Law and Economics Commons^™

Antisocial Innovation, Christopher Buccafusco, Samuel N. Weinstein

Articles

Innovation is a form of civic religion in the United States. In the popular imagination, innovators are heroic figures. Thomas Edison, Steve Jobs, and (for a while) Elizabeth Holmes were lauded for their vision and drive, and seen to embody the American spirit of invention and improvement. For their part, politicians rarely miss a chance to trumpet their vision for boosting innovative activity. Popular and political culture alike treat innovation as an unalloyed good. And the law is deeply committed to fostering innovation, spending billions of dollars a year to make sure society has enough of it. But this sunny …

Regulating Driving Automation Safety, Matthew Wansley

Articles

Over forty thousand people die in motor vehicle crashes in the United States each year, and over two million are injured. The careful deployment of driving automation systems could prevent many of these deaths and injuries, but only if it is accompanied by effective regulation. Conventional vehicle safety standards are inadequate because they can only test how technology performs in a controlled environment. To assess the safety of a driving automation system, regulators must observe how it performs in a range of unpredictable, real world edge cases. The National Highway Traffic Safety Administration (NHTSA) is trying to adapt by experimenting …

The Federal Reserve's Mandates, David T. Zaring, Jeffery Y. Zhang

Articles

Solutions to systemic problems such as climate change and racial inequities have eluded policymakers for decades. In searching for creative solutions, some policymakers have recently thought about expanding the Federal Reserve’s core set of macroeconomic mandates to tackle these issues. But there are real questions about whether that can be done from a legal perspective and whether that should be done from a policy perspective.

Taming Wildcat Stablecoins, Gary B. Gorton, Jeffery Y. Zhang

Articles

Cryptocurrencies, including stablecoins, are all the rage. Investors are exploring ways to profit off of them. Governments are considering ways to regulate them. While the technology underlying cryptocurrencies is new, the economics is centuries old. Oftentimes, lawmakers are so focused on understanding a new technological innovation that they fail to ask what exactly is being created.

In this case, the new technology has recreated circulating private money in the form of stablecoins, which are similar to the banknotes that circulated in many countries during the nineteenth century. The implication is that stablecoin issuers are unregulated banks. Based on lessons learned …

A Further Look At A Hague Convention On Concurrent Proceedings, Paul Herrup, Ronald A. Brand

Articles

The current project of the Hague Conference on Private International Law has reached a critical juncture that requires careful consideration of the terms that delineate the scope of the proposed convention. Work to date has not followed the mandate of the Council on General Affairs and Policy to produce a convention that would deal with concurrent proceedings, understood as including pure parallel proceedings and related actions. In two previous articles we have addressed the practical needs that should be addressed by the concurrent proceedings project and the general architecture of such a convention. The process is now mired in terminological …

Provisional Measures In Aid Of Arbitration, Ronald A. Brand

Articles

The success of the New York Convention has made arbitration a preferred means of dispute resolution for international commercial transactions. Success in arbitration often depends on the extent to which a party may secure assets, evidence, or the status quo between parties prior to the completion of the arbitration process. This makes the availability of provisional measures granted by either arbitral tribunals or by courts fundamental to the arbitration. In this Article, I consider the existing legal framework for provisional measures in aid of arbitration, with particular attention to the sources of the rules providing for such measures. Those sources …

Climate Justice In The Anthropocene And Its Relationship With Science And Technology: The Importance Of Ethics Of Responsibility, Paolo Davide Farah, Alessio Lo Giudice

Articles

Climate change is a global phenomenon. Therefore, globalization is the necessary hermeneutical horizon to develop an analysis of the metamorphosis climate change could cause at a political, social, and economic level. Within this horizon, this Article shows how the relationship between the concept of the Anthropocene epoch and the request for justice allows for framing a climate-justice and intergenerational equity–focused political interpretation of the effects of climate change. In order to avoid reducing such an interpretation to merely an ideological critique of capitalism, the conception of climate justice needs to be grounded in a rational, ethical model. This Article proposes …

Public Ownership And The Wto In A Post Covid-19 Era: From Trade Disputes To A 'Social' Function, Paolo Davide Farah, Davide Zoppolato

Articles

Public ownership is closely bound to the need of the government to protect and guarantee the well-being of its citizens. Where the market cannot, or does not want to, provide goods and services, the State uses different tools to intervene, influence, and control some aspects of the private sphere of expression of its citizens in the name and interest of the collectivity. Although, in the past century, this behavior was accepted as one of the expressions of the public authority and part of the social contract, this perception has shifted partially in accordance with the wave of privatization programs initiated …

Reforming Shareholder Claims In Isds, Julian Arato, Kathleen Claussen, Jaemin Lee, Giovanni Zarra

