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Full-Text Articles in Law
The Availability Heuristic, Intuitive Cost-Benefit Analysis, And Climate Change, Cass R. Sunstein
The Availability Heuristic, Intuitive Cost-Benefit Analysis, And Climate Change, Cass R. Sunstein
Coase-Sandor Working Paper Series in Law and Economics
Because risks are on all sides of social situations, it is not possible to be "precautionary" in general. The availability heuristic ensures that some risks stand out as particularly salient, whatever their actual magnitude. Taken together with intuitive cost-benefit balancing, the availability heuristic helps to explain differences across groups, cultures, and even nations in the assessment of precautions to reduce the risks associated with climate change. There are complex links among availability, social processes for the spreading of information, and predispositions. If the United States is to take a stronger stand against climate change, it is likely to be a …
Total Liability For Excessive Harm, Robert D. Cooter, Ariel Porat
Total Liability For Excessive Harm, Robert D. Cooter, Ariel Porat
Coase-Sandor Working Paper Series in Law and Economics
The harm that each individual causes others is unverifiable in some circumstances where the total harm caused by everyone is verifiable. For example, the environmental agency can often measure the total harm caused by pollution much easier than it can measure the harm caused by each individual polluter. In these circumstances, implementing the usual liability rules or externality taxes is impossible. We propose a novel solution: Hold each participant in the activity responsible for all of the excessive harm that everyone causes. By "excessive harm" we mean the difference between the total harm caused by all injurers and the optimal …
Attention Felons: Evaluating Project Safe Neighborhood In Chicago, Andrew V. Papachristos, Tracey L. Meares, Jeffrey Fagan
Attention Felons: Evaluating Project Safe Neighborhood In Chicago, Andrew V. Papachristos, Tracey L. Meares, Jeffrey Fagan
Coase-Sandor Working Paper Series in Law and Economics
This research uses a quasi-experimental design to evaluate the impact of Project Safe Neighborhood (PSN) initiatives on neighborhood level crime rates in Chicago. Four interventions are analyzed: (1) increased federal prosecutions for convicted felons carrying or using guns, (2) the length of sentences associated with federal prosecutions, (3) supply-side firearm policing activities, and (4) social marketing of deterrence and social norms messages through justice-style offender notification meetings. Using an individual growth curve models and propensity scores to adjust for non-random group assignment, our findings suggest that several PSN interventions are associated with greater declines of homicide in the treatment neighborhoods …
Beyond Marbury: The Executive's Poer To Say What The Law Is, Cass R. Sunstein
Beyond Marbury: The Executive's Poer To Say What The Law Is, Cass R. Sunstein
Coase-Sandor Working Paper Series in Law and Economics
Under Marbury v. Madison, it is "emphatically the province and duty of the judicial department to say what the law is." But as a matter of actual practice, statements about "what the law is" are often made by the executive department, not the judiciary. In the last quarter-century, the Supreme Court has legitimated the executive's power of interpretation, above all in Chevron v. Natural Resources Defense Council, the most-cited case in modern public law. Chevron reflects a salutary appreciation of the fact that the executive is in the best position to make the judgments of policy and principle on which …
Fast, Frugal, And (Sometimes) Wrong, Cass R. Sunstein
Fast, Frugal, And (Sometimes) Wrong, Cass R. Sunstein
Coase-Sandor Working Paper Series in Law and Economics
Do moral heuristics operate in the moral domain? If so, do they lead to moral errors? This brief essay offers an affirmative answer to both questions. In so doing, it responds to an essay by Gerd Gigerenzer on the nature of heuristics, moral and otherwise. While focused on morality, the discussion bears on the general debate between those who emphasize cognitive errors, sometimes produced by heuristics, and those who emphasize the frequent success of heuristics in producing sensible judgments in the real world. General claims are that it is contentious to see moral problems as ones of arithmetic, and that …
Information Asymmetries And The Rights To Exclude, Lior Strahilevitz
Information Asymmetries And The Rights To Exclude, Lior Strahilevitz
Coase-Sandor Working Paper Series in Law and Economics
No abstract provided.
Justice Breyer's Democratic Pragmatism, Cass R. Sunstein
Justice Breyer's Democratic Pragmatism, Cass R. Sunstein
Coase-Sandor Working Paper Series in Law and Economics
There have been many efforts to reconcile judicial review with democratic self-government. Some such efforts attempt to justify judicial review if and to the extent that it promotes self-rule. Active Liberty, by Justice Stephen Breyer, is in this tradition; but it is also marked by a heavy pragmatic orientation, emphasizing as it does the need for close attention to purposes and to the importance of consequences to legal interpretation. Its distinctiveness lies in its effort to forge close connections among three seemingly disparate ideas: a democratic account of judicial review; a purposive understanding of legal texts; and a neo-pragmatic emphasis …
Political Constraints On Supreme Court Reform, Adrian Vermeule
Political Constraints On Supreme Court Reform, Adrian Vermeule
Coase-Sandor Working Paper Series in Law and Economics
No abstract provided.
