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2006

Coase-Sandor Working Paper Series in Law and Economics

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Full-Text Articles in Law

Embracing Chance: Post-Modern Meditations On Punishment, Bernard E. Harcourt Dec 2006

Embracing Chance: Post-Modern Meditations On Punishment, Bernard E. Harcourt

Coase-Sandor Working Paper Series in Law and Economics

No abstract provided.


Reefer Madness: Broken Windows Policing And Misdemeanor Marijuana Arrests In New York, Bernard E. Harcourt, Jens Ludwig Dec 2006

Reefer Madness: Broken Windows Policing And Misdemeanor Marijuana Arrests In New York, Bernard E. Harcourt, Jens Ludwig

Coase-Sandor Working Paper Series in Law and Economics

No abstract provided.


Second-Order Perfectionism, Cass R. Sunstein Dec 2006

Second-Order Perfectionism, Cass R. Sunstein

Coase-Sandor Working Paper Series in Law and Economics

In constitutional law, first-order perfectionism represents an effort to cast the Constitution’s ideals in the best constructive light. Ronald Dworkin's conception of law as "integrity" can be seen as a form of first-order perfectionism. By contrast, second-order perfectionism attempts to set out an account of constitutional adjudication that is sensitive to the fallibility of federal judges. Originalism is best defended as a form of second-order perfectionism; the same can be said of Thayerism, captured in the view that judges should uphold statutes unless they are unquestionably violative of the Constitution. Minimalism, which calls for narrow, incompletely theorized judgments ...


Liability Externalities And Mandatory Choices: Should Doctors Pay Less?, Robert D. Cooter, Ariel Porat Nov 2006

Liability Externalities And Mandatory Choices: Should Doctors Pay Less?, Robert D. Cooter, Ariel Porat

Coase-Sandor Working Paper Series in Law and Economics

According to legal principles, a driver who negligently breaks a pedestrian's leg should pay the same damages as a doctor who negligently breaks a patient's leg. According to economic principles, however, the driver should pay more than the doctor. Non-negligent drivers impose risk on others without being liable for it. When liability externalities are mainly negative as with driving, liability should increase beyond full compensation to discourage the activity. Unlike pedestrians, patients contract with doctors for treatment and willingly submit to the risk of harm. Imperfections in medical markets cause some kinds of doctors to convey more positive ...


Wealth Without Markets?, Lior Strahilevitz Nov 2006

Wealth Without Markets?, Lior Strahilevitz

Coase-Sandor Working Paper Series in Law and Economics

No abstract provided.


The Second-Order Structure Of Immigration Law, Eric A. Posner, Adam B. Cox Nov 2006

The Second-Order Structure Of Immigration Law, Eric A. Posner, Adam B. Cox

Coase-Sandor Working Paper Series in Law and Economics

Immigration law concerns both first-order issues about the number and types of immigrants who should be admitted into a country and second-order design issues concerning the legal rules and institutions that are used to implement those first-order policy goals. The literature has focused on the first set of issues and largely neglected the second. In fact, many current controversies concern the design issues. This Article addresses the second-order dimension and argues that a central design choice all states face is whether to evaluate potential immigrants on the basis of pre-entry characteristics (the ex ante approach) or post-entry conduct (the ex ...


Offestting Risks, Ariel Porat Nov 2006

Offestting Risks, Ariel Porat

Coase-Sandor Working Paper Series in Law and Economics

Under prevailing tort law, an injurer who is required to choose between Course of Action A, which creates a risk of 500, and Course of Action B, which creates a risk of 400, and negligently chooses the former will be held liable for the harm that materializes in its entirety. This full liability forces the injurer to pay damages that are five times higher than necessary for making him internalize the risk of 100 that is actually created by his negligent choice. The argument advanced by this Article is that tort law should recognize the "Offsetting Risks Principle" ("ORP"), under ...


Antitrust And Regulation, Randal C. Picker, Dennis W. Carlton Oct 2006

Antitrust And Regulation, Randal C. Picker, Dennis W. Carlton

Coase-Sandor Working Paper Series in Law and Economics

No abstract provided.


