George Mason School of Law
description
Transcript of George Mason School of Law
![Page 2: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/2.jpg)
Last Day: A Challenge
How to explain why we ought to perform our promises or contracts
2
![Page 3: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/3.jpg)
What books did the Founders read?
3
Don Lutz, Origins of American Constitutionalism (1988)
![Page 4: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/4.jpg)
What books did the Founders read?
4
The Bible
![Page 5: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/5.jpg)
What books did the Founders read?
5
The Bible
The “celebrated Montesquieu”
![Page 6: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/6.jpg)
What books did the Founders read?
6
The Bible
The “celebrated Montesquieu”
Blackstone
![Page 7: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/7.jpg)
What books did the Founders read?
7Henry Fonda as Young Mr. Lincoln
![Page 8: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/8.jpg)
Sir William BlackstoneWhy did the Founders read him?
8
“This review of our situation may fully justify the observation of [Montesquieu] that [England] is the only country in the world where political and civil liberty is the direct end of its constitution.”Commentaries I.1
![Page 9: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/9.jpg)
Sir William BlackstoneSo where did English liberties come from?
9
But the systems of jurisprudence, in our courts both of law and equity, are now equally artificial systems, founded in the same principles of justice and positive law.”Commentaries I.3
![Page 10: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/10.jpg)
Blackstone was simply adopting what Sir Edward Coke had said 150 years before
10
Then the King said, that he thought the Law was founded upon reason, and that he and others had reason, as well as the Judges.
To which it was answered by me, that true it was, that God had endowed his Majesty with excellent Science, and great endowments of nature; but his Majesty was not learned in the Lawes of his Realm of England, and causes which concern the life, or inheritance, or goods, or fortunes of his Subjects; they are not to be decided by naturall reason but by the artificiall reason and judgment of Law, which Law is an act which requires long study and experience, before that a man can attain to the cognizance of it;
12 Co. Rep. 63
![Page 11: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/11.jpg)
Things which cannot be explained naturally, without artificial reason
11
![Page 12: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/12.jpg)
Things which cannot be explained naturally, without artificial reason
12
![Page 13: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/13.jpg)
Things which cannot be explained naturally, without artificial reason
13
![Page 14: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/14.jpg)
How did IOU’s get reified (turned into a species of private property)?
14
![Page 15: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/15.jpg)
How did IOU’s get reified (turned into a species of private property)?
15
UCC 3-201. Negotiation means a transfer of possession, whether voluntary or involuntary, of an instrument by a person other than the issuer to a person who thereby becomes its holder.
![Page 16: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/16.jpg)
So what purposes do such legal fictions serve?
We seem to need a justification from outside, in the consequences which flow from adopting the institution.
16
![Page 17: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/17.jpg)
So what purposes do such legal fictions serve?
Autonomous lives are happier ones—but why this kind of autonomy? Why promissory games and not
tiddleywinks?
17
![Page 18: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/18.jpg)
A Natural Law account of promising?
“X is unnatural.”
“It follows that we ought not to do x.”
18
![Page 19: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/19.jpg)
A Natural Law account of promising?
“Promise-breaking is unnatural.”
“It follows that we ought not to break our promises.”
19
![Page 20: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/20.jpg)
Let’s look at that…
“Promise-breaking is unnatural.” Really?
20
![Page 21: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/21.jpg)
A Natural Law account of promising?
21
“No trustworthy primitive record can be read without perceiving that the habit of mind which induces us to make good a promise is as yet imperfectly developed, and that acts of flagrant perfidy are often mentioned without blame, and sometimes described with approbation.”
-- Ancient Law, 1861
![Page 22: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/22.jpg)
And even if it were otherwise…
Just what would that tell you?
22
![Page 23: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/23.jpg)
Hume’s Challenge to Natural Lawyers The “is-ought” distinction
23
In every system of morality, which I have hitherto met with, I have always remark'd, that the author proceeds for some time in the ordinary ways of reasoning, and … makes observations concerning human affairs; when all of a sudden I am surpriz'd to find, that instead of the usual copulations of propositions, is, and is not, I meet with no proposition that is not connected with an ought, or an ought not.