The Business Of Democracy Is Democracy, John P. Mccormick, Arthur J. Jacobson
The Business Of Democracy Is Democracy, John P. Mccormick, Arthur J. Jacobson
Coase-Sandor Working Paper Series in Law and Economics
No abstract provided.
Absolute Priority, Valuation Uncertainty, And The Reorganization Bargain, Donald S. Bernstein, Douglas G. Baird
Absolute Priority, Valuation Uncertainty, And The Reorganization Bargain, Donald S. Bernstein, Douglas G. Baird
Coase-Sandor Working Paper Series in Law and Economics
In a Chapter 11 reorganization, senior creditors are entitled to insist upon being paid in full before anyone junior to them receives anything. In practice, however, departures from such "absolute priority" are commonplace. Explaining these deviations has been a central preoccupation of reorganization scholars for decades. By the standard law-and-economics account, deviations from absolute priority arise because well-positioned insiders take advantage of cumbersome procedures and inept judges. In this paper, we suggest that a far simpler and more benign force dominates bargaining in reorganization cases. “Deviations” from absolute priority are inevitable even in a world completely committed to respecting priority …
Reparations As Rough Justice, Adrian Vermeule
Reparations As Rough Justice, Adrian Vermeule
Coase-Sandor Working Paper Series in Law and Economics
No abstract provided.
Absolute Voting Rules, Adrian Vermeule
Absolute Voting Rules, Adrian Vermeule
Coase-Sandor Working Paper Series in Law and Economics
No abstract provided.
Emergencies And Democratic Failure, Eric A. Posner, Adrian Vermeule
Emergencies And Democratic Failure, Eric A. Posner, Adrian Vermeule
Coase-Sandor Working Paper Series in Law and Economics
Critics of emergency measures such as the U.S. government's response to 9/11 invoke the Carolene Products framework, which directs courts to apply strict scrutiny to laws and executive actions that target political or ethnic minorities. The critics suggest that such laws and actions are usually the product of democratic failure, and are especially likely to be so during emergencies. However, the application of the Carolene Products framework to emergencies is questionable. Democratic failure is no more likely during emergencies than during normal times, and courts are in a worse position to correct democratic failures during emergencies than during normal times. …
International Law: A Welfarist Approach, Eric A. Posner
International Law: A Welfarist Approach, Eric A. Posner
Coase-Sandor Working Paper Series in Law and Economics
This paper evaluates international law from a welfarist perspective. Global welfarism requires that international law advance the well being of everyone in the world, and scholars influenced by global welfarism and similar cosmopolitan principles have advocated radical restructuring of international law. But global welfarism is subject to several constraints, including (1) heterogeneity of preferences of the world population, which produces the state system; (2) agency costs, which produce imperfect governments; and (3) the problem of collective action. These constraints place limits on what policies motivated by global welfarism can achieve, and explain some broad features of international law that otherwise …
Paretian Intergenerational Discounting, David A. Weisbach, Dexter Samida
Paretian Intergenerational Discounting, David A. Weisbach, Dexter Samida
Coase-Sandor Working Paper Series in Law and Economics
This paper argues that discounting costs and benefits of projects for the opportunity costs of capital Pareto dominates decision criteria that do not discount. It considers and rejects several objections to the Pareto dominance argument, including the problem of making compensating transfers for the costs and benefits of projects and whether taking opportunity costs into account is different than discounting. It also argues that discounting future costs and benefits of projects does not under-value future generations.
