Social and Behavioral Sciences Commons^™

Culture And Prosperity: The Truth About Markets—Why Some Nations Are Rich But Most Remain Poor (Book Review), Jonathan B. Wight

Economics Faculty Publications

John Kay’s latest book offers an absorbing romp through the history of economic thought in the 20th century. Kay attempts to explain the complex reality of a modern market system rather than resorting to simplistic theorizing about it. Gone are perfectly rational traders, perfectly competitive markets, incentive compatibilities, low transaction costs, informational symmetries, and no externalities. Kay highlights problems and problem solving as the ubiquitous and historical strata through which markets in the West evolved.

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 …

The Coordinated Effects Of Mergers In Differentiated Products Market, Kai-Uwe Kuhn

Law & Economics Working Papers Archive: 2003-2009

No abstract provided.

November 2004, Syracuse Department Of Economics

Economics - All Scholarship

No abstract provided.

Strict Liability For Gatekeepers: A Reply To Professor Coffee, Frank Partnoy

University of San Diego Law and Economics Research Paper Series

This article responds to a proposal by Professor John C. Coffee, Jr. for a modified form of strict liability for gatekeepers. Professor Coffee’s proposal would convert gatekeepers into insurers, but cap their insurance obligations based on a multiple of the highest annual revenues the gatekeepers recently had received from their wrongdoing clients. My proposal, advanced in 2001, would allow gatekeepers to contract for a percentage of issuer damages, after settlement or judgment, subject to a legislatively-imposed floor. This article compares the proposals and concludes that a contractual system based on a percentage of the issuer’s liability would be preferable to …

Encumbered Shares, Shaun Martin, Frank Partnoy

University of San Diego Law and Economics Research Paper Series

The fundamental assumptions in the law and economics literature about shareholder voting and the one-share/one-vote rule are flawed. The classic view is that share ownership is necessary and sufficient to create voting rights and that such rights should be directly proportional to share ownership. We demonstrate that this assumption is unfounded, both for shares that are “economically encumbered” (held by shareholders who are not pure residual claimants; e.g., a shareholder who owns one share and is also short one or more shares) as well as shares that are “legally encumbered” (held or associated with more than one shareholder; e.g., shares …

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 …

Does The Tax Law Discriminate Against The Majority Of American Children: The Downside Of Our Progressive Rate Structure And Unbalanced Incentives For Higher Education?, Lester B. Snyder

University of San Diego Law and Economics Research Paper Series

Our graduate income tax structure provides an incentive to shift income to lower-bracket family members. However, some parents have much more latitude to shift income to their children than do others. Income derived from services and private business-by far the majority of American income-is less favored than income derived from publicly traded securities. The rationale given for this discrimination is that parents in services or private business, as opposed to those in securities, do not actually part with control of their property. This article explores these tax broader (yet subtle) tax benefits and their impact on the majority of children …

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 …

Obesity And Advertising Policy, Todd J. Zywicki, Debra Holt, Maureen Ohlhausen

George Mason University School of Law Working Papers Series

It is clear that Americans are getting fatter, both adults and children. This development has led some to call for a ban on food advertising directed at children. There are numerous practical and constitutional difficulties with such a policy. This article poses a more fundamental question - even if feasible, would restricting food advertising do anything to reduce obesity or even slow its trends? The article also considers whether the social costs of banning advertising could outweigh the social benefits of such an action.

This article provides a review of the literature on the fundamental causes of the American obesity …

Synthesizing Criteria And Accounting For Economic Waste In Environmental Laches, Richard G. Collins

William & Mary Environmental Law and Policy Review

No abstract provided.

The Past, Present And Future Of Community Reinvestment Act (Cra): A Historical Perspective, Akm Rezaul Hossain

Economics Working Papers

This paper takes a historical approach to understand the evolution of one of the most controversial banking regulations in recent history, the Community Reinvestment Act (CRA) of 1978 and its effects on access to credit and banking services to community borrowers. The paper lays out the historical milieu of credit markets in the late seventies and describes the early justification of this legislation. The paper explores the implementation of the act through regulations on lending institutions and the effects of the regulations on depository lenders and community borrowers. Detailed description of the reactions to CRA regulations by different parties involved …

How Economists Cite Literature: Citation Analysis Of Two Core Pakistani Economic Journals, Ashraf Sharif, Khalid Mahmood

Libraries

Selected volumes of the Pakistan Development Review (PDR) and the Pakistan Economic and Social Review (PESR) were analysed to find the citation pattern of their articles. Eight volumes of each journal were selected, two volumes representing a decade. The results revealed that the PDR has been the most cited journal. The mean score of citations per article remained insignificantly different in the two core journals. More than 50 per cent of the citations from both journals were single-authored. More than 50 per cent of the citations were from non-journal sources, mainly books. Although citations from online sources were seen, it …

Saving Capitalism From Itself: Whither The Welfare State?, Mimi Abramovitz

New England Journal of Public Policy

The U.S. welfare state has been under attack from both sides of the aisle since the mid-1970s. Using the lens of history, the following pages will argue that neither the rise of the welfare state in the 1930s nor the current attack were merely accidental. Instead, each was a response to a particular crisis of profitability because the institutional arrangements that had created the conditions for profit-making in the prior fifty years had deteriorated. The policies no longer worked for the powers-that-be and had to be “reformed.”

