Economic Analysis of Legal Issues CAS EC 337 (B1)
Fall 2025
CAS 315
Course Description
This course examines the importance laws have on economic outcomes, that is, consider how legal arrangements en-able, impede, and alter the functioning of markets. Using microeconomic theory from other courses, we will show how choices of individuals, firms, and organizations (including government) are affected by legal rules. The goal is to maximize economic welfare (efficiency) and then examining how legal rules can set individual incentives (rationality) to achieve the most-desirable outcome in a common law system in three different areas of law: property, contract, and tort. While it may be discussed, we do not deal with fairness or morality. We will also discuss criminal law, and use the same economic tools in a slightly different manner to analyze optimal punishment for crimes, and optimal deterrence.
This course is heavy in qualitative economic analysis, and there is an expectation that students have strong writ- ing skills. All economic models used are built on microeconomic models developed in EC201.
Success in this four-credit course is based on the expectation that students will spend a minimum of 9 hours of work per week in preparation for class.
N.B. I am not a lawyer. The course does not provide any legal training.
HUB Learning Outcomes
This class will fulfill the
• Ethical Reasoning I component of the Hub’s Diversity, Civic Engagement, and Global Citizenship Capacity, • Writing component of the Communication Capacity,
• Writing, Research, and Inquiry component, of the Intellectual Toolkit Capacity,
Inquiry in the social sciences examines the interplay of factors driving outcomes in the social world. Students will identify and apply major concepts used in economics to explain individual and collective human behavior in the legal world, and using this knowledge will explore the factors that shape the creation, adoption, and modification of laws.
Ethical Reasoning I
This course discusses legal remedies for environmental externalities specifically, and more generally harm to third parties, through liability laws and regulations. There is focus on how to use financial incentives to align legality and morality, as well as its shortcomings. The latter portion of the course discusses heavily criminal justice and the role of for-profit punitive measures and incentive abuses.
Writing
Four case studies are assigned which tasks students to read actual court filings, find supporting documents and materials, and qualitatively assess the economic impacts of particular rulings and hypothetical alternatives. Case studies are designed to be persuasively written with heavy economic theory about welfare effects, individual incentive effects, and to consider any unintended consequences of a ruling or policy change.
Research and Information Literacy
Students are assigned case studies on real legal issues analyzing the economic effects. Students must argue with economic language on the impacts of a court's ruling, as well as research supplemental information.
Prerequisites
CAS EC 201 (Intermediate Microeconomics Analysis) & WRI 100/120 (First Year Writing Seminar).
Required Textbooks & Material
Cooter, Robert and Ulen, Thomas. (2016). Law and Economics, 6th edition. Berkeley Law Books. Book 2.
https://lawcat.berkeley.edu/record/1127400
Academic Conduct
Students are responsible for understanding and adhering to the CAS Academic Conduct Code (available in room CAS 105 and online at http://www.bu.edu/academics/cas/policies/academic-conduct/). Cases of misconduct (e.g. plagiarism) will be referred to the Dean's Office. Plagiarism and other forms cheating will be penalized with a failing grade.
Attendance Policy
Attendance does not count toward your grade, but showing up and participating is imperative to your success in this course. Any missed classes are your responsibility alone, including case study question discussions. Please do not interpret this policy as suggesting that you do not need to attend lectures to pass.
Classroom Policy
There is a no externalities policy in the classroom, and distractions are contagious. Following evidence of technology use in the classroom, students are not permitted to use angled screens in the classroom (in other words, any screens used in class must lie flat on the student's desk). Exceptions may be made on an individual basis. Students who do not comply will receive a grade penalty equivalent to half a homework assignment per infraction.
AI Policy
Students should learn how to use AI text generators and other AI-based resources (AI tools) to enhance their developing abilities as writers, researchers, communicators, and thinkers. Students must,
1. Give credit to AI tools whenever used, even if only to generate ideas rather than usable text or illustrations. A disclaimer must be included at the beginning of a submission.
2. When using AI tools on assignments, add an appendix showing (a) the prompt history; (b) a description of precisely which AI tools were used (e.g. ChatGPT private subscription version or DALL-E free version); (c) an explanation of how the AI tools were used (e.g. to generate ideas, edit or improve grammar, etc.); (d) an account of why AI tools were used (e.g. to save time, to handle mounting stress, to clarify academic or legal articles, etc.). This appendix must follow the bibliography at the end of a submission.
Failure to do so will result in a significant penalty for low-energy or unreflective reuse of material generated by AI tools. Zero points will be assigned for merely reproducing the output from AI tools.
Tutoring Writing in the Disciplines
The Tutoring Writing in the Disciplines (TWID) is a discipline-based, undergraduate peer writing tutoring program. The economics department peer writing tutors, trained by the WID Director in tutoring practices, provide writing support to undergraduate students for the first three case studies. The TWID tutors will assist with all aspects of the case study assignment.
Students can book 15 or 30 minute tutoring sessions using the sign-up link: https://buwriting.mywconline.com/. Please provide your working draft with comments on what aspects you are seeking assistance on.