The Superiority Of An Ideal Consumption Tax Over An Ideal Income Tax, David A. Weisbach, Joseph Bankman
The Superiority Of An Ideal Consumption Tax Over An Ideal Income Tax, David A. Weisbach, Joseph Bankman
Coase-Sandor Working Paper Series in Law and Economics
This paper considers the arguments regarding the choice between an ideal income tax and an ideal consumption tax, focusing on an argument made by Atkinson and Stiglitz regarding neutral taxation of commodities. The argument shows that a properly designed consumption tax is Pareto superior to an income tax: it is more efficient and at least as good at redistribution. The major exception to the Atkinson and Stiglitz result is if individuals with equal wages have different propensities to save. In that event, a consumption tax may no longer be Pareto superior to an income tax. A consumption tax will continue, …
Boundedly Rational Borrowing: A Consumer's Guide, Cass R. Sunstein
Boundedly Rational Borrowing: A Consumer's Guide, Cass R. Sunstein
Coase-Sandor Working Paper Series in Law and Economics
Excessive borrowing, no less than insufficient savings, might be a product of bounded rationality. Identifiable psychological mechanisms are likely to contribute to excessive borrowing; these include myopia, procrastination, optimism bias, "miswanting," and what might be called cumulative cost neglect. Suppose that excessive borrowing is a significant problem for some or many; if so, how might the law respond? The first option involves weak paternalism , through debiasing and other strategies that leave people free to choose as they wish. Another option is strong paternalism, which forecloses choice. Because of private heterogeneity and the risk of government error, regulators should have …
Exclusionary Amenities In Residential Communities, Lior Strahilevitz
Exclusionary Amenities In Residential Communities, Lior Strahilevitz
Coase-Sandor Working Paper Series in Law and Economics
No abstract provided.
On Discounting Regulatory Benefits: Risk, Money, And Ingergenerational Equity, Cass R. Sunstein, Arden Rowell
On Discounting Regulatory Benefits: Risk, Money, And Ingergenerational Equity, Cass R. Sunstein, Arden Rowell
Coase-Sandor Working Paper Series in Law and Economics
There is an elaborate debate over the practice of "discounting" regulatory benefits, such as environmental improvements and decreased risks to health and life, when those benefits will not be enjoyed until some future date. Economists tend to think that, as a general rule, such benefits should be discounted in the same way as money; many philosophers and lawyers doubt that conclusion on empirical and normative grounds. Both sides neglect a simple point: Once government has converted regulatory benefits into monetary equivalents, what is being discounted is merely money, not regulatory benefits as such. No one seeks to discount health and …
Ranking Law Schools: A Market Test?, Cass R. Sunstein
Ranking Law Schools: A Market Test?, Cass R. Sunstein
Coase-Sandor Working Paper Series in Law and Economics
Instead of ranking law schools through statistical aggregations of expert judgments, or by combining a list of heterogeneous factors, it would be possible to rely on a market test, simply by examining student choices. This tournament-type approach would have the large advantage of relying on the widely dispersed information that students actually have; it would also reduce reliance on factors that can be manipulated (and whose manipulation does no good other than to increase rankings). On the other hand, a market test has several problems as a measure of law school quality, partly because cognitive biases and social influences may …
Substitutes For The Doctrine Of Equivalents: A Response To Meurer And Nard, Douglas Gary Lichtman
Substitutes For The Doctrine Of Equivalents: A Response To Meurer And Nard, Douglas Gary Lichtman
Coase-Sandor Working Paper Series in Law and Economics
No abstract provided.
A New Progressivism, Cass R. Sunstein
A New Progressivism, Cass R. Sunstein
Coase-Sandor Working Paper Series in Law and Economics
Based on an address for a conference on Law and Transformation in South Africa, this paper explores problems with two twentieth-century approaches to government: the way of markets and the way of planning. It urge that the New Progressivism simultaneously offers (1) a distinctive conception of government’s appropriate means, an outgrowth of the late-twentieth-century critique of economic planning, and (2) a distinctive understanding of government’s appropriate ends, an outgrowth of evident failures with market arrangements and largely a product of the mid-twentieth-century critique of laissez faire. It emphasizes the need to replace bans and commands with appropriate incentives, and to …
Administrative Law Goes To War, Cass R. Sunstein
Administrative Law Goes To War, Cass R. Sunstein
Coase-Sandor Working Paper Series in Law and Economics
What are the President's war-making powers? This essay, a brief reply to an article by Curtis Bradley and Jack Goldsmith, contends that the answer lies in administrative law, at least in the first instance. The President's authority often depends on what Congress has said, and under established principles, the President has a great deal of power to interpret ambiguities in congressional enactments – in war no less than in peace. The principal qualifications involve interpretive principles, also found in administrative law, that call for a narrow construction of presidential authority to invade constitutionally sensitive interests. The relevant arguments are illustrated …
Chevron Step Zero, Cass R. Sunstein
Chevron Step Zero, Cass R. Sunstein