This change is imperceptible; but is however, of the last consequence. For as this ought, or ought not, expresses some new relation or affirmation, 'tis necessary that … a reason should be given; for what seems altogether inconceivable, how this new relation can be a deduction from others, which are entirely different from it.
![Page 24: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/24.jpg)
Hume’s Challenge to Natural Lawyers
To say that people generally act in a certain way is not to say that they ought to do so unless some value is independently attributed to the act.
24
![Page 25: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/25.jpg)
Can one derive an “ought” from an “is”? John Searle thought so. Promising is an institution in our language under which those who promise ought to perform. It is the case that I have promised. Therefore I ought to perform
25
![Page 26: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/26.jpg)
Can one derive an “ought” from an “is”? John Searle thought so. Promising is an institution in our
language under which those who promise ought to perform.
It is the case that I have promised. Therefore I ought to perform But suppose I think the institution an
evil—or morally indifferent one.
26
![Page 27: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/27.jpg)
Can one derive an “ought” from an “is”? John Searle thought so. But suppose I think the institution an
evil—or morally indifferent one.
If I promise and fail to perform I will weaken the institution—but so what? The case of dueling
27
![Page 28: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/28.jpg)
Let’s turn the syllogism around Promising is a just institution andthose who promise ought to perform. It is the case that I have promised. Therefore I ought to perform
28
![Page 29: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/29.jpg)
After Hume, we distinguish positive and normative theories
Positive theories explain what is
Normative theories explain what out to be.
29
![Page 30: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/30.jpg)
Posner’s Positive Thesis
30
The common law IS efficient
![Page 31: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/31.jpg)
A Normative Thesis
The common law ought to serve efficiency goals.
31
![Page 32: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/32.jpg)
A Normative Thesis
The common law ought to serve efficiency goals.
Whoa…
32
![Page 33: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/33.jpg)
A Normative Thesis
But in the case of promising, is there anything else going on?
33
![Page 34: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/34.jpg)
A Normative Thesis
The institutions of promising and contract law promote trust and permit people to rely on each other.
34
![Page 35: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/35.jpg)
A Normative Thesis
The institutions of promising and contract law promote trust and permit people to rely on each other.
And that results in a wealthier society.
35
![Page 36: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/36.jpg)
A Normative Thesis
The institutions of promising and contract law promote trust and permit people to rely on each other.
And that results in a wealthier society. And that results in a happier society.
36
![Page 37: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/37.jpg)
A Normative Thesis
In which case, the normative theory of promising comes down to a form of utilitarianism Social and legal institutions should
promote the happiness of their members.
37
![Page 38: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/38.jpg)
That’s not to say you have to buy into this
38
“What’s so good about happiness? It can’t buy you money”
George E. Jessel
![Page 39: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/39.jpg)
Charles Baudelaire
39
I feel sorry for you, M’sieu, that you are so easily made happy.
![Page 40: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/40.jpg)
But what value would we want our legislator to embrace?
