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2014

Law and Economics

Institution
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Articles 1 - 30 of 135

Full-Text Articles in Law

Deterrence And Antitrust Punishment: Firms Versus Agents, Keith Hylton Dec 2014

Deterrence And Antitrust Punishment: Firms Versus Agents, Keith Hylton

Faculty Scholarship

Antitrust enforcement regimes rely on two types of penalties for deterrence: penalties against the violating firm and penalties against the agents of the violating firm. In this paper I examine the economics of punishing agents versus firms. My area of application is antitrust, but the argument applies generally to other fields in which the government has the choice between punishing the agent, the firm, or both. This analysis suggests that whenever the firm has an incentive, given existing penalties, to engage in some illegal act that may result in relatively modest punishment for its agents, it can almost always induce ...


Nonprofit Executive Pay As An Agency Problem: Evidence From U.S. Colleges And Universities, David Walker, Brian D. Galle Dec 2014

Nonprofit Executive Pay As An Agency Problem: Evidence From U.S. Colleges And Universities, David Walker, Brian D. Galle

Faculty Scholarship

We analyze the determinants of the compensation of private college and university presidents from 1999 through 2007. We find that the fraction of institutional revenue derived from current donations is negatively associated with compensation and that presidents of religiously-affiliated institutions receive lower levels of compensation. Looking at the determinants of contributions, we find a negative association between presidential pay and subsequent donations. We interpret these results as consistent with the hypotheses that donors to nonprofits are sensitive to executive pay and that stakeholder outrage plays a role in constraining that pay. We discuss the implications of these findings for the ...


The Use And Abuse Of Labor's Capital, David Webber Dec 2014

The Use And Abuse Of Labor's Capital, David Webber

Faculty Scholarship

The recent financial crisis has jeopardized the retirement savings of twenty-seven million Americans who depend on public pension funds, leading to cuts in benefits, increased employee contributions, job losses, and the rollback of legal rights like collective bargaining. This Article examines ways in which public pension funds invest against the economic interests of their own participants and beneficiaries, and the legal implications of these investments. In particular, the Article focuses on the use of public pensions to fund privatization of public employee jobs. Under the ascendant — and flawed — interpretation of the fiduciary duty of loyalty, public pension trustees owe their ...


Delaware’S Familiarity, Brian J. Broughman, Darian M. Ibrahim Nov 2014

Delaware’S Familiarity, Brian J. Broughman, Darian M. Ibrahim

Popular Media

No abstract provided.


The Plight Of Modern Markets: How Universal Banking Undermines Capital Markets, Carolyn Sissoko Nov 2014

The Plight Of Modern Markets: How Universal Banking Undermines Capital Markets, Carolyn Sissoko

University of Southern California Legal Studies Working Paper Series

This paper explains the process of competitive deregulation that led both the U.S. and the U.K. to embrace universal banking and to abandon the functional separation of financial activities that had long characterized their financial systems. The paper argues that only a few rare voices in the debate over universal banking that started in the late-1970s and continued for over a decade understood what was truly at stake. The principal argument in favor of separation, then as now, was that the commercial banking system, which is supported by a government “safety net,” needs to be protected from the ...


Market Efficiency And The Problem Of Retail Flight, Alicia J. Davis Nov 2014

Market Efficiency And The Problem Of Retail Flight, Alicia J. Davis

Articles

In 1950, 91 % of common stock in the U.S. was owned directly by individual inves­ tors. Today, that percentage stands at only 23%. The mass exodus of retail investors and their investment dollars has negative implications not only for capital formation and investor protection, but also for market efficiency. Individual investors are often assumed to be noise traders who distort stock prices and harm market functioning. Therefore, some argue that their withdrawal from the market should be of little concern; indeed, it should be celebrated. Recent empirical evidence calls this assertion of retail noise trading into doubt, and this ...


