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2014

Coase-Sandor Working Paper Series in Law and Economics

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Full-Text Articles in Law

Let The Right 'One' Win: Policy Lessons From The New Economics Of Platforms, E. Glen Weyl, Alexander White Dec 2014

Let The Right 'One' Win: Policy Lessons From The New Economics Of Platforms, E. Glen Weyl, Alexander White

Coase-Sandor Working Paper Series in Law and Economics

Many of the leading controversies in competition policy in the last two decades, especially those surrounding the Microsoft case, reflect the challenges posed by platform industries. Unfortunately, too often economists and policymakers have drawn the wron


Agglomerama, Lee Anne Fennell Dec 2014

Agglomerama, Lee Anne Fennell

Coase-Sandor Working Paper Series in Law and Economics

Urbanization presents students of commons dilemmas with a pressing challenge: how to achieve the benefits of proximity among people and land uses while curbing the negative effects of that same proximity. This piece, written for the 2014 BYU Law Review Sy


The Antitrust Analysis Of Rules And Standards For Software Platforms, David S. Evans Nov 2014

The Antitrust Analysis Of Rules And Standards For Software Platforms, David S. Evans

Coase-Sandor Working Paper Series in Law and Economics

Software platforms anchor vast global communities of users, application developers, device manufacturers, content providers, advertisers, and others. They drive innovation by enabling entrepreneurs, often anywhere in the world, to develop “applications” a


Well-Being And Public Policy, John Bronsteen, Christopher Buccafusco, Jonathan Masur Nov 2014

Well-Being And Public Policy, John Bronsteen, Christopher Buccafusco, Jonathan Masur

Coase-Sandor Working Paper Series in Law and Economics

Governments rely on certain basic economic metrics and tools to analyze prospective laws and policies and to monitor how well their countries are doing. For decades, critics of such economic measures have argued that they ignore important aspects of value


Fairness In Law And Economics: Introduction, Lee Anne Fennell, Richard H. Mcadams Oct 2014

Fairness In Law And Economics: Introduction, Lee Anne Fennell, Richard H. Mcadams

Coase-Sandor Working Paper Series in Law and Economics

No abstract provided.


A Welfarist Perspective On Lies, Ariel Porat, Omri Yadlin Oct 2014

A Welfarist Perspective On Lies, Ariel Porat, Omri Yadlin

Coase-Sandor Working Paper Series in Law and Economics

No abstract provided.


Base Erosion And Profit Shifting: A Simple Conceptual Framework, Dhammika Dharmapala Sep 2014

Base Erosion And Profit Shifting: A Simple Conceptual Framework, Dhammika Dharmapala

Coase-Sandor Working Paper Series in Law and Economics

No abstract provided.


How Do Bank Regulators Determine Capital Adequacy Requirements?, Eric A. Posner Sep 2014

How Do Bank Regulators Determine Capital Adequacy Requirements?, Eric A. Posner

Coase-Sandor Working Paper Series in Law and Economics

Minimum capital regulations play a central role in banking regulation. Regulators require banks to maintain capital above a certain level in order to correct incentives to make excessively risky loans and investments. However, it has never been clear how regulators determine how high or low the minimum capital-asset ratio should be. An examination of U.S. regulators’ justifications for five regulations issued over more than 30 years reveals that regulators have never performed (or at least disclosed) a serious economic analysis that would justify the levels that they chose. Instead, regulators appear to have followed a practice of what I ...


What Do We Know About Base Erosion And Profit Shifting? A Review Of The Empirical Literature, Dhammika Dharmapala Sep 2014

What Do We Know About Base Erosion And Profit Shifting? A Review Of The Empirical Literature, Dhammika Dharmapala

Coase-Sandor Working Paper Series in Law and Economics

The issue of tax-motivated income shifting within multinational firms – or “base erosion and profit shifting” (BEPS) – has attracted increasing global attention in recent years. This paper provides a survey of the empirical literature on this topic. Its emphasis is on reviewing and elucidating what is known about the magnitude of BEPS. The paper discusses different empirical approaches to identifying income shifting, describes existing data sources, and summarizes the findings of the empirical literature. A major theme that emerges from this survey is that in the more recent empirical literature, which uses new and richer sources of data, the estimated magnitude ...


