Social and Behavioral Sciences Commons^™

The Economics Of Limited Liability: An Empirical Study Of New York Law Firms, Scott Baker, Kimberly D. Krawiec

ExpressO

Since the rapid rise in organizational forms for business associations, academics and practitioners have sought to explain the choice of form rationale. Each form contains its own set of default rules that inevitably get factored into this decision, including the extent to which each individual firm owner will be held personally liable for the collective debts and obligations of the firm. The significance of the differences in these default rules continues to be debated. Many commentators have advanced theories, most notably those based on unlimited liability, profit-sharing, and illiquidity, asserting that the partnership form provides efficiency benefits that outweigh any …

Putting Humpty Dumpty Back Together: Pricing In Anticommons Property Arrangements, Ben Depoorter, Sven Vanneste

George Mason University School of Law Working Papers Series

Recently, a new theory has drawn considerable attention in the literature on common property. A number of scholars have pointed to the danger of excessive propertization in the context of what are termed "anticommons" property regimes. Although this theory has found its way into numerous legal and economic applications, the empirical and cognitive foundations of the theory of fragmentation remain unexplored. Based on experimental data, this Article conducts an investigation into the social and personal processes involved in the anticommons.

The results confirm the theoretical proposition that anticommons deadweight losses increase with the degree of complementarity between individual parts and …

The Unsolvable Dilemma Of A Paretian Policymaker, Giuseppe Dari-Mattiacci, Nuno Garoupa

George Mason University School of Law Working Papers Series

In this paper, we argue that social decisionmaking is subject to a fundamental conflict between consistency and completeness. We show that a consistent welfarist method of policy assessment, that is, one that never violates the Pareto principle, may be incomplete in the sense of being incapable of providing a solution to important social welfare problems.

Does Soft Dollar Brokerage Benefit Portfolio Investors: Agency Problem Or Solution?, Stephen M. Horan, D. Bruce Johnsen

George Mason University School of Law Working Papers Series

With soft dollar brokerage, institutional portfolio managers pay brokers “premium” commission rates in exchange for rebates they use to buy third-party research. One hypothesis views this practice as a reflection of the agency problem in delegated portfolio management; another views it as a contractual solution to the agency problem that aligns the incentives of investors, managers, and brokers where direct monitoring mechanisms are inadequate. Using a database of institutional money managers, we find that premium commission payments are positively related to risk-adjusted performance, suggesting that soft dollar brokerage is a solution to agency problems. Moreover, premium commissions are positively related …

A Culturally Correct Proposal To Privatize The British Columbia Salmon Fishery, D. Bruce Johnsen

George Mason University School of Law Working Papers Series

Canada now faces two looming policy crises that have come to a head in British Columbia. The first is long-term depletion of the Pacific salmon fishery by mobile commercial ocean fishermen racing to intercept salmon under the rule of capture. The second results from Canadian Supreme Court case law recognizing and affirming “the existing aboriginal and treaty rights of the aboriginal peoples of Canada” under Section 35(1) of the Constitution Act, 1982. This essay shows that the economics of property rights provides a joint solution to these crises that would promote the Canadian commonwealth by way of a privatization auction …

Theory And Practice Of Competition Advocacy At The Ftc, James C. Cooper, Paul A. Pautler, Todd J. Zywicki

George Mason University School of Law Working Papers Series

This article was prepared as part of a recent symposium celebrating the Ninetieth Anniversary of the founding of the Federal Trade Commission. In addition, fall 2004 marks the Thirtieth Anniversary of a pivotal moment in the establishment of the modern advocacy program at the FTC, Chairman Lewis Engman’s speech on the economic burden that inefficient transportation regulation policies were imposing on the American economy. Although the FTC has been involved in advocacy activities since its founding, Engman’s speech symbolized a new aggressiveness on the part of the FTC in using its expertise to work with other governmental actors at all …

Rents, Dissipation, And Lost Treasures With N Parties, Giuseppe Dari-Mattiacci, Eric Langlais, Francesco Parisi

George Mason University School of Law Working Papers Series

The rent-seeking literature is unanimous on the fact that, in a rent-seeking context, the rent dissipation increases with the number of potential participants. In this paper we analyze the participants' choice to enter the game and their levels of efforts. We show that the usual claim - that the total dissipation approaches the entire value of the rent - applies only when participants are relatively weak. In the presence of strong competitors, the total dissipation actually decreases, since participation in the game is less frequent. We also consider the impact of competitors' exit option, distinguishing between redistributive rent-seeking and productive …