40
![Page 41: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/41.jpg)
41
Why Enforce Contracts:An Economic Analysis of Bargaining Gains
![Page 42: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/42.jpg)
42
Modeling Bargaining Gains Indifference Curves The Budget Line Consumer Choice Beneficial Reliance The Edgeworth Box Function Pareto-Superiority and Pareto-
Optimality
![Page 43: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/43.jpg)
43
0
Two dimensional Commodity Space:Every point represents a combination of the two commodities
X axis
Y axis
Commodity x
Commodity y
![Page 44: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/44.jpg)
44
0
Two dimensional Commodity Space:Every point represents a combination of the two commodities
X axis
Y axis
•A
X*
Y*
44
![Page 45: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/45.jpg)
45
0
The Commodities: Dollars in Two Time Periods
Dollars in Time 2
Dollars in Time 1
•A
X*
Y*
45
![Page 46: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/46.jpg)
46
Dollars in Time 1
0
Dollars in Time 2
Commodity space: Dollars consumed in two time periods
More of both
![Page 47: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/47.jpg)
47
The Budget Line: Allocating $100 between two periods
Dollars in Time 1
100
0
100
Dollars in Time 2
The budget line in red represents every trade-off of $100 in two periods
![Page 48: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/48.jpg)
48
Indifference Curves: Preferences about Consumption
Dollars in Time 1
0
Dollars in Time 2
An indifference curve represents a set of trade-offs to which the subject is indifferent
![Page 49: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/49.jpg)
49
A C: Subject is willing to give up $BC in Time 2 for $AB in
Time 1 Dollars in Time 1
0
Dollars in Time 2
BC
A
![Page 50: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/50.jpg)
50
A C: Subject is willing to give up $BC in Time 2 for $AB in
Time 1 Dollars in Time 1
Convexity (curve bends inward) assumes decreasing marginal utility
0
Dollars in Time 2
BC
A
![Page 51: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/51.jpg)
51
Indifference Curves: Preferences about Consumption
Dollars in Time 1
0
Dollars in Time 2
One is better off the further one gets from the origin
![Page 52: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/52.jpg)
52
Dollars in Time 1
0 Dollars in Time 2
More is better:I2 > I1
I1
I2
More is better
![Page 53: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/53.jpg)
53
Dollars in Time 1
0 Dollars in Time 2
Ordinal Utility: We can’t say how much better I2 is than I1
I1
I2
I3
![Page 54: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/54.jpg)
54
Consumption Decision:Uncle Ebenezer gives David $100
I3
Time 1 I2
I1 100
I2 I1
0
100 Time 2
![Page 55: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/55.jpg)
55
Consumption Decision:David has $100 and is best off at A
Maximization subject to the constraint of the Budget Line
I3
Time 1 I2
I1 100
50 A I2 I1
0
50
100 Time 2
![Page 56: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/56.jpg)
56
Consumption Decision:David has $100 and is best off at A
Maximization subject to the constraint of the Budget Line
I3
Time 1 I2
I1 100
50 A I2 I1
0
50
100 Time 2
B
C
B is not feasible
C is not optimal
56
![Page 57: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/57.jpg)
57
Consumption Decision:David has $100 and is best off at A
Maximization subject to the constraint of the Budget Line
I3
Time 1 I2
I1 100
50 A I2 I1
0
50
100 Time 2
B
B is not optimal
57
![Page 58: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/58.jpg)
58
Consumption Decision:David has $100 and is best off at A
Maximization subject to the constraint of the Budget Line
I3
Time 1 I2
I1 100
50 A I2 I1
0
50
100 Time 2
C
B
C is not feasible
B is not optimal
58
![Page 59: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/59.jpg)
Ebenezer gives David another $100: The Shift to a New Budget Line
200 I200
100 A50, 50
50
I100
0 100 59
![Page 60: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/60.jpg)
A new Consumption Decision
B 100, 100
100 I200 A50, 50
50
I100
IDR
0 50 100
Time 1
Time 2
60
![Page 61: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/61.jpg)
61
What happens when the donor promises to give in the future?
Uncle Ebenezer doesn’t have the $100 to give today but promises to give it to David in the next period
What Should David Do?
![Page 62: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/62.jpg)
62
What happens when the donor promises to give in the future?
Uncle Ebenezer doesn’t have the $100 to give today but promises to give it to David in the next period
David’s election: to rely or not to rely on the promise in the first period
![Page 63: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/63.jpg)
The good scenario: David relies and Ebenezer performs
B 100, 100
100 I200 A50, 50
50
I100
0 50 100 200
200
Reliance by David means spending $100 in period 1
63
![Page 64: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/64.jpg)
B100, 100
I100 I DR
0 50 100
A bad scenario: Detrimental Reliance: David relies and Ebenezer breaches
C 100,0 D
A50, 50 50
Time 1 David spends 100 in period 1 and now has nothing left to spend in period 2
64
![Page 65: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/65.jpg)
B100, 100
I100 I DR
0 50 100
A bad scenario: Detrimental Reliance: David relies and Ebenezer breaches
C 100,0 D
A50, 50 50
Time 1 What do we need to give David to make him as well off as he would be had the promise been performed?