Fearless Friday: Gettysburg Anti-Capitalist Collective, Christina L. Bassler Oct 2014

Fearless Friday: Gettysburg Anti-Capitalist Collective, Christina L. Bassler

SURGE

The Gettysburg Anti-Capitalist Collective, also known as GACC, is a recent yet active addition to the campus community. Through their participation in debates, weekly meetings, and organization of events (most notably Wednesday night’s concert featuring political activists Evan Greer and Anne Feeney), GACC provides a forum for discussing and learning about leftist politics. On a campus that many would describe as highly conservative, GACC and its members are nothing short of fearless. [excerpt]


Up Close And Personal With Delaware, Darian M. Ibrahim, Brian J. Broughman Oct 2014

Up Close And Personal With Delaware, Darian M. Ibrahim, Brian J. Broughman

Popular Media

No abstract provided.


Empirical Law And Economics, Jonah B. Gelbach, Jonathan Klick Oct 2014

Empirical Law And Economics, Jonah B. Gelbach, Jonathan Klick

Faculty Scholarship at Penn Law

Empirical work has grown in importance in law and economics. This growth coincides with improvements in research designs in empirical microeconomics more generally. In this essay, we provide a stylized discussion of some trends over the last two or three decades, linking the credibility revolution in empirical micro to the ascendancy of empirical work in law and economics. We then provide some methodological observations about a number of commonly used approaches to estimating policy effects. The literature on the economics of crime and criminal procedure illustrates the ways in which many of these techniques have been used successfully. Other fields ...


The Effect Of The Syrian Crisis On Jordanian Internal Security, Andrew E. Szparaga Oct 2014

The Effect Of The Syrian Crisis On Jordanian Internal Security, Andrew E. Szparaga

Independent Study Project (ISP) Collection

Jordan has a refugee crisis; between 620,000 and 1.3 million Syrian refugees are seeking refuge in Jordan. This report aims to answer which aspect of Jordanian security the refugees have the biggest effect on. It also aims to answer whether the refugees based in camps, like Za’atari, or those integrated into the Jordanian communities are more threatening to internal security. Because many argue that Syrian refugees have a negative effect on the economic, environmental, military, political, and social securities of Jordan, many believe that they might pose a possible threat to the country’s internal security factors ...


Amicus Brief In Maryland Comptroller V. Wynne, Michael S. Knoll, Ruth Mason Sep 2014

Amicus Brief In Maryland Comptroller V. Wynne, Michael S. Knoll, Ruth Mason

Faculty Scholarship at Penn Law

The internal consistency test reveals that Maryland applies systematically higher “county” taxes to interstate commerce than to in-state commerce.

Economic analysis of Maryland’s tax regime — including its taxes on inbound, outbound, and domestic activities — confirms what the internal consistency test suggests, namely, that the Maryland “county” tax discourages interstate commerce. Specifically, the Maryland tax regime discourages Maryland residents from earning income outside of Maryland, and it simultaneously discourages nonresidents from earning income in Maryland. Maryland alone causes this distortion; the distortion does not depend on the taxes imposed by any other state.

Petitioner’s argument that Maryland’s outbound ...


Paying For Altruism: The Case Of Organ Donation Revisited, Firat Bilgel, Brian D. Galle Sep 2014

Paying For Altruism: The Case Of Organ Donation Revisited, Firat Bilgel, Brian D. Galle

Boston College Law School Faculty Papers

Although many commentators have called for increased efforts to incentivize organ donations, theorists and some evidence suggest these efforts will be ineffective or even could perversely crowd out altruistic efforts. Prior papers examining the impact of tax incentives for donations generally report zero or negative coefficients. We argue these studies incorrectly define their tax variables, and rely on difference-in-differences methods despite likely failures of the requisite parallel trends assumption. We therefore aim to identify the causal effect of tax incentive legislation to serve as an organ donor on living related and unrelated kidney donation rates in the U.S states ...


