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Lecturer(s)
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Filipec Ondřej, Mgr. et Mgr. Ph.D.
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Růžičková Dora, Ing. Ph.D.
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Course content
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1. Designing legal rules for economic efficiency. Rationality, incentives, and behavior of actors within legal systems. Interaction between law and political structures and the role of institutions in shaping a society?s economic prosperity. 2. How law addresses market failures. Approaches to negative externalities, tools of environmental economics. Taxes, regulation, emission allowances or injunctions and damage compensation. 3. The Coase theorem and transaction costs. Core concepts of economic analysis of law applied to situations such as neighborhood disputes, extortion, or overuse of common resources. 4. Financing essential but non-profit sectors. Healthcare, education, infrastructure, and free riders. Public goods and Cost?Benefit Analysis in public policy, with examples such as traffic congestion and tolls/taxes. 5. Economic analysis of property rights. Benefits (resource use) and costs (transaction costs) of ownership. Examples include rights to use or block, cooperative or private ownership, intellectual property, domain speculation, and ?who owns the forest?. 6. Contracts and dispute resolution. Risks of long-term contracts and contractual instruments that mitigate them. Examples from employment and tenancy contracts. Settlement versus litigation. 7. Contracts and fraud, mistakes, and asymmetric information. Supporting mechanisms for contractual relationships, allocation and prevention of risk, insurance, and the role of formal and mainly informal sanctions. 8. Accidents and liability. Traffic accidents, collisions with wildlife, harm caused by negligence or business operations. Liability of hospitals and economic methods for valuing harm to life and health. 9. Economic analysis of litigation. Private and social costs of going to court versus settling out of court. Practices from Czech and international law firms. 10. Economics of crime and the shadow economy. Nash?s game theory: To steal or not to steal? Efficiency of penalties, and regulation of drugs, prostitution, and gambling. 11. Economics of taxation. Behavioral impacts of different tax types, administrative and induced costs (complience costs). Effects of subsidies and bonuses on market behavior. What an efficient tax system looks like?if one exists. Should property tax be abolished? 12. Economic impact analysis of legal regulations. Health care, education, environmental regulation, banking, consumer credit, social services, hygiene standards, accommodation services, taxi regulation, employment of people with disabilities. Media case studies, lessons from Brexit, and economic impacts of war.
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Learning activities and teaching methods
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Dialogic Lecture (Discussion, Dialog, Brainstorming), Work with Text (with Book, Textbook)
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Learning outcomes
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The aim of the course is to show students how legal rules actually operate in economic reality, how they shape the behavior of individuals, companies, and the state, and what kinds of costs or incentives they create. Using economic analysis, we will examine when the law leads to efficient and fair outcomes, and when it instead generates unnecessary costs and injustice. We will not lock ourselves in a theoretical laboratory or examine law and economics separately through the magical formula of ceteris paribus. Instead, we will treat law and economics as interconnected forces that mutually shape one another: legal regulation influences economic behavior, while economic and political interests, in turn, shape the law. The course will focus on topics such as the economic analysis of property rights, liability for damages, contractual relationships, criminal law, and the efficiency of the tax system. The surprising effect of informal sanctions. Through discussions, presentations, and work with real cases from the Czech Republic, abroad and from students? home countries, we will jointly assess the impacts of legal rules and explore how to set them in an optimal way.
Students will learn to think in law-and-economics terms, assess legal rules in relation to both fairness and economic efficiency, and anticipate their practical impacts. They will develop the skills to formulate and present their own positions and gain an understanding of why the economic perspective is essential for the creation and evaluation of modern law.
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Prerequisites
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Completion of this course is not conditional upon completion of some other courses.
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Assessment methods and criteria
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Student performance
Active participation in discussions, simulations, brainstorming and presentation of chosen topics.
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Recommended literature
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Broulík, J., Bartošek, J. (2015). Ekonomický přístup k právu. CH Beck Praha.
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Cooter, R., Ulen, T. (2011). Law and Economics -6th edition. Pearson.
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Fryštenská, M. (2015). Ekonomická analýza civilního práva, 1. vydání. Brno: Masarykova univerzita.
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Mankiw, G., N. (2023). Principles of Economics -10th edition. CENGAGE Learning.
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Mankiw, G., N. (1999). Zásady ekonomie. Grada.
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Polinsky, A., M. (2011). An Introduction to Law and Economics -4th edition. Aspen Publishers.
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Posner, R. (2014). Economic Analysis of Law -9th edition. Aspen Publishers.
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