Law students are routinely taught how to gather facts, interpret legal texts, and apply legal rules to established facts. These techniques are and will always be important to all lawyers, regardless of their position and practice. However, they do not suffice. Lawyers in almost every area of practice (litigation, corporate, government, public interest, etc.) must be familiar with analytical concepts and methods that go beyond fact gathering and interpretative legal skills in order to be successful. This course covers the basics of the methods. It will provide you with a fundamental understanding that allows you to apply them when necessary in legal practice. This course is designed to be fully accessible to those with no prior quantitative training or background in the subjects covered. However, a high school level of mathematics is required.
Vorlesung Methodenlehre, Contracting - Example: Your next tenancy agreement; Why exchange goods and services?; The Edgeworth box: Tea or coffee?; Why contracts?; Complete contracts; Contracts and the law; Adverse selection vs. moral hazard; Adverse selection: The reaction cycle; Moral hazard; Resolving disputes; Contract checklist; Production contracts; Examples for flat-free and cost-plus contracts; The hold-up problem; Sale and lease of property; Loan contracts; Principal-agent contracts; Example: Bonuses for executives.
Vorlesung Methodenlehre, Game Theory - Decision theory vs. game theory; A typical legal application of game theory; Some applications of game theory in legal settings; Representation of games; Normal-form games; The prisoner's dilemma; Prisoner's dilemma in litigation; Solution concepts for the prisoner's dilemma; Discoordination game: Matching pennies; A clever takeover bid; Dominant strategy equilibrium; Iterated games; The iterated prisoner's dilemma; Social benefits or social losses?; Achieving the cooperative outcome; N-person prisoner's dilemmata and common goods; Coordination games; Extensive-form games; The ultimatum game.
Vorlesung Methodenlehre, Individual Finance - What is finance?; Individual Finance; Finance and Lawyers; The time value of money; The time price of money;Compound interest; The effect of compound interest; Example: An investment decision; Example: Refined litigation risk analysis; Inflation; The Rule of 72; Net present value of an investment; The concept of Annuities; Internal rate of return; Risk and return; Mortgages as means of individual finance; The concept of a mortgage; Student debt in the US; Financial distress: Personal bankruptcy; Financial innovations before the crisis; The financial crisis - how come?; Global CDO Issuance Volume 2000 - 2012; Legal responses to the finacial crisis; Too big to fail?.
Vorlesung Methodenlehre, Decision Theory - Fundamental concepts; Expected value; Cumulative Probabilities; Serially cumulative probabilities; Decision trees; TreeAgePro and other software for litigation risk analysis; Difficulties in building the tree; Discounting and risk preferences; Risk aversion; Sensitivity analysis; Challenges to the rationality assumption.
Vorlesung Methodenlehre, Due to software failure this podcast covers only the first part of unit 4; we are currently working on restoring the second part.
Accounting - Accounting and Lawyers; Why Accounting?; Financial Statements; Financial statements in the media; The fundamental accounting equation; The structure of a balance sheet; San Francisco Coffee Company GmbH; The income statement; Sample income statement; Alternative design of the income statement; Income statement Siemens AG; Cash flows; Sample cash flow statement (IAS 7).
Vorlesung Methodenlehre, Corporate Finance - What is corporate finance?; The fundamental accounting equation; Corporate finance and lawyers; The spectrum of financial products; Why do firms emerge?; The theory of the firm; Insourcing or outsourcing - make or buy?; Insourcing at General Motors; Why is there limited liability?; Separation of ownership and control; Shareholder coordination; Managers as agents for the stockholders; The case of Ernst Lieb; Diverging interests; Principal-agent theory; The case of Rajat Gupta; Countermeasures for principal-agent problems; The market for corporate control; Agent costs of debt; The efficient-market hypotheses; Behavioral finance; The dot-com bubble; Company valuation.