High Technology, Consumer Privacy, And U.S. National Security : Hearing Before The Subcomm. On Commerce, Manufacturing, And Trade Of The H. Comm. On Energy And Commerce, 113th Cong., September 17, 2014 (Remarks By Professor Laura K. Donohue, Geo. U. L. Center), Laura K. Donohue Sep 2014

High Technology, Consumer Privacy, And U.S. National Security : Hearing Before The Subcomm. On Commerce, Manufacturing, And Trade Of The H. Comm. On Energy And Commerce, 113th Cong., September 17, 2014 (Remarks By Professor Laura K. Donohue, Geo. U. L. Center), Laura K. Donohue

Testimony Before Congress

Documents released over the past year detailing the National Security Agency’s telephony metadata collection program and interception of international content under the Foreign Intelligence Surveillance Act (FISA) directly implicated U.S. high technology companies in government surveillance. The result was an immediate, and detrimental, impact on U.S. firms, the economy, and U.S. national security.

The first Snowden documents, printed June 5, 2013, revealed that the U.S. government had served orders on Verizon, directing the company to turn over telephony metadata under Section 215 of the USA PATRIOT Act. The following day, The Guardian published classified slides ...


"Competitiveness" Has Nothing To Do With It, Edward D. Kleinbard Sep 2014

"Competitiveness" Has Nothing To Do With It, Edward D. Kleinbard

University of Southern California Legal Studies Working Paper Series

The recent wave of corporate tax inversions has triggered interest in what motivates these tax-driven transactions now. Corporate executives have argued that inversions are explained by an “anti-competitive” U.S. tax environment, as evidenced by the federal corporate tax statutory rate, which is high by international standards, and by its “worldwide” tax base. This paper explains why this competitiveness narrative is largely fact-free, in part by using one recent articulation of that narrative (by Emerson Electric Co.’s former vice-chairman) as a case study.

The recent surge in interest in inversion transactions is explained primarily by U.S. based multinational ...


The 3rd Annual Professor Anthony J. Santoro Business Law Lecture Series: The Business Of Law: Disruptions In The Market For Legal Services, Roger Williams University School Of Law Sep 2014

The 3rd Annual Professor Anthony J. Santoro Business Law Lecture Series: The Business Of Law: Disruptions In The Market For Legal Services, Roger Williams University School Of Law

School of Law Conferences, Lectures & Events

No abstract provided.


Economics Of Legal History, Daniel M. Klerman Aug 2014

Economics Of Legal History, Daniel M. Klerman

University of Southern California Legal Studies Working Paper Series

This essay surveys economic analyses of legal history. In order to make sense of the field and to provide examples that might guide and inspire future research, it identifies and discusses five genres of scholarship.

1) Law as the dependent variable. This genre tries to explain why societies have the laws they do and why laws change over time. Early economic analysis tended to assume that law was efficient, while later scholars have usually adopted more realistic models of judicial and legislative behavior that take into account interest groups, institutions, and transactions costs.

2) Law as an independent variable. Studies ...


An Economic Analysis Of Subject Matter Jurisdiction Waiver: A Response To Professor Buehler, Daniel M. Klerman Aug 2014

An Economic Analysis Of Subject Matter Jurisdiction Waiver: A Response To Professor Buehler, Daniel M. Klerman

University of Southern California Legal Studies Working Paper Series

For nearly a century, it has been black letter law that federal subject matter jurisdiction is non-waivable. Both parties and judges can raise subject matter jurisdiction problems at any time, even on appeal. This doctrine has been criticized as wasteful, because cases are sometimes dismissed after trial and relitigated in state court. Dustin Buehler proposes that federal judges be required to issue a subject matter certification order near the beginning of every federal case, but that judges no longer routinely dismiss cases if it later becomes apparent that subject matter jurisdiction is lacking. While this proposal has much merit, its ...


