Law Commons^™

Tort-Related Risk Costs And The Hand Formula For Negligence, Richard S. Markovits

Richard S. Markovits

No abstract provided.

Background (Fixed-Cost) Avoidance-Choices, Foreground (Variable-Cost) Avoidance-Choices, And The Economically Efficient Approach For Courts To Take To Marine-Salvage Cases: A Positive Analysis And Related Critique Of Landes And Posner’S Classic Study, Richard S. Markovits

Richard S. Markovits

No abstract provided.

Background (Fixed-Cost) Avoidance-Choices, Foreground (Variable-Cost) Avoidance-Choices, And The Economically Efficient Approach For Courts To Take To Marine-Salvage Cases: A Positive Analysis And Related Critique Of Landes And Posner’S Classic Study, Richard S. Markovits

Richard S. Markovits

No abstract provided.

Insider Trading And Ceo Pay, Todd Henderson

Todd Henderson

This Paper presents evidence boards of directors “bargain” with executives about the profits they expect to make from trades in firm stock. The evidence suggests executives whose trading freedom is increased using Rule 10b5-1 trading plans experienced reductions in other forms of pay to offset the potential gains from trading. There are two benefits from trading—portfolio optimization and informed trading profits—and this Paper allows us to isolate them. The data show boards pay executives in a way that reflects the profits they are expected to earn from informed trades. The legal issues about paying using illegal profits are explored. As …

Do Accounting Rules Matter? The Dangerous Allure Of Mark To Market, Todd Henderson

Todd Henderson

This paper examines the relative strength of two imperfect accounting rules: historical cost and mark to market. The manifest inaccuracy of historical cost is well known, and, paradoxically one source of its hidden strength. Because private parties know of its evident weaknesses they look elsewhere for information. In contrast, mark to market for hard-to-value assets has many hidden weaknesses. In this paper we show how it creates asset bubbles and exacerbate their negative collateral consequences once they burst. It does the former by allowing banks to adopt generous valuations in up-markets that increase their lending capacity. It does the latter …

Financial Market Regulation After The Crisis: The Case For Hedge Fund Regulation Via Basel Iii, Wulf A. Kaal Ph.D.

Wulf A. Kaal Ph.D.

Hedge funds have been blamed for their part in the financial market crisis of 2008-09. The exact role and the scope of hedge funds’ involvement in the financial crisis is unclear. Regulators increasingly scrutinize the hedge fund industry worldwide. Regulation of hedge funds could help minimize moral hazard, social externalities and systemic risk generated by the hedge fund industry. The paper evaluates recent regulatory changes including the US Dodd-Frank Act, the European Union Directive on Alternative Investment Fund Managers and other pertinent regulation. Using the methodological tool of New Institutional Economics, the paper provides an impact analysis of regulatory changes, …

The Case For Liberal Spectrum Licenses: An Economic And Technical Analysis, Thomas W. Hazlett

Thomas W Hazlett

The traditional system of radio spectrum allocation has inefficiently restricted wireless services. Alternatively, liberal licenses ceding de facto spectrum ownership rights yield incentives for operators to maximize airwave value. These authorizations have been widely used for mobile services in the U.S. and internationally, leading to the development of highly productive services and waves of innovation in technology, applications and business models. Serious challenges to the efficacy of such a spectrum regime have arisen, however. Seeing the widespread adoption of such devices as cordless phones and wi-fi radios using bands set aside for unlicensed use, some scholars and policy makers posit …

A Review Of The 2011 And 2013 Digital Television Energy Efficiency Regulations Developed And Adopted By The California Energy Commission, Christopher P. Wazzan

Christopher P Wazzan

In December 2009, the California Energy Commission (“CEC”) adopted on-mode standards for power consumption of televisions, (e.g., watts used) which will go into effect in 2011. Proposed standards are subject to Section 25402(c) of the California Public Resources Code (“CPRC”) which requires that proposed regulations must “not result in any added total costs to the consumer over the designed life of the appliances concerned.” In order to comply with the CPRC, in September 2009, the CEC issued a report alleging consumers would save $8.1 billion from reduced energy consumption. We find that the CEC study is critically flawed and that …

The Start Of A Revolution: How Shays’ Rebellion Continues Today, Gary P. Opper

Gary P Opper

You might remember from your days in your high school history class the tale of Daniel Shays. He was a poor farmhand from Massachusetts that went on to lead a rebellion against the United States government, whom he and others felt were imposing crushing debt and taxes. Anyone who failed to pay such debts could end up in debtor’s prison and had their property seized.

