Economic Analysis of Law

Introduction

How can effective contracts be designed? When should you sue a supplier? How can businesses operate in countries with weak legal systems? How can economic theory help us explain and understand existing law?

This course provides an introduction to the economic analysis of law. We will analyze how individual firms can best adapt to legal rules and how the legal system influences markets. We will also use economic theory to explain why our legal rules exist. Economic analysis is a powerful tool for interpreting and understanding existing law and can be used to formulate compelling legal arguments.

The teaching will be based on cases that may vary from year to year.

Course content

• Contracts. How can effective contracts be designed? How can businesses operate in countries where contracts are difficult to enforce? What is the economic explanation behind contract law?

• Economic crime. How does the legal system affect incentives to commit criminal acts such as tax evasion, money laundering, fraud, and corruption? How can businesses avoid being involved in economic crimes?

• Environmental law. How should the law be designed to combat environmental problems most effectively?

• Tort law. When is it profitable to enter with a lawsuit? How much compensation will the plaintiff be entitled to? How can tort law be explained with economic theory?

• Civil procedure. Is litigation too expensive in Norway? When should settlements be reached? What are the consequences of procedural rules for actors' incentives to comply with the law? Why are procedural rules designed the way they are?