Digital Commons Network^™

Path Dependence And Durability Of Hong Kong's Existing Corporate Reorganization System, Charles Zhen Qu Dr

Charles Zhen Qu Dr

A corporate reorganization system that ensures optimal deployment of distressed companies’ assets helps promote economic development. In many developed economies, faltering firms are reorganized through a formal corporate reorganization procedure. The Hong Kong government has recently recommended the enactment of such a procedure on the assumption that the existing corporate and insolvency framework is ill-equipped to restructure failing companies. This article rebuts this assumption through an assessment of the efficiency of the judicially-developed reorganization system that has emerged as a result of the failure to introduce a formal reorganization procedure a decade ago. It argues that since an efficient alternative …

Determining The Appropriate Interest Rate Under Till In A Bankruptcy Proceeding, C. Paul Wazzan

Christopher P Wazzan

The determination of the appropriate rate of interest in a bankruptcy proceeding is guided by the United States Supreme Court’s decision in Till v. SCS Credit Com. which establishes a formula approach and states one should begin with the Prime Rate and then consider: 1) the circumstances of the bankruptcy estate; 2) the nature of the security; 3) the duration of the reorganization plan; and 4) the feasibility of the reorganization plan. The Supreme Court decision does not specify exactly what these four factors consist of. This paper attempts to superimpose economic principles on the Till decision and provide legal …

Down The Rabbit Hole: The Madness Of State Film Incentives As As "Solution" To Runaway Production, Adrian H. Mcdonald

Adrian H. McDonald

This working paper is a "sequel" to my first law review article on runaway productions called "Through the Looking Glass": Runaway Productions and "Hollywood Economics," published in The University of Pennsylvania Journal of Labor and Employment Law in August 2007.

Since 2007, there has been a race to the bottom as virtually every state has enacted significant, if not detrimentally generous, tax incentives to lure film and television production. The efficacy of these incentives is evaluated at length, with particular attention paid to the origin and implementation of tax incentives in California, Massachusetts and Louisiana - states with colorful backgrounds …

When Enough Is Not Enough: Correcting Market Inefficiencies In The Purchase And Sale Of Residential Property Insurance, Kenneth S. Klein

Kenneth S Klein

Each year at least hundreds, and often thousands of Americans lose their homes to natural disasters striking populated areas, and tens of thousands lose their homes to single-instance fires, floods, or other catastrophes. A recurring storyline is that the majority of these homeowners are underinsured, meaning they have less insurance than it will cost to rebuild their homes. This Article analyzes whether that is indicative of correctible inefficiencies in the residential property insurance markets. The Article identifies two inefficiencies – (1) Inadequate information, which is impairing informed pricing decisions by purchasers; and (2) Dispute costs (such as litigation) in the …

Neutrality And Diversity In The Internet Ecosystem, Andrea Renda

Andrea Renda

The public policy approach to the Internet has become more and more complex as several markets – including fixed and mobile communications, media and content, IT – converge into one single Internet ecosystem. As in all ecosystems, zones and domains depend on each other, and there is no possibility of touching one layer without affecting all others. This paper reflects on the economics of the Internet and emerging business models, and comments on the current debates in each of the layers of modern all-IP architectures, from the unbundling of network elements to net neutrality and the emerging discussion on search …

Análisis Económico De La Intervención Judicial En Los Contratos ¿Una Cuestión De Justicia?, Daniel Monroy

Daniel A Monroy C

Desde la perspectiva del AED, una de las funciones principales del derecho de contratos, sobre la cual diferentes autores hacen mayor énfasis, es la relacionada con la “disuasión del oportunismo”; en igual sentido, otra de las funciones del derecho de contratos es la relativa a la “interpolación eficiente de términos contractuales”. Dichas funciones suelen explicar buena parte de la regulación en materia de contratos, además de justificar la intervención judicial. Por otro lado, algunos autores nos llevan a considerar que propugnar exclusivamente por la libertad y la autonomía contractual, puede llevarnos a garantizar que los contratos, además de ser mecanismos …

