Economics Advance Course Information Fall 2004

This information effective for Fall 2004. Check with instructor the first day of class for any changes.

A new course dealing with the economic aspects of the arts—both on the spending and the fund raising sides. Offered as both a lower division and upper division course. Much of the course lecture/discussion will be led by individuals directly engaged in a variety of arts-related activities.

The course begins with an introductory lecture on where the course will proceed, the other usual administrative requirements, and on the general subject matter of the course.

Thereafter, a one-hour segment will be devoted to an introduction to the law and the judicial function. The purpose of this segment will be to introduce the student to the role of law in society, its origins, and its role in the interplay between the various forces of business. In addition, it will orient the students to the organization, powers, and functions of the judicial system. Hopefully, the students will gain some insight into how judicial decisions are made including concepts of stare decisis, res judicata, and judicial abstention.

The second segment of the course will last one session and will deal with the court system as it exists in California (state court system) and nationally (the federal court system). The method of selection of judges and tenure of judges will be discussed—including concepts relevant to the removal of Supreme Court Justices in California and the nominations to the United States Supreme Court. The concept of the jury system, its advantages and pitfalls will be explored. The differences between the various courts from small claims to the U.S. Supreme Court will be covered. Students will be expected to know the rationale and requirements for selection of a particular forum and the basis for removal of a case from the state to the federal system. Finally, the appellate process and basic rules the courts use in determining appeals will be discussed with some emphasis on California's unique "non-published case" doctrine.

The third segment of the course will take four sessions and will cover litigation, mediation, and arbitration—both judicial and non-judicial. This section will be an introduction to the course that a "typical" civil case in litigation follows, the advantages and pitfalls of the discovery process, trial preparation, and jury selection. Concepts of litigation from standing to sue, class actions, and venue will be included. The rising use of Alternative Dispute Resolution (ADR) (arbitration and mediation) will be explored.

As part of this segment, some play acting using portions of the class for jury selection and witness examination will be included to show the concepts of burden of proof, rules of evidence, and pure "acting" as they relate to a trial. Also, a student will be given some information on selection of a trial attorney if that becomes necessary.

The fourth segment will last one session and discusses the impact of the Bill of Rights on the business community. Concepts of the First Amendment (libel, slander, blue laws) will be covered and contrasted with the opposing freedoms. Broad concepts of eminent domain, search and seizure, and "state action" will be discussed. If time permits, this segment may be expanded to an additional session.

The fifth session begins the portion of the course which deals with the practical concepts of the law. Business organizations will be discussed with an in-depth comparison of the five basic forms of business organization (sole proprietorship, corporation, partnership, limited partnership and limited liability company) and the reasons why one would be selected in a given set of facts as opposed to another. A student will be expected, following this segment of four sessions, to be able to select either a sole proprietorship, partnership, limited partnership, corporation, limited liability companies and limited liability partnerships or corporation for a hypothetical client after having been given a set of facts.

The sixth segment will touch briefly on securities regulation on the federal level. The concepts of insider trading and what constitutes a security will be emphasized. The purpose of this segment is to alert a business person to a possible security problem so that they can seek competent legal advice.

The seventh segment will be an introduction of the concept of a legal contract. The basic ideas of offer, acceptance, mutual assent, detrimental reliance, breach, and the statutory concepts of illegality and consumer protection will be explored. This segment will take at least three sessions and constitute the largest area of substantive law that the students will study. The enlarged role of government in the contract area, the diminished role of caveat emptor ("let the buyer beware"), and the future of those policy trends in "consumer protection" will be discussed. Students will be asked to assume and argue the relative position of consumer advocates and the business person in common transactions.

The last segment will take up the balance of the quarter and deal with torts in the business environment. The student will get an introduction into changing concepts of tort law which affect the business community. The history and evolution of products liability and service liability (errors and omissions) will be explored together with the current topics of "deep pocket" doctrines and issues dealing with insurance company liability and exposure. The student should leave this course with a broad understanding of the implied warranties which attach to products. The exceptions of Workman's Compensation, Federal Bankruptcy Laws, and similar statutory exclusions will be explored.

The part of the final one-hour session before each midterm and final will include an open discussion of any previously covered subjects. The final session of the quarter will include an open discussion on the course—its weaknesses and strengths.

The class sessions will be conducted in a Socratic method with lectures de-emphasized and probing of legal concepts through discussion as the primary mode. Homework will consist of response to questions at the end of the text or handouts from previous sessions. Students are expected to read the assignments prior to each class and discuss the facts and holdings of any cases discussed in the text.

