ELE 3786 Economic Analysis of Law

ELE 3786 Economic Analysis of Law

Course code: 
ELE 3786
Course coordinator: 
Christian Riis
Henrik Sigstad
Course name in Norwegian: 
Product category: 
Bachelor - Electives
2024 Autumn
Active status: 
Level of study: 
Teaching language: 
Course type: 
One semester

How can effective contracts be designed? When should you sue a supplier? How can businesses operate in countries with weak legal systems? How can economic theory help us explain and understand existing law?

This course provides an introduction to the economic analysis of law. We will analyze how individual firms can best adapt to legal rules and how the legal system influences markets. We will also use economic theory to explain why our legal rules exist. Economic analysis is a powerful tool for interpreting and understanding existing law and can be used to formulate compelling legal arguments.

The teaching will be based on cases that may vary from year to year.

Learning outcomes - Knowledge

By the end of the course, students should:

  • Have acquired knowledge about the field of economic analysis of law

  • Have acquired basic knowledge of tort law, contract law, environmental law, criminal law, and civil procedure.

  • Be familiar with key concepts and methods in the economic analysis of law:

    • Economic efficiency

    • Coase theorem

    • Bargaining theory

    • Basic game theory

Learning outcomes - Skills

After completing the course, students should be able to:

  1. Conduct an economic analysis of a legal rule.

  2. Analyze:

    1. How the legal rule affects economic behavior: How individual firms can best adapt to the legal rule and how other actors can be expected to respond.

    2. What the consequences of the legal rule are for economic efficiency.

    3. How existing law can be understood and interpreted based on the goal of efficient use of society's resources.

  3. Read and understand legal opinions that use economic arguments.

General Competence

After completing the course, students should have an overview of the field of economic analysis of law, be comfortable with applied microeconomic analysis, and be able to think systematically about the effects of legal rules on economic decisions.

Course content
  • Contracts. How can effective contracts be designed? How can businesses operate in countries where contracts are difficult to enforce? What is the economic explanation behind contract law?

  • Economic crime. How does the legal system affect incentives to commit criminal acts such as tax evasion, money laundering, fraud, and corruption? How can businesses avoid being involved in economic crimes?

  • Environmental law. How should the law be designed to combat environmental problems most effectively?

  • Tort law. When is it profitable to enter with a lawsuit? How much compensation will the plaintiff be entitled to? How can tort law be explained with economic theory?

  • Civil procedure. Is litigation too expensive in Norway? When should settlements be reached? What are the consequences of procedural rules for actors' incentives to comply with the law? Why are procedural rules designed the way they are?

Teaching and learning activities

The course will consist of interactive lectures, group discussions, and solving exam-relevant tasks in groups. Three out of five submissions must be approved to take the exam. The teaching uses cases that may vary from year to year.

Software tools
No specified computer-based tools are required.
Required prerequisite knowledge

Det kreves ingen spesielle forkunnskaper.

Exam category: 
School Exam
Form of assessment: 
Written School Exam - digital
Exam/hand-in semester: 
First Semester
Support materials: 
  • All printed and handwritten support materials
  • BI-approved exam calculator
  • Simple calculator
3 Hour(s)
Exam code: 
ELE 37861
Grading scale: 
Examination when next scheduled course
Type of Assessment: 
Ordinary examination
Total weight: 
Student workload
30 Hour(s)
50 Hour(s)
Student's own work with learning resources
100 Hour(s)
Prepare for teaching
20 Hour(s)
Sum workload: 

A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 7,5 ECTS credit corresponds to a workload of at least 200 hours.