicholas L. Georgakopoulos
     
 

ISBN-10: 0521826810

ISBN-13: 9780521826815

Pub. Date: 07/31/2005

Publisher: Cambridge University Press

This is an introductory book that targets the reader who aspires to apply economic analysis but seeks a technical introduction to its mathematical techniques or a structured elaboration of its philosophical principles. It juxtaposes economic analysis with moral philosophy, political theory, egalitarianism, and other methodological principles. It then presents the

Overview

This is an introductory book that targets the reader who aspires to apply economic analysis but seeks a technical introduction to its mathematical techniques or a structured elaboration of its philosophical principles. It juxtaposes economic analysis with moral philosophy, political theory, egalitarianism, and other methodological principles. It then presents the details of methods such as model building, derivatives, differential equations, statistical tests, and the use of computer programs.

Product Details

ISBN-13:
9780521826815
Publisher:
Cambridge University Press
Publication date:
07/31/2005
Pages:
392
Product dimensions:
5.98(w) x 8.98(h) x 0.98(d)

Table of Contents

Prefacexiii
Introduction: Innovation in Legal Thinking1
AProposals, Consequences, and Ideals1
BToward Scientific Analysis of Law3
CBibliographical Note7
Part 1Principles
1From Formal Logic to Normative Reasoning11
AFormal Deontic Logic12
BFormal Logic's Failure in Normative Reasoning13
CThe Informal Normative Syllogism15
Proposals, Consequences, and Ideals in Normative Reasoning16
DConcluding Exercises17
EBibliographical Note19
2Social Welfare versus Moral Philosophy20
AIdeals behind Law and Economics: Welfarism and Pragmatism23
BJuxtaposition with Other External Derivations of Ideals25
iDeriving Ideals from Existing Rules (Including Formalism)25
iiRawls' Contractarianism26
iiiThe Potential Equivalence of Derived Ideals and Preferences27
CDistinguishing Features of Economic Analysis29
iAvoidance of Moral Relativity30
iiPreference for Applications over Refinement of Principles30
iiiUbiquitous Importance of Incentives30
ivTreatment of Preferences as Objective31
vLack Bias for Rule Proliferation34
viOrientation Toward the Future34
DConcluding Exercises35
EBibliographical Note36
3From Political Philosophy to Game Theory37
APolitical Theory38
iInefficiencies of Majority Rule39
iiLegal Process: Explaining the Administrative State40
iiiCivic Republicanism42
ivPerfectionism43
BVoting System Design44
CGame Theory50
iCooperation Games: Prisoner's Dilemma51
iiCoordination Games: Driving Side54
iiiGame Theory in Legal Scholarship55
DSocial Norms57
EBounded Rationality59
FConcluding Exercises66
GBibliographical Note70
4The Importance of Distribution of Wealth72
ARedistribute!75
BDo Not Redistribute!79
CDelegating Redistribution to Tax Policy84
DConcluding Exercises89
EBibliographical Note94
5Coase and Law's Irrelevance95
ACoasean Irrelevance96
BNormative Use98
iRevealing Imperfections98
iiAn Example99
CTransaction Costs: The Usual Suspect99
iVantage Point Makes Transaction Costs103
iiInnovations Transform Transaction Costs104
iiiLitigation Costs: Transaction Cost or Not?105
ivExample: Increasing Social Gain from Private Litigation105
vNormative Implications for Litigation of the Analysis of Transaction Costs107
DConcluding Exercises109
EBibliographical Note111
6More Failures of Coasean Irrelevance112
ANegotiation Holdouts112
BSystematic Errors115
CRisk Aversion115
iImposing a Transaction Cost118
iiSubstantive Solutions of Risk Aversion118
DDistribution120
EConcluding Exercises121
FBibliographical Note126
Part 2Methods
7Mathematical Modeling129
ASymbols, Functions, and Idioms131
BSimplification and the Model as a Premise140