Grading
Homework: 10%
Case Studies: Property law 20%
Contract law 20%
Tort law 20%
Crime and punishment 30%
Homework
Homework assignments will be select questions from the text book, and will be graded on a scale from 0-3 (none, poor, good, error-free). Homework assignments are to be submitted independently, but you may consult with other students. Identical and plagiarized assignments will not be accepted, and will result in a zero grade. Homework scores are not calculated raw, and adjusted relative to the class (scores are roughly equivalent to 0%, 80%, 90%, 100%). Homework assignments must be submitted through Blackboard as a PDF by 11:59 pm on the due date. Due dates are listed on the course outline below. No late assignments will be accepted.
Case Studies
There are four case studies assigned, three of which looks at a specific legal case or ruling that requires comprehensive economic analyses. Your submission will take evidence from the case as fact, and assume the law has been ruled on correctly while understanding the motives of each economic agent. Your submission should provide analysis of the ruling from an economist's point of view, providing evidence to support your economic claims.
There is a ‘soft cap’ of 2,500 words for submissions; while longer submissions are accepted without penalty, it is advisable that the incremental value of additional words outweighs the incremental cost of writing/reading them. Shorter submissions are not penalized either just because they are short. Please do not try and ‘fill’ your submission to reach any particular word count, as excessively worded submissions may be penalized. Ensure that all questions and parts asked are thoroughly answered.
Reports should be free of grammatical errors, typos, spelling mistakes, and poor formatting. Failure to meet pro- fessional standards of organization, composition, editing, and proofreading can result in up to a 10% grade deduction. Presentation scrutiny increases throughout the semester. You must cite all external sources! Any data, numbers, or facts must be cited so they can be verified! A bibliography/works cited page at the end of the paper must be included. Failure to do so is plagiarism, and will be penalized accordingly (see next page for rubric). You may reach out to the TA regarding questions about formatting, citations, etc.
Case studies must be submitted on Blackboard as a PDF as a Blackboard Group. Instructions are provided on Blackboard. Please format your submission file as (last names alphabetically) (space) CS#.pdf, and title the paper with all contributors listed in alphabetical order. For instance, if Robert Diggs, Russell Jones, Gary Grice, and Clifford Smith work together on case study 2, please submit the file as Diggs Grice Jones Smith CS2.pdf, and the heading of the paper should look like the sample on the next page. This will ensure that all students in the group are credited.
Formatting sample:
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Diggs Grice Jones Smith CS2.pdf
Robert Diggs
Gary Grice
Russell Jones
Clifford Smith, Jr.
AI Disclaimer: No AI assistance was used generating this syllabus.
Question 1: Through great input you get great output.
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Co-authors
Case studies may be done with up to five co-authors, composed of a well-balanced mix of students with different strengths in economic theory, research, writing, and analytic skills.
When deciding to work with co-authors, you are making trade-offs over the quantity of work, quality of work, and risk of others’ work. Co-authoring should not assign each co-author independent work, but rather should be a collab- oration with individuals bringing in their particular skills: whichever co-author is the best writer should be the editor; whoever is particularly adept at research should be doing that; whoever understands the economic theory the best should be determining what research should be pulled in, etc., and this is the reason why case studies are given more than two weeks each to do. Working with co-authors also allows someone to read over what you wrote and provide feedback prior to submission.
When submitting work with co-authors you are responsible for the entirety of the submission (as are they). I do not get involved in group dynamic issues: if you feel that someone did not pull their weight on a particular assignment then you should not work with them on the next assignment.
Case Study Grading
Each case study is graded on eight metrics: three coarse grain and five question-specific evaluations. The overall grade is based on not an equal weighting of all eight, but are broken down so students can see where improvement is needed.
Coarse Grain Grading Rubric
The following page provides greater detail on the writing and economic rubrics.
• Writing: an assessment of the readability of the entire paper. This includes formatting, flow, and proper citations.
• Economics: an assessment of the submission's understanding and application of economic theory (in general and specific to the relevant material).
• Research: an assessment of the quality and quantity of outside research (quantity does not make up for poor quality). Students are expected to provide credible sources for all claims made within their submission. Deductions apply to arguments that rely on purely believing your work - the expectation is that everything needs credible evidence in support.
Question Grading Rubric
Individual question response grades carry more weight, particularly the questions focusing on application of the relevant material.
• A grade: must demonstrate understanding of the relevant economic concepts from that section of material, apply or evaluate it correctly with credible evidence, and correctly apply general economic theory (i.e. rationality, efficiency, etc.).
• B grade: at least must demonstrate understanding of the relevant economic concepts from that section of material. The application or evaluation of it may be lacking or insufficient, but at least provides credible evidence.
• C grade: does not demonstrate full understanding of the relevant economic concepts, or is broadly lacking credible evidence to support claims or assumptions, or research is mis-applied.
• D grade: does not demonstrate understanding and lacks support for claims, but effort (i.e. research) is evident but insufficient.
• F grade: for submissions that demonstrate insufficient understanding, no additional effort, offers mostly conjecture, and incomplete submissions.