Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 30 of 41
Full-Text Articles in Law
Ostrom's Law: Property Rights In The Commons, Lee Anne Fennell
Ostrom's Law: Property Rights In The Commons, Lee Anne Fennell
Coase-Sandor Working Paper Series in Law and Economics
Elinor Ostrom's work has immeasurably enhanced legal scholars' understanding of property. Although the richness of these contributions cannot be distilled into a single thesis, their flavor can be captured in a maxim I call Ostrom's Law: A resource arrangement that works in practice can work in theory. Ostrom's scholarship challenges the conventional wisdom by examining how people interact over resources on the ground – an approach that enables her to identify recurring institutional features associated with long-term success. In this essay, I trace some of the ways that Ostrom's focus on situated examples has advanced interdisciplinary dialogue about property as …
Political Risk And Sovereign Debt Contracts, Eric A. Posner, Stephen J. Choi, G. Mitu Gulati
Political Risk And Sovereign Debt Contracts, Eric A. Posner, Stephen J. Choi, G. Mitu Gulati
Coase-Sandor Working Paper Series in Law and Economics
Default on sovereign debt is a form of political risk. Issuers and creditors have responded to this risk both by strengthening the terms in sovereign debt contracts that enable creditors to enforce their debts judicially and by creating terms that enable sovereigns to restructure their debts. These apparently contradictory approaches reflect attempts to solve an incomplete contracting problem in which debtors need to be forced to repay debts in good states of the world; debtors need to be granted partial relief from debt payments in bad states; debtors may attempt to exploit divisions among creditors in order to opportunistically reduce …
The Boundaries Of The Moral (And Legal) Community, Brian Leiter
The Boundaries Of The Moral (And Legal) Community, Brian Leiter
Coase-Sandor Working Paper Series in Law and Economics
No abstract provided.
Accounting For Anticipation Effects: An Application To Medical Malpractice Tort Reform, Anup Malani, Julian Reif
Accounting For Anticipation Effects: An Application To Medical Malpractice Tort Reform, Anup Malani, Julian Reif
Coase-Sandor Working Paper Series in Law and Economics
While conducting empirical work, researchers sometimes observe changes in outcomes before adoption of a new treatment program. The conventional diagnosis is that treatment is endogenous. Observing changes in outcomes prior to treatment is also consistent, however, with anticipation effects. This paper provides a framework for comparing the different methods for estimating anticipation effects and proposes a new set of instrumental variables that can address the problem that subjects' expectations are unobservable. The paper uses this framework to analyze the effect of tort reform on physician supply and finds that accounting for anticipation effects doubles the estimated effect of tort reform.
Does Accuracy Improve The Information Value Of Trials?, Scott Baker, Anup Malani
Does Accuracy Improve The Information Value Of Trials?, Scott Baker, Anup Malani
Coase-Sandor Working Paper Series in Law and Economics
We develop a model where products liability trials provide information to consumers who are not parties to the litigation. Consumers use this information to take precautions against dangerous products. A critical assumption is that consumers cannot differentiate between firms that have never been sued and firms that have been sued but settled out of court. In this framework, we show that perfectly accurate courts do not maximize information to consumers and thus welfare, contrary to Kaplow and Shavell (1994). More accurate courts provide more information only if producers go to trial. Greater accuracy, however, encourages producers of dangerous products to …
Governing Bad Behavior By Users Of Multi-Sided Platforms, David S. Evans
Governing Bad Behavior By Users Of Multi-Sided Platforms, David S. Evans
Coase-Sandor Working Paper Series in Law and Economics