The student will be evaluated on the basis of classroom participation and homework (20%), two midterms (25% each), and a final examination (30%). All examinations will be hypothetical factual situations which require application of legal concepts learned to arrive at answers. A combination of essay and multiple choice questions will be utilized. An answer to an essay question is not necessarily right or wrong (there are two sides to most cases), but will usually fail because it is incomplete. If you do not understand a concept or an exam, I welcome questions—knowing that you are concerned—but you have to make me aware of it.

If you choose to take this course pass or fail (as opposed to a letter grade), do not expect me to follow some preconceived use of qualitative words that you believe are equivalent to a letter grade in your evaluation. For example, the word "good" does not equate in my mind to a given letter grade.

My official office hours are from 6:45 p.m. to 7:30 p.m. on Wednesdays in Room 251 Soc Sci 1. Special appointments can almost always be made as well, after class or at my office, 133 Mission Street, Suite 280, Santa Cruz. In addition, I am usually able and very willing to stay around after class for questions. The campus office phone is 459-5080, but I am rarely there other than office hours. Work phone is (831) 426-8484 (after 5 p.m.: 426-8487) or at home at (831) 427-3767, and you can feel free to call either number. (Please remember my advanced years and make the calls at a decent hour!)

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165. Economics as an Experimental Science

MWF 2:00-3:10 p.m., College 8, 252
Instructor: D. Friedman

Course Description:

This course introduces modern laboratory experimental methods to students with well-developed interests in economics and with an intermediate-level knowledge of microeconomics and statistics. We will examine lab techniques in detail and survey recent applications in fields such as asset markets, industrial organization, choice under certainty, and public goods. The course satisfies the W requirement. Enrollment limited to 25; priority goes to seniors and juniors.

The primary text is Economics Lab, by Friedman and Cassar, Routledge, 2004 (FC04 for short); it is carried by Slug Books. The reader contains the articles listed below. Secondary texts (on reserve at the science library) include Behavioral Game Theory: Experiments in Strategic Interactions, by Colin Camerer (Russel Sage Foundation/ Princeton University Press, 2003, C03 for short); Statistics for Experimenters, by Box, Hunter and Hunter (Wiley, 1978; BHH78 for short), and Experimental Economics, by Davis and Holt (Princeton University Press 1993; DH93). Other useful material will appear on the class website, http://econ.ucsc.edu/faculty/dan/165/ .

Students will be evaluated on the basis of class participation (20 points), the midterm exam score (30 points) and a term project (50 points). The project will involve a survey of previous experiments investigating some topic of interest, the design of a new experiment on that topic, and (funds permitting) a pilot experiment. The project will be presented orally to the class and written up in a paper of 10-30 pages.

The class meets MWF 2-3:10pm in 252 College 8. Office hours are MW 4-5pm and by appointment, in 417 E2.

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234. Financial Institutions and Markets

MWF 11:00 a.m.–12:10 p.m., Soc Sci 2, 363
Instructor: D. Friedman

Course Description:

A second MS course in finance, Economics 234 studies the economics of intertemporal trade and risky trade. Building on this foundation, the course then examines financial institutions and financial markets and their rapid recent transformation.

Course prerequisites are first year MS courses or equivalent background in finance, econometrics, macroeconomics, and microeconomics.

The primary text (required) is Capital Markets: Institutions and Instruments, 3rd Edition, by Fabozzi and Modigliani (Prentice-Hall, 2003), denoted FM below. A supplementary, optional text is Financial Institutions Management, 4th Edition, by Saunders and Cornett (McGraw-Hill, 2003), denoted SC. Students may also want to look at Managing Financial Institutions, 5th Edition, by Garder, Mills, and Cooperman (Thompson/Southwestern, 2004). Supplementary required readings include The Wall St. Journal, New York Times, The Economist, or a comparable news source. Additional readings will be on reserve in the Science Library and/or posted on the class website, http://econ.ucsc.edu/faculty/dan/econ234/.

Students will be evaluated on the basis of class participation and homework (up to 20 points), a 30-point midterm, a 10-point presentation, and a 50-point final project. The presentation will be a topic covered in week 7-10. The final project will apply course material to a recent development, e.g., Enron's impact on energy derivatives markets. It will include an oral presentation as well as a term paper.

The class meets MWF 11:00 a.m.–12:10 p.m. in 363 Social Sciences 2. Office hours are MW 4:00–5:00 p.m. and by appointment, in 417 E2.

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