Social and Behavioral Sciences Commons^™

The Welfare Effects Of Civil Forfeiture, Michael Preciado, Bart J. Wilson

ESI Publications

Using a laboratory experiment we explore competing claims on the welfare effects of civil forfeiture. Experiment participants are tasked with making trade-offs in allocating resources “to fight crime” with and without the ability to seize and forfeit assets. It is an open question whether the societal impact of reducing crime is greater in a world with or without civil forfeiture. Proponents of civil forfeiture argue that the ill-gotten gains of criminals can be used by law enforcement to further fight crime. Opponents claim that the confiscation of assets by law enforcement distorts the prioritization of cases by focusing attention, not …

Coase Minus The Coase Theorem--Some Problems With Chicago Transaction Cost Analysis, Pierre Schlag

Pierre Schlag

In law as well as economics, the most well-known aspect of Coase’s “The Problem of Social Cost,” is the Coase Theorem. Over the decades, that particular notion has morphed into a crucial component of Chicago law and economics—namely, transaction cost analysis. In this Article, I deliberately bracket the Coase Theorem to show that “The Problem of Social Cost” contains far more interesting and unsettling lessons—both for law as well as for economics. Indeed, while Coase’s arguments clearly target the Pigouvian attempts to “improve on the market” through government correctives, there is, lurking in those arguments, a much more profound critique …

Voice Without Say: Why Capital-Managed Firms Aren’T (Genuinely) Participatory, Justin Schwartz

Justin Schwartz

Why are most capitalist enterprises of any size organized as authoritarian bureaucracies rather than incorporating genuine employee participation that would give the workers real authority? Even firms with employee participation programs leave virtually all decision-making power in the hands of management. The standard answer is that hierarchy is more economically efficient than any sort of genuine participation, so that participatory firms would be less productive and lose out to more traditional competitors. This answer is indefensible. After surveying the history, legal status, and varieties of employee participation, I examine and reject as question-begging the argument that the rarity of genuine …

A Theory Without A Movement, A Hope Without A Name: The Future Of Marxism In A Post-Marxist World, Justin Schwartz

Justin Schwartz

Just as Marx's insights into capitalism have been most strikingly vindicated by the rise of neoliberalism and the near-collapse of the world economy, Marxism as social movement has become bereft of support. Is there any point in people who find Marx's analysis useful in clinging to the term "Marxism" - which Marx himself rejected -- at time when self-identified Marxist organizations and societies have collapsed or renounced the identification, and Marxism own working class constituency rejects the term? I set aside bad reasons to give on "Marxism," such as that the theory is purportedly refuted, that its adoption leads necessarily …

Are People Probabilistically Challenged? Book Review Of Daniel Kahneman, Thinking, Fast And Slow (2011), Alex Stein

Alex Stein

Daniel Kahneman’s recent book, Thinking, Fast and Slow, is a must-read for any scholar and policymaker interested in behavioral economics. Thus far, behavioral economists did predominantly experimental work that uncovered discrete manifestations of people’s bounded rationality: representativeness, availability, anchoring, overoptimism, base-rate neglect, hindsight bias, loss aversion, and other misevaluations of probability and utility. This work has developed no causal explanations for these misevaluations. Kahneman’s book takes the discipline to a different level by developing an integrated theory of bounded rationality’s causes and characteristics. This theory holds that humans use two distinct modes of reasoning, intuitive (System 1) and deliberative (System …

Neoliberalism And The Law: How Historical Materialism Can Illuminate Recent Governmental And Judicial Decision Making, Justin Schwartz

Justin Schwartz

Neoliberalism can be understood as the deregulation of the economy from political control by deliberate action or inaction of the state. As such it is both constituted by the law and deeply affects it. I show how the methods of historical materialism can illuminate this phenomenon in all three branches of the the U.S. government. Considering the example the global financial crisis of 2007-08 that began with the housing bubble developing from trade in unregulated and overvalued mortgage backed securities, I show how the repeal of the Glass-Steagall Act, which established a firewall between commercial and investment banking, allowed this …

La Gestione Dei Diritti Delevisivi Sportivi: Is It All About Weltanschauung?, Valerio Cosimo Romano

Valerio Cosimo Romano

No abstract provided.

Enfoques Teóricos De Las Reglas Por Defecto En El Derecho De Contratos: Complementariedades, Coincidencias Y Contradicciones, Daniel Monroy

Daniel A Monroy C

El artículo muestra una lectura crítica en lo que respecta a la noción, las funciones y el diseño de las reglas por defecto en el derecho de contratos a partir de tres enfoques teóricos a saber: la perspectiva jurídica tradicional; la visión del Análisis Económico del Derecho (AED) en su versión clásica y; el enfoque del denominado behavioral law and economics (BL&E). El documento destaca con particular atención que en lo correspondiente a la noción y las funciones de las reglas por defecto en el derecho de contratos, existe un alto nivel de coherencia entre la perspectiva jurídica tradicional por …

The Rise Of Planning In Industrial America, 1865-1914

Richard Adelstein

How American firms grew very large after the Civil War, and how Americans responded to them.