Análisis Económico De Los Riesgos Contractuales: Racionalidad Económica Como Argumento Para La Supresión De La Teoría De La Imprevisión., Daniel Monroy

Daniel A Monroy C

Este artículo constituye un aporte a la recurrente discusión acerca de la forma como se contempla la problemática de los riesgos contractuales desde la perspectiva jurídica tradicional, complementándola de manera crítica a través de herramientas propias del AED y haciendo especial énfasis en lo relativo a la Teoría de la Imprevisión. Se argumenta que la forma como está planteada actualmente dicha Teoría en el sistema jurídico, particularmente la dificultad para dotar objetivamente de contenido los requisitos normativos exigidos, conduce a que aquella alcance tal nivel de complejidad que dificulta ampliamente su aplicación en la realidad. Adicionalmente, al contemplarse la posibilidad …

Can The Federal Reserve Adopt An Inflation Targeting Regime Under The Current Statutory Arrangements?, Hong Kyoon Cho

Hong Kyoon Cho

This paper discussed legal perspectives in institutional framework of central banking, keyed to monetary policy framework. The statutory objectives of monetary policy provide an environment under which the central bank can design its monetary policy framework, in that the choice of the monetary policy framework could lie within the scope of the spirits embodied in the statutory objectives of monetary policy. Monetary policy framework could illuminate legal aspects of debate, as specifically seen in the Federal Reserve’s case that has adopted not an explicit but an implicit monetary policy framework, namely the Just-Do-It approach. Under the current legal mandate, i.e., …

Del Derecho Y La Economía Al Derecho Económico. Working Paper N. 1, Mario A. Pinzón Mapc

Mario A Pinzón Camargo

La relación entre derecho y economía se ha condensado en un nuevo espacio de reflexión que puede ser denominado como un nuevo paradigma en las ciencias sociales. A diferencia de la concepción clásica que plantea el antagonismo entre estas dos, éste artículo examina su complementariedad. The link between law and economics has been condensed in a new space of reflection that can be called a new paradigm within the social sciences, which intends to build the bridges of understanding between these two sciences. In contrast to the classical conception that states the antagonism in between them, due to their constitutive …

Puntos De Encuentro Y Apoyo De La Nueva Economía Institucional En El Análisis De Las Políticas Públicas. Working Paper N. 2, Mario A. Pinzón Mapc

Mario A Pinzón Camargo

Este artículo tiene como propósito analizar el grado de utilidad de una de las vertientes del Análisis Económico del Derecho, la Nueva Economía Institucional, en el Análisis de Políticas Públicas.

An Empirical Analysis Of Regulator Mandates On The Pass Through Of Switched Access Fees For In-State Long-Distance Telecommunications In The U.S., Debra J. Aron, David E. Burnstein, Ana Danies, Gerry Keith

Debra J. Aron

In the parlance of regulatory economics, “pass through” refers to the effect of a change in an incremental cost – generally, the effect of a change in a regulated input price – on the retail price of a good or service. In this paper we examine pass through with regard to the switched access fees paid by long distance companies to local exchange carriers in the United States. We estimate the degree to which long distance companies pass through differences in access rates to their customers, and we examine whether mandates imposed by regulators on long distance companies to pass …

Law, Institutions And Corruption Cleanups In Africa, John Mukum Mbaku

JOHN MUKUM MBAKU

ABSTRACT Since independence, virtually all African countries have suffered and continue to suffer from extremely high rates of bureaucratic corruption. Today, corruption remains one of the most important constraints to social, political and economic development. Despite the efforts made, in several countries, to deal with corruption and other forms of political opportunism (e.g., rent seeking), these phenomena remain entrenched in these countries and continue to constrain entrepreneurship and creation of the wealth that is needed to deal with extremely high rates of poverty and material deprivation. Part of the reason why many African countries have not been able to effectively …

