Law and Economics Commons^™

Valuing Cultural Differences In Behavioral Economics, Justin D. Levinson, Kaiping Peng

ExpressO

Behavioral economic research has tended to ignore the role of cultural differences in economic decision-making. The authors suggest that a systematic bias affects existing behavioral economic theory-- cognitive biases are often assumed to be universal. To examine how cultural background informs economic decision-making, and to test framing effects, morality effects, and out-group effects in a cross-cultural study, the authors conducted an experiment in the United States and China. The experiment was designed to test cultural and cognitive effects on a fundamental economic phenomenon-- how people estimate the financial values of objects over time.

Results of the experiment demonstrated dramatic cultural …

Formal Versus Informal Allocation Of Land In A Commons: The Case Of The Macarthur Park Sidewalk Vendors, Gregg Kettles

ExpressO

Sidewalk vendors are becoming a more common presence in cities in Latin America and the United States. Vendor demand for the best sidewalk vending spots increasingly exceeds supply, making necessary a system to allocate space in what is essentially an open access commons. This paper presents an empirical study of two very different systems of allocation that have been adopted in the city of Los Angeles, California, a formal one imposed by the city on legal vendors when they were unable to come up with one on their own, and a second that was embraced by illegal vendors across the …

Commodification And Contract Formation: Placing The Consideration Doctrine On Stronger Foundations, David S. Gamage

ExpressO

Under the traditional consideration doctrine, a promise is only legally enforceable if it is made in exchange for something of value. This doctrine lies at the heart of contract law, yet it lacks a sound theoretical justification – a fact that has confounded generations of scholars and created a mess of case law.

This paper argues that the failure of traditional justifications for the doctrine comes from two mistaken assumptions. First, previous scholars have assumed that anyone can back a promise with nominal consideration if they wish to do so. We show how social norms against commodification limit the availability …

Buried Online: State Laws That Limit E-Commerce In Caskets, Jerry Ellig, Asheesh Agarwal

ExpressO

Consumers seeking to purchase caskets online could benefit from the Supreme Court’s 2005 decision that states cannot discriminate against interstate direct wine shipment. Federal courts have reached conflicting conclusions when asked whether state laws requiring casket sellers to be licensed funeral directors violate the U.S. Constitution’s Due Process Clause. In Powers v. Harris, the 10th Circuit even offered an unprecedented ruling that economic protectionism is a legitimate state interest that can justify otherwise unconstitutional policies. In Granholm v. Heald, however, the Supreme Court declared that discriminatory barriers to interstate wine shipment must be justified by a legitimate state interest, and …

Entrenched Managers & Corporate Social Responsibility, Shane M. Shelley

ExpressO

A growing number of academics have suggested U.S. corporate governance laws bestow too much power on managers. Much of the research focuses on the relationship between corporate governance arrangements, which supply a means to managerial power, and the financial performance of corporations. This exclusive focus on financial performance may be misguided. Although profits serve as a proxy for the benefits corporations provide society, they do not always adequately reflect the costs of the activities that generated them. In this sense, financial performance may not give an accurate, or at least complete, picture of the real value of corporations. Whether managers …

The Focused Attention Of Others: A Conceptual And Normative Model Of Personal And Legal Privacy, Jeffery L. Johnson

ExpressO

The article defends an analysis of privacy as those areas of a person’s life where s/he is entitled to immunity from the illegitimate focused attention of others. It goes on to argue that such a model encompasses the concept of privacy in colloquial and legal contexts. The article concludes with an analysis of the normative value of privacy.

Global Pharmaceutical Patent Law In Developing Countries- Amending Trips To Promote Access For All, Angela J. Anderson

ExpressO

This comment will analyze the need to amend and revise the current global pharmaceutical patent system under TRIPS to take into account the needs of developing countries and overall public health. This comment will emphasize that the current international trade rules, which although administered by the WTO, are dictated by developed country governments and powerful pharmaceutical companies, and therefore, without reform will further diminish the access of poor people in developing countries to vital medicines. Part II of this comment will provide a general overview of the international trade law governing patents on pharmaceuticals focusing specifically on the development of …