The Article Iii Problem In Bankruptcy, Anthony Casey, Aziz Huq Sep 2014

The Article Iii Problem In Bankruptcy, Anthony Casey, Aziz Huq

Coase-Sandor Working Paper Series in Law and Economics

This Article reconsiders the implementation of Article III in the bankruptcy context. Recent rulings limiting the delegation of adjudicative power to non-Article III tribunals have generated only uncertainty and a profusion of litigation. The reason for t


Does De Jure Judicial Independence Really Matter? A Reevaluation Of Explanations For Judicial Independence, James Melton, Tom Ginsburg Sep 2014

Does De Jure Judicial Independence Really Matter? A Reevaluation Of Explanations For Judicial Independence, James Melton, Tom Ginsburg

Coase-Sandor Working Paper Series in Law and Economics

The relationship between de jure and de facto judicial independence is much debated in the literature on judicial politics. Some studies find no relationship between the formal rules governing the structure of the judiciary and de facto judicial independence, while others find a tight correlation. This article sets out to reassess the relationship between de jure and de facto judicial independence using a new theory and an expanded data set. De jure institutional protections, we argue, do not work in isolation but work conjunctively, so that particular combinations of protections are more likely to be effective than others. We find ...


One-And-A-Half Badges Of Fraud, Douglas G. Baird Aug 2014

One-And-A-Half Badges Of Fraud, Douglas G. Baird

Coase-Sandor Working Paper Series in Law and Economics

Lenders have long included savings clauses in loan documents as a way to minimize exposure to fraudulent conveyance at-tacks. This paper suggests that scope of operation of savings clauses is exceeding small. Those cases in which lenders find themselves exposed to fraudulent conveyance liability are only rarely ones in which a savings clause is of much use. Savings clauses are useful to guard against constructive fraudulent conveyance attacks, but only in environments in which actual intent fraudulent conveyances attacks are also possible and for these savings clauses do little good. Even when in environments in which they might protect a ...


Inequality In The Twenty-First Century (Reviewing Thomas Piketty, Capital In The Twenty-First Century (2014)), Saul Levmore Aug 2014

Inequality In The Twenty-First Century (Reviewing Thomas Piketty, Capital In The Twenty-First Century (2014)), Saul Levmore

Coase-Sandor Working Paper Series in Law and Economics

No abstract provided.


An Empirical Study Of Political Bias In Legal Scholarship, Adam S. Chilton, Eric A. Posner Aug 2014

An Empirical Study Of Political Bias In Legal Scholarship, Adam S. Chilton, Eric A. Posner

Coase-Sandor Working Paper Series in Law and Economics

Law professors routinely accuse each other of making politically biased arguments in their scholarship. They have also helped produce a large empirical literature on judicial behavior that has found that judicial opinions sometimes reflect the ideological


Do Constitutional Rights Make A Difference?, Adam S. Chilton, Mila Versteeg Aug 2014

Do Constitutional Rights Make A Difference?, Adam S. Chilton, Mila Versteeg

Coase-Sandor Working Paper Series in Law and Economics

Although the question of whether constitutional rights matter is of great theoretical and practical importance, we know little about whether any constitutional rights actually improve rights in practice. We test the effectiveness of six political rights.


The Costs And Benefits Of Mandatory Securities Regulation: Evidence From Market Reactions To The Jobs Act Of 2012, Dhammika Dharmapala, Vikramaditya S. Khanna Aug 2014

The Costs And Benefits Of Mandatory Securities Regulation: Evidence From Market Reactions To The Jobs Act Of 2012, Dhammika Dharmapala, Vikramaditya S. Khanna

Coase-Sandor Working Paper Series in Law and Economics

The effect of mandatory securities regulation on firm value has been a longstanding concern across law, economics and finance. In 2012, Congress enacted the Jumpstart Our Business Startups (“JOBS”) Act, relaxing disclosure and compliance obligations for a


The Use Of Neutralities In International Tax Policy, David A. Weisbach Aug 2014

The Use Of Neutralities In International Tax Policy, David A. Weisbach

Coase-Sandor Working Paper Series in Law and Economics

No abstract provided.