The Unconventional Uses Of Transaction Costs, David Gilo, Ariel Porat Oct 2006

The Unconventional Uses Of Transaction Costs, David Gilo, Ariel Porat

Coase-Sandor Working Paper Series in Law and Economics

No abstract provided.


The Antitrust Enterprise: Principle And Execution, Randal C. Picker Oct 2006

The Antitrust Enterprise: Principle And Execution, Randal C. Picker

Coase-Sandor Working Paper Series in Law and Economics

No abstract provided.


Who Should Regulate Entry Into Iptv And Municipal Wireless?, Randal C. Picker Sep 2006

Who Should Regulate Entry Into Iptv And Municipal Wireless?, Randal C. Picker

Coase-Sandor Working Paper Series in Law and Economics

We are at an unusual moment in telecommunications. We have two very live cases of entry: Internet protocol television (IPTV) and municipal wireless broadband. IPTV will create new competition with cable, satellite and over-the-air broadcast TV, promising lower prices and new services. Muni wireless makes it possible for local communities to add new broadband capabilities to compete with DSL and cable broadband. Unsurprisingly given the newness of the services, there is substantial uncertainty about whether and how these services should be regulated, and we have seen legislative action at municipal, state and federal levels. To assess that, I set forth ...


Paying Ceos In Bankruptcy: Executive Compensation When Agency Costs Are Low, M. Todd Henderson Sep 2006

Paying Ceos In Bankruptcy: Executive Compensation When Agency Costs Are Low, M. Todd Henderson

Coase-Sandor Working Paper Series in Law and Economics

Conventional wisdom suggests that high agency costs explain the (excessive) amounts and (inefficient) forms of CEO compensation. This paper offers a simple empirical test of this claim and the reform proposals that follow from it, by looking at pay practices in firms under financial distress, where agency costs are dramatically reduced. When a firm files for Chapter 11 or privately works out its debt with lenders, sophisticated investors consolidate ownership interests into a few large positions replacing diffuse and disinterested shareholders. These investors, be they banks or vulture investors, effectively control the debtor during the reorganization process. In addition, all ...


The Case For For-Profit Charities, Eric A. Posner, Anup Malani Sep 2006

The Case For For-Profit Charities, Eric A. Posner, Anup Malani

Coase-Sandor Working Paper Series in Law and Economics

Nonprofit firms may not distribute profits to owners but instead must retain them or reinvest them. Nonprofits that are "charitable organizations" under § 501(c)(3) of the tax code may receive donations from individuals who are allowed to deduct their donations from their income for tax purposes. We argue that the law should not link tax benefits to corporate form in this way. There may be good arguments for recognizing the nonprofit form and good arguments for providing tax subsidies to charities or donors to charities, but there is no good argument for making those tax subsidies available only to ...


The Credible Executive, Eric A. Posner, Adrian Vermeule Sep 2006

The Credible Executive, Eric A. Posner, Adrian Vermeule

Coase-Sandor Working Paper Series in Law and Economics

Legal and constitutional theory has focused chiefly on the risk that voters and legislators will trust an ill-motivated executive. This paper addresses the risk that voters and legislators will fail to trust a well-motivated executive. Absent some credible signal of benign motivations, voters will be unable to distinguish good from bad executives and will thus withhold discretion that they would have preferred to grant, making all concerned worse off. We suggest several mechanisms with which a well-motivated executive can credibly signal his type, including independent commissions within the executive branch; bipartisanship in appointments to the executive branch, or more broadly ...


Irreparable Benefits, Douglas Gary Lichtman Sep 2006

Irreparable Benefits, Douglas Gary Lichtman

Coase-Sandor Working Paper Series in Law and Economics

The conventional approach to preliminary relief focuses on irreparable harm but neglects entirely irreparable benefits. That is hard to understand. Errant irreversible harms are important because they distort incentives and have lasting distributional consequences. But the same is true of errant irreversible gains. When a preliminary injunction wrongly issues, then, there are actually two distinct errors to count: the irreparable harm wrongly imposed on the nonmoving party, and the irreparable benefit wrongly enjoyed by the moving party. Similarly, when a preliminary injunction is wrongly denied, there are again two errors, not one: the irreparable harm wrongly imposed on the moving ...


