1. Music: The Beatles: Magical Mystery Tour (1967)

2. Two Percolating Concerns This Class is Fine BUT : 1.Does any of this really matter? 2.I don’t know what I need to know for the exam

3. Two Percolating Concerns 1.Does any of this really matter? –9/11 & Lawyers –Calisthenics & Weasels

4. Two Percolating Concerns 2.I don’t know what I need to know for the exam Nothing in Format of Exam or What is Expected Will Be a Surprise When We Get There (I Promise) You Will Have Lots of Info on Technique – Getting to Maybe – Exam Technique Workshop – Old Exams Standard Exam Task (& Part of Mine): Apply Authorities Studied to New Hypothetical or “Fact Pattern”

5. GROUP ASSIGNMENT #1 Standard Exam Task: Apply Authorities Studied to New Hypothetical or “Fact Pattern” Assmt #1 : Structured Sequence of Arguments – Not everything you could say about the hypo – BUT Together good basis for an exam answer – Specific arguments for each party from (1A) Facts of Shaw (1B) Specific language from Shaw (1C) Labor policy

6. GROUP ASSIGNMENT #1 Two Important Skills to Practice 1.Focusing on One Narrow Topic at a Time – Read Instructions Carefully & Just Do Your Topic: (1A) Facts of Shaw OR (1B) Specific language fromShaw (1C) Labor policy – For Examples, Look at Shack Qs/Comments/Models – Doing more than you’re asked earns penalties not extra credit Cf. Responding to Judges in Oral Argument Cf. Coverage in Associate Assignments at Law Firm

7. GROUP ASSIGNMENT #1 Two Important Skills to Practice 1.Focusing on One Narrow Topic at a Time 2.Finding Best Arguments for Each Party – Generally in Structure of Assignment – Good Exam Answers are Schizophrenic Conversations

8. GROUP ASSIGNMENT #1 Legal Smeagols

9. GROUP ASSIGNMENT #1 Some General Points 1.Carefully Follow Formatting & Substantive Directions 2.Special Problems of Tie-Breaker Qs 3.Working Together – Take Advantage – Be Cooperative QUESTIONS?

10. LOGISTICS: CLASS #10 Full Section B Contact List Distributed via E-Mail Tuesday. If you did not receive it or some of your info is wrong, contact Letty Tejeda. Next Set of Course Materials – Now on Course Page – A Few Pages of Additional Reading for Tomorrow – A Few DQs (Uranium) – We’ll cover 1 st Tomorrow to set up next week’s work

11. LOGISTICS: CLASS #10 Graded Briefs – OXYGEN: Mullett Brief due next Thurs (9/20) @ 9pm Look at IM #2: – Instructions for all Written Work – Instructions for Written Briefs E-Mail me if Qs – RADIUM: I’m Starting Work on Shaw Briefs (Goal = Mon 9/24) Meanwhile can look at comments/models in Info Memo #3

12. STATE v. SHAW DQ27: Uranium Can you frame a single rule that makes sense of the results in Pierson, Liesner, and Shaw? Why is this a useful exercise? Explain unreconciled cases In court or legal memo Ideally reconciles cases AND shows that your side wins

13. STATE v. SHAW DQ27: Uranium STUDENT #1: Property rights to a wild animal occur when a pursuer, [ii] who continues to pursue the animal and has no intent of releasing him back into the wild, [i] has substantially rid the animal of his natural liberty as to render escape highly unlikely under normal circumstances.

14. STATE v. SHAW DQ27: Uranium Property rights to a wild animal occur when a pursuer …  A pursuer acquires property rights to a wild animal when the pursuer…

15. STATE v. SHAW DQ27: Uranium A pursuer acquires property rights to a wild animal when the pursuer… [i] has substantially rid the animal of his natural liberty as to render escape highly unlikely under normal circumstances.

16. STATE v. SHAW DQ27: Uranium A pursuer acquires property rights to a wild animal when the pursuer… [i] (a)has substantially rid the animal of his natural liberty  Need both (a) & (b)?  (b) as to render escape highly unlikely (c) under normal circumstances.