CModeling Applications142
iModeling Negligence Law: Optimization143
iiModeling the End of Affirmative Action: Differential Equations146
DConcluding Exercises148
EBibliographical Note152
8Confronting Uncertainty: Basic Probability Theory154
ADescribing Randomness: Probability and Expectation155
BMathematical Models of Expectation159
CUncertain Uncertainty: Conditional Probability161
DConcluding Exercises166
EBibliographical Note174
9Advanced Probability: Distributions as the Shape of Randomness175
AThe Shape of Randomness: Distribution Functions176
iVisual Comparison of Discrete and Continuous Distributions177
iiCDF and PDF: Features and Relations178
iiiTruncated and Censored Distributions181
BThe Normal Distribution186
CConcluding Exercise: Imperfect Enforcement188
DBibliographical Note196
10How to Price Uncertainty: Finance197
AValuation in Perfect Markets199
iKnown Rates: Discounting199
iiRisky Assets203
BNormative Implications of the CAPM211
iFinancial Information211
iiForecasts212
CFinancial Market Microstructure: The Game-Theoretical Foundation of the CAPM213
DNormative Application of Microstructure: Insider Trading214
EConcluding Exercises220
FBibliographical Note224
11Finance and Probability: Options and Derivatives225
AOption Pricing227
BNormative Implications of Option Pricing234
iRecipients of Fiduciary Obligation235
iiAutomated Reorganizations via Options236
iiiThe Options Understanding of the New Value Exception240
CConcluding Exercises244
DBibliographical Note248
12Using Spreadsheets249
AThe Basics249
iObtaining Built-in Help about Functions251
iiUsing the Function Wizard253
iiiCategories of Built-in Functions255
ivRelative and Absolute References in Copying258
BGraphics261
iChart Types262
iiCompleting the Chart Wizard265
iiiManipulating Charts267
CSolving Equations269
iThe Solver269
iiGoal Seek270
DMacros and User-Defined Functions271
iRecording a Macro271
iiEditing a Macro273
iiiAssigning a Macro to a Graphic274
ivEntering a Function274
EDownloading and Combining Data274
iData Files Separating Columns with Commas or Tabs275
iiSpecifying the Type of Data277
iiiFixed-Width Data278
ivCombining Data279
FConcluding Exercises280
GBibliographical Note281
13Statistics283
AThe Use of Statistics in Legal Thinking284
BFundamentals: Descriptive Statistics and Distributions287
CEmpirical Research288
iBasics: Comparing Data That Take Values and Data That Fall into Categories289
iiDetermining Influences: Multiple Outcomes298
iiiDetermining Influences: Yes/No Outcomes308
ivObservations That Are Filtered by a Threshold310
DConcluding Exercises311
EBibliographical Note313
14Conclusion: Importing Methodological Innovations315
ACellular Automata315
BFractals317
CEvolutionary Theory320
DTo End320
EBibliographical Note321
Appendix AMeinhard v. Salmon 249 N.Y. 458 (1928)323
Appendix BGlossary332
Appendix CMathematica Notebooks339
ADifferential Equations in Law: The Effect of Terminating Affirmative Action342
iDetermine the Participation in the Workforce342
iiAdd the Initial Condition343
iiiManipulate the Exponent to See It Disappear343
ivThe Long-Run Participation344
vThe Composition of the Candidates344
viGraphics345
BDerivation of the Normal Distribution347
iDerive the Normal Distribution as Gauss Did347
iiThe Standard Normal Distribution349
iiiRestating with Standard Deviation349
ivRestating with Average Deviation350
vThe Triangular Distribution351
CApplication of Triangular Distribution: The Uncertain Apprehension of Speed Limit Violations355
DA Comparison of Insider Trading Regimes360
iFoundation360
iiProblem361
iiiSolution: Statement361
ivSolution: Proof362
vIllustration of Price Path365
Index369

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