Prediction Markets For Corporate Governance, Michael Abramowicz, M. Todd Henderson Aug 2006

Prediction Markets For Corporate Governance, Michael Abramowicz, M. Todd Henderson

Coase-Sandor Working Paper Series in Law and Economics

Building on the success of prediction markets at forecasting political elections and other matters of public interest, firms have made increasing use of prediction markets to help make business decisions. This Article explores the implications of prediction markets for corporate governance. Prediction markets can increase the flow of information, encourage truth telling by internal and external firm monitors, and create incentives for agents to act in the interest of their principals. The markets can thus serve as potentially efficient alternatives to other approaches to providing information, such as the Sarbanes-Oxley Act’s internal controls provisions. Prediction markets can also produce ...


Montreal Versus Kyoto: A Tale Of Two Protocols, Cass R. Sunstein Aug 2006

Montreal Versus Kyoto: A Tale Of Two Protocols, Cass R. Sunstein

Coase-Sandor Working Paper Series in Law and Economics

No abstract provided.


Legal Institutions, Legal Origins, And Governance, Kenneth W. Dam Aug 2006

Legal Institutions, Legal Origins, And Governance, Kenneth W. Dam

Coase-Sandor Working Paper Series in Law and Economics

No abstract provided.


The Temporal Dimension Of Voting Rights, Adam B. Cox Jul 2006

The Temporal Dimension Of Voting Rights, Adam B. Cox

Coase-Sandor Working Paper Series in Law and Economics

No abstract provided.


Do Judges Make Regulatory Policy? An Empirical Investigation Of Chevron, Cass R. Sunstein, Thomas J. Miles Jun 2006

Do Judges Make Regulatory Policy? An Empirical Investigation Of Chevron, Cass R. Sunstein, Thomas J. Miles

Coase-Sandor Working Paper Series in Law and Economics

In the last quarter-century, the Supreme Court has legitimated agency authority to interpret regulatory legislation, above all in Chevron U.S.A., Inc v Natural Resources Defense Council, Inc, the most-cited case in modern public law. Chevron recognizes that the resolution of statutory ambiguities often requires judgments of policy; its call for judicial deference to reasonable interpretations was widely expected to have eliminated the role of policy judgments in judicial review of agency interpretations of law. But this expectation has not been realized. On the Supreme Court, conservative justices vote to validate agency decisions less often than liberal justices. Moreover ...


Tax Expenditures, Principle Agent Problems, And Redundancy, David A. Weisbach Jun 2006

Tax Expenditures, Principle Agent Problems, And Redundancy, David A. Weisbach

Coase-Sandor Working Paper Series in Law and Economics

This paper considers tax expenditures from two related perspectives. First, it analyzes how the incentives on Congress to use a tax expenditure change when principal agent problems are considered. For example, it considers whether tax expenditures can reduce moral hazard or adverse selection problems created by delegations to expert agencies. Second, it considers the condition under which tax expenditures should be expected to be redundant with direct expenditures, as many are. The two, principal agent problems and redundancy, are related because redundancy is often seen as a solution to the principal agent problem. The paper concludes that both principal agent ...


What Happened On Deliberation Day?, Cass R. Sunstein, David Schkade, Reid Hastie Jun 2006

What Happened On Deliberation Day?, Cass R. Sunstein, David Schkade, Reid Hastie

Coase-Sandor Working Paper Series in Law and Economics

What are the effects of deliberation about political issues? This essay reports the results of a kind of Deliberation Day, involving sixty-three citizens in Colorado. Groups from Boulder, a predominantly liberal city, met and discussed global warming, affirmative action, and civil unions for same-sex couples; groups from Colorado Springs, a predominately conservative city, met to discuss the same issues. The major effect of deliberation was to make group members more extreme than they were when they started to talk. Liberals became more liberal on all three issues; conservatives became more conservative. As a result, the division between the citizens of ...


