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Full-Text Articles in Law
Selling Mayberry: Communities And Individuals In Law And Economics, Peter Siegelman, Gideon Parchomovsky
Selling Mayberry: Communities And Individuals In Law And Economics, Peter Siegelman, Gideon Parchomovsky
Faculty Articles and Papers
In an unusual turn of events, American Electric Power Company recently acquired the entire small town of Cheshire, Ohio. The buyout was intended to put an end to a serious pollution problem caused by the company's giant power plant, which was located at the edge of town. Although the plant was worth substantially more than the town, no simple Coasean bargain guided the buyout. This Article combines ethnographic research into the Cheshire buyout with theoretical insights from law and economics to present an empirical and theoretic challenge to the standard account of nuisance disputes. It explores the transaction in detail …
Adverse Selection In Insurance Markets: An Exaggerated Threat, Peter Siegelman
Adverse Selection In Insurance Markets: An Exaggerated Threat, Peter Siegelman
Faculty Articles and Papers
The thesis of this Essay is that although theory demonstrates that adverse selection can occur, and some instances have certainly been documented, neither the theoretical models nor the empirical studies provide much support for its widespread importance in insurance markets. The nature of selection pressures turns out to be vastly more complicated than the rhetoric of courts and academic commentators would suggest. And while the economic theory of adverse selection in insurance markets has become enormously sophisticated, much of it is devoted to rarified analysis of the nature and existence of equilibria. It has thus managed to obscure some essential …