Shays and his compatriots sought debt relief through lower taxes and receiving funds from the government. They attempted to stop the courts from taking their property by forcing the courts in western Massachusetts to close …

Law Firms Competing On The "Edge Of Chaos": Pro Bono's Role In A Winning Competitive Strategy, Tom Spahn

Tom Spahn

My Article takes an interdisciplinary approach to arguing that robust pro bono practices can give law firms a strategic advantage in the modern economy. I use modern economic theories, from game theory to complexity theory, to consider a pro bono practice’s role in responding to both internal and external competitive pressures. This leads to several key insights, such as pro bono’s ability to offset the dead-weight loss incurred when oligopolistic firms merge, its power to cause a paredo improvement to a firm’s position by moving it away from a non-cooperative Nash equilibrium, and the iterative recombination effect that such a …

Personal Bankruptcy And Tax Debt: An Examination Of The Usefulness Of Chapter 13 In Managing Irs Claims, Matthew Q. Mcpherson, Donald D. Hackney, Daniel L. Friesner, Candice L. Correia

Matthew Q McPherson

The bankruptcy code has been used, with varying degrees of success, to mitigate debtor obligations for certain classes of financial claims. Taxes are a unique class of claim. The IRS, as the enforcement tool of the Federal Government’s revenue generating operations, is armed with collection powers not available to ordinary creditors. These include, but are not limited to, liens, levies, attachments, assessment penalties, and, most significantly, the power to ignore debtor homestead protections. Bankruptcy can be very valuable to a debtor caught in an active IRS tax collection. For example, filing Chapter 13 bankruptcy stops the running of interest on …

Roe V Nebbia: Could Roe Be In Constitutional Jeopardy?, R. Morris Coats, Victor Parker, Shane Sanders, Bhavneet Walia

Shane D. Sanders

This study provides a positive analysis of abortion price regulation. Given Court precedent on the issues of abortion and state price regulation, the implementation of an abortion price control would create a potential legal conundrum. The price of abortion best meeting a state’s needs may affect incidence of legal abortion as would a direct market limitation or ban. Abortion price controls are evaluated with respect to relevant issues of liberty and confiscation. Given the Court's allowance of abortion as a marketable service allocated by a (restrictive) price mechanism, it is ambiguous and confounding that a state-controlled abortion price would present …

Tax First, Ask Questions Later: Problems Predicting The Effect Of Obama's International Tax Reforms, Timothy H. Shapiro

Timothy H Shapiro

The Obama Administration has proposed a dramatic reworking of the way US corporations are taxed on income they earn outside the US. Although less prominent than other Washington policy debates, these changes are no less contentious. The result is either a fairer tax system yielding the government an extra $210 billion, or the end of US-based multinational corporations, depending on who one asks. Yet both sides of the debate have opted for rhetorical simplicity over accuracy, sidestepping sixty years of theoretical scholarship on the subject. The world economy is a dynamic system, and the current projections of US companies’ reactions …

Against The Stand-Alone-Cost Test In U.S. Freight Rail Regulation, Russell W. Pittman

Russell W. Pittman

The stand-alone-cost test has become an expensive, extensive, and time-consuming part of the regulatory practice of the U.S. Surface Transportation Board in the performance of its statutory duty to protect "captive shippers" from monopoly rail rates. Worse, a close examination of the history of its adoption and application suggests only a very tenuous connection with its claimed intellectual foundations, the classic works of Faulhaber (1975) and Baumol, Panzar, and Willig (1982). It is time to retire this tool and replace it with something simpler and more effective and transparent.

Microfinance Regulation: Interest Rate Caps And Concept Of Usury, Gray L. Skinner, William H. Payne

Gray L Skinner

I. Between Scylla and Charybdis: The balancing act of lending to the poor (Abstract)

Over the past two decades, microfinance has grown rapidly, reaching markets around the world and garnering the attention of policy makers and the media. Microfinance is the practice of offering small-scale banking services to communities in developing nations to improve the client's productivity and quality of life. The microfinance industry has attracted investors and practitioners who wish to unlock the profit potential of new markets while also achieving a philanthropic goal. As microfinance has grown, however, so has the need for legal regulation. Experts and practitioners …

Gender Budget Analysis In Morocco: Achieving Education Parity For Women And Girls, Christie J. Edwards

Christie J. Edwards Esq.

