Open Access. Powered by Scholars. Published by Universities.®
- Publication Year
- Publication
- Publication Type
Articles 1 - 21 of 21
Full-Text Articles in Law
A Crossroads, Not An Island: A Response To Hanoch Dagan, Zoë Hitzig, E. Glen Weyl
A Crossroads, Not An Island: A Response To Hanoch Dagan, Zoë Hitzig, E. Glen Weyl
Michigan Law Review Online
Hanoch Dagan critiques Radical Markets for insufficient attention to the value of autonomy. While most of his concrete disagreements result from miscommunications, he appears sympathetic to a theory of autonomy that is more widespread, and deserves response. Human agency is fundamentally social, and individuality is primarily constituted by the unique set of social connections and identities one adopts. In this sense, flourishing individuals are crossroads of different communities, not self-sufficient islands. Beyond any welfarist benefits, a fundamental value of Radical Markets is that they aim to instantiate the social nature of identity and empower agency through diverse community.
The Affordable Care Act, Experience Rating, And The Problem Of Non-Vaccination, Eric Esshaki
The Affordable Care Act, Experience Rating, And The Problem Of Non-Vaccination, Eric Esshaki
University of Michigan Journal of Law Reform Caveat
Polio, the whooping cough, and the mumps, among many other communicable diseases, were once prevalent in communities within the developed world and killed millions of people.1 The advent of vaccinations contained or eradicated several of these diseases.2 However, these diseases still exist in the environment3 and are making a comeback in the United States.4 Their persistence is directly attributable to the rising trend among parents refusing to vaccinate their children.5 One proposed solution to this problem is to hold parents liable in tort when others are harmed by their failure to vaccinate. Another proposed solution argues that parents should pay …
Broker-Dealers And Investment Advisers: A Behaviorial-Economics Analysis Of Competing Suggestions For Reform, Polina Demina
Broker-Dealers And Investment Advisers: A Behaviorial-Economics Analysis Of Competing Suggestions For Reform, Polina Demina
Michigan Law Review
For the average investor trying to save for retirement or a child’s college fund, the world of investing has become increasingly complex. These retail investors must turn more frequently to financial intermediaries, such as broker-dealers and investment advisers, to get sound investment advice. Such intermediaries perform different duties for their clients, however. The investment adviser owes his client a fiduciary duty of care and therefore must provide financial advice that is in the client’s best interests, while the broker-dealer must merely provide advice that is suitable to the client’s interests—a lower standard than the fiduciary duty of care. And yet …
Rationality's Reach, Adam B. Badawi
Rationality's Reach, Adam B. Badawi
Michigan Law Review
Economic analysis and the rational actor model have dominated contracts scholarship for at least a generation. In the past fifteen years or so, however, a group of behaviorists has challenged the ability of the rational choice model to account for consumer behavior. These behaviorists are not trying to dismantle the entire enterprise. They generally accept the fundamentals of economic analysis but argue that the rational actor model can be improved by incorporating evidence of decisionmaking flaws that people exhibit. Oren Bar-Gill has been one of the foremost and influential proponents of a behaviorist take on contracts, and his recent book, …
Are People Probabilistically Challenged?, Alex Stein
Are People Probabilistically Challenged?, Alex Stein
Michigan Law Review
Daniel Kahneman's recent book, Thinking, Fast and Slow, is a must-read for any scholar or policymaker interested in behavioral economics. Behavioral economics is a young, but already well-established, discipline that pervasively affects law and legal theory. Kahneman, a 2002 Nobel Laureate, is the discipline's founding father. His pioneering work with Amos Tversky and others challenges the core economic concept of expected utility, which serves to determine the value of people's prospects. Under mainstream economic theory, the value of a person's prospect equals the prospect's utility upon materialization (U) multiplied by the probability of the prospect materializing (P). When the prospect …
The Meaning Of The Market Myth, Benjamin Means
The Meaning Of The Market Myth, Benjamin Means
Michigan Business & Entrepreneurial Law Review
This Book Review contends that the perfectly rational market may be a myth, not just in the sense of a false or over-simplified account of reality, but also in the deeper, anthropological sense of cultural explanation. Part I describes how rational-market theories were developed by financial economists and applied to Wall Street, sometimes without adequate appreciation for the difference between simplified economic models and real-world behavior. Part II contends that if the rational-market theory has met with acceptance that outstrips its empirical support, the favorable reception may be explained in part by the theory’s congruence with broader normative views about …
The Dog That Didn't Bark: Private Investment Funds And Relational Contracts In The Wake Of The Great Recession, Robert C. Illig
The Dog That Didn't Bark: Private Investment Funds And Relational Contracts In The Wake Of The Great Recession, Robert C. Illig
Michigan Business & Entrepreneurial Law Review
In the aftermath of the subprime mortgage crisis, the contract rights of numerous hedge funds and venture capital funds were breached. These contracts were complex and sophisticated and had been negotiated at great time and expense. Yet despite all of the assumptions of neo-classical contracts theory, nothing happened. Practically none of these injured parties sued to enforce their rights. Professor Illig uses this dearth of litigation to conduct a form of natural experiment as to the value of contract law. Discrete market participants contracted before the crash and then pursued their rights in court afterwards, while relational market participants contracted …
Plus Factors And Agreement In Antitrust Law, William E. Kovacic, Robert C. Marshall, Leslie M. Marx, Halbert L. White
Plus Factors And Agreement In Antitrust Law, William E. Kovacic, Robert C. Marshall, Leslie M. Marx, Halbert L. White
Michigan Law Review
Plus factors are economic actions and outcomes, above and beyond parallel conduct by oligopolistic firms, that are largely inconsistent with unilateral conduct but largely consistent with explicitly coordinated action. Possible plus factors are typically enumerated without any attempt to distinguish them in terms of a meaningful economic categorization or in terms of their probative strength for inferring collusion. In this Article, we provide a taxonomy for plus factors as well as a methodology for ranking plus factors in terms of their strength for inferring explicit collusion, the strongest of which are referred to as "super plus factors."