Multi-sided platforms such as exchanges, search engines, social networks and software platforms create value by assembling and serving communities of people and businesses. They generally come into being to solve a transaction problem that prevents agents from getting together to exchange value. An essential feature of these platforms is that they promote positive externalities between members of the community. But as with any community, there are numerous opportunities for people and businesses to create negative externalities, or engage in other bad behavior, that can reduce economic efficiency and, in the extreme, lead to the tragedy of the commons. Multi-sided platforms, …
Improving The Fda Approval Process, Mark Van Der Laan, Anup Malani, Oliver Van Der Bembom
Improving The Fda Approval Process, Mark Van Der Laan, Anup Malani, Oliver Van Der Bembom
Coase-Sandor Working Paper Series in Law and Economics
The FDA employs an average-patient standard when reviewing drugs: it approves a drug only if is safe and effective for the average patient in a clinical trial. It is common, however, for patients to respond differently to a drug. Therefore, the average-patient standard can reject a drug that benefits certain patient subgroups (false negative) and even approval a drug that harms other patient subgroups (false positives). These errors increase the cost of drug development – and thus health care – by wasting research on unproductive or unapproved drugs. The reason why the FDA sticks with an average patient standard is …
Implicit Bias In Legal Interpretation, Ward Farnsworth, Dustin F. Guzior, Anup Malani
Implicit Bias In Legal Interpretation, Ward Farnsworth, Dustin F. Guzior, Anup Malani
Coase-Sandor Working Paper Series in Law and Economics
What role do policy preferences play when a judge or any other reader decides what a statute or other legal text means? Most judges think of themselves as doing law, not politics. Yet the observable decisions that judges make often follow patterns that are hard to explain by anything other than policy preferences. Indeed, if one presses the implications of the data too hard, it is likely to be heard as an accusation of bad faith—a claim that the judge or other decision-maker isn't really earnest in trying to separate preference from judgment. This does not advance the discussion, and …
Regulation For The Sake Of Appearance, Adam M. Samaha
Regulation For The Sake Of Appearance, Adam M. Samaha
Coase-Sandor Working Paper Series in Law and Economics
Appearance is often given as a justification for decisions, including government decisions, but the logic of appearance arguments is not well theorized. This Article develops a framework for understanding and evaluating appearance-based justifications for government decisions. First, working definitions are offered to distinguish appearance from reality. Next, certain relationships between appearance and reality are singled out for attention. Sometimes reality is insulated from appearance, sometimes appearance helps drive reality over time, and sometimes appearance and reality collapse from the outset. Finally, sets of normative questions are suggested based on the supposed relationship between appearance and reality for a given situation. …
A Critical Look At A Critical Look – Reply To Sanchirico, Joseph Bankman, David A. Weisbach
A Critical Look At A Critical Look – Reply To Sanchirico, Joseph Bankman, David A. Weisbach
Coase-Sandor Working Paper Series in Law and Economics
This paper responds to claims made by Chris Sanchirico in his paper, A Critical Look at the Economic Argument for Taxing only Labor Income. His paper, in part, criticizes the claims we made in "The Superiority of an Ideal Consumption Tax Over an Ideal Income Tax, 58 Stan. L. Rev. 1413 (2006). We show that he makes at least three critical mistakes. First, he systematically confuses a Haig-Simons tax with tax systems that have small positive or negative taxes on capital. Arguments for taxes on capital are not the same as arguments for a Haig-Simons income tax. Second, he argues …
Delegation In Immigration Law, Eric A. Posner, Adam B. Cox
Delegation In Immigration Law, Eric A. Posner, Adam B. Cox
Coase-Sandor Working Paper Series in Law and Economics
