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Full-Text Articles in Law and Economics

A Bit Like Cash: Understanding Cash-For-Bitcoin Transactions Through Individual Vendors, Stephanie J. Robberson, Mark R. Mccoy Oct 2018

A Bit Like Cash: Understanding Cash-For-Bitcoin Transactions Through Individual Vendors, Stephanie J. Robberson, Mark R. Mccoy

Journal of Digital Forensics, Security and Law

As technology improves and economies become more globalized, the concept of currency has evolved. Bitcoin, a cryptographic digital currency, has been embraced as a secure and convenient type of money. Due to its security and privacy for the user, Bitcoin is a good tool for conducting criminal trades. The Financial Crimes Enforcement Network (FinCEN) has regulations in place to make identification information of Bitcoin purchasers accessible to law enforcement, but enforcing these rules with cash-for-Bitcoin traders is difficult. This study surveyed cash-for-Bitcoin vendors in Oklahoma, Texas, Arkansas, Missouri, Kansas, Colorado, and New Mexico to determine personal demographic information, knowledge of ...


The Hollowed Out Common Law, Sam Issacharoff, Florencia Marotta-Wurgler Oct 2018

The Hollowed Out Common Law, Sam Issacharoff, Florencia Marotta-Wurgler

New York University Law and Economics Working Papers

The electronic marketplace poses novel issues for contract law. Contracts created through browsewrap, clickwrap, and shrinkwrap (contracts whose embedded terms are only available after purchase) poorly fit doctrines that emerged from face-to-face offer and acceptance, the mutual execution of a common set of documents, or the rituals of mass market transactions involving physical fine print. Not surprisingly, these contracts of the new electronic marketplace require doctrinal elaboration. Our Article asks not about the specific resolution of new doctrinal challenges, but about how the common law of contracts will be elaborated. Specifically, the Article begins with empirical observations about the domain ...


Forum Selling Abroad, Stefan Bechtold, Jens Frankenreiter, Daniel M. Klerman Sep 2018

Forum Selling Abroad, Stefan Bechtold, Jens Frankenreiter, Daniel M. Klerman

University of Southern California Legal Studies Working Paper Series

Judges decide cases. Do they also try to influence which cases they decide? Clearly plaintiffs “shop” for the most attractive forum, but do judges try to attract cases by “selling” their courts? Some American judges actively try to enlarge their influence by making their courts attractive to plaintiffs, a phenomenon known as “forum sell-ing.” This article shows that forum selling occurs outside the U.S. as well, focusing on Germany, a country that is often held up as the paragon of the civil law approach to adjudication. As in the U.S., German courts attract cases primarily through the pro-plaintiff ...


The Meaning Of Capital In The Twenty-First Century, Edward J. Mccaffery Sep 2018

The Meaning Of Capital In The Twenty-First Century, Edward J. Mccaffery

Edward J McCaffery

America is on a path towards a level of both wealth and income inequality unparalleled in recorded history. Thomas Piketty’s Capital in the Twenty-First Century summarizes and conveys the work of Piketty and many co-authors, over many decades, looking at the structure of income and wealth inequality across many nations and centuries. This review essay builds on Piketty’s ambitions as well as his data, in order to put forth a better solution: one that accepts and even embraces the facts of unequal ownership of capital, but changes the social meaning of those facts to avoid the social harms ...


The Death Of The Income Tax (Or, The Rise Of America's Universal Wage Tax), Edward J. Mccaffery Sep 2018

The Death Of The Income Tax (Or, The Rise Of America's Universal Wage Tax), Edward J. Mccaffery

Edward J McCaffery

In 1913, with whispers of progressive politics in the air, Americans ratified a Constitutional amendment allowing for a tax on “all incomes, from whatever source derived.”This set the stage for the individual income tax, a tax meant to fall on wealth and the wealthy. It was a small step, but it was a step. Capital and labor, wealth and wages, would each be paying the price of civilization. The corporate income and gift and estate taxes soon formed a troika of wealth taxes, though the individual income tax fell on upper-income wages as well.

Things changed. Over a century ...