On The Divergent American Reactions To Terrorism And Climate Change, Cass R. Sunstein Jun 2006

On The Divergent American Reactions To Terrorism And Climate Change, Cass R. Sunstein

Coase-Sandor Working Paper Series in Law and Economics

Two of the most important sources of catastrophic risk are terrorism and climate change. The United States has responded aggressively to the risk of terrorism while doing very little about the risk of climate change. For the United States alone, the cost of the Iraq war is now in excess of the anticipated cost of the Kyoto Protocol. The divergence presents a puzzle; it also raises more general questions about both risk perception and the public demand for legislation. The best explanation for the divergence emphasizes bounded rationality. Americans believe that aggressive steps to reduce the risk of terrorism promise ...


Temporary Legislation, Jacob Gersen Jun 2006

Temporary Legislation, Jacob Gersen

Coase-Sandor Working Paper Series in Law and Economics

No abstract provided.


Implementing Income And Consumption Taxes: An Essay In Honor Of David Bradford, David A. Weisbach Jun 2006

Implementing Income And Consumption Taxes: An Essay In Honor Of David Bradford, David A. Weisbach

Coase-Sandor Working Paper Series in Law and Economics

This essay explores the extent to which income and consumption taxes can be implemented using parallel designs. The economic differences in the two taxes is thought to be the taxation of pure time value returns under an income tax but not under a consumption tax. In theory, therefore, all differences in implementation methods should be traceable to the measurement of time value returns. To explore the extent to which this is true, the essay examines four major design elements of any tax system: (i) the use of cash flows or basis accounts to measure the base; (ii) remittance of the ...


Chevorn As A Voting Rule, Jacob Gersen, Adrian Vermeule Jun 2006

Chevorn As A Voting Rule, Jacob Gersen, Adrian Vermeule

Coase-Sandor Working Paper Series in Law and Economics

No abstract provided.


Patent Holdouts And The Standard Setting Process, Douglas Gary Lichtman May 2006

Patent Holdouts And The Standard Setting Process, Douglas Gary Lichtman

Coase-Sandor Working Paper Series in Law and Economics

No abstract provided.


’How's My Driving?’ For Everyone (And Everything?), Lior Strahilevitz Apr 2006

’How's My Driving?’ For Everyone (And Everything?), Lior Strahilevitz

Coase-Sandor Working Paper Series in Law and Economics

This is a paper about using reputation tracking technologies to displace criminal law enforcement and improve the tort system. The paper contains an extended application of this idea to the regulation of motorist behavior in the United States and examines the broader case for using technologies that aggregate dispersed information in various settings where reputational concerns do not adequately deter antisocial behavior. The paper begins by exploring the existing data on "How's My Driving?" programs for commercial fleets. Although more rigorous study is warranted, the initial data is quite promising, suggesting that the use of "How's My Driving ...


Mistrust-Based Digital Rights Management, Randal C. Picker Apr 2006

Mistrust-Based Digital Rights Management, Randal C. Picker

Coase-Sandor Working Paper Series in Law and Economics

No abstract provided.


The Law Of Implicit Bias, Cass R. Sunstein, Christine Jolls Apr 2006

The Law Of Implicit Bias, Cass R. Sunstein, Christine Jolls

Coase-Sandor Working Paper Series in Law and Economics

Considerable attention has been given to the Implicit Association Test (IAT), which finds that most people have an implicit and unconscious bias against members of traditionally disadvantaged groups. Implicit bias poses a special challenge for antidiscrimination law because it suggests the possibility that people are treating others differently even when they are unaware that they are doing so. Some aspects of current law operate, whether intentionally or not, as controls on implicit bias; it is possible to imagine other efforts in that vein. An underlying suggestion is that implicit bias might be controlled through a general strategy of "debiasing through ...