Vorlesung Methodenlehre, Law and Economics I - The basic idea of Law and Economics; Positive and normative Law and Economics; History of Law and Economics; Importance for jurists and lawyers; Property rights; Bargaining and efficiency; The externality problem; Solutions to the externality problem; Which legal measure to take?; The Coase theorem; The Coase's invariance thesis; Coase's efficiency thesis; Pareto efficiency and Kaldor-Hicks efficiency; Coase's assumptions; Challenges to the Coase theorem; Transaction costs; Consequences of high transaction costs; The (political) program of Law and Economics.
Vorlesung Methodenlehre, Microeconomics II - Microeconomics II - Imperfect consumer information; Adverse selection: The reaction cycle; Government responses; Example: Practice of mediation; Monopoly and related market behavior; Relevance for lawyers; Types of monopolies; Monopoly and IP; How a monopolist sets prices; The monopolist's calculation; Price discrimination; Government policy and monopoly; High profile cases; Natural monopolies and price regulation; Pricing in a duopoly; Oligopoly and monopolistic competition; Public goods; Welfare economics.
Vorlesung Methodenlehre, Microeconomics I - Microeconomics in the news; What is microeconomics about?; Microeconomics vs. macroeconomics; Microeconomics and lawyers; Individual decisions on the consumption of goods; Basic demand theory; Elasticities; Consumer choice; Opportunity costs; Supply and demand curves; Supply and demand; Competitive markets; Social welfare; Consumers' surplus and producers' surplus; Why competition?; Total surplus as a measure for social welfare?;
Government intervention; Price floor and price ceiling; Commodity taxation leading to a deadweight loss; Distributive justice; Lessons for lawmakers.
Vorlesung Methodenlehre, Law and Economics II - Information productivity; Information duties; Complete contracts; Incomplete contracts; Contractual risk allocation; Risk allocation schedule; Utility function of a risk-averse individual; Contractual risk allocation; Risk allocation and legal practice; Sanctions for breach of contract; Efficient breach of contract; Specific performance and efficiency; Restitution damages and efficiency; Reliance damages and efficiency; Expectation damages and efficiency; Sanctions for breach of contract; Contract renegotiation.
Vorlesung Methodenlehre, Statistics I - Statistics and lawyers; What do statisticians do?; Descriptive vs. inferential statistics; Terms used for descriptive statistics; A multivariate date set; Building a histogram; Numerical descriptors; Inferential statistics; Variables used in inferential statistics; Deviations and distributions; The standard normal distribution; The Gaussian distribution; Z-scores and z-table; Calculating with a z-table; Hyothesis testing; Error types; Estimation; How to perform empirical research; The difference between coincidence and correlation; Negative Correlation; The difference between correlation and causation.
Vorlesung Methodenlehre, Statistics II - Methodology of econometrics; Regression analysis; OLS regressions; Minimizing ordinary least squares; Bivariate and multivariate statistics; Regression analysis in practice; Event studies; Cumulated average abnormal returns; Survey data and validity; Stratified random sampling; Misleading averages: Gesell's norms; Percentages and percentage points; How to tune up a graph; Statistical misinterpretation; Marketing with statistics; Suspicious wording; Statistical Don'ts.
Vorlesung Methodenlehre, Law and Economics IV - Dispute resolution and legal practice; Economic perspective on litigation; Corrective policies; Settle or litigate?; The English rule; The American rule; The zone of possible agreement; Effects of risk aversion; Prisoner's dilemma in litigation; The rationality assumption; Optimistic overconfidence; A hypothetical value function; Other challenges to the rationality assumption; Alternative dispute resolution; Methods of alternative dispute resolution; Dispute resolution clauses; Private and public effects of ADR; Settlement statistics.
Vorlesung Methodenlehre, Law and Economics III - Tort law and legal practice; The crisis of tort law; Costs of the US tort system; The history of liability law and economics; Liability standards; Tort law as a complement to contract law; Factors influencing the efficiency of liability standards; Damage costs; Liability (only) for damages intentionally caused; Negligence liability; The Hand rule; Strict liability; Identifying the optimal precaution level; Contributory vs. comparative negligence; Practical problems with the negligence rule and the strict liability; Which liability rule to choose?; Optimal liability standard; Liability and administratives costs.