Samenvatting Class notes - law & economics

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Samenvatting - Class notes - law & economics

  • 1427839200 property

  • Definition property
    Bundle of rights which describe what people may and may not do with the resources they own
  • Characteristics rights
    rights are: impersonal ( they attach to the property not to the owner); the owner is free to exercise the rights over his or her property; others are forbidden to interfere with the owner's rights
  • Coase Theorem
    When private rights are clearly established and transaction costs are zero there will be an efficient allocation of scarce resources
  • Endownment effect
    People demand a higher price for a product that they own, than the price that they would be willing to pay in order to buy the product
  • Normative Coase Theorem
    Structure the law so as to remove the impediments to private agreement ( lubricate bargaining)
  • Normative Hobbes Theorem
    Structure the law so as to minimize the harm caused by failure in private agreement; The law should assign the rights to the party who values them the most
  • What types of remedies exist?
    Legal remedy and equitable relief
  • Definition legal remedy
    payment of compensatory money damages. Damages are usually the remedy for broken promises and accidents. Applicable in contract and in tort law. Damages are also refered as liability rule
  • Definition equitable relief
    consists of an order by the court directing the defendant to perform an act or to refrain from acting in a particular manner. This order is in the form of an injuction. This applies usually in in property law. It is referred to as property rule
  • What rule applies when transaction costs are zero
    Damages and injuction are both equally efficient. 
  • What rule applies when trascation costs are low?
    Injuction is the usual remedy, because parties can bargain with each other, when the rights are clearly defined
  • What rule applies when transaction costs are high?
    Damages is the usual remedy, because it involve lower administrative costs.
  • Patent system
    ownership rights to inventions, processes and other technical improvements; exclusive rights granted by the government to the inventor to manufacture, use or sell an invention for a certain number of years
  • Copyright system
    ownership rights to author, artists and composers; property rights to creations on demonstration that their work is original expressions
  • Trademark system
    ownership rights for distinctive commercial marks or symbols
  • Characteristic information
    credibility, non-rivalrous, non excludable, non appropriability
  • Non-appropriability
    information is cheap to transmit but expensive to produce. producers have difficulty in selling information for more than just a fraction of its value.
  • What are the remedies for an uregulated market which under supplies the efficient amount of information?
    the state should subsidize art and science; charitable contribution; trade secrets protection; intellectual property law`
  • Royalty
    the holder of the patent can licence the use for the patent in exchange for the licensee's payment of a fee
  • Broad patents
    encourages fast duplicative research; if the social value of investment in fundamental research is higher than the social value of investment in developing application, the patent should be broadened; broad patents are also awarded for invention with little stand alone value
  • Narrow patents
    Encourages slower complementary research; if the social value of investment in developing applications exceeds the social value of investment in fundamental research the patents should be narrowed; award narrow patents for inventions with large stand alone value.
  • Fair use exception
    permits some unauthorized use. books can be quoted in reviews and satires or distributed for educational purposes.
  • Organizations
    a structure of offices and roles capable of corporate actions
  • Partitioning
    separating the assets of the company from the creditors of the owners
  • Co-mingling
    Not separating the assets of the company from the creditors of the owner
  • Limited liability
    people who invest in a stock risk losing their investment and nothing more
  • What are the principles of assigning property rights?
    first possession: first in time, first in right, it is cheap to apply, causes preemptive investment in order to obtain the right; tied ownership: ties fugitive property to settled property, it is expensive to administer and enforce
  • Transfer of rights, US and Europe
    US: people can only transfer rights which they legitimately have. gives an extra incentive to the buyer to verify that the seller is the actual owner; Europe: the good faith requirements means that the buyer must truly believe that the seller actually owns the good. it gives an extra incentive to protect property against theft
  • When is it efficient for the good faith buyer to acquire title?
    When the cost of the original owner to protect the theft is lower than the cost of the purchaser to verify that the seller is the owner
  • When is efficient to retain title against the good faith buyer?
    When the cost of the original owner to protect the good against theft is higher than the cost of the purchaser to verify that the seller is the owner
  • Adverse possesion
    If the owner has slept on his rights, allowing trespass to age, then trespasser may acquire ownership of the property. Someone can acquire ownership rights of another's property by occupying it for a period of time specified in the statute, provided that the occupation is adverse to the owners' interests and the original owner does not protest or take legal action. The property moves to a higher valuing user.
  • Estray statute
    Statute which stipulates a procedure for the finder to acquire ownership of a lost or abandoned property
  • Rule against perpetuities
    imposes a time limit on property restrictions imposed by the term of a gift, sale, bequest or other transaction.
  • Private necessity
    In an emergency, one person can use another's property without permission. However the user must compensate the owner of the cost of use
  • Inalienability
    Something of yours which you cannot lose by any means ( body organs, sex, children are inalienable by sale, vote is alienable by sale or gift, human rights are inalienable by any means)
  • Nuisance definition
    a harmful externality
  • Temporary damages
    Damages awarded to the plaintiff for the harm that was inflicted on him in the past. High transaction costs
  • Permanent damages
    damages awarded to the plaintiff for the past harm plus the PVD of all anticipated future harms. High error costs. They impose no incentive for the harmer to adopt technical improvement.
  • Taking definition
    When the government takes someone's property and also compensates for it. This leads to wasteful investment because owners will be indifferent between having the property and not having it with compensation.
  • Regulation
    When the government takes someone's property but doesn't compensate for it
  • When does a regulation count as protecting the public from harm?
    When the regulation mitigates the harm. The state may condition a permit on mitigating the harm caused by its exercise.
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Voorbeelden van vragen in deze samenvatting

Definition property
Characteristics rights
Coase Theorem
Endownment effect
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