Immigration law both screens migrants and regulates the behavior of migrants after they have arrived. Both activities are information-intensive because the migrant's "type" and the migrant's post-arrival activity are often forms of private information that are not immediately accessible to government agents. To overcome this information problem, the national government can delegate the screening and regulation functions. American immigration law, for example, delegates extensive authority to both private entities—paradigmatically, employers and families—and to the fifty states. From the government's perspective, delegation carries with it benefits and costs. On the benefit side, agents frequently have easy access to information about the …
Pay For Regulator Performance, M. Todd Henderson, Frederick Tung
Pay For Regulator Performance, M. Todd Henderson, Frederick Tung
Coase-Sandor Working Paper Series in Law and Economics
Few doubt that executive compensation arrangements encouraged the excessive risk taking by banks that led to the recent Financial Crisis. Accordingly, academics and lawmakers have called for the reform of banker pay practices. In this Article, we argue that regulator pay is to blame as well, and that fixing it may be easier and more effective than reforming banker pay. Regulatory failures during the Financial Crisis resulted at least in part from a lack of sufficient incentives for examiners to act aggressively to prevent excessive risk. Bank regulators are rarely paid for performance, and in atypical cases involving performance bonus …
The Ftc’S Proposal For Regulationg Ip Through Ssos Would Replace Private Coordination With Government Holdups, Daniel F. Spulber, F. Scott Kieff, Richard A. Epstein
The Ftc’S Proposal For Regulationg Ip Through Ssos Would Replace Private Coordination With Government Holdups, Daniel F. Spulber, F. Scott Kieff, Richard A. Epstein
Coase-Sandor Working Paper Series in Law and Economics
In its recent report entitled "The Evolving IP Marketplace," the Federal Trade Commission (FTC) advances a far-reaching regulatory approach (Proposal) whose likely effect would be to distort the operation of the intellectual property (IP) marketplace in ways that will hamper the innovation and commercialization of new technologies. The gist of the FTC Proposal is to rely on highly non-standard and misguided definitions of economic terms of art such as "ex ante" and "hold-up," while urging new inefficient rules for calculating damages for patent infringement. Stripped of the technicalities, the FTC Proposal would so reduce the costs of infringement by downstream …
Better Mistakes In Patent Law, Andres Sawicki
Better Mistakes In Patent Law, Andres Sawicki
Coase-Sandor Working Paper Series in Law and Economics
This Article analyzes patent mistakes—that is, mistakes made by the patent system when it decides whether a particular invention has met the patentability requirements. These mistakes are inevitable. Given resource constraints, some might even be desirable. This Article evaluates the relative costs of patent mistakes, so that we can make better ones. Three characteristics drive the costs of mistakes: their type (false positive or false negative), timing (early or late), and doctrinal basis (utility, novelty, nonobviousness, and so on). These characteristics make some mistakes more troubling than others. Consider, for example, the disclosure rules, which require that a patent reveal …
Hybrid Judicial Career Structures: Reputation V. Legal Tradition, Nuno Garoupa, Tom Ginsburg
Hybrid Judicial Career Structures: Reputation V. Legal Tradition, Nuno Garoupa, Tom Ginsburg
Coase-Sandor Working Paper Series in Law and Economics
Scholars have distinguished career from recognition judiciaries, largely arguing that they reflect different legal cultures and traditions. We start by noting that the career/recognition distinction does not correspond perfectly to the civil law/common law distinction, but rather that there are pockets of each institutional structure within regimes that are dominated by the other type. We discuss the causes and implications of this phenomenon, arguing that institutional structure is better explained through a theory of judicial reputation/legitimacy than through a theory of legal origin or tradition. We provide some preliminary empirical support for our account.