17. STATE v. SHAW DQ27: Uranium A pursuer acquires property rights to a wild animal when the pursuer… [i] (a)has rendered escape highly unlikely (b) under normal circumstances. (Very clever idea)

18. STATE v. SHAW DQ27: Uranium A pursuer acquires property rights to a wild animal when the pursuer [i] has rendered escape highly unlikely under normal circumstances; and [ii] (a) continues to pursue the animal and (b) has no intent of releasing him back into the wild,

19. STATE v. SHAW DQ27: Uranium A pursuer acquires property rights to a wild animal when the pursuer [i] has rendered escape highly unlikely under normal circumstances; and [ii] (a)continues to pursue the animal (do you want to require for traps/nets) (b) has no intent of releasing him back into the wild

20. STATE v. SHAW DQ27: Uranium A pursuer acquires property rights to a wild animal when the pursuer [i] has rendered escape highly unlikely under normal circumstances; and [ii] (a)continues to pursue the animal (b) has no intent of releasing him [it] back into the wild (do you want test of pure intent w/o actions?)

21. STATE v. SHAW DQ27: Uranium A pursuer acquires property rights to a wild animal when the pursuer [i] has rendered escape highly unlikely under normal circumstances; and [ii] continues to pursue the animal or to otherwise show he has no intent of releasing it.

22. STATE v. SHAW DQ27: Uranium STUDENT #2: A wild animal is deemed property of a person pursuing it if he … A person is deemed the proprietor of a wild animal if he … 1.through his actions made escape of the animal highly unlikely and 2.through his actions has substantially decreased the likelihood of escape since the outset of the pursuit.

23. STATE v. SHAW DQ27: Uranium STUDENT #2: A wild animal is deemed property of a person pursuing it if he … A person is deemed the proprietor of a wild animal if he … 1.through his actions made escape of the animal highly unlikely and 2.through his actions has substantially decreased the likelihood of escape since the outset of the pursuit.

24. Beware of Pronouns!!!

25. STATE v. SHAW DQ27: Uranium A person is deemed the proprietor of [to have property rights in] a wild animal if he … 1.through his actions made escape of the animal highly unlikely and 2.through his actions has substantially decreased the likelihood of escape since the outset of the pursuit. (interesting idea, but not clear would lead to Pierson result)

26. STATE v. SHAW DQ28: Uranium DQ28 = Exercise to Set Up Demsetz Reading

27. STATE v. SHAW DQ28: Uranium Assume net-owners have no enforceable rights in fish caught in their nets until they physically remove the fish from the nets. Thomas chooses to take fish from the owners’ nets. Who is affected by this decision? Which of these effects is Thomas likely to take into account when deciding whether to take the fish?

28. EXTERNALITIES Costs or benefits external to a decision- making process – Must be with reference to particular decision – Helpful to start by identifying decision-maker

29. STATE v. SHAW DQ28: Uranium Thomas Likely to Consider Own Exertions/Cost of Equipment, etc. Benefits to Dependents Benefits to Likely Purchasers Likely Externalities Costs to Net-Owners, Their Dependents, Their Purchasers Costs to Net Manufacturers Effect on Ecosystem (note might be benefits if “theft” discourages use of big nets)

30. EXTERNALITIES Costs or benefits external to a decision- making process – Must be with reference to particular decision – Helpful to start by identifying decision-maker Examples from outside this problem?

31. EXTERNALITIES Costs or benefits external to a decision-making process – Must be with reference to particular decision – Helpful to start by identifying decision-maker If decision-maker considers a cost, but chooses to absorb it, not an externality – E.g., Thomas considers own exertion necessary to take from nets, may decide to take anyway

32. STATE v. SHAW DQ28: Uranium If the fish are worth more to the net- owners than to Thomas, presumably there is some amount of money they could contract to pay him to leave the fish alone that would leave all parties better off than before the contract.

33. STATE v. SHAW DQ28: Uranium What obstacles stand in the way of the parties entering contract where T promises not to take fish from nets? Assume cost to net-owner is $500/wk & benefit to Thomas is $300/wk. Assume One-on-One Negotiation.

34. STATE v. SHAW DQ28: Uranium Costs of One-on-One Negotiation Investigation Costs Bargaining Costs Strategic Behavior Enforcement Costs

35. STATE v. SHAW DQ28: Uranium What obstacles stand in the way of the parties entering contract where T promises not to take fish from nets? Assume cost to net-owner is $500/wk & benefit to Thomas is $300/wk. Assume Multi-Party Negotiation (multiple net-owners; multiple fish- takers).