Regulatory Status Of Voip In The Post-Brand X World, Jerry Ellig

ExpressO

During the past several years, the Federal Communications Commission has engaged in a series of rulemakings to determine the regulatory status of Voice over Internet Protocol (VoIP). The Supreme Court’s Brand X decision clarifies that even if the FCC’s determination conflicts with that of a court, the FCC’s judgment holds sway as long as the decision is reasonable. We believe that VoIP should be classified as an information service, rather than a telecommunications service, for several reasons. First, the Internet Protocol nature of VoIP technology means that it functions like an information service, rather than a telecommunications service. Second, in …

Are We Unnecessarily Serving Up Civil Liberties On A Patriot Platter?, Kyle A. Clark

ExpressO

This paper seeks to identify the general cognitive biases and overall measurement errors inherent in recent studies seeking to measure the effects of terrorism. Such biases lead to unprincipled conclusions founded upon incomplete information. These problems are exacerbated by inaccurate measures of the true impact of terrorism on the economy, the human psyche, policy-making and the world community. Such measurement errors severely diminish the probative value of the studies and lead to merely speculative conclusions. The goal of this paper is to shed light on these inaccurate conclusions in the hope that future legislation and practices aimed at curbing terrorism …

Before Competition: Origins Of The Internal Affairs Doctrine, Frederick Tung

ExpressO

To the modern corporate scholar and lawyer, the internal affairs doctrine seems in the natural order of things. Corporate law is state law. Each corporation is formed under the law of its chosen state of incorporation. To ensure consistency and predictability, that law must govern the corporation’s internal affairs. Yet the origin of such a doctrine is puzzling. Respecting the firm’s choice of corporate law, the doctrine forces state legislatures into competition to attract incorporations. But how did legislatures come to concede their traditional territorial regulatory authority, and instead agree to compete? This Article solves this puzzle, offering the first …

Global Pharmaceutical Patent Law In Developing Countries- Amending Trips To Promote Access For All, Angela J. Anderson

ExpressO

This comment will analyze the need to amend and revise the current global pharmaceutical patent system under TRIPS to take into account the needs of developing countries and overall public health. This comment will emphasize that the current international trade rules, which although administered by the WTO, are dictated by developed country governments and powerful pharmaceutical companies, and therefore, without reform will further diminish the access of poor people in developing countries to vital medicines. Part II of this comment will provide a general overview of the international trade law governing patents on pharmaceuticals focusing specifically on the development of …

“It’S The [Tort System], Stupid:” Consumer Deductibles; How To More Equitably Distribute The Risks Of Medical Malpractice And Adequately Compensate Victims Without Statutory Damage Caps., Bradford Luke Ledbetter

ExpressO

No abstract provided.

Justice And The Evolution Of The Common Law, Richard O. Zerbe

ExpressO

Empirical evidence shows, and theory suggests, that the common law tends toward economic efficiency. While various theories attempt to explain this phenomenon, no single one is well accepted. This article provides a simple explanation. It suggests that efficiency arises as a matter of justice. Justice is sought because justice-seeking is a social norm with its own sanctioning force. Justice is sought and efficiency achieved because they substantially overlap. Limitations in the traditional definition of efficiency, however, ensure that efficiency is not congruent with justice. This paper suggests that it can be: the congruence of justice and efficiency will be greater …

Legislation And Legitimation: Congress And Insider Trading In The 1980s, Thomas W. Joo

ExpressO

Legislation and Legitimation:

Congress and Insider Trading in the 1980s

Abstract

Orthodox corporate law-and-economics holds that American corporate and securities regulation has evolved inexorably toward economic efficiency. That position is difficult to square with the fact that regulation is the product of government actors and institutions. Indeed, the rational behavior assumptions of law-and-economics suggest that those actors and institutions would tend to place their own self-interest ahead of economic efficiency. This article provides anecdotal evidence of such self-interest at work. Based on an analysis of legislative history—primarily Congressional hearings—this article argues that Congress had little interest in the economic policy …

Implementation Of Sarbanes-Oxley: New Rules For Lawyers And What Lawyers Think, Olga Yevglevskaya-Wayne

ExpressO

This paper discusses practical implications of Sarbanes-Oxley for lawyers. Emphasis is on the new federal rules of professional responsibility the Act sets up. The paper includes the views of various renowned practitioners interpreting and using these rules. The paper also contains suggestions for how the Securities and Exchange Commission could potentially improve those areas that are proving problematic for attorneys so as to better effectuate the purpose of this major new law, in light of its legislative history and intent, which are also discussed in the paper.