Unbundling Efficient Breach, Maria Bigoni, Stefania Bortolotti, Francesco Parisi, Ariel Porat Aug 2014

Unbundling Efficient Breach, Maria Bigoni, Stefania Bortolotti, Francesco Parisi, Ariel Porat

Coase-Sandor Working Paper Series in Law and Economics

Current law and economics scholarship analyzes efficient breach cases monolithically. The standard analysis holds that breach is efficient when performance of a contract generates a negative surplus for the parties. However, by simplistically grouping efficient breach cases as of a single kind, the prior literature overlooks some important factors that meaningfully distinguish types of efficient breach, such as effects of the breach on productive and allocative efficiency, restraints on the incentive to breach, information-forcing, and competitive effects of the right to breach. We argue that these factors are important for the development of a more nuanced economic theory of efficient ...


Reconsidering The Motivations Of The United States' Bilateral Investment Treaty Program, Adam S. Chilton Jul 2014

Reconsidering The Motivations Of The United States' Bilateral Investment Treaty Program, Adam S. Chilton

Coase-Sandor Working Paper Series in Law and Economics

No abstract provided.


Credible Threats, Saul Levmore, Ariel Porat Jul 2014

Credible Threats, Saul Levmore, Ariel Porat

Coase-Sandor Working Paper Series in Law and Economics

“Your money or your life” is a classic threat, and it is one that law is prepared to penalize. The sanction may occasionally do more harm than good, but for the most part the law’s treatment of such serious threats is sensible. In contrast, “If you do not lower the price of that automobile I hope to buy, I will never return to this dealership” is a threat that law ignores. The buyer is free to return the next day and reveal that the threat was a bluff. In both cases the threat is a more valuable signal if ...


Distributionally-Weighted Cost Benefit Analysis: Welfare Economics Meets Organizational Design, David A. Weisbach Jul 2014

Distributionally-Weighted Cost Benefit Analysis: Welfare Economics Meets Organizational Design, David A. Weisbach

Coase-Sandor Working Paper Series in Law and Economics

No abstract provided.


Lapses Of Attention In Medical Malpractice And Road Accidents, Robert D. Cooter, Ariel Porat Jun 2014

Lapses Of Attention In Medical Malpractice And Road Accidents, Robert D. Cooter, Ariel Porat

Coase-Sandor Working Paper Series in Law and Economics

A doctor who lapses and injures her patient, and a driver who lapses and causes an accident, are liable under negligence law for the harm done. But lapse is not necessarily negligence, since reasonable people lapse from time to time. We show that tort liability for "reasonable" lapses distorts doctors’, drivers’, and manufacturers’ incentives to take care. Furthermore, such liability provides potential injurers with incentives to substitute activities which are less prone to lapses with activities which are more prone to lapses, even if such substitution is inefficient. We propose several solutions to the inefficiencies that result from liability for ...


Nuisance Suits, William Hubbard Jun 2014

Nuisance Suits, William Hubbard

Coase-Sandor Working Paper Series in Law and Economics

This paper develops a simple but general model of negative-expected-value (NEV) suit and settlement given symmetric information. It accounts for the roles of the merits, litigation costs, and bargaining power; incorporates complaints and answers for which parties' investments in pleading detail are endogenously determined; permits strategic default by the defendant; and nests several existing models of NEV litigation as special cases. It generates testable, counterintuitive, empirical predictions and facilitates normative analysis. For example, the model predicts that plausibility pleading standards will have modest effects in deterring low-merit suits but may be harmful to plaintiffs and defendants settling stronger cases.