Articles

ISDS stands alone in empowering shareholders to bring claims for reflective loss (SRL) – meaning claims over harms allegedly inflicted upon the company, but which somehow affect share value. National systems of corporate law and public international law regimes generally bar SRL claims for strong policy reasons bearing on the efficiency and fairness of the corporate form. Though not necessitated by treaty text, nor beneficial in policy terms, ISDS tribunals nevertheless allow shareholders broad and regular access to seek relief for reflective loss. The availability of SRL claims in ISDS ultimately harms States and investors alike, imposing surprise ex post …

Title Theft, Stewart E. Sterk

Articles

Real property owners across the country have been targeted by scammers who prepare deeds purporting to convey title to property the scammers do not own. Sometimes, the true owners are entirely unaware of these bogus transfers. In other instances, the scammers use misrepresentation to induce unsophisticated owners to sign documents they do not understand.

Property doctrine protects owners against forgery and fraud—the primary vehicles scammers use in their efforts to transfer title. Owners enjoy protection not only against the scammers themselves, but generally against unsuspecting purchasers to whom the scammers transfer purported title.

Recovery of title, however, involves costs and …

A More Capacious Concept Of Church, Philip Hackney, Samuel D. Brunson

Articles

United States tax law provides churches with extra benefits and robust protection from IRS enforcement actions. Churches and religious organizations are automatically exempt from the income tax without needing to apply to be so recognized and without needing to file a tax return. Beyond that, churches are protected from audit by stringent procedures. There are good reasons to consider providing a distance between church and state, including the state tax authority. In many instances, Congress granted churches preferential tax treatment to try to avoid excess entanglement between church and state, though that preferential treatment often just shifts the locus of …

The Futures Of Law, Lawyers, And Law Schools: A Dialogue, Sameer M. Ashar, Benjamin H. Barton, Michael J. Madison, Rachel F. Moran

Articles

On April 19 and 20, 2023, Professors Bernard Hibbitts and Richard Weisberg convened a conference at the University of Pittsburgh School of Law titled “Disarmed, Distracted, Disconnected, and Distressed: Modern Legal Education and the Unmaking of American Lawyers.” Four speakers concluded the event with a spirited conversation about themes expressed during the proceedings. Distilling a lively two days, they asked: what are the most critical challenges now facing US legal education and, by extension, lawyers and the communities they serve? Their agreements and disagreements were striking, so much so that Professors Hibbitts and Weisberg invited those four to extend their …

Dynamic Pricing Algorithms, Consumer Harm, And Regulatory Response, Alexander Mackay, Samuel Weinstein

Articles

Pricing algorithms are rapidly transforming markets, from ride-sharing, to air travel, to online retail. Regulators and scholars have watched this development with a wary eye. Their focus so far has been on the potential for pricing algorithms to facilitate explicit and tacit collusion. This Article argues that the policy challenges pricing algorithms pose are far broader than collusive conduct. It demonstrates that algorithmic pricing can lead to higher prices for consumers in competitive markets and even in the absence of collusion. This consumer harm can be initiated by a single firm employing a superior pricing algorithm. Higher prices arise from …

Ma'ii And Nanaboozhoo Fistfight In Heaven, Tamera Begay, Matthew Fletcher

Articles

In the form of a cute, cuddly, and innocent waabooz, Nanaboozhoo munched on the chewy, bitter Tłohdá’ákáłiitsoh he found everywhere in this⁣ land, far from his own. Although, it was a bit dry. In this land, Dinétah,⁣ Nanaboozhoo thought he could see forever. There were few trees. The sky⁣ was bright blue and limitless. The air smelled like a kind of dirt he had never⁣ experienced. And, boy howdy, was it dry. He couldn’t smell water for the⁣ life of him. But there was water, to be sure, or else there wouldn’t be this⁣ bush.

Too Much Of A Good Thing? A Governing Knowledge Commons Review Of Abundance In Context, Michael J. Madison, Brett M. Frischmann, Madelyn Sanfilippo, Katherine J. Strandburg

Articles

The economics of abundance, along with the sociology of abundance, the law of abundance, and so forth, should be re-framed, linked, and situated in a common context for empirical rather than conceptual research. Abundance may seem to be a new, big thing, between anxiety over information overload, Big Data, and related technological disruptions. But scholars know that abundance is an ancient phenomenon, which only seemed to disappear as twentieth century social science focused on scarcity instead. Restoring the study of abundance, and figuring out how to solve the problems that abundance might create, means shedding disciplinary blinders and going back …

A Hague Parallel Proceedings Convention: Architecture And Features, Paul Herrup, Ronald A. Brand

