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Full-Text Articles in Law and Economics

Does Contract Law Need Morality?, Kimberly D. Krawiec, Wenhao Liu Jan 2018

Does Contract Law Need Morality?, Kimberly D. Krawiec, Wenhao Liu

Faculty Scholarship

In "The Dignity of Commerce", Nathan Oman sets out an ambitious market theory of contract, which he argues is a superior normative foundation for contract law than either the moralist or economic justifications that currently dominate contract theory. In doing so, he sets out a robust defense of commerce and the marketplace as contributing to human flourishing that is a refreshing and welcome contribution in an era of market alarmism. But the market theory ultimately falls short as either a normative or prescriptive theory of contract. The extent to which law, public policy, and theory should account for values other ...


Contingent Judicial Deference: Theory And Application To Usury Laws, Bernardo Guimarães, Bruno Meyerhof Salama Dec 2017

Contingent Judicial Deference: Theory And Application To Usury Laws, Bernardo Guimarães, Bruno Meyerhof Salama

Bruno Meyerhof Salama

Legislation is less likely to be enforced when courts disagree with it. Building on this premise, we propose a model of Bayesian adjudicators that use their own prior knowledge to evaluate the appropriateness of legislation. The model yields a non-monotonic relation between written rules and effectively enforced rules. Hence the enactment of legislation prohibiting something raises the probability that courts will allow related things not expressly forbidden. Moreover, legal uncertainty is greater with legislation that commands little deference from courts than with legislation that commands none. We discuss examples of e§ects of legislated prohibitions (and, in particular, usury laws ...


Should I Stay Or Should I Go? Gender Gaps In The Lateral Market For Sec Lawyers, Stephen J. Choi, G. Mitu Gulati, Adam C. Pritchard Dec 2017

Should I Stay Or Should I Go? Gender Gaps In The Lateral Market For Sec Lawyers, Stephen J. Choi, G. Mitu Gulati, Adam C. Pritchard

Law & Economics Working Papers

This article examines the gender gap in the lateral market for government lawyers. Using data on lawyers from the Enforcement Division of the Securities and Exchange Commission (SEC), from 2004 to 2016, we find the following: First, gender gaps in pay and promotion appear to be minimal. Second, and confounding the first finding, we find significant gaps in assignments, with men receiving the more challenging and career-enhancing projects. Third, men are more likely than women to move laterally; and when they do, are more likely than the women to move to lucrative private sector jobs.


O'Connor V. Uber Technologies, Inc., Justin Mccrary Dec 2017

O'Connor V. Uber Technologies, Inc., Justin Mccrary

Justin McCrary

No abstract provided.


The Shifting Tides Of Merger Litigation, Matthew D. Cain, Jill E. Fisch, Steven Davidoff Solomon, Randall S. Thomas Dec 2017

The Shifting Tides Of Merger Litigation, Matthew D. Cain, Jill E. Fisch, Steven Davidoff Solomon, Randall S. Thomas

Faculty Scholarship

In 2015, Delaware made several important changes to its laws concerning merger litigation. These changes, which were made in response to a perception that levels of merger litigation were too high and that a substantial proportion of merger cases were not providing value, raised the bar, making it more difficult for plaintiffs to win a lawsuit challenging a merger and more difficult for plaintiffs’ counsel to collect a fee award.

We study what has happened in the courts in response to these changes. We find that the initial effect of the changes has been to decrease the volume of merger ...


Macroeconomic Modeling Of Tax Policy: A Comparison Of Current Methodologies, Itai Grinberg, Alan J. Auerbach, Thomas A. Barthold, Nicholas Bull, W. Gavin Elkins, Pamela J. Moomau, Rachel Moore, Benjamin Page, Brandon Pecoraro, Kyle Pomerleau Dec 2017

Macroeconomic Modeling Of Tax Policy: A Comparison Of Current Methodologies, Itai Grinberg, Alan J. Auerbach, Thomas A. Barthold, Nicholas Bull, W. Gavin Elkins, Pamela J. Moomau, Rachel Moore, Benjamin Page, Brandon Pecoraro, Kyle Pomerleau

Georgetown Law Faculty Publications and Other Works

The macroeconomic effects of tax reform are a subject of significant discussion and controversy. In 2015, the House of Representatives adopted a new “dynamic scoring” rule requiring a point estimate within the budget window of the deficit effect due to the macroeconomic response to certain proposed tax legislation. The revenue estimates provided by the staff of the Joint Committee on Taxation (JCT) for major tax bills often play a critical role in Congressional deliberations and public discussion of those bills. The JCT has long had macroeconomic analytic capability, and in recent years, responding to Congress’ interest in macrodynamic estimates for ...