Executive Compensation: The Law And Incentives, Stas Getmanenko

Stas Getmanenko

Excessive executive compensation frequently breeds resentment, undermines consumer faith in the financial system, and overly stigmatizes otherwise common business failures. Frequently, the opponents of lavish pay packages compare executive compensation to the compensation of rank-and-file workers. Such criticism reflects perfectly appropriate societal concerns over pay equity and distribution of wealth within a society. An entirely separate source of friction is the shareholders’ right to benefit from the corporation’s wealth. Shareholders’ dividend is directly reduced by the company’s expenses, one of which executive compensation. For most of today’s public companies the executive compensation expense is often negligible when considered in light …

The Mortgage Market Crisis: A Game Theory Analysis, Raquel Mato

Raquel Mato

The mortgage market experienced a global bubble during the early 2000s. The bubble burst in 2006, creating a global financial crisis with widespread repercussions. In this paper, I will discuss how the mortgage market normally works and what changes occurred leading up to the 2000s that allowed for the rapid expansion of the mortgage market. I will talk about contributing factors such as: deregulation of the market, government encouragement of homeownership, the mortgage backed securities market, existing legislation, and a general lack of responsibility by all parties involved. I will use various aspects of game theory to explain how this …

Statistical Evidence On The Gender Gap In Law Firm Partner Compensation, Marina Angel, Eun Young Whang, Rajiv Banker, Joseph F. Lopez

Marina Angel

Our study compiled the largest research sample on the gender gap in compensation at the 200 largest law firms by combining two large databases to examine why women partners are compensated less: because they are less productive than men partners or because they are women. The AmLaw 100 and 200 studies include gross revenue, profits, number of equity and non-equity partners, and the total number of lawyers at each firm. The Vault/MCCA Law Firm Diversity Programs study (Vault/MCCA) includes the gender ratios at each AmLaw 200 firm. Our study covers the years 2002 to 2007.

The ratio of women equity …

Is The Public Utility Holding Company Act A Model For Breaking Up The Banks That Are Too-Big-To-Fail?, Roberta S. Karmel

Roberta S. Karmel

ABSTRACT FOR “IS THE PUBLIC UTILITY HOLDING COMPANY ACT A MODEL FOR BREAKING UP THE BANKS THAT ARE TO-BIG-TO-FAIL?”

BY ROBERTA S. KARMEL

During the financial crisis of 2007-08 and the debates on regulatory reform that followed, there was general agreement that the “too-big-to-fail” principle creates unacceptable moral hazard. Policy makers divided, however, on the solutions to this problem. Some argued that the banking behemoths in the United States should be broken up. Others argued that dismantling the big banks would be bad policy because these banks would not be able to compete with universal banks in the global capital …

An Economic Analysis Of Patent Law's Inequitable Conduct Doctrine, Thomas F. Cotter

Thomas F. Cotter

In recent years, patent law’s inequitable conduct doctrine has attracted considerable attention from judges, legislators, patent lawyers and commentators, culminating most recently in the Federal Circuit’s decision to reconsider en banc several aspects of the doctrine in Therasense, Inc. v. Becton, Dickinson & Co. Building on the work of other scholars, this Article proposes an instrumental view of the doctrine as, ideally, a tool for inducing patent applicants to disclose the optimal quantity of information relating to the patentability of their inventions; it then presents a formal model of the applicant’s choices in deciding how much information to reveal. The …

An Economic Analysis Of Patent Law's Inequitable Conduct Doctrine, Thomas F. Cotter

Thomas F. Cotter

In recent years, patent law’s inequitable conduct doctrine has attracted considerable attention from judges, legislators, patent lawyers and commentators, culminating most recently in the Federal Circuit’s decision to reconsider en banc several aspects of the doctrine in Therasense, Inc. v. Becton, Dickinson & Co. Building on the work of other scholars, this Article proposes an instrumental view of the doctrine as, ideally, a tool for inducing patent applicants to disclose the optimal quantity of information relating to the patentability of their inventions; it then presents a formal model of the applicant’s choices in deciding how much information to reveal. The …