Articles

In Paul Herrup and Ronald A. Brand, A Hague Convention on Parallel Proceedings, 63 Harvard International Law Journal Online 1(2022), available at https://harvardilj.org/2022/02/a-hague-convention-on-parallel-proceedings/ and https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3894502, we argued that the Hague Conference on Private International Law should not undertake a project to require or prohibit exercise of original jurisdiction in national courts. Rather, the goal of current efforts should be to improve the concentration of parallel litigation in a “better forum,” in order to achieve efficient and complete resolution of disputes in transnational litigation. The Hague Conference is now taking this path. As the Experts Group and Working Group …

Government By Code? Blockchain Applications To Public Sector Governance, Pedro Bustamante, Meina Cai, Marcela Gomez, Colin Harris, Prashabnt Krishnamurthy, Wilson Law, Michael J. Madison, Ilia Murtazashvili, Jennifer Brick Murtazashvili, Tymofiy Mylovanov, Nataliia Shapoval, Annette Vee, Martin B. H. Weiss

Articles

Studies of blockchain governance can be divided into analyses of the governance of blockchains (such as rules and power dynamics within a given network) and governance by blockchains (such as how blockchains can be implemented to improve self-governance of community-based peer production networks). Less emphasis has been placed on applications of distributed ledgers to public sector governance. Our review clarifies that the decentralization and distributive features that enable blockchains to link up loosely connected private organizations and public agencies to improve efficiency and transparency of government transactions. However, most blockchain applications lack clear advantages over the conventional digital recording of …

Covid-19 And (Mis)Understanding Public Attitudes To Social Security: Re-Setting Debate, Sudipa Sarkar, Michael Orton

Articles

The Covid-19 pandemic has seen emerging debate about a possible shift in ‘anti-welfare commonsense’ i.e. the orthodoxy previously described in this journal as solidifying negative public attitudes towards ‘welfare’. While a shift in attitudes might be ascribed to the circumstances of the crisis it would still be remarkable for such a strongly established orthodoxy to have changed quite so rapidly. It is appropriate, therefore, to reflect on whether the ‘anti-welfare’ orthodoxy was in fact as unequivocal as claimed? To address this question, challenges to the established orthodoxy that were emerging pre-pandemic are examined along with the most recently available survey …

Portraits Of Bankruptcy Filers, Pamela Foohey, Robert M. Lawless, Deborah Thorne

Articles

One in ten adult Americans has turned to the consumer bankruptcy system for help. For almost forty years, the only systematic data collection about the people who file bankruptcy has come from the Consumer Bankruptcy Project (CBP), for which we serve as co-principal investigators. In this Article, we use CBP data from 2013 to 2019 to describe who is using the bankruptcy system, providing the first comprehensive overview of bankruptcy filers in thirty years. We use principal component analysis to leverage these data to identify distinct groups of people who file bankruptcy. This technique allows us to situate the distinctions …

The Elastic Corporate Form In International Law, Julian Arato

Articles

The corporate form is being distorted by international law. Surprisingly, this is occurring in the law of foreign investment, where one would expect the stability and efficiency of corporate formalities to matter most. The main driver is a highly enforceable mode of treaty-based arbitration known as investor-state dispute settlement (ISDS), which affords foreign investors a private right of action to sue sovereign states. Questions of corporate law come up regularly in ISDS. But when addressing them, tribunals have varied widely in their respect for core formalities. This is undermining the basic relationships among all corporate stakeholders—including shareholders, management, creditors, governments, …

The Parallel March Of The Ginis: How Does Taxation Relate To Inequality, And What Can Be Done About It?, Reuven S. Avi-Yonah

Articles

The United States currently has one of the highest levels of inequality among industrialized economies. In addition, numerous scholars have shown that social mobility in the United States is significantly lower than it was in the period between 1945 and 1970, when inequality was declining. The combination of these trends is dangerous because it risks transforming the United States into a society where small elites capture most of the gains, a pattern in which growth cannot be sustained over time. The level of inequality in the United States after taxes and transfers are taken into account is much lower, but …

The Orkney Slew And Central Bank Digital Currencies, Jeffery Y. Zhang, Gary B. Gordon

Articles

This Article on central bank digital currencies is motivated by a parable, The Orkney Slew, which is set in an archipelago. Based on the parable, we point out a significant economic market failure that exists in the cross-border payments realm. The analysis then focuses on real-world examples and the national security concerns, including for Anti-Money Laundering/Combatting the Financing of Terrorism (AML/CFT) and the continued efficacy of U.S. sanctions, associated with the rapidly evolving digital payments landscape.

Many central banks around the world are now cooperatively experimenting with cross-border interoperability of digital currencies. These efforts are driven by the idea of …

A New Framework For Digital Taxation, Reuven S. Avi-Yonah, Young Ran (Christine) Kim, Karen Sam

Articles

The international tax regime has wide implications for business, trade, and the international political economy. Under current law, multinational enterprises do not pay their fair share of taxes to market countries where profits are generated because market countries are only allowed to tax companies with a physical presence there. Digital companies, like Google and Amazon, can operate entirely online, thereby avoiding market country taxes. Multinationals can also exploit existing tax rules by shifting their profits to low-tax jurisdictions, thereby avoiding taxes in the residence country where their headquarters are located.

