Law Commons^™

Essential Property, Timothy M. Mulvaney, Joseph William Singer

Faculty Scholarship

For a sizable swath of the U.S. population, incomes and wealth are insufficient to cover life’s most basic necessities even in the most ordinary of times. A disturbingly resilient explanation for this state of affairs rests on the view that resource inequities are avoidable through self-reliance, a stance that invites observers to see people in poverty as morally suspect. This Article advances a counterview in contending that the widespread lack of essential resources did not simply arise naturally via individuals’ life choices but instead has been, in very meaningful part, created and perpetuated by our system of property laws.

The …

A Proposed Sec Cyber Data Disclosure Advisory Commission, Lawrence J. Trautman, Neal Newman

Faculty Scholarship

Constant cyber threats result in: intellectual property loss; data disruption; ransomware attacks; theft of valuable company intellectual property and sensitive customer information. During March 2022, The Securities and Exchange Commission (SEC) issued a proposed rule addressing Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure, which requires: 1. Current reporting about material cybersecurity incidents; 2. Periodic disclosures about a registrant’s policies and procedures to identify and manage cybersecurity risks; 3. Management’s role in implementing cybersecurity policies and procedures; 4. Board of directors’ cybersecurity expertise, if any, and its oversight of cybersecurity risk; 5. Registrants to provide updates about previously reported cybersecurity …

Inflation, Market Failures, And Algorithms, Rory Van Loo

Faculty Scholarship

Inflation is a problem of tremendous scale. But inflation itself is unlikely to cause the greatest economic harm during inflationary periods. Instead, a more likely source of devastation will be policymakers’ response to inflation. Their main anti-inflation tools, most notably increasing interest rates, increase unemployment and the risk of recessions. This Article argues that there is a better approach. Rather than defaulting to interest rate hikes that harm markets, policy makers should prioritize laws that lower prices while improving markets. For decades, businesses have raised prices by manipulating consumers, exercising monopoly power, and lobbying for laws that block competition. Automated …

Who Benefits From Corporate Tax Cuts?: Evidence From Banks And Credit Unions Around The Tcja, Edward Fox, Benjamin David Pyle

Faculty Scholarship

The TCJA of 2017 made large changes to the taxation of corporate and pass-through businesses in the U.S. Understanding the effects of these changes is complicated by the difficulty of finding control firms whose taxation was not altered by the Act. We study the effect of the TCJA on small and medium size banks using credit unions—which compete with these banks for deposits and in making loans—as a novel control group. Credit unions were not taxed both before and after the Act. Using a difference-in-difference framework, we find that an important fraction of the incidence of the tax cut goes …

Deregulation And The Lawyers' Cartel, Nuno Garoupa, Milan Markovic

Faculty Scholarship

At one time, the legal profession largely regulated itself. However, based on the economic notion that increased competition would benefit consumers, jurisdictions have deregulated their legal markets by easing rules relating to attorney advertising, fees, and, most recently, nonlawyer ownership of law firms. Yet, despite reformers’ high expectations, legal markets today resemble those of previous decades, and most legal services continue to be delivered by traditional law firms. How to account for this seeming inertia?

We argue that the competition paradigm is theoretically flawed because it fails to fully account for market failures relating to asymmetric information, imperfect information, and …

Can Moral Framing Drive Insurance Enrollment In The Us?, Christopher Robertson, Wendy Netter Epstein, David Yokum, Hansoo Ko, Kevin Wilson, Monica Ramos, Katherine Kettering, Margaret Houtz

Faculty Scholarship

To encourage health insurance uptake, marketers and policymakers have focused on consumers’ economic self-interest, attempting to show that insurance is a good deal or to sweeten the deal, with subsidies or penalties. Still, some consumers see insurance as a bad deal, either because they rationally exploit private risk information (“adverse selection”), or irrationally misperceive the value due to cognitive biases (e.g., optimism). As a result, about 30 million Americans remain uninsured, including many who could afford it.

At the same time, polling suggests that Americans view health insurance through a moral lens, seeking to protect those with pre-existing conditions especially. …

Laws And Norms With (Un)Observable Actions, Claude Fluet, Murat C. Mungan

Faculty Scholarship

We analyze the interactions between social norms, the prevalence of acts, and policies when people cannot directly observe actors’ behavior and must rely on noisy proxies. Norms provide ineffective incentives when acts are committed either very frequently or very infrequently, because noisy signals of behavior are then too weak to alter people’s beliefs about others’ behavior. This cuts against the dynamics of the ‘honor-stigma’ model (Bénabou and Tirole 2006; 2011), and leads to the opposite positive and normative conclusions with even modest errors. The review process through which public signals are provided is then an additional policy variable. When the …

The Gender Pay Gap And High-Achieving Women In The Legal Profession, Milan Markovic, Gabrielle Plickert

Faculty Scholarship

Although women have made significant strides in the legal profession, female attorneys continue to earn far less than male attorneys. Relying on survey data from a large sample of full-time attorneys in Texas, we find a gender pay gap of thirty-five thousand dollars at the median that cannot be explained by differences in human capital or occupational segregation. We also provide evidence that the legal market especially disadvantages women who excel in law school. Whereas high academic achievement boosts male lawyers’ incomes substantially, it does not have the same effect on female lawyers’ incomes. High-achieving female lawyers earn less than …