Editor's Note, Padraig O'Malley

New England Journal of Public Policy

In this issue, special guest editors, Elaine Werby and Donna Haig Friedman, assemble an array of distinguished scholars, policymakers, community activists and political advocates to examine the interaction of the economic, political, and social “flows,” the undercurrents of history that stymied the war on poverty. Their articles and essays chart the beachheads that must be secured before the war can be successfully resumed; No war, they collectively remind us, is won without some battles being lost. You do not secure the future of the country if you abandon the principles of equity and equality for all, the bedrock of the …

Foreword, Elaine Werby, Donna Haig Friedman

New England Journal of Public Policy

Interspersed throughout this issue are Voices of Community Action — the voices of executive directors, board members, and staff. Some are personal reflections; others describe their work or tell of the struggles of those who live with poverty. All speak to the commitment of service and change, to personal development and growth, and to the worth of their work. Their stories are 10 matched in the testimony of those who have received services or participated in community action programs. All of these stories bear witness to the importance of what happens on the front lines among leaders, board members, staff, …

Sex, Shame, And The Law: An Economic Perspective On Megan's Law, Doron Teichman

Law & Economics Working Papers Archive: 2003-2009

This Article focuses on the question, how should policymakers aiming to minimize the cost of sanctioning utilize legal and nonlegal sanctions when designing a system of criminal sanctions. After presenting the general economic case for the use of nonlegal sanctions the article turns to present a model of shaming, which unlike existing models, incorporates the endogenous effects of legal and nonlegal sanctions. This model demonstrates that tailoring an efficient regime that combines legal and nonlegal sanctions might be more difficult than previously perceived by law and economics scholars. A specific case study presented in this article is of the current …

Income, Work And Freedom, Philip L. Harvey

ExpressO

The ability of public policies to secure the economic and social rights recognized in the Universal Declaration of Human Rights is proposed as a trumping supplement to the utility-maximization criterion of neo-classical welfare economics. Two progressive proposals for ending poverty and promoting personal development and freedom are then compared using this assessment criterion. The first proposal is that society guarantee everyone an unconditional basic income (BI) without imposing work requirements in exchange for the guarantee. The second proposal is that society use direct job creation to provide employment assurance (EA) for anyone who is unable to find decent work in …

Economic Theories Of Bundling And Their Policy Implications In Abuse Cases: An Assessment In Light Of The Mircrosoft Case, Kai-Uwe Kuhn

Law & Economics Working Papers Archive: 2003-2009

No abstract provided.

Banking The Poor: Policies To Bring Low-Income Americans Into The Financial Mainstream, Michael S. Barr

Law & Economics Working Papers Archive: 2003-2009

Low-income households in the United States often lack access to bank accounts and face high costs for conducting basic financial transactions through check cashers and other alternative financial service providers. These families find it more difficult to save and plan financially for the future. Living paycheck to paycheck leaves them vulnerable to medical or job emergencies that may endanger their financial stability, and lack of longer-term savings undermines their ability to improve skills, purchase a home, or send their children to college. High-cost financial services and inadequate access to bank accounts may undermine widely-shared societal goals of reducing poverty, moving …

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 …

Do Patents Facilitate Financing In The Software Industry?, Ronald J. Mann

ExpressO

This paper is the first part of a wide-ranging study of the role of intellectual property in the software industry. Unlike previous papers, which focus primarily on software patents – which generally are held by firms that are not software firms – this paper provides a thorough and contextually grounded description of the role that patents actually play in the software industry itself.

The bulk of the paper considers the pros and cons of patents in the software industry. On the positive side, the paper starts by emphasizing the difficulties that pre-revenue startups face in obtaining any value from patents. …

Expensing Isn't The Only Option: Alternatives To The Fasb's Stock Option Expensing Proposal, Benjamin A. Templin

ExpressO

This paper reviews the arguments for and against the Financial Accounting Standard Board's (FASB) proposal to require that corporations expense options. It identifies two major goals of the proposed rule -- 1) clarity in financial statements and 2) a reduction of corporate fraud by removing the incentive of options. To address these two goals, I adopt a framework of Information Reforms v. Rules of the Game Reforms. The article starts with a history of FASB Statement No. 123 Accounting for Stock-based Compensation and also analyzes the Congressional legislation that attempts to block the measure, the Stock Option Accounting Reform Act. …

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

ExpressO

No abstract provided.

Dominance In College Football And The Role Of Scholarship Restrictions, Katie Baird

Katie Baird

This article examines the relationship between player compensation in college football and competitive balance on the field. It shows that National Collegiate Athletic Association rule changes restricting football-player compensation are not associated with an improvement in football's competitive balance. Although college football is marginally more balanced than professional sports in any given year, an examination of cumulative records spanning numerous seasons proves college football to be as unbalanced as professional sports. The movement toward reducing player compensation, coincident with an increasing value to player talent, raises issues over how the financial gain from college football talent should be used. The …