29252 - Economic Analysis of Contracts

Academic Year 2012/2013

  • Teaching Mode: Traditional lectures
  • Campus: Bologna
  • Corso: Second cycle degree programme (LM) in Financial Markets and Institutions (cod. 0901)

    Also valid for Second cycle degree programme (LM) in Law and Economics (cod. 0899)

Learning outcomes

In this course a law and economics analysis of contract law is provided. Particularly, contract rules solving problems of uncertainty, risk aversion and uncertainty are analyzed, together with remedies for contract breach. The effect of several contractual clauses is also studied, in the attempt to design contractual solutions that have the effect to limit the opportunistic behavior of the parties.

Course contents

LectureI

The basis of the economic approach to the analysis of law.

Readings:

Parisi, “Positive, Normative and Functional Schools in Law and Economics” European Journal of Law and Economics (2004) (http://ssrn.com/abstract=586641 )

LectureII

Contracts without law?

Readings:

Kronman, Contract Law in the Law of Nature (Journal of Law, Economics and Organization, 1985)

Fon, V. e F. Parisi, “Reciprocity-Induced Cooperation” Journal of Institutional and Theoretical Economics (2003) (http://ssrn.com/abstract=313180 )

LectureIII

The Coase Theorem

Readings:

Parisi, “Coase Theorem,” in New Palgrave Dictionary of Economics, 2nd ed. (2010) (http://ssrn.com/abstract=981282 )

LectureIV

The economic functions of contract law

Readings:

Cooter-Ulen, Law and Economics (English edition), Cap. 6

LectureV

An economic model for remedies for breach of contract

Readings:

Cooter-Ulen, Law and Economics (English edition), Cap. 7

Cenini, M. e F. Parisi, “Interesse Positivo, Interesse Negativo e Incentivi nella Responsabilita' Contrattuale: Un'Analisi Economica e Comparata” 54 RIVISTA DI DIRITTO CIVILE 218-242 (2008)

Parisi, F., B. Luppi e V. Fon, Optimal Remedies for Bilateral Contracts (http://ssrn.com/abstract=1020669)

Lecture VI

The optimal allocation of risk in contracts

Readings:

Cenini, M. e F. Parisi, “Allocazione del Rischio tra Clausola Penale e Autonomia Contrattuale” 55 RIVISTA DI DIRITTO CIVILE 309-325 (2009)

Lecture VII

Contract and Asymmetric Information

Readings:

Akerlof, George A. (1970). "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism". Quarterly Journal of Economics (The MIT Press) 84 (3): 488–500

Dari-Mattiacci, Onderstal and Parisi, Inverse Adverse Selection: The Market for Gems (2010) (http://papers.ssrn.com/author=227722)

Parisi, Francesco “The Harmonization of Warranties in European Sales Law: An Economic Analysis”American Journal of Comparative Law(2004) (http://ssrn.com/abstract=276993)



Assessment methods

Written exam

Office hours

See the website of Francesco Parisi