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Full-Text Articles in Law
Screening, Plea Bargains And The Innocent Problem, Oren Gazal
Screening, Plea Bargains And The Innocent Problem, Oren Gazal
Law & Economics Working Papers Archive: 2003-2009
Courts in common law countries reject plea-agreements only when the agreed upon sentence is seen as exceedingly lenient. This judicial intervention is designed to ensure that plea-bargaining does not undermine deterrence. Many legal scholars argue against this policy, claiming that courts should prohibit plea-bargaining all together. They argue that the plea-bargaining system increases the risk of wrongful convictions. Economists often criticize this judicial intervention as well, but for a different reason. Rather than advocating the abolition of plea-bargaining, many economists argue that the courts should accept all plea-agreements without review. They claim that plea-bargaining can help ensure an efficient use …
The Coordinated Effects Of Mergers In Differentiated Products Market, Kai-Uwe Kuhn
The Coordinated Effects Of Mergers In Differentiated Products Market, Kai-Uwe Kuhn
Law & Economics Working Papers Archive: 2003-2009
No abstract provided.
Plea Bargains Only For The Guilty, Oren Gazal, Oren Bar-Gill
Plea Bargains Only For The Guilty, Oren Gazal, Oren Bar-Gill
Law & Economics Working Papers Archive: 2003-2009
A major concern with plea bargains is that innocent defendants will be induced to plead guilty. This paper argues that the law can address this concern by providing prosecutors with incentives to select cases in which the probability of guilt is high. By restricting the permissible sentence reduction in a plea bargain the law can preclude plea bargains in cases where the probability of conviction is low (L cases). The prosecutor will therefore be forced to – (1) select fewer L cases and proceed to trial with these cases; or (2) select more cases with a higher probability of conviction …
An Ex-Ante View Of The Battle Of The Forms: Inducing Parties To Draft Reasonable Terms, Omri Ben-Shahar
An Ex-Ante View Of The Battle Of The Forms: Inducing Parties To Draft Reasonable Terms, Omri Ben-Shahar
Law & Economics Working Papers Archive: 2003-2009
This paper focuses on one type of ex-ante effect of the battle of the forms: the incentive to draft reasonable boilerplate terms. It argues that the experience with the battle-of-the-forms rule under the CISG reinforces what we already know, that existing legal solutions do not provide any incentive for the parties to draft reasonable forms. The paper suggests that the goal of inducing parties to draft reasonable terms can be significantly promoted by a third rule, a variant of the “best-shot” rule proposed by Victor Goldberg. Under the version labeled the “reasonable-shot” rule, the court would resolve the battle of …
Corporate Defendants And The Protections Of Criminal Procedure: An Economic Analysis, Vikramaditya S. Khanna
Corporate Defendants And The Protections Of Criminal Procedure: An Economic Analysis, Vikramaditya S. Khanna
Law & Economics Working Papers Archive: 2003-2009
Corporations are frequently treated as “persons” under the law. One of the fundamental questions associated with this treatment is whether corporations should receive the same Constitutional protections and guarantees as natural persons. In particular, should corporations receive the Constitutional protections of Criminal Procedure? After all, corporations cannot be sent to jail so the sanctions they face are essentially the same as in civil proceedings. If so, then why not have the same procedural protections for corporate defendants in civil and criminal cases? Little scholarly analysis has focused on this issue from an economic perspective and this article aims to fill …
The Market For Criminal Justice: Federalism, Crime Control And Jurisdictional Competition, Doron Teichman
The Market For Criminal Justice: Federalism, Crime Control And Jurisdictional Competition, Doron Teichman
Law & Economics Working Papers Archive: 2003-2009
For the most part, the United States has a decentralized criminal justice system. State legislatures define the majority of crimes and set out the punishments for those crimes. In addition, the enforcement of criminal laws lies, in most cases, in the hands of local law enforcement agencies. This article points out how this decentralized structure drives local jurisdictions to harshen their criminal justice system in order to displace crime to neighboring jurisdictions. More precisely, local jurisdictions can attempt to displace crime in two distinct ways. First, they can raise the expected sanction to a level that is higher than that …
