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-0-0-0-0-0-0-0-0-0Praise for “The Legal Analyst” “Every good lawyer knows that there’s a standard set of argumentative moves that are repeatedly made in different legal settings. Farnsworth’s book is chock full of the kind of tools that every legal analyst should have in his or her back pocket. This ambitious book is likely to spur a lively debate about what exactly are the essential tools of legal analysis. While some will grouse that their pet tool was excluded, the book points toward a new way of organizing the first-year curriculum. Farnsworth is forging a new pedagogical canon.” ia n ay r e s , Townsend Professor, Yale Law School and author of Super Crunchers “This is an outstanding book. It occupies a significant and unique niche in the literature of jurisprudence and legal methodology. The beauty of this book is that it introduces students and practitioners alike to basic methods of analysis of legal rules and outcomes across a broad range of disciplines (economics, psychology, sociology, jurisprudence, and evidence). This should become the ultimate ‘toolbox’ for those new to, or simply interested in, the profession.” d av i d j . b e d e r m a n, Emory University School of Law “The Legal Analyst provides an engaging and enlightening introduction to the most essential concepts of legal reasoning. In exceptionally clear prose, Ward Farnsworth walks the reader through concepts such as the Coase theorem, the prisoner’s dilemma, and property rules and liability rules—peeling away the fog of confusion that often envelops them to reveal the deep and startlingly simple insights that they offer. The reader comes away from the book with a toolkit of ideas that can be used to take apart and examine almost any legal issue.” oon a a . h at h away, Yale Law School -0-0-0-0-0-0-0-0-0- T h e L e g a l A na ly st -0-0-0-0-0-0-0-0-0- The Legal Analyst A Toolkit for Thinking about the Law Wa r d F a r n s w o r t h -0-0-0-0-0-0-0-0-0- T h e U n i v e r s i t y o f C h i c a g o P r e s s Chicago and London For Ward Farnsworth, Sr. The University of Chicago Press, Chicago 60637 The University of Chicago Press, Ltd., London © 2007 by The University of Chicago All rights reserved. Published 2007 Printed in the United States of America 16 15 14 13 12 11 10 09 08 2 3 4 5 ISBN-13: 978-0-226-23834-0 (cloth) ISBN-13: 978-0-226-23835-7 (paper) ISBN-10: 0-226-23834-2 (cloth) ISBN-10: 0-226-23835-0 (paper) library of congress cataloging-in-publication data Farnsworth, Ward, 1967– The legal analyst : a toolkit for thinking about the law / Ward Farnsworth. p. cm. Includes bibliographical references and index. ISBN-13: 978-0-226-23834-0 (cloth : alk. paper) ISBN-10: 0-226-23834-2 (cloth : alk. paper) ISBN-13: 978-0-226-23835-7 (pbk. : alk. paper) ISBN-10: 0-226-23835-0 (pbk. : alk. paper) 1. Law—Methodology. 2. Sociological jurisprudence. 3. Law and economics. 4. Law—Psychological aspects. I. Title. k212.f37 2007 340'.11—dc22 2006039091 ∞ The paper used in this publication meets the minimum requirements of the American National Standard for Information Sciences—Permanence of Paper for Printed Library Materials, ANSI Z39.48-1992. Contents 0 Preface · vii Acknowledgments · xi Part I. Incentives 1 2 3 4 5 6 7 8 Ex Ante and Ex Post · 3 The Idea of Efficiency · 13 Thinking at the Margin · 24 The Single Owner · 37 The Least Cost Avoider · 47 Administrative Cost · 57 Rents · 66 The Coase Theorem · 75 P a rt I I . T r u s t , C o o p e r at i o n , a n d O t h e r P r o b l e m s f o r M u l t i p l e P l ay e r s 9 10 11 12 13 14 15 16 Agency (with Eric Posner) · 87 The Prisoner’s Dilemma · 100 Public Goods · 109 The Stag Hunt · 117 Chicken · 126 Cascades · 136 Voting Paradoxes · 144 Suppressed Markets (with Saul Levmore) · 152