65
![Page 66: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/66.jpg)
B100, 100
I100 I DR
0 50 100
A bad scenario: Detrimental Reliance: David relies and Ebenezer breaches
C 100,0 D
A50, 50 50
Time 1
The Expectation Interest is CB, or $100
66
![Page 67: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/67.jpg)
B100, 100
I100 I DR
0 50 100
A bad scenario: Detrimental Reliance: David relies and Ebenezer breaches
C 100,0 D
A50, 50 50
Time 1 What do we need to give David to make him as well off as he would have been had the promise not been made, or had he not relied?
67
![Page 68: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/68.jpg)
B100, 100
I100 I DR
0 50 100
A bad scenario: Detrimental Reliance: David relies and Ebenezer breaches
C 100,0 D
A50, 50 50
Time 1
The Reliance Interest is CD, or about $25
68
![Page 69: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/69.jpg)
69
Fool me once…: Non-reliance: David assumes Ebenezer will breach
Time 1 I1
100 50 B I1
0 50
100 Time 2
Now David spends only 50 in period 1
![Page 70: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/70.jpg)
70
Fool me once…: Non-reliance: Ebenezer breaches: No harm, no foul
Time 1 I1
100 50 B I1
0 50
100 Time 2
Now David spends only 50 in period 1
![Page 71: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/71.jpg)
100
I200
50
E150, 50
0 100 150
Loss of Beneficial Reliance: David doesn’t rely and Ebenezer performs
Ino-reliance
Goetz and Scott, 89 Yale L.J. 1261 (1980)
David spends only 50 in period 1
71
Where David is on performance
![Page 72: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/72.jpg)
B100, 100 100
I200
50
E150, 50
0 100 150
Loss of Beneficial Reliance: David doesn’t rely and Ebenezer performs
Ino-reliance
Goetz and Scott, 89 Yale L.J. 1261 (1980)
David spends only 50 in period 1
Where David would have been had he relied
72
![Page 73: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/73.jpg)
B100, 100 100
I200
50
E150, 50
0 100 150
Loss of Beneficial Reliance: David doesn’t rely and Ebenezer performs
Ino-reliance
Goetz and Scott, 89 Yale L.J. 1261 (1980)73
![Page 74: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/74.jpg)
74
Enforceable Contracts provide the gains
associated with beneficial reliance
![Page 75: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/75.jpg)
Now: How parties gain from contracting
75
“If one person does not lose, the other does not gain.”
St. Augustine
![Page 76: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/76.jpg)
76
Modeling a Bargain: Mums and Roses
0
Mum
s
Roses
![Page 77: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/77.jpg)
77
Mums
Mary Roses
Two bargainers
Mums
Bess Roses
![Page 78: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/78.jpg)
78
Mums
Mary Roses
Rotating Bess’s diagram I
Roses
Mums
Bess
![Page 79: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/79.jpg)
79
Mums
Mary Roses
Rotating Bess’s diagram II
RosesMums
Bess
![Page 80: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/80.jpg)
80
Rotating Bess’s diagram III
Mums
Mary Roses
Mums
Bess
Roses
![Page 81: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/81.jpg)
81
Rotating Bess’s diagram IV
Mums
Mary Roses
Mums
Bess
Roses
![Page 82: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/82.jpg)
82
Rotating Bess’s diagram V
0
0
Mums Roses Bess
Mums Mary
Roses
![Page 83: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/83.jpg)
83
Mary
Edgeworth Box Function: Bargaining from endowment point A
0
Bess
A
0
![Page 84: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/84.jpg)
84
Edgeworth Box Function: Bargaining from endowment point A
Mary
Bess
A
0
0
![Page 85: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/85.jpg)
85
Edgeworth Box Function: Bargaining from endowment point A
Mary
Bess
A
0
0
Rosesbess
Mumsmary Mumsbess
Rosesmary
![Page 86: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/86.jpg)
86
Paretian standardsVilfredo Pareto (1848-1923)
Pareto-superiority: A transformation from A to B is Pareto-superior if at least one person is better off and no one is worse off
Pareto-optimality: No further Pareto-superior transformations are possible
![Page 87: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/87.jpg)
87
Are these attractive moral standards?