Sex, Shame, And The Law: An Economic Perspective On Megan's Law, Doron Teichman
Sex, Shame, And The Law: An Economic Perspective On Megan's Law, Doron Teichman
Law & Economics Working Papers Archive: 2003-2009
This Article focuses on the question, how should policymakers aiming to minimize the cost of sanctioning utilize legal and nonlegal sanctions when designing a system of criminal sanctions. After presenting the general economic case for the use of nonlegal sanctions the article turns to present a model of shaming, which unlike existing models, incorporates the endogenous effects of legal and nonlegal sanctions. This model demonstrates that tailoring an efficient regime that combines legal and nonlegal sanctions might be more difficult than previously perceived by law and economics scholars. A specific case study presented in this article is of the current …
Economic Theories Of Bundling And Their Policy Implications In Abuse Cases: An Assessment In Light Of The Mircrosoft Case, Kai-Uwe Kuhn
Economic Theories Of Bundling And Their Policy Implications In Abuse Cases: An Assessment In Light Of The Mircrosoft Case, Kai-Uwe Kuhn
Law & Economics Working Papers Archive: 2003-2009
No abstract provided.
Banking The Poor: Policies To Bring Low-Income Americans Into The Financial Mainstream, Michael S. Barr
Banking The Poor: Policies To Bring Low-Income Americans Into The Financial Mainstream, Michael S. Barr
Law & Economics Working Papers Archive: 2003-2009
Low-income households in the United States often lack access to bank accounts and face high costs for conducting basic financial transactions through check cashers and other alternative financial service providers. These families find it more difficult to save and plan financially for the future. Living paycheck to paycheck leaves them vulnerable to medical or job emergencies that may endanger their financial stability, and lack of longer-term savings undermines their ability to improve skills, purchase a home, or send their children to college. High-cost financial services and inadequate access to bank accounts may undermine widely-shared societal goals of reducing poverty, moving …
Should Issuers Be On The Hook For Laddering? An Empirical Analysis Of The Ipo Market Manipulation Litigation, Stephen Choi, Adam C. Pritchard
Should Issuers Be On The Hook For Laddering? An Empirical Analysis Of The Ipo Market Manipulation Litigation, Stephen Choi, Adam C. Pritchard
Law & Economics Working Papers Archive: 2003-2009
nder Section 11 of the Securities Act of 1933, firms making public offerings of securities are strictly liable to investors for any material misstatements in the registration statements that accompany those offers. This strict liability regime is premised on the notion that issuers are best placed to avoid misstatements in the registration statement. Section 11 gives other potential defendants a “due diligence” defense to reflect their lesser ability to ensure the accuracy of the registration statement. The recent spate of “laddering” lawsuits alleging manipulation of the aftermarket for certain stocks issued in “hot” initial public offerings (IPOs) presents a role-reversal …
International Tax As International Law, Reuven S. Avi-Yonah
International Tax As International Law, Reuven S. Avi-Yonah
Law & Economics Working Papers Archive: 2003-2009
The purpose of this article is to introduce to the international lawyer the somewhat different set of categories (e.g., residence and source rather than nationality and territoriality) employed by international tax lawyers, and explain the reasons for some of the differences. At the same time, it attempts to persuade practicing international tax lawyers and international tax academics that their field is indeed part of international law, and that it would help them to think of it this way. For example, knowledge of the Vienna Convention on the Law of Treaties would help international tax lawyers in interpreting tax treaties, and …
The Pitfalls Of International Integration: A Comment On The Bush Proposal And Its Aftermath, Reuven S. Avi-Yonah
The Pitfalls Of International Integration: A Comment On The Bush Proposal And Its Aftermath, Reuven S. Avi-Yonah
Law & Economics Working Papers Archive: 2003-2009
In January 2003, the Bus Administration proposed a new system for taxing corporate dividends, under which domestic shareholders in U.S. corporations would not be taxed on dividends they received, provided the corporation distributed these dividends out of after-tax earnings (the “Bush Proposal”). The Bush Proposal was introduced in Congress in February 27,2003. Ultimately, however, Congress balked at enacting full-fledged dividend exemption. Instead, in the Jobs and Growth Tax Relief Reconciliation Act of 2003 (“JGTRRA”) as enacted on May 28, 2003, a lower rate of 15% was adopted for dividends paid by domestic and certain foreign corporations, and the capital gains …