Taxing Wealth Seriously, Edward J. Mccaffery Sep 2018

Taxing Wealth Seriously, Edward J. Mccaffery

Edward J McCaffery

The social and political problems of wealth inequality in America are severe and getting worse. A surprise is that the U.S. tax system, as is, is a significant cause of these problems, not a cure for them. The tax-law doctrines that allow those who already have financial wealth to live, luxuriously and tax-free, or to pass on their wealth tax-free to heirs, are simple. The applicable legal doctrines have been in place for nearly a century under the income tax, the primary social tool for addressing matters of economic inequality. The analytic pathways to reform are easy to see ...


It's Tax Not Trade (Stupid), Edward J. Mccaffery Sep 2018

It's Tax Not Trade (Stupid), Edward J. Mccaffery

Edward J McCaffery

Globalization, trade and other free market policies increase wealth. But the gains from trade are not being evenly spread among all citizens. People and politicians rage against foreigners. But it is the United States tax system, not trade, that ought to change, and wealthy Americans, not workers world-wide, who should be sharing the wealth. A nd it is the form of tax, not just its rate structure, that must reform, so that capital at last bears a meaningful share of the burden.


Bankruptcy For Banks: A Tribute (And Little Plea) To Jay Westbrook, David A. Skeel Jr. Sep 2018

Bankruptcy For Banks: A Tribute (And Little Plea) To Jay Westbrook, David A. Skeel Jr.

Faculty Scholarship at Penn Law

In this brief essay, to be included in a book celebrating the work of Jay Westbrook, I begin by surveying Jay’s wide-ranging contributions to bankruptcy scholarship. Jay’s functional analysis has had a profound effect on scholars’ understanding of key issues in domestic bankruptcy law, and Jay has been the leading scholarly figure on cross-border insolvency. After surveying Jay’s influence, I turn to the topic at hand: a proposed reform that would facilitate the use of bankruptcy to resolve the financial distress of large financial institutions. Jay has been a strong critic of this legislation, arguing that financial ...


Finishing The Job Best Practices For A Diverse Workforce In The Construction Industry V.8 Sept 2018, Susan Moir Scd Sep 2018

Finishing The Job Best Practices For A Diverse Workforce In The Construction Industry V.8 Sept 2018, Susan Moir Scd

Labor Studies Faculty Publication Series

This manual is a work in progress. It is produced by the Policy Group on Tradeswomen’s Issues (PGTI), a regional collaboration of researchers, government agencies, unions, community-based organizations, developers and contractors committed to increasing access for women and people of color to good paying careers in the construction trades. Our goal is to make our shared efforts and experiences helpful to industry leaders who share our commitment. It is based on best practices developed on major projects that came close, met, or exceeded workforce hiring goals. This manual and additional resources are available online at on the PGTI website ...


Making Sustainability Disclosure Sustainable, Jill E. Fisch Sep 2018

Making Sustainability Disclosure Sustainable, Jill E. Fisch

Faculty Scholarship at Penn Law

Sustainability is receiving increasing attention from issuers, investors and regulators. The desire to understand issuer sustainability practices and their relationship to economic performance has resulted in a proliferation of sustainability disclosure regimes and standards. The range of approaches to disclosure, however, limit the comparability and reliability of the information disclosed. The Securities & Exchange Commission (SEC) has solicited comment on whether to require expanded sustainability disclosures in issuer’s periodic financial reporting, and investors have communicated broad-based support for such expanded disclosures, but, to date, the SEC has not required general sustainability disclosure.

This Article argues that claims about the relationship ...


Taking Control Rights Seriously, Robert Rasmussen Sep 2018

Taking Control Rights Seriously, Robert Rasmussen

University of Southern California Legal Studies Working Paper Series

It is common to observe that investors receive both cash flow rights and control rights against a borrower. The crucial differences between these two “rights” is rarely focused on. Cash flow rights are rights in that they are legal entitlements. Outside of bankruptcy, failure to pay entitles a lender to resort to a legal remedy against the borrower. Inside of bankruptcy, the Bankruptcy Code structures the way in which these legal entitlements will be adjusted. Control rights are different. They do not confer direct power over the business, nor do they provide lenders with a judicial remedy that allows them ...


Cryptocurrencies: The New Species, Ors Penzes Sep 2018

Cryptocurrencies: The New Species, Ors Penzes

Nova Law Review

No abstract provided.