The Appropriate Legal Standard And Sufficient Economic Evidence For Exclusive Dealing Under Section 2: The Ftc’S Mcwane Case, Steven C. Salop, Sharis A. Pozen, John R. Seward Aug 2014

The Appropriate Legal Standard And Sufficient Economic Evidence For Exclusive Dealing Under Section 2: The Ftc’S Mcwane Case, Steven C. Salop, Sharis A. Pozen, John R. Seward

Georgetown Law Faculty Publications and Other Works

The FTC recently found McWane, Inc. liable for unlawful monopoly maintenance by a 3-1 majority. The dispute among the FTC Commissioners raises important and interesting issues regarding the law and economics of exclusive dealing and the proper evaluation of the competitive effects of exclusionary conduct. Commissioner Wright’s Dissent proposes and utilizes a new legal standard that requires the plaintiff to show “clear evidence” of harm to competition before shifting the burden to the defendant to show procompetitive efficiency benefits. This burden of proof and production on the plaintiff is much higher than showing “probable effect” based on a preponderance ...


Public Good Economics And Standard Essential Patents, Christopher S. Yoo Aug 2014

Public Good Economics And Standard Essential Patents, Christopher S. Yoo

Faculty Scholarship at Penn Law

Standard essential patents have emerged as a major focus in both the public policy and academic arenas. The primary concern is that once a patented technology has been incorporated into a standard, the standard can effectively insulate it from competition from substitute technologies. To guard against the appropriation of quasi-rents that are the product of the standard setting process rather than the innovation itself, standard setting organizations (SSOs) require patentholders to disclose their relevant intellectual property before the standard has been adopted and to commit to license those rights on terms that are fair, reasonable, and non-discriminatory (FRAND).

To date ...


Revenue, U.S. Government, Bert Chapman Jul 2014

Revenue, U.S. Government, Bert Chapman

Libraries Faculty and Staff Scholarship and Research

Provides a historical overview of U.S. Government revenue receipts and spending during the early years of national history. Presents revenue generation statistics, information on revenue sources, and information on domestic and international political and economic factors affecting government revenue receipts.


New York Stock Exchange, Bert Chapman Jul 2014

New York Stock Exchange, Bert Chapman

Libraries Faculty and Staff Scholarship and Research

Provides a historical overview of the origins and early development of the New York Stock Exchange.


Framing A Purpose For Corporate Law, William W. Bratton Jul 2014

Framing A Purpose For Corporate Law, William W. Bratton

Faculty Scholarship at Penn Law

This article seeks to frame a short statement of purpose for corporate law on which all reasonable observers can agree. The statement, in order to succeed at its intended purpose, must satisfy two strict conditions: first, it must have enough content to be meaningful; second, it must be completely uncontroversial, both descriptively and normatively. The exercise, thus described, involves avoiding the issues that occupy center stage in discussions about corporate law while at the same time highlighting the discussants’ generally held presuppositions. Three closely interconnected issues arise. First, whether the statement of the purpose of corporate law should speak in ...


Nuisance, Keith Hylton Jul 2014

Nuisance, Keith Hylton

Faculty Scholarship

This essay sets out the law and the economic theory of nuisance. Nuisance law serves a regulatory function: it induces actors to choose the socially preferred level of an activity by imposing liability when the externalized costs of the activity are substantially greater than the externalized benefits or not reciprocal to other background external costs. Proximate cause doctrine plays a role in supplementing nuisance law.


Paternalism, Public Health, And Behavioral Economics: A Problematic Combination, Wendy K. Mariner Jul 2014

Paternalism, Public Health, And Behavioral Economics: A Problematic Combination, Wendy K. Mariner

Faculty Scholarship

Some critiques of public health regulations assume that measures directed at industry should be considered paternalistic whenever they limit any consumer choices. Given the presumption against paternalistic measures, this conception of paternalism puts government proposals to regulate industry to the same stringent proof as clearly paternalist proposals to directly regulate individuals for their own benefit. The result is to discourage regulating industry in ways that protect the public from harm and instead to encourage regulating individuals for their own good -- quite the opposite of what one would expect from a rejection of paternalism. Arguments favoring "soft paternalism" to justify some ...