Big But Brittle: Economic Perspectives On The Future Of The Law Firm In The New Economy, Bernard A. Burk, David Mcgowan

Bernard A Burk

This Article addresses the deceptively simple questions why, up to the onset of the recent recession, law firms continued to grow at the rapid rate and in the unusual configuration that they have exhibited for over 40 years; and whether lawyers, clients, law students and law schools should expect familiar trends to reassert themselves as the economy improves. We show that the copious academic theorizing addressing these questions (focusing on such notions as diversification, asset specificity, “tournament” theory, and reputational and agency-cost concerns at the level of the firm as a whole) has proved ineffective at explaining or predicting actual …

Re-Thinking First Principles Of Transfer Pricing Rules, John Ja Burke

John JA Burke

This Article rejects the conventional wisdom that “transfer pricing rules” are designed either to level the playing field between Multi-National Enterprises [MNEs] and medium sized enterprises or to prevent pre-meditated tax evasion by MNEs. Rather, this Article posits that “transfer pricing rules” [TPRs] are substitutes for diminished tariff revenue, or imposed artificial mark-ups, shifting costs to ultimate purchasers, and contradicting the fundamental rule of microeconomic theory of firm maximizing profits by equating marginal cost and marginal revenue. The debate about transfer pricing now centres on tweaking the “arm’s length principle”, safe harbour rules, and advance pricing agreements. Lost in this …

An Economic Analysis Of Patent Law's Inequitable Conduct Doctrine, Thomas F. Cotter

Thomas F. Cotter

In recent years, patent law’s inequitable conduct doctrine has attracted considerable attention from judges, legislators, patent lawyers and commentators, culminating most recently in the Federal Circuit’s decision to reconsider en banc several aspects of the doctrine in Therasense, Inc. v. Becton, Dickinson & Co. Building on the work of other scholars, this Article proposes an instrumental view of the doctrine as, ideally, a tool for inducing patent applicants to disclose the optimal quantity of information relating to the patentability of their inventions; it then presents a formal model of the applicant’s choices in deciding how much information to reveal. The …

Optimal Fines For False Patent Marking, Thomas F. Cotter

Thomas F. Cotter

Since January 1, 2010, plaintiffs have filed over three hundred lawsuits under 35 U.S.C. § 292, the false patent marking statute. Fueled in large part by recent Federal Circuit case law embracing an expansive interpretation of the statute, this uptick has alarmed some observers, who fear that patent owners whose products bear the numbers of expired or inapplicable patents could be liable for, literally, billions of dollars in fines. While Congress and the courts consider various responses, one issue that has failed to attract much notice thus far is the question of how to calculate appropriate fines for marking violations. …

Was Selden Right? The Expansion Of Closed Seas And Its Consequences, Scott Shackelford

Scott Shackelford

This Article focuses on the relationship between the legal regimes governing offshore resources in the continental shelves and the deep seabed, particularly in reference to the extent to which continental shelf claims are encroaching on the deep seabed. The question of how well these respective legal regimes regulate resource exploitation will also be considered, along with an analysis of the underlying reasons driving change in these governance structures. I argue that the primary issue is one of whether vague rules, particularly UNCLOS Article 76, are working in terms of incentivizing sustainable, peaceful development of offshore resources.

Non- Profit Charitable Tax Exempt Hospitals- Wolves In Sheep's Clothing:To Increase Fairness And Enhance Compition All Hospitals Should Be For Profit And Taxable, George A. Nation Iii

George A Nation III

Most hospitals in the United States are not-for-profit tax exempt institutions. Legally these hospitals are deemed to be charities and are exempt from federal, state and local taxes, raise money through tax exempt bond offerings and receive charitable contributions that are tax deductible to the donors. Today it is estimated that 47 million Americans lack access to healthcare.5A Moreover, even when the new Patient Protection and Affordable Care Act5B is fully operational, which is estimated to be around 2019, there will still be millions of Americans without health insurance and thus without reliable access to healthcare.5C Notwithstanding the millions of …