The Economic (In) Significance Of Executive Pay Esg Incentives, David I. Walker

Faculty Scholarship

The hottest topic in corporate governance circles today involves company commitments to and pursuit of ESG (environmental, social, and governance) initiatives in addition to the traditional pursuit of profits. One facet of this debate has to do with how to motivate executives to pursue ESG goals. Increasingly, companies tie executive pay to ESG performance, although even strong ESG advocates debate the advisability of doing so. This Article joins the fray by closely examining ESG-based CEO pay arrangements at a subset of companies with leadership positions on the Business Roundtable, an industry trade group that embraced ESG in a 2019 statement …

The Pain Of Paying Taxes, Gary M. Lucas Jr

Faculty Scholarship

With a few caveats, standard economic models assume that, from society’s perspective, the payment of a tax constitutes a costless transfer from the taxpayer to the government. The financial loss to the taxpayer is exactly offset by the financial gain to the government, which can use the resulting tax revenue for the benefit of its citizens. In other words, paying taxes forces taxpayers to forgo private consumption, but the resulting loss in utility can be counterbalanced by an increase in utility from government spending. In fact, if the government spends wisely on beneficial public goods that are undersupplied by private …

Tiny Homes: A Big Solution To American Housing Insecurity, Lisa T. Alexander

Faculty Scholarship

“There’s no place like home,” said Dorothy. Yet, millions of people in the United States may face eviction, foreclosure, or homelessness in 2021 and beyond. America is on the brink of an unprecedented housing crisis in the wake of Covid-19. The federal government, and various states and localities, have taken actions to avert a housing crisis in the aftermath of Covid 19. While these actions have undeniably helped mitigate widespread foreclosure and eviction crises, they do not fully address the more fundamental American housing challenge—an inadequate supply of affordable housing at all income levels, a longstanding problem that Covid-19 has …

The Remainder Effect: How Automation Complements Labor Quality, James Bessen, Erich Denk, Chen Meng

Faculty Scholarship

This paper argues that automation both complements and replaces workers. Extending the Acemoglu-Restrepo model of automation to consider labor quality, we obtain a Remainder Effect: while automation displaces labor on some tasks, it raises the returns to skill on remaining tasks across skill groups. This effect increases between-firm pay inequality while labor displacement affects within-firm inequality. Using job ad data, we find firm adoption of information technologies leads to both greater demand for diverse skills and higher pay across skill groups. This accounts for most of the sorting of skills to high paying firms that is central to rising inequality.

Valid T-Ratio Inference For Iv, David S. Lee, Justin Mccrary, Marcelo J. Moreira, Jack Porter

Faculty Scholarship

In the single-IV model, researchers commonly rely on t-ratio-based inference, even though the literature has quantified its potentially severe large-sample distortions. Building on Stock and Yogo (2005), we introduce the tF critical value function, leading to a standard error adjustment that is a smooth function of the first-stage F-statistic. For one-quarter of specifications in 61 AER papers, corrected standard errors are at least 49 and 136 percent larger than conventional 2SLS standard errors at the 5 percent and 1 percent significance levels, respectively. tF confidence intervals have shorter expected length than those of Anderson and Rubin (1949), whenever both are …

The Farcical Samaritan's Dilemma, Andre Douglas Pond Cummings

Faculty Scholarship

“[T]he hypothesis is that modern man has become incapable of making the choices that are required to prevent his exploitation by predators of his own species[.]”

This article explores one of the foundational pillar theories of Law and Economics and specifically Public Choice Theory as espoused by Nobel Laureate James M. Buchanan: the “Samaritan’s Dilemma.” Using the Biblical parable of the Good Samaritan, Buchanan imagines a “dilemma” faced by the Good Samaritan when encountering a beaten and bloodied man left to die on the road to Jericho. Using Game Theory, Buchanan constructs a moral quandary that the man from Samaria …

Opportunity Zones: A Program In Search Of A Purpose, Ofer Eldar, Chelsea Garber

Faculty Scholarship

In 2017, Congress created the Opportunity Zone (“OZ”) program to stimulate economic growth in low-income communities. The program was characterized by its unprecedented scale relative to previous place-based development efforts and was described as “perhaps the most ambitious economic development tool to come out of Congress in a generation.” However, the program was quickly criticized on numerous grounds, and its design flaws are so severe that several legislators have called for its reform or repeal.

This Essay argues that the root of the OZ program’s problems is a strong mismatch between its stated purpose and its actual terms. We discuss …

Enabling Esg Accountability: Focusing On The Corporate Enterprise, Rachel Brewster

Faculty Scholarship

Environmental, social, and governance accountability for companies has become an important topic in popular and academic debate in modern society. The idea that corporations should have ESG goals has been embraced by major investment companies, employees, and many corporations themselves. Yet, less attention has been focused on how corporate enterprise law—which governs how corporations structure their relationships between parent corporations and their subsidiaries—creates or contributes to the ESG concerns that the public has with corporations in the first place. Modern enterprise law allows corporations, particularly those operating across national borders, to use their subsidiaries to avoid responsibility for their public …

Navassa: Property, Sovereignty, And The Law Of The Territories, Joseph Blocher, Mitu Gulati

Faculty Scholarship

The United States acquired its first overseas territory—Navassa Island, near Haiti—by conceptualizing it as a kind of property to be owned, rather than a piece of sovereign territory to be governed. The story of Navassa shows how competing conceptions of property and sovereignty are an important and underappreciated part of the law of the territories—a story that continued fifty years later in the Insular Cases, which described Puerto Rico as “belonging to” but not “part of” the United States.

Contemporary scholars are drawn to the sovereignty framework and the public-law tools that come along with it: arguments about rights and …