Relevance Of The Regulatory State In North/South Intersections, Mark Findlay, Si Wei Lim Jul 2014

Relevance Of The Regulatory State In North/South Intersections, Mark Findlay, Si Wei Lim

Research Collection School Of Law

Purpose – What seems like a new social anthropology of global regulation is an endeavour much too grand for this paper, even though it has much merit. To contain the analysis which follows, the discussion of social embeddedness will be restricted to a comparison of markets which retain some local or regional integrity from those which have become largely removed from cultural or communal social bonds. An example is between markets trading in goods and services with a consumer base which is local and subsistence, and markets in derivative products that are inextricably dependent on supranational location. The paper aims to ...


A Unified Framework For Competition Policy And Innovation Policy, Keith Hylton Jun 2014

A Unified Framework For Competition Policy And Innovation Policy, Keith Hylton

Faculty Scholarship

I describe a model of competition law enforcement that treats competition and innovation policy as the inseparable partners they ought to be. The enforcement authority determines an optimal punishment knowing that if it sets the penalty too high it will reduce firms’ incentives to invest in innovation, and if firms do not invest, new goods and new markets will not be created. The authority therefore moderates the penalty in order to maintain innovation incentives. The implications of this framework for competition policy and for innovation policy are quite different from what is commonly observed today. I discuss implications for competition ...


U.S. Vs. European Broadband Deployment: What Do The Data Say?, Christopher S. Yoo Jun 2014

U.S. Vs. European Broadband Deployment: What Do The Data Say?, Christopher S. Yoo

Faculty Scholarship at Penn Law

As the Internet becomes more important to the everyday lives of people around the world, commentators have tried to identify the best policies increasing the deployment and adoption of high-speed broadband technologies. Some claim that the European model of service-based competition, induced by telephone-style regulation, has outperformed the facilities-based competition underlying the US approach to promoting broadband deployment. The mapping studies conducted by the US and the EU for 2011 and 2012 reveal that the US led the EU in many broadband metrics.

• High-Speed Access: A far greater percentage of US households had access to Next Generation Access (NGA) networks ...


Competition Policy And The Technologies Of Information, Herbert J. Hovenkamp Jun 2014

Competition Policy And The Technologies Of Information, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

When we speak about information and competition policy we are usually thinking about oral or written communications that have an anticompetitive potential, and mainly in the context of collusion of exclusionary threats. These are important topics. Indeed, among the most difficult problems that competition policy has had to confront over the years is understanding communications that can be construed as either threats to exclude or as offers to collude or facilitators of collusion.

My topic here, however, is the relationship between information technologies and competition policy. Technological change can both induce and undermine the use of information to facilitate anticompetitive ...


Antitrust And The Close Look: Transaction Cost Economics In Competition Policy, Herbert J. Hovenkamp May 2014

Antitrust And The Close Look: Transaction Cost Economics In Competition Policy, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

This paper briefly examines the contributions of Transaction Cost Economics (TCE) to antitrust analysis, focusing on vertical integration and its contractual substitutes, mainly, minimum and maximum resale price maintenance, vertical nonprice restraints, tying, bundled discounts and exclusive dealing and related exclusionary contracts.

TCE generally assumes that business firms organize their activities so as to maximize their value, which they can do both by economizing and also by obtaining higher prices. Sensible antitrust policy recognizes that both advantageous contracting and monopoly can be profitable to a firm, and it can be expected to pursue both when they are available. Nevertheless, the ...


Common Capital: A Thought Experiment In Cross-Border Resolution, Anna Gelpern May 2014

Common Capital: A Thought Experiment In Cross-Border Resolution, Anna Gelpern

Georgetown Law Faculty Publications and Other Works

Cross-border bank resolution efforts focus on burden-sharing between bank owners, private creditors and the public. There is little talk of burden-sharing among governments, despite the rich history of governments trying to stick one another with the cost of financial conglomerate failures. There is an unspoken fear that acknowledging the need to allocate losses among governments would undermine post-crisis pledges of No More Bailouts. This symposium essay argues for making government stakes in private financial firms more transparent, and for using the contingent public share as a key to loss allocation among governments in cross-border banking crises.