A Destination-Based Cash Flow Tax Can Be Structured To Comply With World Trade Organization Rules, Itai Grinberg Dec 2017

A Destination-Based Cash Flow Tax Can Be Structured To Comply With World Trade Organization Rules, Itai Grinberg

Georgetown Law Faculty Publications and Other Works

This paper briefly outlines alternative approaches to enacting a destination-based cash flow tax that are more clearly compatible with the World Trade Organization rules than the approach that has previously been described in the literature. The first structural alternative involves expanding the universe of businesses subject to the tax by clearly defining both the base of the new U.S. business tax and its tax nexus requirement as domestic consumption, and thereafter treating foreign importers and other sellers equivalently, rather than imposing a deduction disallowance or an import tax. The second alternative involves adopting a business activities tax, and then ...


Putting Distribution First, Robert C. Hockett Nov 2017

Putting Distribution First, Robert C. Hockett

Robert C. Hockett

It is common for normative legal theorists, economists and other policy analysts to conduct and communicate their work mainly in maximizing terms. They take the maximization of welfare, for example, or of wealth or utility, to be primary objectives of legislation and public policy. Few if any of these theorists seem to notice, however, that any time we speak explicitly of maximizing one thing, we speak implicitly of distributing other things and of equalizing yet other things. Fewer still seem to recognize that we effectively define ourselves by reference to that which we distribute and equalize. For it is in ...


Collaborative Gatekeepers, Stavros Gadinis Nov 2017

Collaborative Gatekeepers, Stavros Gadinis

Stavros Gadinis

No abstract provided.


Foreign Bribery: Incentives And Enforcement, Jonathan Karpoff Nov 2017

Foreign Bribery: Incentives And Enforcement, Jonathan Karpoff

Law, Economics, & Business Workshop

No abstract provided.


Progressive Antitrust, Herbert J. Hovenkamp Nov 2017

Progressive Antitrust, Herbert J. Hovenkamp

Faculty Scholarship

Several American political candidates and administrations have both run and served under the “progressive” banner for more than a century, right through the 2016 election season. For the most part these have pursued interventionist antitrust policies, reflecting a belief that markets are fragile and in need of repair, that certain interest groups require greater protection, or in some cases that antitrust policy is an extended arm of regulation. This paper argues that most of this progressive antitrust policy was misconceived, including that reflected in the 2016 antitrust plank of the Democratic Party. The progressive state is best served by a ...


Not Too Salt-Y: The Disparate Federal Income Tax Treatment Of Business And Non-Business State And Local Taxes, Michael S. Knoll Nov 2017

Not Too Salt-Y: The Disparate Federal Income Tax Treatment Of Business And Non-Business State And Local Taxes, Michael S. Knoll

Faculty Scholarship

The Tax Cuts and Jobs Act, H.R. 1, would eliminate the federal income tax deduction for nonbusiness state and local taxes while maintaining the deduction for business state and local taxes. That disparate treatment has generated a storm of negative commentary. In this short essay, I consider whether the federal tax law should allow a deduction for business state and local taxes assuming that there is no deduction for nonbusiness state and local taxes. I argue that investors and businesses, including pass-through businesses, should be allowed to deduct state and local property and sales taxes, but not general income ...


Horizontal Mergers, Market Structure, And Burdens Of Proof, Herbert J. Hovenkamp, Carl Shapiro Nov 2017

Horizontal Mergers, Market Structure, And Burdens Of Proof, Herbert J. Hovenkamp, Carl Shapiro

Faculty Scholarship

Since the Supreme Court’s landmark 1963 decision in Philadelphia National Bank, antitrust challengers have mounted prima facie cases against horizontal mergers that rested on the level and increase in market concentration caused by the merger, with proponents of the merger then permitted to rebut by providing evidence that the merger will not have the feared anticompetitive effects. Although the way that concentration is measured and the triggering levels have changed over the last half century, the basic approach has remained intact. This longstanding structural presumption, which is well supported by economic theory and evidence, has been critical to effective ...


Rationing Criminal Justice, Richard A. Bierschbach, Stephanos Bibas Nov 2017

Rationing Criminal Justice, Richard A. Bierschbach, Stephanos Bibas

Michigan Law Review

Of the many diagnoses of American criminal justice’s ills, few focus on externalities. Yet American criminal justice systematically overpunishes in large part because few mechanisms exist to force consideration of the full social costs of criminal justice interventions. Actors often lack good information or incentives to minimize the harms they impose. Part of the problem is structural: criminal justice is fragmented vertically among governments, horizontally among agencies, and individually among self-interested actors. Part is a matter of focus: doctrinally and pragmatically, actors overwhelmingly view each case as an isolated, short-term transaction to the exclusion of broader, long-term, and aggregate ...