Economic Liberty "In A World Of Pure Imagination”: A Theoretical Analysis Of Willy Wonka, Natural Rights, And The New Age Of Innovation, Tammy M. Eick Sep 2018

Economic Liberty "In A World Of Pure Imagination”: A Theoretical Analysis Of Willy Wonka, Natural Rights, And The New Age Of Innovation, Tammy M. Eick

Nova Law Review

No abstract provided.


The Diminishing Duty Of Loyalty, Julian Velasco Sep 2018

The Diminishing Duty Of Loyalty, Julian Velasco

Journal Articles

Fiduciary duties comprise an integral part of corporate law. It is generally understood that directors owe the corporation and its shareholders two fiduciary duties: the duty of care and the duty of loyalty. Although both duties are firmly established in corporate law, they are not treated equally. It is generally understood that the duty of loyalty is enforced far more rigorously than the duty of care. The justification for this dichotomy is twofold. First, differential treatment is appropriate because of the relative urgencies of the underlying subject matter: loyalty issues pose greater risks than do care issues. Second, the deference ...


The Death Of The Income Tax (Or, The Rise Of America's Universal Wage Tax), Edward J. Mccaffery Aug 2018

The Death Of The Income Tax (Or, The Rise Of America's Universal Wage Tax), Edward J. Mccaffery

University of Southern California Legal Studies Working Paper Series

In 1913, with whispers of progressive politics in the air, Americans ratified a Constitutional amendment allowing for a tax on “all incomes, from whatever source derived.”This set the stage for the individual income tax, a tax meant to fall on wealth and the wealthy. It was a small step, but it was a step. Capital and labor, wealth and wages, would each be paying the price of civilization. The corporate income and gift and estate taxes soon formed a troika of wealth taxes, though the individual income tax fell on upper-income wages as well.

Things changed. Over a century ...


The International Provisions Of The Tcja: Six Results After Six Months, Reuven S. Avi-Yonah Aug 2018

The International Provisions Of The Tcja: Six Results After Six Months, Reuven S. Avi-Yonah

Law & Economics Working Papers

Over six months have passed since the enactment of the TCJA, so it is now possible to reach some preliminary conclusions on its impact. The main ones are:

1. The transition tax plus anticipated GILTI tax minus territoriality have resulted in higher GAAP effective tax rates for 2017. In some cases they approach 35% for large multinationals with a lot of offshore income. For the first six months of 2018, however, overall corporate tax revenues are sharply down because of the 21% rate plus expensing. This is the exact reverse of the situation before TCJA in which MNEs showed very ...


Between Power Politics And International Economic Law: Asian Regionalism, The Trans-Pacific Partnership And U.S.-China Trade Relations, Jiangyu Wang Aug 2018

Between Power Politics And International Economic Law: Asian Regionalism, The Trans-Pacific Partnership And U.S.-China Trade Relations, Jiangyu Wang

Pace International Law Review

This Article examines the interactions of power politics and international economic law in the development of regionalism in Asia, particularly in the context of United States-China trade relations. It argues that the process of regional economic integration in Asia has been slow-moving because of the politicization of regionalism by power rivalries. China’s initial regional integration initiatives apparently ignored the United States, a superpower which has always been a major player in Asia and an indispensable part of the region’s economic process. The United States-led Trans-Pacific Partnership was allegedly designed to exclude China, Asia’s largest economy. On the ...


Campaign Finance Transparency Affects Legislators' Election Outcomes And Behavior, Abby Wood, Christian R, Grose Aug 2018

Campaign Finance Transparency Affects Legislators' Election Outcomes And Behavior, Abby Wood, Christian R, Grose

University of Southern California Legal Studies Working Paper Series

Do audits by executive agencies impact the behavior of those audited? Does revealing negative information about candidates affect electoral results and behavior? Institutions that encourage transparency, such as campaign finance disclosure, influence mass and elite behavior. We theorize that greater transparency provides information to voters during legislative campaigns about the character of candidates, and that information affects voter and legislator behavior. The U.S. Federal Election Commission conducted random audits of 10 percent of U.S. House members in the 1970s. This FEC program is the only randomized experiment an agency has conducted on federal legislators and their electorates. We ...