Paretian man is not an altruist He takes no interest in the other person
![Page 88: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/88.jpg)
88
Are these attractive moral standards?The bourgeoisie … has pitilessly torn asunder the motley feudal ties … and has left remaining no other nexus between man and man than naked self-interest, than callous “cash payment.” It has drowned the most heavenly ecstasies of religious fervour, of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egotistical calculation.
![Page 89: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/89.jpg)
89
Are these attractive moral standards?
What’s so good about altruism?
![Page 90: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/90.jpg)
90
Are these attractive moral standards?Altruists
Sir William Beechey, Sir Francis Ford’s Children Giving a Coin to a Beggar Boy
![Page 91: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/91.jpg)
91
Are these attractive moral standards?Altruists
Which child is showing empathy?
![Page 92: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/92.jpg)
92
Are these attractive moral standards?Altruists
Who is showing empathy?
![Page 93: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/93.jpg)
93
Are these attractive moral standards?Altruists
Who is showing empathy?
![Page 94: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/94.jpg)
94
Are these attractive moral standards?Altruists
What happens to him tomorrow?
![Page 95: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/95.jpg)
95
Are these attractive moral standards?Altruists
Is sentiment a substitute for social and economic policies that reduce the distress that prompts sentimentality?
![Page 96: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/96.jpg)
96
Are these attractive moral standards?Altruists
Sentiment: I observe your distress and feel your pain
Sentimentality: I observe the pain I feel at your distress and feel good about myself
![Page 97: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/97.jpg)
97
Are these attractive moral standards?Here’s another altruist
Gericault, Portrait(Envy)
![Page 98: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/98.jpg)
Is a complete lack of empathy an attractive quality for bargainers?
98
![Page 99: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/99.jpg)
Defining Paretian Standards
Pareto-superiority
Pareto-optimality
99
![Page 100: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/100.jpg)
100
B and C as Pareto-superior to A D and E as Pareto-inferior
Mary
Bess
A
B
C
D
E
Coleman, 8 Hofstra L.Rev. 905 (1980)
![Page 101: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/101.jpg)
101
Are all bargaining gains exploited at F?The bargaining “lens” shrinks through bargaining
Mary
Bess
A
B
C
D
E
F
![Page 102: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/102.jpg)
102
Are all bargaining gains exploited at G?The bargaining lens disappears when the indifference
curves are tangent
Mary
Bess
A
B
C
D
E
F
G
![Page 103: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/103.jpg)
103
A ~ C, A ~ B
Mary
Bess
A
B
C
D
E
F
G
103
![Page 104: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/104.jpg)
104
A < F
Mary
Bess
A
B
C
D
E
F
G
104
![Page 105: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/105.jpg)
105
A < F < G
Mary
Bess
A
B
C
D
E
F
G
105
![Page 106: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/106.jpg)
106
G is on the contract curve and no further Pareto-Superior transformations are possible
Mary
Bess
A
B
C
D
E
F
G
106
![Page 107: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/107.jpg)
107
Mary
The Contract Curve: All possible Pareto-optimal contracts represented at the
points of tangency
Bess
A
B
C
D
E
FG
![Page 108: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/108.jpg)
108
Further Readings Blackstone’s Commentaries, Book I,
chapter 1 “Of the Absolute Rights of Individuals”, at lonang.com
Goetz and Scott, Enforcing Promises: An Examination of the Basis of Contract, 89 Yale LJ 1261 (1980)
108
![Page 109: George Mason School of Law](https://reader034.fdocuments.us/reader034/viewer/2022051402/56815b62550346895dc94a84/html5/thumbnails/109.jpg)
109
Contract Law in the State of NatureIII.State of Nature.ppt
109