Recalibrating The War On Terror By Enhancing Development Practices In The Middle East, Kevin J. Fandl

ExpressO

This research paper suggests that the cart has been placed before the horse, that democratization and open markets in the Middle East are more likely the result of effective development than the catalyst for it. The war on terror has been justified by the United States as an effective means of reducing the possibility of terrorist attacks. This paper analyzes the validity of those justifications by reviewing the linkage between democracy and economic growth and that between democracy and peace.

The paper begins by hypothesizing that the war on terror and forced democratization of the Middle East are leading to …

Identity And Market For Loyalties Theories: The Case For Free Information Flow In Insurgent Iraq, Paul D. Callister

ExpressO

When monopoly control over the flow of information is lost, the unavoidable consequence is destabilization. Information flow through a society can be understood as a market—not a market exchanging cash for goods, but loyalty for identity. Hence the market is called the “Market for Loyalties"--so labeled by an economics of information theory first developed by Prof. Monroe Price, of Cardozo Law School, and Director of the Howard M. Squadron Program in Law, Media and Society, to explain government regulation of radio, TV, cable and satellite broadcasting.

In post-invasion Iraq, Saddam Hussein lost or monopoly control over the information market, where …

The Recognition Of Same-Sex Relationships: Comparative Institutional Analysis, Contested Social Goals, And Strategic Institutional Choice, Nancy J. Knauer

ExpressO

The emerging field of comparative institutional analysis (CIA) has much to offer public policy analysts. However, the failure of CIA to address the dynamic process through which social goals are articulated limits the scope of its application to the largely prescriptive pronouncements of legal scholars. By examining the movement for equal recognition of same-sex relationships, this Essay builds on the basic observations of CIA and introduces a new dimension, namely the dynamic process through which social goals are articulated and social change is pursued. The acknowledgment that the production of social goals involves institutional behavior, as well as multiple sites …

Fighting Fraud On Faith: Federal Securities Regulation And The Limits Of Disclosure, Shannon R. Selden

ExpressO

In the past ten years, Congress passed three major reform acts to address two diametrically opposed concerns: It first restrained what it believed was an excess of securities fraud litigation, then responded to an explosion of securities fraud. This Article contends that despite the competing provocations and ambitions of the reforms, they share an unwarranted adherence to the principle of disclosure as the best means to attack market malfeasance: The Article examines the basis for and consequences of that undeserved legislative fidelity. Applying behavioral economics and cultural theory to the recent legislation and its underpinnings, the Article concludes that a …

Breaking The Bank: Revisiting Central Bank Of Denver After Enron And Sarbanes-Oxley, Celia Taylor

ExpressO

No abstract provided.

Prisons Of The Mind: Social Value And Economic Inefficiency In The Criminal Justice Response To Mental Illness, Amanda C. Pustilnik

ExpressO

This Article employs a “New Chicago School” law and economics analysis to examine why the staggering economic and human costs of channeling non-violent mentally ill adults and children into the criminal system not only are countenanced but embraced by voters and lawmakers. Analyzing legislation, statements by lawmakers and jurors, and historical sources, the Article contends that certain social value is created through the incarceration of this marginalized group. That is, there is a taste for the punishment of these people that incarceration satisfies but that therapeutic alternatives would not. The willingness to pay for this contestable taste keeps entrenched this …

Do Institutions Really Matter? Assessing The Impact Of State Judicial Structures On Citizen Litigiousness, Jeff L. Yates, Paul Brace, Holley Tankersley

ExpressO

No abstract provided.

Deterring Roper’S Juveniles: Why Immature Criminal Youth Require The Death Penalty More Than Adults – A Law & Economics Approach, Moin A. Yahya

ExpressO

In Roper v. Simmons, the United States Supreme Court declared the death penalty for juveniles unconstitutional. It relied on three reasons, one of which concerns this article, namely the theory that juveniles are less culpable and deterrable than adults. The Court relied on the American Medical Association’s amicus brief which purported to show scientifically that juveniles had less developed brains than adults. The Court characterized juveniles as being risk-lovers who highly preferred the present over the future, who loved gains no matter how risky but did not care for losses, and who could not engage in proper cost-benefit analysis, because …