Regulation, Unemployment, And Cost-Benefit Analysis, Eric A. Posner, Jonathan Masur
Regulation, Unemployment, And Cost-Benefit Analysis, Eric A. Posner, Jonathan Masur
Coase-Sandor Working Paper Series in Law and Economics
Regulatory agencies take account of the potential unemployment effects of proposed regulations in an ad hoc, theoretically incorrect way. Current practice is to conduct feasibility analysis, under which the agency predicts the unemployment effects of a proposed regulation, and then declines to regulate (or weakens the proposed regulation) if the unemployment effects exceed an unarticulated threshold, that is, seem "too high." Agencies do not reveal the threshold, do not explain why certain unemployment effects are excessive, and do not explain how they compare unemployment effects and the net benefits of the regulation. Many agencies also predict unemployment effects incorrectly. The …
The Social Evaluation Of Intergenerational Policies And Its Application To Integrated Assessment Models Of Climate Change, David A. Weisbach, Louis Kaplow, Elisabeth Moyer
The Social Evaluation Of Intergenerational Policies And Its Application To Integrated Assessment Models Of Climate Change, David A. Weisbach, Louis Kaplow, Elisabeth Moyer
Coase-Sandor Working Paper Series in Law and Economics
Assessment of climate change policies requires aggregation of costs and benefits over time and across generations, a process ordinarily done through discounting. Choosing the correct discount rate has proved to be controversial and highly consequential. To clarify past analysis and guide future work, we decompose discounting along two dimensions. First, we distinguish discounting by individuals, an empirical matter that determines their behavior in models, and discounting by an outside evaluator, an ethical matter involving the choice of a social welfare function. Second, for each type of discounting, we distinguish it due to pure time preference from that attributable to curvature …
Carbon Taxation In Europe: Expanding The Eu Carbon Price, David A. Weisbach
Carbon Taxation In Europe: Expanding The Eu Carbon Price, David A. Weisbach
Coase-Sandor Working Paper Series in Law and Economics
The current pricing mechanism for carbon in the EU, the EU emissions trading system, only covers 40 percent of emissions. Carbon taxation currently plays no role. The Commission has recently proposed to revise the energy tax system in the EU to include a carbon tax component. This paper evaluates the Commission proposal and considers the possible expansion of the EU carbon pricing base either by expanding emissions trading to cover more sectors or by enacting a carbon tax. It concludes that there are strong arguments for expanding the carbon pricing base, as suggested by the Commission. Nevertheless, expanding the base …
Discount Rates, Judgments, Individuals’ Risk Preferences, And Uncertainty, Louis Kaplow, David A. Weisbach
Discount Rates, Judgments, Individuals’ Risk Preferences, And Uncertainty, Louis Kaplow, David A. Weisbach
Coase-Sandor Working Paper Series in Law and Economics
The choice of the proper discount rate is important in the analysis of projects whose costs and benefits extend into the future, a particularly striking feature of policies directed at climate change. Much of the literature, including prominent work by Arrow et al. (1996), Stern (2007, 2008), and Dasgupta (2008), employs a reduced-form approach that conflates social value judgments and individuals' risk preferences, the latter raising an empirical question about choices under uncertainty rather than a matter for ethical reflection. This article offers a simple, explicit decomposition that clarifies the distinction, reveals unappreciated difficulties with the reduced-form approach, and relates …
Is Knowledge Of The Tax Law Socially Desirable?, David A. Weisbach
Is Knowledge Of The Tax Law Socially Desirable?, David A. Weisbach
Coase-Sandor Working Paper Series in Law and Economics
This paper considers whether knowledge of the tax law is socially desirable. Unlike other laws, which most often attempt to channel behavior, revenue raising taxes attempt to avoid changing behavior, so it is not obvious whether or when knowledge of the tax law is desirable. I argue that whether knowledge of the tax law is desirable depends on three factors: expectations about the tax in the absence of knowledge, the type of tax, and the quality of the tax. I then apply this to various policy decisions where knowledge of the tax law is a key variable, including the regulation …
Last Chance, America, Joseph Isenbergh
Last Chance, America, Joseph Isenbergh
Coase-Sandor Working Paper Series in Law and Economics
No abstract provided.
Present Bias And Criminal Law, Richard H. Mcadams
Present Bias And Criminal Law, Richard H. Mcadams
Coase-Sandor Working Paper Series in Law and Economics
Although "present bias" (or weakness of will, impulsiveness, myopia, or bounded willpower) was flagged as an issue for legal examination by Tom Ulen and Russell Korobkin over a decade ago, the concept has received insufficient attention in the legal field—and most of that attention has focused on its implications for the regulation of credit and savings. But, as demonstrated by this Article, the inconsistency of time preferences has wider implications, especially for criminal law. First, present bias may have significant implications for the general deterrence of crime. Individuals with time-inconsistent preferences may give in to immediate temptations to offend, even …
Privatization And The Sale Of Tax Revenues, Julie Roin
Privatization And The Sale Of Tax Revenues, Julie Roin
Coase-Sandor Working Paper Series in Law and Economics
No abstract provided.