Stereotypes And Affirmative Action In Higher Education Admissions, Prasad Krishnamurthy, Aaron Edlin Oct 2017

Stereotypes And Affirmative Action In Higher Education Admissions, Prasad Krishnamurthy, Aaron Edlin

Aaron Edlin

No abstract provided.


Do Bank Regulation And Supervision Displace Bank Auditing?, Stephen Ryan Oct 2017

Do Bank Regulation And Supervision Displace Bank Auditing?, Stephen Ryan

Law, Economics, & Business Workshop

No abstract provided.


China And The Future Of The International Tax Regime, Reuven S. Avi-Yonah, Haiyan Xu Oct 2017

China And The Future Of The International Tax Regime, Reuven S. Avi-Yonah, Haiyan Xu

Law & Economics Working Papers

The International tax regime (ITR) has been transformed after the Great Recession of 2008-2009. The G20/Organization for Economic Cooperation and Development (OECD)’s Base Erosion and Profit Shifting (BEPS) project (2013-2015) has fundamentally changed the ITR, giving new life to the single tax principle (income should be taxed once, i.e. no double taxation and no double non taxation).

Reaction to BEPS has varied dramatically between the EU and the US, the two largest markets in the world. In the EU BEPS is taken very seriously, as shown for example by the new Anti Tax Avoidance Directives that implement ...


Common Agency In Bank Regulation, Yesha Yadav Oct 2017

Common Agency In Bank Regulation, Yesha Yadav

Law, Economics, & Business Workshop

No abstract provided.


The Legal Architecture Of Nation-Building: An Introduction, Charles H. Norchi Oct 2017

The Legal Architecture Of Nation-Building: An Introduction, Charles H. Norchi

Maine Law Review

In the future, a historian studying the early twenty-first century will observe a trend: numerous lawyers applying their skill sets to the problems of pathological states. Our future historian will note that the topography of the post-Cold War international system was marked by weakly-governed states failing. Fragile states eroded, frayed, and disintegrated under stress, and their internal social processes became highly susceptible to external forces. Powerful non-state actors, including private armies, operated within the porous boundaries of entities that were once functioning polities. Legal authority became divorced from political control as non-state actors wielded naked power, challenging formal state structures ...


Destination-Based Cash Flow Taxation, Alan J. Auerbach Oct 2017

Destination-Based Cash Flow Taxation, Alan J. Auerbach

Alan J. Auerbach

No abstract provided.


Consistent Good News And Inconsistent Bad News, Kelly Shue Oct 2017

Consistent Good News And Inconsistent Bad News, Kelly Shue

Law, Economics, & Business Workshop

No abstract provided.


The Modigliani-Miller Theorem At 60: The Long-Overlooked Legal Applications Of Finance’S Foundational Theorem, Michael S. Knoll Oct 2017

The Modigliani-Miller Theorem At 60: The Long-Overlooked Legal Applications Of Finance’S Foundational Theorem, Michael S. Knoll

Faculty Scholarship

2018 marks the 60th anniversary of the publication of Franco Modigliani and Merton Miller’s The Cost of Capital, Corporation Finance, and the Theory of Investment. Widely hailed as the foundation of modern finance, their article, which purports to demonstrate that a firm’s value is independent of its capital structure, is little known by lawyers, including legal academics. That is unfortunate because the Modigliani-Miller capital structure irrelevancy proposition (when inverted) provides a framework that can be extremely useful to legal academics, practicing attorneys and judges.


Análisis De La Propuesta De Regulación De La Hipoteca Inversa En Perú, Paul Cajacuri Jancachagua Oct 2017

Análisis De La Propuesta De Regulación De La Hipoteca Inversa En Perú, Paul Cajacuri Jancachagua

Paul Cajacuri Jancachagua

Actualmente se encuentra en evaluación la incorporación a nuestro sistema legal-financiero, una nueva modalidad de crédito con garantía hipotecaria denominada Hipoteca Inversa.
La presente es una presentación promovida por el Grupo de Estudios de Derecho Inmobiliario-GEDI de la UNMSM, donde el autor debatió tal propuesta de incorporación.


Crime, Punishment And The Value Of Corporate Social Responsibility, Inessa Liskovich Oct 2017

Crime, Punishment And The Value Of Corporate Social Responsibility, Inessa Liskovich

Law, Economics, & Business Workshop

No abstract provided.