Recently, a global tax deal was reached to tackle these …

Love In The Time Of Covid, Jeanne L. Schroeder

Articles

A striking aspect of the current American cultural divide is divergent attitudes towards expertise, generally, and masking and vaccination to mitigate the Covid-19 pandemic, specifically. Liberal pundits profess shock that Red State America won’t just ‘trust the science’. On the right, politicians and television personalities reject mandates in the name of ‘freedom’.

Lacanian discourse theory gives insight into this. The rejection of expertise is an example of an ‘hysteric discourse’ challenging a ‘university discourse’: the regime of experts. An hysteric discourse is a critique of rules imposed by experts by the subjects-subjected-to them. Hysteria can lead, in turn, to a …

Blockchain Networks As Knowledge Commons, Ilia Murtazashvili, Jennifer Brick Murtazashvili, Martin B. H. Weiss, Michael J. Madison

Articles

Researchers interested in blockchains are increasingly attuned to questions of governance, including how blockchains relate to government, the ways blockchains are governed, and ways blockchains can improve prospects for successful self-governance. Our paper joins this research by exploring the implications of the Governing Knowledge Commons (GKC) framework to analyze governance of blockchains. Our novel contributions are making the case that blockchain networks represent knowledge commons governance, in the sense that they rely on collectively-managed technologies to pool and manage distributed information, illustrating the usefulness and novelty of the GCK methodology with an empirical case study of the evolution of Bitcoin, …

Changing Every Wrong Door Into The Right One: Reforming Legal Services Intake To Empower Clients, Jabeen Adawi

Articles

It’s recognized that people affected by poverty often have numerous overlapping legal needs and despite the proliferation of legal services, they are unable to receive full assistance. When a person is faced with a legal emergency, rarely is there an equivalent to a hospital’s emergency room wherein they receive an immediate diagnosis for their needs and subsequent assistance. In this paper, I focus on the process a person goes through to find assistance and argue that it is a burdensome, and demoralizing task of navigating varying protocols, procedures, and individuals. While these systems are well intentioned from the lawyer’s perspective, …

White Vigilantism And The Racism Of Race-Neutrality, Christian Sundquist

Articles

Race-neutrality has long been touted in American law as central to promoting racial equality while guarding against race-based discrimination. And yet the legal doctrine of race-neutrality has perversely operated to shield claims of racial discrimination from judicial review while protecting discriminators from liability and punishment. This Article critiques the doctrine of race-neutrality by examining the law’s response to white vigilantism in the much-publicized criminal trials of Kyle Rittenhouse and that of Ahmaud Arbery’s assailants.

Bursting The Auto Loan Bubble In The Wake Of Covid-19, Pamela Foohey

Articles

Before the COVID-19 pandemic, auto loans outstanding in the United States had soared to record highs. The boom in lending spanned new and used cars and traditional and subprime loans. With loan delinquencies also hitting new highs almost every quarter, predictions that the auto lending market could burst soon abounded. When the economy came to a grinding halt and unemployment skyrocketed in the wake of the pandemic, auto lenders knew they were facing a crisis. Throughout 2020, auto lenders granted more payment forbearances to consumers, while slashing interest rates on new loans. Auto manufacturers similarly made promises to buyers, such …

Contract Design When Relationship-Specific Investment Produces Asymmetric Information, Albert H. Choi, George Triantis

Articles

Under conventional contract theory, contracts may be efficient by protecting relationship specific investment from holdup in subsequent (re)negotiation over terms of trade. This paper demonstrates a different problem when specific investment also provides significant private information to the investing party. This is fairly common: for example, a manufacturer invests to learn about its buyer's idiosyncratic needs or a collaborator invests to learn about a joint venture. We show how such private information can lead to subsequent bargaining failure and suboptimal ex ante relationship-specific investment. We also show that this inefficiency is worse if the parties enter into a binding and …

The Economics Of Class Action Waivers, Albert H. Choi, Kathryn E. Spier

Articles

Many firms require consumers, employees, and suppliers to sign class action waivers as a condition of doing business with the firm, and the U.S. Supreme Court has endorsed companies’ ability to block class actions through mandatory individual arbitration clauses. Are class action waivers serving the interests of society or are they facilitating socially harmful business practices? This paper synthesizes and extends the existing law and economics literature by analyzing the firms’ incentive to impose class action waivers. While in many settings the firms’ incentive to block class actions may be aligned with maximizing social welfare, in many other settings it …