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1 INTRODUCTION 1

Law and Economics 1

Nature and Origin of Laws 2

Nature and History of Economics 3

The Interface between Law and Economics 4

Where Law and Economics Might Not Meet 11

Entitlements and Externalities and the Role of the Law 12

2 PROPERTY LAW’S BASIC LEGAL PREMISES 20

Introduction 20

Defining Rights and Entitlements to Property 20

Permanent Transfer of Rights and Entitlements 27

Temporary Transfer of Rights and Entitlements 34

Land Use Planning and Development 46

Conclusion 51

3 ECONOMIC ANALYSIS OF LANDLORD-TENANT LAWS 52

Introduction 52

Habitability Laws 53

Rent Control Laws 64

Laws Complementing Rent Control 73

Just-Cause Eviction Laws 74

Housing Subsidy Laws 77

Conclusion 79

4 ECONOMIC ANALYSIS OF ZONING LAWS 80

Introduction 80

Residential-Commercial-Industrial Zoning Ordinances 82

Exclusionary Zoning 89

Inclusionary Zoning 94

Zoning as a Taking? 98

Expanding Aims of Zoning 102

Conclusion 103

5 CONTRACT LAW 105

Introduction 105

The Basic Legal Premises of Contract Law 105

Economic Considerations of Contract Law 120

Conclusion 136

6 TORT LAW’S BASIC LEGAL PREMISES 137

Introduction 137

What Is a Tort? 137

Negligence 139

Duty 144

Proximate Cause 146

Defenses 149

Liability Rules—Introductory Classification 151

The Rule of Contributory Negligence 152

The Rule of Comparative Negligence 155

The Rule of Strict Liability 158

Probabilistic Causation 165

Damages 167

Conclusion 170

7 ECONOMIC ANALYSIS OF TORT LAW 172

Introduction 172

Economic Analysis of Medical Malpractice 175

Effects of Liability Standards 190

Some Economic Considerations of Product Liability 195

Economic Analysis of Accident Law 199

Sovereign Immunity 206

Rules for Assigning Liability for Litigation Costs 212

Tort Reforms’ Economic Effects 215

Conclusion 216

8 CRIMINAL LAW 217

Introduction 217

Basic Legal Premises of Criminal Law 219

Economic Analysis of Criminal Law 227

Crime Deterrence by Raising Costs to Criminals 233

Crime Deterrence by Raising Legal Income 246

Conclusion 249

9 ENVIRONMENTAL LAW 251

Introduction 251

Legal Aspects of Environmental Protection 252

Court-Made Environmental Law 254

Statutory Environmental Law 260

Economic Analysis 264

Conclusion 274

10 ANTIMONOPOLY LAW 275

Introduction 275

The Economic Incentive to Monopolize Markets 277

A Brief Outline of Antimonopoly Acts 279

Ways to Monopolize Markets: Many Roads Lead to Rome 281

Horizontal Mergers and Conglomerates 281

Cartels 285

Price Discrimination 288

Foreclosing Entry 290

Vertical Integration 290

Government-Induced Price Fixing and Foreclosure 300

Remedies 305

Some Further Economic Considerations 306

Anti-trust Policy toward High-Tech Industries 308

Conclusion 310

11 DISCRIMINATION LAW 312

Introduction 312

Employment Discrimination 312

Housing Discrimination 334

Age Discrimination 343

Conclusion 347

INDEX 349