Overview
The essence of this project is for you to choose a legal topic that is of interest to you and demonstrate that you can apply economic analysis to the legal issues raised by the topic. One approach to identifying a topic is to skim the National Law Journal or legal sections of The Econcomist, New York Times, Washington Post, Wall Street Journal, Philadelphia Enquirer, or similar source for actual cases or other legal disputes that are in the news. Another approach is to think of an application of a mechanism that we study in the course. It is best if you limit your topic to the areas of property, contracts, torts, crime, or concepts of justice. You may not do project on antitrust law and economics.
You should list sources that you used for the project, but you do not have to use outside sources.
Some very good projects have been based entirely on the student’s own ideas, without any external references.
Most acceptable papers are in the rage of 8 to 12 pages. Shorter papers usually indicate lack of effort. Some papers have been 30-40 pages. That is unnecessarily long, but I do not impose a limit.
This course has largely focused on the problem of aligning incentives for individuals with private information to make decentralized decisions that achieve (implement) some social goal as an equilibrium outcome. In your final paper, you should use this mechanism design approach to law and economics to address some problem of your choosing.
The textbook provides many applications that serve as models for the type of analysis I would like to see you perform in your final paper. Some of these applications use formal mechanisms (see Catalogue of Mechanism in text) that are general enough to fit many different real world situations. In other cases, the mechanism design framework is a less formal approach to designing incentive systems. In either case, the approach has the following features that you should include in your paper:
A clear statement of the social goal.
A description of the individuals (agents) and how they differ (their type).
A description of how private information is distributed among the individuals.
A method of publicizing this information (the information space).
A set of rules or incentives (outcome functions) that determine individual outcomes as a function of all the individual choices.
An authority or institution that gathers the information and oversees the application of the rules.
An equilibrium concept (dominant strategy, Nash, sequential, Bayesian, Core, etc.) that determines an outcome from which individuals or coalitions will not deviate.
Alignment of the outcome with the social goal.
In real world applications, these features are desirable but may not always be fully present.
In grading your paper, I will consider many criteria, including the following:
creativity and originality in choosing and formulating your problem
use of the framework outlined above
- your trade off between formalism and informalism (do you ignore obvious formal mechanisms that apply, do you ignore obvious problems in fitting your problem into a given formal mechanism
- depth of your understanding of the concepts presented in the course
- clarity and completeness of your explanation of your problem and analysis
- the extent to which your analysis goes beyond what is presented in class or in the text (do not simply summarize an application from the course material)
- a critical analysis of the strengths and shortcomings of existing laws versus your approach
- Your project should include graphical models where appropriate. You should compose the project as if you are addressing someone with the background of your classmates. The project is due on the day that the
- University schedules the final exam for this course. The project is in place of a final exam. There is no final exam.
The project requirements are intentionally flexible to permit you to choose an interesting topic and present it in an interesting manor. My grading will accommodate different approaches to satisfying the project requirement. Thoughtful application of mechanism design to law is the main requirement.
Creativity is rewarded.
Appendix: Catalog of Mechanisms
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Example Papers:
RESEARCH PAPER AEF.docx
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408 Final.pdf
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Here are some general topics that might make good topics. I hesitate to elaborate them in detail because I want you to exercise some thought and creativity in formulating a topic. I hope these topics will inspire some variation of your own.
Beach erosion and reconstruction cases
Eminent domain in gas pipeline construction
Western water rights
Fishery rights: International or domestic (Salmon, whales, tuna, etc)
Western cattle grazing rights
Logging rights
Public land use allocation
Fracking
Cap and Trade programs (Europe, California, China, etc)
Allocation of new airport landing slots (rights) between LAX and China
Allocation systems for human organs for transplantation
Freedom of the Seas, (South China Sea)
Fraternity or Sorority rush as a matching model
Liability for emissions cheating (VW, Mitsubishi)
Allocation of tribal revenues (from casinos, tribal lands, etc)
Allocation of orbital rights for satellites
Apply a mechanism to provision of some specific public good
Apply a mechanism to provision of some specific public externality problem
Intellectual property rights (how should rights be established, how to allocate benefits of joint contributions)
Franchise rules in major league or college sports (division of TV revenues, spending caps, player trading, the draft)
Optimal criminal sentencing
Interesting methods for aggregating individual preferences to obtain a social goal
Property rights in personal likeness (appearance, voice, identity, persona, etc.)