Coase-Sandor Working Paper Series in Law and Economics
The most famous case in administrative law, Chevron U.S.A. v. Natural Resources Defense Council, Inc., has come to be seen as a counter-Marbury, or even a McCulloch v. Maryland, for the administrative state. But in the last period, new debates have broken out over Chevron Step Zero—the initial inquiry into whether Chevron applies at all. These debates are the contemporary location of a longstanding dispute between Justice Scalia and Justice Breyer over whether Chevron is a revolutionary decision, establishing an across-the-board rule, or instead a mere synthesis of preexisting law, inviting a case-by-case inquiry into congressional instructions on the deference …
Ipo Liability And Entrepreneurial Response, James C. Spindler
Ipo Liability And Entrepreneurial Response, James C. Spindler
Coase-Sandor Working Paper Series in Law and Economics
This paper explores how legal liability in the IPO context can impact an entrepreneur's decision of whether and how to take a firm public. Liability under the Securities Act of 1933 effectively embeds a put option in an IPO security, where the entrepreneur must insure the shareholder against poor firm performance, which inflates the price of the security and exposes the entrepreneur to risk. This may cause IPO firms to appear to underperform relative to non-IPO firms as the option value decays, and may lead the entrepreneur to undertake strategic (but destructive) responses to minimize the put value and his …
Private Debt And The Missing Lever Of Corporate Governance, Robert K. Rasmussen, Douglas G. Baird
Private Debt And The Missing Lever Of Corporate Governance, Robert K. Rasmussen, Douglas G. Baird
Coase-Sandor Working Paper Series in Law and Economics
Traditional approaches to corporate governance focus exclusively on shareholders and neglect the large and growing role of creditors. Today’s creditors craft elaborate covenants that give them a large role in the affairs of the corporation. While they do not exercise their rights in sunny times when things are going well, these are not the times that matter most. When a business stumbles, creditors typically enjoy powers that public shareholders never have, such as the ability to replace the managers and install those more to their liking. Creditors exercise these powers even when the business is far from being insolvent and …
Property, Natural Monopoly, And The Uneasy Legacy Of Ins V. Ap, Douglas G. Baird
Property, Natural Monopoly, And The Uneasy Legacy Of Ins V. Ap, Douglas G. Baird
Coase-Sandor Working Paper Series in Law and Economics
International News Service v. Associated Press held that a wire service had the right to prevent rivals from copying its bulletin. It established the doctrine of misappropriation and justified it on the ground that someone that invests in gathering and disseminating information is entitled to the fruits of its labor. The Supreme Court, however, missed the strong anti-competitive undercurrents in the case. INS and AP were not conventional rivals. The most important AP member (and the person who stood to gain the most from AP’s anticompetitive activities) also owned INS. Far from being about first principles, the case illustrates how …
Irreversible And Catastrophic, Cass R. Sunstein
Irreversible And Catastrophic, Cass R. Sunstein
Coase-Sandor Working Paper Series in Law and Economics
As many treaties and statutes emphasize, some risks are distinctive in the sense that they are potentially irreversible or catastrophic; for such risks, it is sensible to take extra precautions. When a harm is irreversible, and when regulators lack information about its magnitude and likelihood, they should purchase an "option" to prevent the harm at a later date—the Irreversible Harm Precautionary Principle. This principle brings standard option theory to bear on environmental law and risk regulation. And when catastrophic outcomes are possible, it makes sense to take special precautions against the worst-case scenarios—the Catastrophic Harm Precautionary Principle. This principle is …
Serial Entrepreneurs And Small Business Bankruptcies, Edward Morrison, Douglas G. Baird
Serial Entrepreneurs And Small Business Bankruptcies, Edward Morrison, Douglas G. Baird
Coase-Sandor Working Paper Series in Law and Economics
This empirical study suggests that, far from ensuring assets are put to their best use, Chapter 11 encourages entrepreneurs to remain too long with failed businesses before trying to start new ones. Small entrepreneurs open and close a number of businesses over the course of their careers as they search for the business (or employer) that offers the best match with their skills. Chapter 11 delays this matching process and, over this dimension, differs little from rent control and other government policies that encourage socially wasteful lock-in of scarce resources. These costs may not be large, as bankruptcy judges are …
There Are No Penalty Default Rules In Contract Law, Eric A. Posner
There Are No Penalty Default Rules In Contract Law, Eric A. Posner
Coase-Sandor Working Paper Series in Law and Economics
In an influential article, Ian Ayres and Robert Gertner introduced the concept of the "penalty default rule," a rule that fills a gap in an incomplete contract with a term that would not be chosen by a majority of parties similarly situated to the parties to the contract in question. Ayres and Gertner argued that such a rule might be efficient in a model in which contracting parties have asymmetric information. However, Ayres and Gertner did not provide any persuasive examples of penalty default rules; their best example is the Hadley rule, but this rule is probably not a penalty …