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CCLE020 Economic Application to Law

Module Description

The rationale of this course is to introduce students with a unified framework under which Economic Law operates and its relevance to models in Economic Theory. Students seeking to proceed to an interdisciplinary working environment need to develop an understanding of these concepts and this module meets these needs. This course complements courses taught currently in the CCLS.  

This course introduces concepts in Economics and its interaction with Law at a level that is appropriate for students with a legal background. The first part of the course introduces the student with concept of Risk and Theory of Agency, Asymmetric information and Moral Hazard. The focus eventually turns to various topics, such as Term Structure of Interest Rates and its application to valuation of litigation; theory of Arbitrage and its role in “Risk and Return” models. Through the course analysis, students will develop a thorough understanding of the models that influence and eventually determine the interaction among economic agents and entities. Specific case studies are used to analyse actual situations and explore different possible solutions using both legal and financial models. The course concludes with auction pricing model and its role in litigation valuation as well as game theory and its application to litigation.

Module Topics

  • Risk and Theory of Agency
  • Asymmetric information and Moral Hazard and Signalling
  • Term Structure of Interest Rates
  • Application of Interest Rates and Discount Rates to Valuation Litigation
  • Theory of Arbitrage and its role in “Risk and Return” models
  • Auction Pricing Model and its role in Valuation Litigation
  • Game Theory and its application to litigation

Applicable Groupings

  • LLM in Law and Economics

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