The Kingdom of Morocco has a long history of stability and democracy in the North African region, in large part due to the government’s commitment to improving the lives and status of women and girls. In the past few years, Morocco has set ambitious goals for increased access for women and girls to education as key strategies for the country’s economic development. However, although the government has committed to these gender-specific policies, implementation of education and literacy programs has been sporadic and inconsistent due to the enormity of the problem of female illiteracy and the complexity of the solutions proposed …

Taking Bubbles Seriously In Contract Law, John P. Hunt

John P Hunt

This Article argues that bubbles driven by traders with poor judgment exist, can be identified on an aggregate level, and have negative effects on parties that are not involved in the bubble markets. If those premises are accepted, then failing to respect bubble contracts – rescinding bubble transactions – makes sense. Such a rule should deter the formation of bubbles. Moreover, the rule is not in serious tension with the principle of freedom of contract to the degree one might expect. The poor judgment exhibited during a bubble suggests that incapacity should, and mistake and fraud do, apply to a …

The Financial Crisis And The Future Of Law And Economics, Wladimir D. Kraus

Wladimir D. Kraus

A Failure of Capitalism is a multifaceted contribution to our understanding of the Great Recession. But, due to its overwhelmingly macroeconomic character and substance, the nuanced approach of the law and economics scholarship is virtually absent, and so is any plausible explanation of the financial crisis that touched off the great recession. This is puzzling, because attention to the economic consequences of the law seems to provide a much more powerful framework for understanding what caused the financial collapse, and it is a natural approach for scholars of law and economics to pursue.

A Consequential Approach To Interpretation And Interpretive Risk: Rethinking Judicial Intervention From Contracts To The Chrysler Bankruptcy, J. P. Kostritsky

Juliet P Kostritsky

Abstract When contracts remain ambiguous or incomplete, courts and scholars must confront the inevitable question of when intervention in private contracts is justified. To deal with the unresolution or residual uncertainty, the Austrian economists and the new textualists suggest that any intervention would be a fool’s errand. Their position amounts to an unvarying posture that any party asking for an additional term or a broad interpretation will always lose. Recognizing that there is an interpretive risk in all contracts, the court should adopt an interpretive methodology that parties would be willing to adopt and that would enhance the willingness of …

Just Notice: Re-Reforming Employment At Will, Rachel S. Arnow-Richman

Rachel S. Arnow-Richman

This Article proposes a fundamental shift in the movement to reform employment termination law. For forty years, there has been a near consensus among employee advocates and worklaw scholars that the current doctrine of employment at will should be abandoned in favor of a rule requiring just cause for termination. This Article contends that such calls are misguided, not (as defenders of the current regime have argued) because a just cause rule grants workers too much protection vis-à-vis management, but because it grants them too little. A just cause rule provides only a weak cause of action to a narrow …

Trust And The Reform Of Securities Regulation, Ronald J. Colombo

Ronald J Colombo

Trust is a critically important ingredient in the recipes for a successful economy and a well-functioning securities market. Due to scandals, ranging in nature from massive incompetence, to massive irresponsibility, to massive fraud, investor trust is in shorter supply today than in years past. This is troubling, and commentators, policy makers, and industry leaders have all recognized the need for trust's restoration.

As in times of similar crises, many have turned to law and regulation for the answers to our problems. The imposition of additional regulatory oversight, safeguards, and remedies, some advocate, can help resuscitate investor trust. These advocates have …

Free To Air? – Legal Protection For Tv Program Formats, Neta-Li E. Gottlieb

Neta-li E Gottlieb

Television is only as strong as its programming. The use of program formats has slowly but surely developed into an important component of the television industry. This paper examines the surprising gap between the constantly growing, multi-billion-dollar trade of program formats and their unclear and contradictory legal treatment. Using an interdisciplinary approach, I look at the characteristics of both the product at hand and the markets it serves to examine possible justification for legal protection. I argue that the use of the term “TV format” is misleading and that a clear separation between the unpublished and published stages of the …