Explaining The Importance Of Public Choice For Law, D. Daniel Sokol
Explaining The Importance Of Public Choice For Law, D. Daniel Sokol
Michigan Law Review
The next generation of government officials, business leaders, and members of civil society likely will draw from the current pool of law school students. These students often lack a foundation of the theoretical and analytical tools necessary to understand law's interplay with government. This highlights the importance of public choice analysis. By framing issues through a public choice lens, these students will learn the dynamics of effective decision making within various institutional settings. Filling the void of how to explain the decision-making process of institutional actors in legal settings is Public Choice Concepts and Applications in Law by Maxwell Steams …
The Last Best Hope For Progressivity In Tax, E. J. Mccaffery, James R. Hines Jr.
The Last Best Hope For Progressivity In Tax, E. J. Mccaffery, James R. Hines Jr.
Articles
We argue that a spending tax, as opposed to an income or wage tax, is the “last best hope” for a return to significantly more progressive marginal tax rates than obtain today. The simple explanation for this central claim looks to incentive effects, especially for “rich people,” as both economists and commentators are inclined to focus. High marginal tax rates under an income tax fall on and hence deter the socially productive activities of work and savings. High marginal rates under a wage tax fall on and hence deter the socially productive activity of work alone. But high marginal rates …
Insufficient Activity And Tort Liability: A Rejoinder, David Gilo, Ehud Guttel
Insufficient Activity And Tort Liability: A Rejoinder, David Gilo, Ehud Guttel
Michigan Law Review First Impressions
In our article, Negligence and Insufficient Activity, we proposed that tort scholarship has overlooked the risk that injurers will behave strategically in setting their activity levels. Whereas the standard literature has predicted that injurers who are subject to a negligence regime will often invest efficiently in care but choose excessive activity levels, we showed that they may do exactly the opposite: injurers may deliberately restrict their activity to avoid investments in socially desirable precaution. After reviewing the conditions that may give rise to the risk of insufficient activity, we examined the ways in which the legal system can minimize the …
Activity Levels Under The Hand Formula: A Comment On Gilo And Guttel, Richard A. Epstein
Activity Levels Under The Hand Formula: A Comment On Gilo And Guttel, Richard A. Epstein
Michigan Law Review First Impressions
A response to David Gilo & Ehud Guttel, Negligence and Insufficient Activity: The Missing Paradigm in Torts, 108 Mich. L. Rev. 277 (2009). Within the law and economics field, there often surfaces a near hypnotic attraction to the Hand formula as the one and only tool that drives tort law toward economic efficiency. Hand's intuition was, of course, that the test for efficiency requires a balancing of three variables. The burden of taking particular precautions is compared to the expected loss from some activity, which in turn consists of the likelihood of some particular harm multiplied by its anticipated severity. …
Another Theory Of Insufficient Activity Levels, Mark Grady
Another Theory Of Insufficient Activity Levels, Mark Grady
Michigan Law Review First Impressions
A response to David Gilo & Ehud Guttel, Negligence and Insufficient Activity: The Missing Paradigm in Torts, 108 Mich L. Rev. 277 (2009). Professors David Gilo and Ehud Guttel have written an important article on the tendency of the negligence rule to produce inefficiently low activity levels. In Negligence and Insufficient Activity: The Missing Paradigm in Torts, the authors claim insufficient activity to be the "missing paradigm" in tort theory. Although I agree with Gilo and Guttel that this missing paradigm is central to negligence doctrine, I disagree with them about how insufficient activity levels arise.