Intellectual Property, Income Inequality, And Societal Interconnectivity In The United States: Social Calculus And The Historical Distribution Of Wealth, Brenda Reddix-Smalls Aug 2018

Intellectual Property, Income Inequality, And Societal Interconnectivity In The United States: Social Calculus And The Historical Distribution Of Wealth, Brenda Reddix-Smalls

North Carolina Central University Science & Intellectual Property Law Review

Scant attention has been paid to the historical trajectory and effect of the United States’ intellectual property regimes—patenting, copyrighting, and trademarking—as devices which implement racialized property grants and further income and social inequality. This article focuses on just that and argues that the United States Constitution was designed as a property-based and economically-driven social compact which identifies intellectual property interests through a racialized lens. From this view, it is further argued that the Intellectual Property Clause, which itself was designed to incentivize invention and innovation, protected the racialized property interests of the governing elites of the newly established ...


Citizens United As Bad Corporate Law, Leo E. Strine Jr., Jonathan Macey Aug 2018

Citizens United As Bad Corporate Law, Leo E. Strine Jr., Jonathan Macey

Faculty Scholarship at Penn Law

In this Article we show that Citizens United v. FEC, arguably the most important First Amendment case of the new millennium, is predicated on a fundamental misconception about the nature of the corporation. Specifically, Citizens United v. FEC, which prohibited the government from restricting independent expenditures for corporate communications, and held that corporations enjoy the same free speech rights to engage in political spending as human citizens, is grounded on the erroneous theory that corporations are “associations of citizens” rather than what they actually are: independent legal entities distinct from those who own their stock. Our contribution to the literature ...


Effects Of Senate Bill 4 On Wage-Theft: Why All Workers Are At Risk In Low-Income Occupations, Daniella Salas-Chacon Aug 2018

Effects Of Senate Bill 4 On Wage-Theft: Why All Workers Are At Risk In Low-Income Occupations, Daniella Salas-Chacon

The Scholar: St. Mary's Law Review on Race and Social Justice

Abstract forthcoming


The Salience Theory Of Consumer Financial Regulation, Natasha Sarin Aug 2018

The Salience Theory Of Consumer Financial Regulation, Natasha Sarin

Faculty Scholarship at Penn Law

Prior to the financial crisis, banks’ fee income was their fastest-growing source of revenue. This revenue was often generated through nefarious bank practices (e.g., ordering overdraft transactions for maximal fees). The crisis focused popular attention on the extent to which current regulatory tools failed consumers in these markets, and policymakers responded: A new Consumer Financial Protection Bureau was tasked with monitoring consumer finance products, and some of the earliest post-crisis financial reforms sought to lower consumer costs. This Article is the first to empirically evaluate the success of the consumer finance reform agenda by considering three recent price regulations ...


Shareholder Collaboration, Jill E. Fisch, Simone M. Sepe Jul 2018

Shareholder Collaboration, Jill E. Fisch, Simone M. Sepe

Faculty Scholarship at Penn Law

Two models dominate the debate on the theory of the firm. Under the management-power model, decision-making power exclusively belongs to corporate insiders (officers and directors). The competing shareholder-power model contemplates increasing shareholder power to limit managerial authority. Both models are focused on managerial agency costs and address the appropriate allocation of power between insiders and shareholders to minimize these costs. Both models also assume that insiders and shareholders are engaged in a competitive struggle for corporate power.

Corporate practice has moved on, however. Increasingly, the insider-shareholder dynamic is collaborative, not competitive. This Article traces the development of insider-shareholder collaboration and ...


Behavioral Finance, Decumulation And The Regulatory Strategy For Robo-Advice, Tom Baker, Benedict Dellaert Jul 2018

Behavioral Finance, Decumulation And The Regulatory Strategy For Robo-Advice, Tom Baker, Benedict Dellaert

Faculty Scholarship at Penn Law

This working paper surveys the decumulation services offered by investment robo-advisors as a case study with which to examine regulatory and market structure issues raised by automated financial advice. We provide a short introduction to decumulation, describing some of the uncertainties involved in identifying optimal decumulation strategies and sketching a few of the ‘rules of thumb’ that financial advisors have developed in this area in the face of this uncertainty. Next we describe behavioral effects that could inhibit consumers from following an optimal decumulation strategy, concluding that, left to their own devices, consumers are likely to make sub-optimal decumulation decisions ...