After Google Book Search: Rebooting The Digital Library, Randal C. Picker
After Google Book Search: Rebooting The Digital Library, Randal C. Picker
Coase-Sandor Working Paper Series in Law and Economics
No abstract provided.
Commensurability And Agency: Two Yet-To-Be-Met Challenges For Law And Economics, Alon Harel, Ariel Porat
Commensurability And Agency: Two Yet-To-Be-Met Challenges For Law And Economics, Alon Harel, Ariel Porat
Coase-Sandor Working Paper Series in Law and Economics
No abstract provided.
Property And Precaution, Lee Anne Fennell
Property And Precaution, Lee Anne Fennell
Coase-Sandor Working Paper Series in Law and Economics
Property in land suffers from an unacknowledged precautionary deficit. Ownership is dispensed in standardized blocks of monopoly control that are routinely retained in their entirety until someone raises an issue regarding an actual or potential incompatible land use. This arrangement, which encourages owners to take sustained, unpriced draws against a limited stock of future flexibility, sets the stage for future impasse as inconsistent plans develop. It also makes property an unnecessarily accident-prone institution, given the role that bargaining failure plays in producing costly land use conflicts. Expanding the slate of potential precautions beyond owners' locational and operational choices to include …
Reversible Rewards, Omri Ben-Shahar, Anu Bradford
Reversible Rewards, Omri Ben-Shahar, Anu Bradford
Coase-Sandor Working Paper Series in Law and Economics
This article offers a new mechanism of law enforcement, combining sanctions and rewards into a scheme of "reversible rewards." A law enforcer sets up a pre-committed fund and offers it as reward to another party to refrain from violation. If the violator turns down the reward, the enforcer can use the money in the fund for one purpose only—to pay for punishment of the violator. The article shows that this scheme doubles the effect of funds invested in enforcement, and allows enforcers to stop violations that would otherwise be too difficult to deter. It argues that reversible rewards could be …
The Antitrust Economics Of Free, David S. Evans
The Antitrust Economics Of Free, David S. Evans
Coase-Sandor Working Paper Series in Law and Economics
This article examines antitrust analysis when one of the possible subject products of an antitrust or merger is ordinarily offered at a zero price. It shows that businesses often offer a product for free because it increases the overall profits they can earn from selling the free product and a companion product to either the same customer or different customers. The companion product may be a complement, a premium version of the free product, or the product on the other side of a two-sided market. The article then shows how antitrust and merger analysis should proceed when the subject is …
Bargaining With Double Jeopardy, Saul Levmore, Ariel Porat
Bargaining With Double Jeopardy, Saul Levmore, Ariel Porat
Coase-Sandor Working Paper Series in Law and Economics
Virtually every legal system specifies a variety of burdens of proof for different kinds of claims, and then secures each specification with another, nominally unrelated rule pertaining to relitigation. In criminal law, where a prosecutor might be required to prove guilt beyond a reasonable doubt, the prosecutor is prevented from repeatedly drawing from the urn, as it were, by the familiar and nearly universal rule of double jeopardy. We suggest that if law were to weaken the protection, or more likely to permit the defendant to waive the double jeopardy protection, both private and social benefits might follow. The benefits …
Car Trouble, Douglas G. Baird
Car Trouble, Douglas G. Baird
Coase-Sandor Working Paper Series in Law and Economics
By common account, the reorganizations of Chrysler and General Motors were extraordinary cases, very much alike, but different from any other. Government intervention on such a scale is not likely to recur and, given their peculiar character, these bankruptcies offer few lessons for corporate reorganizations as a general matter. This essay suggests that this perception is fundamentally wrong. Each case presented a radically different challenge for the bankruptcy system. Moreover, these two distinct challenges, far from being unusual, are not particularly related to the fact of government involvement and are likely to recur many times. The debate over speedy sales …