Economic Foundations of Law and Organization

Donald Wittman is Professor of Economics at the University of California, Santa Cruz. He previously taught at the University of Chicago. Professor Wittman's book The Myth of Democratic Failure (1995) won the American Political Science Association award for the best title in political economy in the years 1994–6. He is coeditor of the forthcoming Oxford Handbook of Political Economy. Professor Wittman's research has appeared in journals such as the American Economic Review, Journal of Political Economy, American Political Science Review, Journal of Economic Theory, Journal of Legal Studies, Journal of Law and Economics, and Journal of Public Economics. His research has been supported by various National Science Foundation programs.

• 1. Introduction; Part I. Economic Fundamentals - Rationality and Efficiency: 2. Rational behavior, preferences and prices; 3. Pareto optimally versus utilitarianism; 4. Cost-benefit analysis; Part II. Transaction Costs and the Coasean Revolution: 5. Transaction costs; 6. Fencing in and fencing out; 7. Coase versus Pigou; Part III. Cost-Benefit Analysis and the Law: 8. How to think like an economist: two hawks and a fence; 9. Smoking regulations: market solutions; 10. Rules of thumb: sports and driving rules; Part IV. Rights: 11. The protection of entitlements; 12. Property rights or communal rights in knowledge?; 13. Liability for harm or restitution for benefit; 14. Takings: should there be compensation for regulation; Part V. Torts and Crimes: Liability Rules and Punishments: 15. Cost minimization and the role of liability rules; 16. Negligence rules; 17. Crime and criminal law; Part VI. The Role of Sequence: 18. Mitigation of damages and last clear chance; 19. The Good Samaritan rule; 20. The role of being first in allocating entitlements; Part VII. Contracts and Breach of Contract: 21. Default rules and breach of contract; 22. When is a handshake a contract and when is a contract not a contract; 23. Marriage as contract: family law; Part VIII. Harms Arising Between Contracting Parties: 24. Exploding coke bottles; 25. The role of asymmetric information; 26. Consumers and producers cause damage: lawnmowers; Part IX. Insurance and the Law: 27. The market for insurance; 28. Royalties for artists and insurance for investors; 29. Regulating automobile insurance; 30. Bankruptcy; 31. Deposit insurance and banking crises; Part X. Governance and Organization: 32. The governance of organization; 33. Corporate law and agency problems; 34. Insider trading; 35. Organizational response to opportunism; 36. The organization of legislatures; 37. Federalism; 38. The internal organization of the family; Part XI. Bargaining in the Shadow of a Trial: 39. Settlement of cases; Table of cases.

'This text is interesting and valuable, and has many useful things to say about both law and organization from a solid economic perspective. The author is a well-spring of theoretical knowledge, legal cases, examples, and stories, and this serves his teaching purposes well. An excellent textbook.' Professor Avner Ben-Ner, Carlson School of Management, University of Florida