Teaching The Lochner Era, Barry Cushman Jul 2018

Teaching The Lochner Era, Barry Cushman

Journal Articles

This article, prepared for the St. Louis University Law Journal's issue on “Teaching the Fourteenth Amendment,” develops a taxonomy of the Supreme Court's economic substantive due process jurisprudence during the so-called “Lochner Era” of the late-19th and early-20th centuries, and offers an assessment of the trajectory and mechanisms of the decline of that body of doctrine.


Intellectual Property And The Economics Of Product Differentiation, Christopher S. Yoo Jul 2018

Intellectual Property And The Economics Of Product Differentiation, Christopher S. Yoo

Faculty Scholarship at Penn Law

The literature applying the economics of product differentiation to intellectual property has been called the most important development in the economic analysis of IP in years. Relaxing the assumption that products are homogeneous yields new insights by explaining persistent features of IP markets that the traditional approaches cannot, challenging the extent to which IP allows rightsholders to earn monopoly profits, allowing for sources of welfare outside of price-quantity space, which in turn opens up new dimensions along which intellectual property can compete. It also allows for equilibria with different welfare characteristics, making the tendency towards systematic underproduction more contingent and ...


How Liability Insurers Protect Patients And Improve Safety, Tom Baker, Charles Silver Jul 2018

How Liability Insurers Protect Patients And Improve Safety, Tom Baker, Charles Silver

Faculty Scholarship at Penn Law

Forty years after the publication of the first systematic study of adverse medical events, there is greater access to information about adverse medical events and increasingly widespread acceptance of the view that patient safety requires more than vigilance by well-intentioned medical professionals. In this essay, we describe some of the ways that medical liability insurance organizations contributed to this transformation, and we catalog the roles that those organizations play in promoting patient safety today. Whether liability insurance in fact discourages providers from improving safety or encourages them to protect patients from avoidable harms is an empirical question that a survey ...


The Economics Of Immigration Reform, Howard F. Chang Jul 2018

The Economics Of Immigration Reform, Howard F. Chang

Faculty Scholarship at Penn Law

In this article, I draw upon economic theory and recent empirical work on the economic and fiscal effects of immigration to evaluate some recent proposals for immigration reform in terms of their effects on the economic welfare of natives in the United States. In particular, I consider the Reforming American Immigration for a Strong Economy (RAISE) Act, a bill that would cut immigration to half of its current level. President Donald Trump has endorsed the RAISE Act and has insisted that many of its provisions be part of any legislation legalizing the status of unauthorized immigrants granted relief under the ...


The Cost Of Legal Restrictions On Experience Rating, Levon Barseghyan, Francesca Molinari, Darcy Steeg Morris, Joshua C. Teitelbaum Jul 2018

The Cost Of Legal Restrictions On Experience Rating, Levon Barseghyan, Francesca Molinari, Darcy Steeg Morris, Joshua C. Teitelbaum

Georgetown Law Faculty Publications and Other Works

We investigate the cost of legal restrictions on experience rating in auto and home insurance. The cost is an opportunity cost as experience rating can mitigate the problems associated with unobserved heterogeneity in claim risk, including mispriced coverage and resulting demand distortions. We assess this cost through a counterfactual analysis in which we explore how risk predictions, premiums, and demand in home insurance and two lines of auto insurance would respond to unrestricted multiline experience rating. Using claims data from a large sample of households, we first estimate the variance-covariance matrix of unobserved heterogeneity in claim risk. We then show ...


The Certification Paradox, Jonathan M. Barnett Jul 2018

The Certification Paradox, Jonathan M. Barnett

University of Southern California Legal Studies Working Paper Series

It is commonly observed that certification intermediaries mitigate informational asymmetries by “lending” reputational capital to support transacting parties’ quality commitments. However, this proposition is challenged by cases in which well-established intermediaries have failed to detect fraud, misrepresentation and other misbehavior. The “certification paradox” provides a more nuanced account that anticipates both the general success, and periodic failure, of certification intermediaries. Transacting parties minimize search and evaluation costs by using a small number of certification intermediaries with large stocks of reputational capital. Incumbent certifiers are substantially protected by entrants’ high costs of accumulating sufficient reputational capital and users’ high costs of ...