Good Faith In The Cisg: Interpretation Problems In Article 7, Benedict C. Sheehy

ExpressO

ABSTRACT: This article examines the dispute concerning the meaning of Good Faith in the CISG. Although there are good reasons for arguing a more limited interpretation or more limited application of Good Faith, there are also good reasons for a broader approach. Regardless of the correct interpretation, however, practitioners and academics need to have a sense of where the actual jurisprudence is going. This article reviews every published case on Article 7 since its inception and concludes that while there is little to suggest a strong pattern is developing, a guided pattern while incorrect doctrinally is preferable to the current …

On The Misuse Of The Nash Bargaining Solution In Law And Economics, Abraham L. Wickelgren

ExpressO

Bargaining plays a very important role in a great deal of legal scholarship, particularly in law and economics scholarship. Scholars often assume that the Nash bargaining solution determines the bargaining outcome, where the parties equally split the joint benefit created by the agreement. This solution, however, is inappropriate when parties have outside options, alternatives that only provide a payoff if the bargainer terminates the original bargaining. Most legal bargaining problems involve outside options. This article explains why the Nash bargaining solution generates an inappropriate outcome in this situation. Then, it examines several different prior articles that have used the Nash …

“Politics As Markets” Reconsidered: Economic Theory, Competitive Democracy And Primary Ballot Access , David N. Schleicher

ExpressO

No abstract provided.

Modern Bootlegging And The Prohibition On Fair Prices: Last Call For The Repeal Of Pharmaceutical Price Gouging, Luke W. Cleland

ExpressO

This article discusses the recent passage of the Medicare Prescription Drug, Modernization and Improvement Act of 2003, and the executive and judicial decisions affecting the ability of the general public to access foreign pharmaceutical markets. The article examines the recent actions taken by the U.S. government, explore various state movements within the United States aimed at reducing pharmaceutical drug prices, outline the process of pharmaceutical drug prices in foreign countries, and advocate for a workable integration of all available mechanisms to feasibly reduce prescription drug prices for the benefit of both U.S. consumers and U.S. drug companies. As avenues to …

Extraterritoriality Of The Sherman Act And Deterrence Of Private International Cartels, John M. Connor

ExpressO

This paper argues that the facts in the vitamins cartel support decisions in the 2nd and DC circuits to permit wholly foreign direct buyers of globally cartelized products standing to sue in U.S. courts. Such an interpretation of the Sherman Act is justified by conduct that is essentially linked to the management of successful international cartels, namely, the prevention of geographic arbitrage. This paper shows that the degree of injuries imposed on U.S. consumers could not have occurred were it not for coordinated price increases in countries with weak or nonexistent anticartel laws. Moreover, this paper endeavors to demonstrate that, …

Assessing The Options For Designing A Mandatory U.S. Greenhouse Gas Reduction Program, Robert R. Nordhaus, Kyle W. Danish

ExpressO

The United States faces growing pressure – both from domestic and international sources – to adopt a mandatory greenhouse gas reduction program to address the risk of global climate change. If policy-makers decide to establish such a program, they could end up creating an environmental regulatory regime of potentially unprecedented scope and impacts. A domestic greenhouse gas program could break ground in other ways too. Many policy-makers are considering innovative market-based approaches to regulation, including a multi-billion dollar economy-wide “cap-and-trade” program. In this paper, we: (1) set forth criteria for evaluating program options; (2) analyze the leading design options and …

Securing Truth For Power: Informational Strategy And Regulatory Policy Making, Cary Coglianese

ExpressO

No abstract provided.

What Is Fiscal Responsibility? Long-Term Deficits, Generational Accounting, And Capital Budgeting, Neil H. Buchanan

Rutgers Law School (Newark) Faculty Papers

This article assesses three basic approaches to assessing the future effects of the government’s fiscal policies: traditional measures of the deficit, measures associated with Generational Accounting, and measures derived from applying Capital Budgeting to the federal accounts. I conclude that Capital Budgeting is the best of the three approaches and that Generational Accounting is the least helpful. Acknowledging that there might be some value in learning what we can from a variety of approaches to analyzing fiscal policy, I nevertheless conclude that Generational Accounting is actually a misleading or--at best--empty measure of future fiscal developments. The best approach to providing …