The Inefficiency Of The Accession Doctrine: A Case For The Property Rule, Yun-Chien Chang

Yun-chien Chang

The accession doctrine in property law exists in both common law countries and civil law countries. The prior literature does not question, and even makes a case for, the efficiency of the accession doctrine. I argue that the accession doctrine fails to meet the normative standard that the law should allocate property rights to the party who values them the most. Efficiency should be ascertained by comparing the ex ante economic values of the original owner and the improver, not by comparing the fair market value of the processed properties before and after the improvements, as the accession doctrine dictates. …

Cost-Benefit Analysis Of The Business Judgment Rule: A Critique In Light Of The Financial Meltdown, Todd Aman

Todd M Aman

In 2008, the United States – indeed the whole world – suffered a devastating financial meltdown. We know now that a significant cause of the meltdown was that, in the face of numerous red flags, the managers of several venerable financial firms decided to take tremendous risks in the subprime mortgage market, and the directors of these firms did little or nothing to stop them. However, despite their actions, these managers and directors face little or no risk of personal liability because they are shielded by the business judgment rule and other liability reducing mechanisms, such as director exculpation statutes. …

Lessons In Price Stability From The U.S. Real Estate Market Collapse, Andrea J. Boyack

Andrea J Boyack

The U.S. residential housing market collapse illustrates the consequences of ignoring risk while funding mortgage borrowing. Collateral over-valuation was a foundational piece of the crisis. Over the past few decades, secondary markets, securitization, policy and psychology increased the flow of funds into real estate. At the same time, financial market segmentation divorced risk from reward. Increased mortgage capital availability, unmitigated by proper risk allocation, led to real estate price inflation. Social trends and government policies exacerbated both the mortgage capital over-supply and the risk-valuation disconnect.

The Dodd-Frank Act inadequately addresses the underlying asset valuation problem. Federal regulation may support market …

Relational Integrity Regulation: Nudging Consumers Toward Products Bearing Valid Environmental Marketing Claims, Jeffrey J. Minneti

Jeffrey J Minneti

Over the last two decades scholars have addressed attributes of effective environmental regulation and advocated a wide spectrum of regulatory approaches, from the traditional command-and-control model to a libertarian-paternalism approach. Some writers have used those approaches to advocate for modifications to the Green Guides. This article joins that conversation and accomplishes two goals. First, it harmonizes environmental regulation scholarship, resulting in the creation of a new form of regulation that it terms “Relational Integrity” regulation. Second, in light of the Relational Integrity approach to regulation, the article examines public and private environmental claim regulatory schemes and suggests how those schemes …

Punishing The Penitent: Disproportionate Fines In Recent Fcpa Enforcements And Suggested Improvements, Bruce Hinchey

Bruce Hinchey

The Department of Justice has long promised tangible benefits to companies that voluntarily disclose Foreign Corrupt Practices Act (FCPA) violations. Justice Department officials have promised that the enforcement of the FCPA is both fair and consistent. Despite these promises, critics question the benefits of voluntary disclosure based on the outcome of a few, isolated cases. In this thesis, forty FCPA cases from 2002 through 2009 are compiled, comparing the ratio between bribes and fines for companies that do and do not voluntarily disclose. The results side with the critics and reveal that there does not appear to be a benefit …

Self Restraint And National Security, Nathan Alexander Sales

Nathan Alexander Sales

Why does the government sometimes tie its own hands in national security operations? This article identifies four instances in which officials believed that the applicable laws allowed them to conduct a particular military or intelligence operation but nevertheless declined to do so. For example, policymakers have barred counterterrorism interrogators from using any technique other than the fairly innocuous methods listed in the Army Field Manual. Before 9/11, officials rejected the CIA’s plans to use targeted killings against Osama bin Laden and other terrorist leaders. Judge advocates sometimes use policy considerations to restrict military strikes that would be lawful. And in …