36. STATE v. SHAW DQ28: Uranium Additional Costs of Multi-Party Negotiation Free-Riding Holdouts Organization/Management Costs

37. STATE v. SHAW DQ28: Uranium Collectively: “Transaction Costs” Investigation Costs Bargaining Costs Strategic Behavior Enforcement Costs Free-Riding Holdouts Organization/Management Costs

38. Transaction Costs Costs of Reaching Agreements Can Prevent Parties from Reaching Bargains that are “Efficient” (i.e., Would Make Everyone Better Off)

39. DEMSETZ ARTICLE

40. DEMSETZ ARTICLE DQ29: RADIUM “In the world of Robinson Crusoe property rights play no role.” Who is Robinson Crusoe? What does quote mean? Why does Demsetz believe this to be true?

41. INTERNALIZING EXTERNALITIES Changing Rules, Laws or Circumstances to Force Decision- Maker to Take External Costs or Benefits Into Account

42. INTERNALIZING EXTERNALITIES Changing Rules, Laws or Circumstances to Force Decision-Maker to Take External Costs or Benefits Into Account Imposed from Outside; Generally Not Done by Decision-Maker

43. INTERNALIZING EXTERNALITIES Changing Rules, Laws or Circumstances to Force Decision-Maker to Take External Costs or Benefits Into Account Imposed from Outside; Generally Not Done by Decision-Maker Beneficial Because Means Price of Activities Will Reflect Real Costs (e.g., pollution costs)

44. DEMSETZ ARTICLE DQ30: RADIUM Examples of internalizing externalities from outside the reading?

45. INTERNALIZING EXTERNALITIES Changing Rules, Laws, Circumstances to Force Decision-Maker to Take External Costs or Benefits Into Account; Can Do Several Ways: Require Payment of Damages Criminalize Activity Private Negotiation (Bribes)

46. DEMSETZ ARTICLE DQ31: RADIUM Why does the author believe that new property rights tend to arise from “the emergence of new or different beneficial and harmful effects”? (p.29)

47. DEMSETZ FIRST THESIS New property rights tend to develop “when the gains of internalization become larger than the cost of internalization.”

48. DEMSETZ FIRST THESIS DQ32: RADIUM New property rights tend to develop “when the gains of internalization become larger than the cost of internalization.” What are “gains” of internalization?

49. DEMSETZ FIRST THESIS DQ32: RADIUM New property rights tend to develop “when the gains of internalization become larger than the cost of internalization.” What are “costs” of internalization?

50. DEMSETZ FIRST THESIS DQ32: RADIUM New property rights tend to develop “when the gains of internalization become larger than the cost of internalization.” What are “costs”? costs of bargaining privately costs of collectively creating new rules (can be very expensive) multi-party negotiation legislation

51. DEMSETZ FIRST THESIS New property rights tend to develop “when the gains of internalization become larger than the cost of internalization.” If cost of externalities > cost of change  change in rule

52. DEMSETZ FIRST THESIS New property rights tend to develop “when the gains of internalization become larger than the cost of internalization.” If cost of externalities > cost of change  change in rule Rough Approximation (Not Precise Math)

53. DEMSETZ FIRST THESIS New property rights tend to develop “when the gains of internalization become larger than the cost of internalization.” If cost of externalities > cost of change  change in rule Rough Approximation (Not Precise Math) Resulting Change in Rule Unpredictable

54. DEMSETZ FIRST THESIS New property rights tend to develop “when the gains of internalization become larger than the cost of internalization.” If cost of externalities > cost of change  change in rule Often Results from Social/Cultural Change  New Social Habits  Scarcity  New Science/Technology  Scarcity or Better Monitoring

55. DEMSETZ FIRST THESIS: Basic Analysis Identify decision at issue Identify old rule Identifyneg. externalities under old rule Identify change in circumstances Does change increase neg. externalities? If cost of externalities > cost of change  change in rule

56. DEMSETZ FIRST THESIS: Basic Analysis: Shaw v. State Identify decision at issue Identify old rule Identifyneg. externalities under old rule Identify change in circumstances Does change increase neg. externalities? If cost of externalities > cost of change  change in rule