How And Understanding Of The Second Personal Standpoint Can Change Our Understanding Of The Law: Hart's Unpublished Response To Exclusive Legal Positivism, Robin B. Kar

ExpressO

This Article describes recent developments in moral philosophy on the “second personal standpoint,” and argues that they will have important ramifications for legal thought. Moral, legal and political thinkers have, for some time now, understood important distinctions between the first personal perspective (of deliberation) and the third personal perspective (of observation, cause and effect), and have plumbed these distinctions to great effect in their thought. This distinction is, in fact, implicit the law and economics movement’s “rational actor” model of decision, which currently dominates much legal academic thought. Recent developments in value theory due to philosopher Stephen Darwall suggest, however, …

A Foundation For International Taxation: The Institutional Competence Of Nations, Eric T. Laity

ExpressO

This Article proposes a conceptual foundation for the field of international tax law. The Article refers to this foundation as the institutional competence of nations in global economic development. A nation’s institutional competence is its discretion to make decisions in pursuit of our collective goal of global economic development, discretion that is subject to a number of standards and limitations.

The Article constructs the institutional competence of nations in global economic development from institutional economics, simple game theory, and the literature on social norms. The Article expresses the institutional competence of nations through standards and limitations that reduce the abuse …

Strategic Judging Under The United States Sentencing Guidelines: Positive Political Theory And Evidence, Max M. Schanzenbach, Emerson Tiller

Public Law and Legal Theory Papers

We present a positive political theory of criminal sentencing and test it using data from the United States Sentencing Commission. The theory posits that, faced with appellate review, federal district court judges applying the Sentencing Guidelines strategically use "sentencing instruments" -- fact-based and law-based determinations made during the sentencing phase -- to maximize the judges' sentencing preferences subject to the Guideline’s constraints. Specifically, district court judges are more likely to use law-based departures when they share the same party ideology with the overseeing circuit court than when there is no party alignment between the two courts. Fact-based adjustments, on the …

An Economic Theory Of Infrastructure And Commons Management, Brett M. Frischmann

ExpressO

In this article, Professor Frischmann combines a number of current debates across many disciplinary lines, all of which examine from different perspectives whether certain resources should be managed through a regime of private property or through a regime of open access. Frischmann develops and applies a theory that demonstrates there are strong economic arguments for managing and sustaining openly accessible infrastructure. The approach he takes differs from conventional analyses in that he focuses extensively on demand-side considerations and fully explores how infrastructure resources generate value for consumers and society. As a result, the theory brings into focus the social value …

The Customary International Law Game, Joel P. Trachtman, George Norman

ExpressO

Structural realists in political science and some rationalist legal scholars argue that customary international law cannot affect state behavior: that it is “epiphenomenal.” This article develops a game theoretic model of a multilateral prisoner’s dilemma in the customary international law context that shows that it is plausible that states would comply with customary international law under certain circumstances. Our model shows that these circumstances relate to: (i) the relative value of cooperation versus defection, (ii) the number of states effectively involved, (iii) the extent to which increasing the number of states involved increases the value of cooperation or the detriments …

The New Deterrence: Crime And Policy In The Age Of Globalization, Patrick Keenan

ExpressO

Globalization has made it much easier for criminal activity to cross borders, but deterrence theory has not kept up with this changed reality. I draw insights from both law-and-economics and criminology literature to enrich our understanding of deterrence. I ground my theoretical discussion in the real-world problem of sex tourism as an example of the kind of unwanted activity that now crosses borders and has complicated our understanding of deterrence. I focus on two issues central to deterrence that have not gotten sufficient scholarly attention: the phenomenon of displacement and the role of status. I argue that informal sanctions, as …

The North Korean Nuclear Crisis: Past Failures And Present Solutions, Morse Tan

ExpressO

North Korea has recently announced that it has developed nuclear weapons and has pulled out of the six-party talks. These events do not emerge out of a vacuum, and this article lends perspective based on an interdisciplinary lens that seeks to grapple with the complexities and provide constructive approaches based on this well-researched understanding. This article analyzes political, military, historical, legal and other angles of this international crisis.

Past dealings with North Korea have been unfruitful because other nations do not recognize the ties between North Korean acts and its ideology and objectives. For a satisfactory resolution to the current …