Insufficient Analysis Of Insufficient Activity, Kenneth S. Abraham
Insufficient Analysis Of Insufficient Activity, Kenneth S. Abraham
Michigan Law Review First Impressions
A response to David Gilo & Ehud Guttel, Negligence and Insufficient Activity: The Missing Paradigm in Torts, 108 Mich L. Rev. 277 (2009). In Negligence and Insufficient Activity: The Missing Paradigm in Torts, David Gilo and Ehud Guttel argue that negligence law encourages inefficiently high and low levels of activity because negligence law ordinarily does not take activity levels into account. They suggest that the law should impose liability for failing to take safety precautions-even where precautions would not be cost-justified-whenever the threat of this liability negates the incentive for an actor to choose an insufficient level of activity. Until …
Dilution Of Liability And Multiple Tortfeasors In The Context Of Liability For Unrequested Precautions, Assaf Jacob
Dilution Of Liability And Multiple Tortfeasors In The Context Of Liability For Unrequested Precautions, Assaf Jacob
Michigan Law Review First Impressions
A Response to Ariel Porat, Private Production of Public Goods: Liability for Unrequested Benefits, 108 Mich. L. Rev. (2009). One of the more intriguing questions in tort law is the case of joint and several tortfeasors and the dilution-of-liability puzzle. When harm materializes and there are multiple potential tortfeasors, the law tends to limit the number of joint tortfeasors, focusing the final burden on a small number of actors. This limitation is achieved by several legal mechanisms, such as a no duty rule, a narrow interpretation of negligence, a restrictive implementation of the causal link (be it the but for …
Letting Good Deeds Go Unpunished: Volunteer Immunity Laws And Tort Deterrence, Jill R. Horwitz, Joseph Mead
Letting Good Deeds Go Unpunished: Volunteer Immunity Laws And Tort Deterrence, Jill R. Horwitz, Joseph Mead
Articles
Does tort law deter risky behavior in individuals? We explore this question by examining the relationship between tort immunity and volunteering. During the 1980s and 1990s, nearly every state provided some degree of volunteer immunity. Congress followed with the 1997 Volunteer Protection Act. This article analyzes these acts, identifying three motivations for them: the chilling effects of tort liability, limits on liability insurance, and moral concerns. Using data from the Independent Survey’s Giving and Volunteering surveys, we then identify a large and positive correlation between immunity and volunteering. We next consider the implications of the findings for tort theory and …
Behavioral Economics And The Sec, Stephen J. Choi, Adam C. Pritchard
Behavioral Economics And The Sec, Stephen J. Choi, Adam C. Pritchard
Articles
Not all investors are rational. Quite apart from the obvious examples of credulity in the face of the latest Ponzi scheme, there is no shortage of evidence that many investors' decisions are influenced by systematic biases that impair their abilities to maximize their investment returns. For example, investors will often hold onto poorly performing stocks longer than warranted, hoping to recoup their losses. Other investors will engage in speculative trading, dissipating their returns by paying larger commissions than more passive investors. And we are not just talking about widows and orphans here. There is evidence that supposedly sophisticated institutional investors-mutual …
Theorizing Behavioral Law And Economics: A Defense Of Evolutionary Analysis And The Law, Neel P. Parekh
Theorizing Behavioral Law And Economics: A Defense Of Evolutionary Analysis And The Law, Neel P. Parekh
University of Michigan Journal of Law Reform
Behavioral law and economics (BLE) provides a steady stream of empirical evidence that counters the predictions of law and economics. Despite this research and data, however, many theorists argue that BLE ultimately fails because it posits no underlying theory. This Note argues that perspectives from evolutionary biology, evolutionary psychology, and the brain sciences can provide the missing motivational theory for BLE's empirical findings. The Note also examines the implications a more consistent and reasoned consideration of evolutionary analysis and the law (EA) has for our legal regime. In theorizing BLE and defending EA, this Note aims to show how evolutionary …
Regret Theory - Explanation, Evaluation And Implications For The Law, Grant B. Gelberg
Regret Theory - Explanation, Evaluation And Implications For The Law, Grant B. Gelberg
University of Michigan Journal of Law Reform
This Note discusses regret theory, which offers an alternative explanation of rational behavior in risky or uncertain situations. Unlike traditional law and economics, which is based on expected utility theory, regret theory posits that individuals either rejoice or experience regret after making a decision, and that the anticipation of these feelings influences choices ex ante. In recent years, studies have shown the robustness of regret theory, particularly when individuals compare action to inaction, in disparate feedback environments, and when decisional agency is altered. These, and other factors, influence regret theory's impact on litigant behavior, as well as on the …
Linking The Visions, Omri Ben-Shahar
Linking The Visions, Omri Ben-Shahar
Other Publications
Professor Omri Ben-Shahar talks about his teaching and work.
The Problem Of Social Cost Revisited, Donald H. Regan
The Problem Of Social Cost Revisited, Donald H. Regan
Articles
SOME years ago, in a paper entitled "The Problem of Social Cost," Professor Ronald Coase asserted and argued for a proposition which has since acquired the convenient sobriquet "the Coase Theorem." The proposition is: That in a world of perfect competition, perfect information, and zero transaction costs, the allocation of resources in the economy will be efficient and will be unaffected by legal rules regarding the initial impact of costs resulting from externalities. Note that there are two claims being made, which it is well to separate for purposes of discussion. The first claim is that, under the conditions described, …