Slicing And Dicing: The Structural Problems Of The Tax Reform Framework, Reuven S. Avi-Yonah Oct 2017

Slicing And Dicing: The Structural Problems Of The Tax Reform Framework, Reuven S. Avi-Yonah

Law & Economics Working Papers

The “Unified Framework for Fixing Our Broken Tax Code” (the “Framework”) released by the “Big Six” group of Treasury, White House and Congressional leaders on September 27 has been the focus of a lot of commentary. Most of the comments have focused on the distributive aspects of the plan and on the proposed rate structure, as well as the impact on revenues and the federal deficit. In this comment, I plan to focus instead on the structural aspects of the plan and in particular on the various new lines that it draws, because these are more likely to be lasting.


Horizontal Shareholding And Antitrust Policy, Fiona M. Scott Morton, Herbert J. Hovenkamp Oct 2017

Horizontal Shareholding And Antitrust Policy, Fiona M. Scott Morton, Herbert J. Hovenkamp

Faculty Scholarship

“Horizontal shareholding” occurs when one or more equity funds own shares of competitors operating in a concentrated product market. For example, the four largest mutual fund companies might be large shareholders of all the major United States air carriers. A growing body of empirical literature concludes that under these conditions market output in the product market is lower and prices higher than they would otherwise be.

Here we consider how the antitrust laws might be applied to this practice, identifying the issues that courts are likely to encounter and attempting to anticipate litigation problems. We assume that neither the mutual ...


Remembering An Abolitionist, Ambassador John R. Miller (May 23, 1938-October 4, 2017), Eleanor Kennelly Gaetan, Donna M. Hughes Oct 2017

Remembering An Abolitionist, Ambassador John R. Miller (May 23, 1938-October 4, 2017), Eleanor Kennelly Gaetan, Donna M. Hughes

Dignity: A Journal on Sexual Exploitation and Violence

A memorial for Ambassador-at-Large to Monitor and Combat Trafficking in Persons, John R. Miller (May 23, 1938-October 4, 2017). Ambassador Miller believed modern-day slavery, encompassing sex trafficking and forced labor, requires a principled global offensive that the United States is morally obligated to lead. In the four formative years he led the State Department’s Office to Monitor and Combat Trafficking in Persons, 2002 to 2006, John Miller set the office’s course as diplomatically aggressive and programmatically creative. He made the annual Trafficking in Persons report more than a bureaucratic submission, putting daring heroes at the center, and insisting ...


Antitrust Policy And Inequality Of Wealth, Herbert J. Hovenkamp Oct 2017

Antitrust Policy And Inequality Of Wealth, Herbert J. Hovenkamp

Faculty Scholarship

Why would anyone want to use antitrust law as a wealth distribution device when far more explicit statutory tools are available for that purpose? One feature of antitrust is its open-textured, nonspecific statutes that are interpreted by judges. As a result, using antitrust to redistribute wealth may be a way of invoking the judicial process without having to go to Congress or a state legislature that is likely to be unsympathetic. Of course, a corollary is that someone attempting to use antitrust law to redistribute wealth will have to rely on the existing antitrust statutes rather than obtaining a new ...


New Dimensions In Economic Analysis Of Legal Issues: The Appropriate Regulatory Balance Of Antitrust Law In The Context Of The Technological Innovation, Jungmi Bang Oct 2017

New Dimensions In Economic Analysis Of Legal Issues: The Appropriate Regulatory Balance Of Antitrust Law In The Context Of The Technological Innovation, Jungmi Bang

Theses and Dissertations

The role of Empirical study in legal decision, even in the rule making, was increased by the economic development with the occurrence of economic realism. The incensement of economic implication of the law, without exception, impacted to the court’s ruling in the antitrust case and the antitrust law-making itself. Now it is one of the common way, court use concepts and theories developed by economists and weaves economic concepts into decisions to support their result.

The classical perspective of economic theories regarding antitrust law was start from early theorist Adam Smith in 1776, even it denied the economic implication ...


Is Say On Pay All About Pay? The Impact Of Firm Performance, Jill E. Fisch, Darius Palia, Steven Davidoff Solomon Sep 2017

Is Say On Pay All About Pay? The Impact Of Firm Performance, Jill E. Fisch, Darius Palia, Steven Davidoff Solomon

Faculty Scholarship

The Dodd-Frank Act of 2010 mandated a number of regulatory reforms including a requirement that large U.S. public companies provide their shareholders with the opportunity to cast a non-binding vote on executive compensation. The “say on pay” vote was designed to rein in excessive levels of executive compensation and to encourage boards to adopt compensation structures that tie executive pay more closely to performance. Although the literature is mixed, many studies question whether the statute has had the desired effect. Shareholders at most companies overwhelmingly approve the compensation packages, and pay levels continue to be high.

Although a lack ...