Solution Manual for Law and Economics 6th Edition

Solution Manual for Law and Economics 6th Edition Chapter 1 An Introduction to Law and Economics The introductory material in this chapter is very similar to that in previous editions. Most law students will find it either off-putting or suspicious that economists pay so much attention to efficiency and not much to fairness or justice. So, it’s worth saying whatever one can early in the semester about this topic. The section on the efficiency aspects of achieving an equitable distribution of resources makes what seems to us to be an uncontroversial point—namely, that in seeking an equitable outcome, one ought to pay attention to efficiency considerations—but it is a point about which there has been much sturm und drang in the professional literature. There is more on this issue on our website.  Efficiency; Positive and Normative; Ex Ante; and Empirical Over the years we have found that although law students are becoming increasingly familiar with economic (and other social scientific) concepts, there is, nonetheless, some deep and persistent misunderstandings about economics among noneconomists. One that seems nearly impervious to reasoned refutation is that economics is a handmaiden to a very conservative political philosophy. It may be that there is a sensible explanation for why this view is so widespread, but if so, neither of us has expressed it or heard it. We have also found that there are some emphases that you might want to make in discussing the material in this chapter. First, be sure to stress the difference between positive and normative analyses. Economic analysis is insightful in both tasks. Even those who are skeptical of efficiency as a legal norm must recognize the value of economic analysis in performing positive analysis. Second, we have found that stressing the ex ante analysis of the effects of legal rules is crucial. This is especially so with regard to law students. Legal education tends to focus on the resolution of disputes. Indeed, in the United States the principal method of teaching any substantive area of the law is to read the opinions of appellate justices. There’s no denying the value of this method of teaching the law. But it also has costs. One is that law students tend to focus on how best to resolve disputes than on how best to avoid disputes. Law and economics clearly puts a much stronger emphasis on the prospective effect of law—that is, on a law’s likely effect on future human behavior—than does traditional doctrinal analysis. Third, we believe that one of the most significant developments in law and economics since the publication of the early editions of this book has been the rapid rise of empirical legal studies. Indeed, there is now a first-rate scholarly journal entitled the Journal of Empirical Legal Studies. You might want to alert your students to the fact that this edition of the book, unlike previous editions, now contains, as an integral part of each subject, an extensive discussion of the empirical literature in this area. Preparing the students to think about the empirical aspects of the subject—does the patent system really encourage innovative and inventive activity, and how would we know?—is an important innovative element of law and economics in the legal curriculum. Chapter 1 An Introduction to Law and Economics 3  Introduction to Law and Economics Part of the delight of this course is the reading and discussion of written opinions of courts in some real disputes. The founding article of law and economics—Ronald Coase’s, “The Problem of Social Cost,” 3 J. Law & Econ. 1 (1960)—contained this wonderful case. We’ll describe it in some detail because it serves as a wonderful introduction to the subject. Or you might use these facts in an examination or in a later class discussion. The case of Sturges v. Bridgman involves a dispute about the use of property in London in the 1870s. The plaintiff (the person who files a complaint) was a Dr. Sturges. He felt that his neighbor, Mr. Bridgman, had interfered with his legitimate use of his property. Dr. Sturges had built a consulting room at the end of the garden behind his home. As was the custom for doctors then, he held examinations of his patients in that room. Apparently to save money in building the room and to preserve as much of his garden as possible, Dr. Sturges had built the wall of his consulting room hard against the back wall of his neighbor, Mr. Bridgman. Thus, the neighbors shared a wall, which was called a “party wall.” The Bridgmans operated a confectionery-manufacturing operation in their kitchen, and their kitchen wall was also the back wall of Dr. Sturges’ consulting room. When the confectionery-manufacturing machines were going, they made such a racket that Dr. Sturges could not properly examine his patients. He brought an action against the Bridgmans to ask the court to order them to stop making so much noise during his office hours. The Bridgmans answered this complaint by saying that they were using their property in a perfectly legitimate manner, and, moreover, they had been doing so for over 60 years without anyone’s complaining of noise and vibration. They suggested that the doctor could not fairly claim that he had been surprised by their manufacturing activity. He knew or should have known that they were using noisy machinery when he decided to build his consulting room hard against their kitchen wall. Here is what the court said about the matter and how they tried to resolve this dispute: