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Why are insecure private property rights so economically destructive? Why are enforceable contracts so beneficial? How can we best understand the forces of demand and supply in markets for illegal goods and services? Is the market for lawyers so different from other markets? Should we expect the common law to produce economically desirable outcomes? Law and Markets analyses and answers these and many other questions, and in the process shows why understanding the role that legal rules and institutions play in modern market economies is more important than ever. The book uses standard demand and supply analysis to study a wide range of topics in law and economics, including the role of courts, tort law, product liability law, contract law, property rights, criminal law and illegal markets, competition law, corporate law, and the market for lawyers. This book has been written specifically for advanced undergraduates and graduate students in economics, and provides a comprehensive guide to the ways in which legal rules can alter economic incentives.