Cost-Benefit Analysis Of Financial Regulations: A Response To Criticisms, Eric A. Posner, E. Glen Weyl May 2014

Cost-Benefit Analysis Of Financial Regulations: A Response To Criticisms, Eric A. Posner, E. Glen Weyl

Coase-Sandor Working Paper Series in Law and Economics

Financial regulators should use cost-benefit analysis (CBA) to evaluate financial regulations. Finance is an ideal domain for CBA because the direct costs and benefits of financial activity can be easily monetized, and a huge amount of data exists for calculating the relevant valuations. John Coates and others have argued that in fact the valuations are too difficult to determine because of unique features of financial markets that distinguish them from other types of markets where CBA is used. We respond that these features are present in other markets, and that financial valuations are difficult to determine at present only because ...


The Laws Of War And Public Opinion: An Experimental Study, Adam S. Chilton May 2014

The Laws Of War And Public Opinion: An Experimental Study, Adam S. Chilton

Coase-Sandor Working Paper Series in Law and Economics

Research examining whether the laws of war change state behavior has produced conflicting results, and limitations of observational studies have stalled progress on the topic. I have conducted a survey experiment to bring new evidence to the debate. I directly test whether a mechanism hypothesized to drive compliance with international law—public opinion—creates pressure to comply with the laws of war. The results provide qualified support to research suggesting that democracies may comply with the laws of war when there is the expectation of reciprocity, and demonstrate the potential of using experimental methods to study the laws of war.


Does The Constitutional Amendment Rule Matter At All? Amendment Cultures And The Challenges Of Measuring Amendment Difficulty, Tom Ginsburg, James Melton May 2014

Does The Constitutional Amendment Rule Matter At All? Amendment Cultures And The Challenges Of Measuring Amendment Difficulty, Tom Ginsburg, James Melton

Coase-Sandor Working Paper Series in Law and Economics

No abstract provided.


A Study Of The Risks Of Contract Ambiguity, Preston Torbert May 2014

A Study Of The Risks Of Contract Ambiguity, Preston Torbert

Coase-Sandor Working Paper Series in Law and Economics

No abstract provided.


Partition And Revelation, Yun-Chien Chang, Lee Anne Fennell Apr 2014

Partition And Revelation, Yun-Chien Chang, Lee Anne Fennell

Coase-Sandor Working Paper Series in Law and Economics

No abstract provided.


Economic Aspects Of Bitcoin And Other Decentralized Public-Ledger Currency Platforms, David S. Evans Apr 2014

Economic Aspects Of Bitcoin And Other Decentralized Public-Ledger Currency Platforms, David S. Evans

Coase-Sandor Working Paper Series in Law and Economics

A number of internet-based digital currency platform based on decentralized public ledgers have started since the introduction of the blockchain concept by the founder of Bitcoin in 2008. An important element of these public ledger platforms is an incentive system that elicits efforts from a distributed global workforce to verify and record transactions on the public ledger and a governance system for the platform. The economic efficiency and possibly viability of a public ledger platform ultimately depend on the design of these incentive and governance systems. Even if a decentralized public ledger were a more efficient technology for conducting financial ...


The Fannie And Freddie Bailouts Through The Corporate Lens, Adam Badawi, Anthony Casey Mar 2014

The Fannie And Freddie Bailouts Through The Corporate Lens, Adam Badawi, Anthony Casey

Coase-Sandor Working Paper Series in Law and Economics

In August of 2012, the Department of Treasury redirected the profits of Fannie Mae and Freddie Mac away from common shareholders and into the Treasury. Those shareholders have filed multiple lawsuits challenging this action. The complaints allege, among other claims, that the decision to wipe out equity violated the principles of corporate law. In this Essay — prepared for a symposium on the Future of Fannie and Freddie — we analyze that argument. We ask whether the shareholders of an ordinary public company could assert a similar claim under these circumstances. Those circumstances involve a lender of last resort converting a debt-like ...