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1. Introduction 1

PART Ⅰ ECONOMIC CONCEPTS 11

2. Property Rights 11

Introduction 11

Private Property and Efficiency 12

Testing the Theory 15

Summary 25

3. The Coase Theorem 27

Conflicting Uses of Property 27

The Assumptions Underlying the Coase Theorem 32

Summary 39

4. Economic Efficiency 41

Pareto Optimality 41

The Efficiency Version of the Coase Theorem 45

Economic Profits and Producers’ Surplus 46

Consumers’ Surplus 49

The Kaldor-Hicks Criterion 57

Distributional Considerations 62

PART Ⅱ LAW 67

5. Entitlements and their Defence 67

6. Property 79

Nuisance 79

Public Regulation of Land Use 88

Compulsory Purchase and Eminent Domain 113

7. Tort 129

Strict Liability and Negligence 133

Contributory and Comparative Negligence 138

Risk-aversion and Insurance 143

The Economic Formulation of Negligence and the Courts 147

Liability in a Market Setting 150

8. Contract 155

Optimal Promises 157

Optimal Breach 160

Specific Performance 167

Standard-form Contracts 173

Neo-institutionalism 184

9. The Efficiency of the Common Law 194

References 210

Index 218