Free To Air? – Legal Protection For Tv Program Formats, Neta-Li E. Gottlieb

Neta-li E Gottlieb

Television is only as strong as its programming. The use of program formats has slowly but surely developed into an important component of the television industry. This paper examines the surprising gap between the constantly growing, multi-billion-dollar trade of program formats and their unclear and contradictory legal treatment. Using an interdisciplinary approach, I look at the characteristics of both the product at hand and the markets it serves to examine possible justification for legal protection. I argue that the use of the term “TV format” is misleading and that a clear separation between the unpublished and published stages of the …

Consumer Use And Government Regulation Of Title Pledge Lending, Todd J. Zywicki

Todd J. Zywicki

Recent years have seen growth in the use of certain types of nontraditional lending products, such as payday lending and auto title lending, and a relative decline of others, such as finance companies and pawnbrokers. Congress is currently considering major new regulations on short-term lending products, such as title lending, that could produce their demise—even though there is no evidence that such products were related in any way to the financial crisis.

This study examines the question of who uses title pledge lending and why. The results are surprising. I find that title pledge lending is used predominantly by three …

Fairness, Utility, And Market Risk, Jeff Schwartz

Jeff Schwartz

In this Article, I argue that we lack a satisfactory theory about how disclosure, the centerpiece of securities regulation, serves investor interests. To close this gap, I contend that the regulations should be viewed as part of a broader societal framework that protects individuals from stock-market risk. I flesh out this notion in three ways. First, I set out to justify protection from market risk as a valid societal goal. To do so, I appeal to Rawlsian and utilitarian notions of justice. These moral theories contain the principle that a just society helps individuals manage risk. I argue that this …

Underwater And Not Walking Away: Shame, Fear And The Social Management Of The Housing Crisis, Brent T. White

Brent T. White

Despite reports that homeowners are increasingly “walking away” from their mortgages, most homeowners continue to make their payments even when they are significantly underwater. This article suggests that most homeowners choose not to strategically default as a result of two emotional forces: 1) the desire to avoid the shame and guilt of foreclosure; and 2) exaggerated anxiety over foreclosure’s perceived consequences. Moreover, these emotional constraints are actively cultivated by the government and other social control agents in order to encourage homeowners to follow social and moral norms related to the honoring of financial obligations - and to ignore market and …

Baseball's Moral Hazard: Law, Economics And The Designated Hitter Rule, Steve P. Calandrillo

Steve P. Calandrillo

No subject prompts greater disagreement among baseball fans than the designated hitter rule, which allows teams to designate a player to hit for the pitcher. The rule increases the number of hit batsmen, and some have suggested this effect is a result of “moral hazard,” which recognizes that persons insured against risk are more likely to engage in dangerous behavior. Because American League pitchers do not bat, they allegedly are not deterred by the full cost of making risky, inside pitches—namely, retribution during their next at bat. Using a law-and-economics approach, this Article concludes that the designated hitter rule creates …

Affirmative Action: Where It Was, Where It Is, And Where It Should Go, Lawrence Opisso

Lawrence Opisso

A comment on the history of affirmative action, its current state, and a perspective on its future. This comment focuses on affirmative action moving toward a poverty-based solution to social inequities.

An Economic Take On Patent Licensing: Understanding The Implications Of The “First Sale Patent Exhaustion” Doctrine, Anne S. Layne-Farrar

Anne S. Layne-Farrar

Under the legal doctrine of first sale, or patent exhaustion, a patent holder’s ability to license multiple parties along a production chain is restricted. How and when such restrictions should be applied is a controversial issue, as evidenced by the Supreme Court’s granting certiorari in the Quanta case. The issue is important, as it has significant implications for how firms can license in vertically disaggregated industries. We explore this issue from an economic viewpoint and find that under ideal circumstances how royalty rates are split along the production chain has no real consequence for social welfare. Even when we depart …

The Need For Better Analysis Of High Capacity Services, George S. Ford, Lawrence J. Spiwak

GEORGE S FORD

In 1999, the Federal Communications Commission (“FCC”) began to grant incumbent local exchange carriers (“LECs”) pricing flexibility on special access services in some Metropolitan Statistical Areas (“MSAs”) when specific evidence of competitive alternatives is present. The propriety of that deregulatory move by the FCC has been criticized by the purchasers of such services ever since. Proponents of special access price regulation rely on three central arguments to support a retreat to strict price regulation: (1) the market(s) for special access and similar services is unduly concentrated; (2) rates of return on special access services, computed using FCC ARMIS data, are …