Corporations, Society And The State: A Defense Of The Corporate Tax, Reuven S. Avi-Yonah
Corporations, Society And The State: A Defense Of The Corporate Tax, Reuven S. Avi-Yonah
Law & Economics Working Papers Archive: 2003-2009
This article attempts to provide the first comprehensive rationale for defending the current corporate income tax. It argues that the usual reasons given for the tax (primarily as an indirect way of taxing shareholders, or alternatively as a form of benefit tax) are inadequate. It then explains what the original rationale to adopt this tax was in 1909, namely to regulate managerial power, and that this rationale stems from the real view of the corporation, which was the dominant view throughout the many transformations underwent by the corporate form from Roman times to the present. Turning to normative argument, the …
Banking The Poor, Michael S. Barr
Banking The Poor, Michael S. Barr
Law & Economics Working Papers Archive: 2003-2009
Low-income households often lack access to banking accounts and face high costs for transacting basic financial services through check cashers and other alternative financial service providers. These families find it more difficult to save and plan financially for the future. Living paycheck to paycheck leaves them vulnerable to medical or job emergencies that may endanger their financial stability, and lack of longer-term savings undermines their ability to improve skills, purchase a home, or send their children to college. Additionally, high cost financial services and inadequate access to bank accounts may undermine widely-shared societal goals of reducing poverty, moving families from …
Credible Coercion, Oren Bar-Gill, Omri Ben-Shahar
Credible Coercion, Oren Bar-Gill, Omri Ben-Shahar
Law & Economics Working Papers Archive: 2003-2009
The ideal of individual liberty and autonomy requires that society provide relief against coercion. In the law, this requirement is often translated into rules that operate “post-coercion” to undo the legal consequences of acts and promises extracted under duress. This Article argues that these ex-post anti-duress measures, rather than helping the coerced party, might in fact hurt her. When coercion is credible—when a credible threat to inflict an even worse outcome underlies the surrender of the coerced party—ex post relief will only induce the strong party to execute the threatened outcome, to the detriment of the coerced party. Anti-duress relief …
A Comparative Empirical Investigation Of Agency And Market Theories Of Insider Trading, Laura N. Beny
A Comparative Empirical Investigation Of Agency And Market Theories Of Insider Trading, Laura N. Beny
Law & Economics Working Papers Archive: 2003-2009
The paper summarizes various agency cost and market theories of insider trading propounded over the course of the perennial law and economics debate over insider trading. The paper then suggests three testable hypotheses regarding the relationship between insider trading laws and several measures of financial performance. Using international data and alternative regression specifications, the paper finds that more stringent insider trading laws and enforcement are generally associated with greater ownership dispersion, greater stock price accuracy and greater stock market liquidity. This set of findings provides empirical support to theoretical arguments in favor of more stringent insider trading legislation and enforcement.
"Agreeing To Disagree": Filling Gaps In Deliberately Incomplete Contracts, Omri Ben-Shahar
"Agreeing To Disagree": Filling Gaps In Deliberately Incomplete Contracts, Omri Ben-Shahar
Law & Economics Working Papers Archive: 2003-2009
This Article develops a new standard for gap filling in incomplete contracts. It focuses on an important class of situations in which parties leave their agreement deliberately incomplete, with the intent to further negotiate and resolve the remaining issues. In these situations, neither the traditional no-enforcement result nor the usual gap filling approaches accord with the parties’ partial consent. Instead, the Article develops the concept of pro-defendant gap-fillers, under which each party is granted an option to enforce the transaction supplemented with terms most favorable (within reason) to the other party. A deliberately incomplete contract with pro-defendant gap fillers transforms …