Collective Choice, Justin Schwartz

Justin Schwartz

This short nontechnical article reviews the Arrow Impossibility Theorem and its implications for rational democratic decisionmaking. In the 1950s, economist Kenneth J. Arrow proved that no method for producing a unique social choice involving at least three choices and three actors could satisfy four seemingly obvious constraints that are practically constitutive of democratic decisionmaking. Any such method must violate such a constraint and risks leading to disturbingly irrational results such and Condorcet cycling. I explain the theorem in plain, nonmathematical language, and discuss the history, range, and prospects of avoiding what seems like a fundamental theoretical challenge to the possibility …

Collective Choice, Justin Schwartz

Justin Schwartz

This short nontechnical article reviews the Arrow Impossibility Theorem and its implications for rational democratic decisionmaking. In the 1950s, economist Kenneth J. Arrow proved that no method for producing a unique social choice involving at least three choices and three actors could satisfy four seemingly obvious constraints that are practically constitutive of democratic decisionmaking. Any such method must violate such a constraint and risks leading to disturbingly irrational results such and Condorcet cycling. I explain the theorem in plain, nonmathematical language, and discuss the history, range, and prospects of avoiding what seems like a fundamental theoretical challenge to the possibility …

Uncertainty Regarding Interpretation Of The `Negligence Rule' And Its Implications For The Efficiency Of Outcomes, Satish K. Jain

Satish K. Jain

There are two ways that the negligence rule is interpreted. Under one interpretation a negligent injurer is liable for the entire harm to the victim; and under the other interpretation a negligent injurer is liable only for that part of the harm which can be ascribed to his negligence. Both these versions are efficient. However, if there is uncertainty regarding whether the court will be employing the full liability version or the incremental liability version for determining the liability of a negligent injurer, notwithstanding the fact that both the versions are efficient, inefficiency is possible. In the paper necessary and …

The Structure Of Efficient Liability Rules, Satish K. Jain

Satish K. Jain

The purpose of this paper is two-fold. One, to obtain a complete characterization of efficient liability rules within the framework of a model which is essentially the standard tort model with only some minor differences; but with a liability rule notion more general than the standard one. It is shown in the paper that the subclass of efficient liability rules is characterized by the conjunction of two conditions, namely, the condition of negligence liability and the requirement of non-reward for over-nonnegligence. Negligence liability requires that if one party is exactly nonnegligent and the other party is negligent then the negligent …

Coase, Institutionalism, And The Origins Of Law And Economics, Herbert J. Hovenkamp

All Faculty Scholarship

Ronald Coase merged two traditions in economics, marginalism and institutionalism. Neoclassical economics in the 1930s was characterized by an abstract conception of marginalism and frictionless resource movement. Marginal analysis did not seek to uncover the source of individual human preference or value, but accepted preference as given. It treated the business firm in the same way, focusing on how firms make market choices, but saying little about their internal workings.

“Institutionalism” historically refers to a group of economists who wrote mainly in the 1920s and 1930s. Their place in economic theory is outside the mainstream, but they have found new …

Coasean Markets, Herbert J. Hovenkamp

All Faculty Scholarship

Coase’s work emphasized the economic importance of very small markets and made a new, more marginalist form of economic “institutionalism” acceptable within mainstream economics. A Coasean market is an association of persons with competing claims on a legal entitlement that can be traded. The boundaries of both Coasean markets and Coasean firms are determined by measuring not only the costs of bargaining but also the absolute costs of moving resources from one place to another. The boundaries of a Coasean market, just as those of the Coasean business firm, are defined by the line where the marginal cost of reaching …

The Coasean Analysis Of Harmful Interactions: Some Conceptual Difficulties, Satish K. Jain

Satish K. Jain

This paper is concerned with two distinct issues flowing from Coase's analysis of harmful interactions and of how courts deal with them. The first issue relates to the domain of validity of the Coase Theorem. It is argued in the paper that if non-pecuniary considerations are brought into the analysis then it can no longer be claimed that the outcome will be efficient regardless of liability assignments. In other words, it is contended in the paper that the validity of the Coase Theorem is crucially dependent on neglect of non-pecuniary considerations from the analysis. From this it follows that if …

Fannie Mae And Freddie Mac: Creatures Of Regulatory Privilege, David J. Reiss

David J Reiss

This book chapter addresses the appropriate role of Fannie Mae and Freddie Mac, the government-chartered, privately owned mortgage finance companies, in the United States housing finance sector. The federal government recently placed Fannie and Freddie in conservatorship. These two massive companies are profit-driven, but as government-sponsored enterprises they also have a government-mandated mission to provide liquidity and stability to the United States mortgage market and to achieve certain affordable housing goals. How the two companies should exit their conservatorship has implications that reach throughout the global financial markets and are of key importance to the future of American housing finance …

Firms As Social Actors, Richard Adelstein

Richard Adelstein

A close look at what firms are and how they act.

Organizations And Economics, Richard Adelstein

Richard Adelstein

A contribution to a symposium on a paper by Richard Posner.

On The Efficiency Of Negligence Rule, Satish K. Jain

Satish K. Jain

In the law and economics literature there are three different versions of negligence rule which have been discussed. These three versions are: (i) Injurer is liable for the entire loss if negligent, and not liable if nonnegligent. Injurer is negligent if his care level is below the due care level, otherwise nonnegligent. (ii) Injurer is liable for the incremental loss if negligent, and not liable if nonnegligent. Injurer is negligent if his care level is below the due care level, otherwise nonnegligent. (iii) Injurer is liable for the incremental loss if negligent, and not liable if nonnegligent. Injurer is negligent …

The Coase Theorem And Arthur Cecil Pigou, Herbert J. Hovenkamp

All Faculty Scholarship

In "The Problem of Social Cost" Ronald Coase was highly critical of the work of Cambridge University Economics Professor Arthur Cecil Pigou, presenting him as a radical government interventionist. In later work Coase's critique of Pigou became even more strident. In fact, however, Pigou's Economics of Welfare created the basic model and many of the tools that Coase's later work employed. Much of what we today characterize as the "Coase Theorem," including the relevance of transaction costs, externalities, and bilateral monopoly, was either stated or anticipated in Pigou's work. Further, Coase's extreme faith in private bargaining led him to fail …

Symposium Introduction: Public International Law And Economics, Tom Ginsburg, Christophe Engel, Ann Van Aaken

Tom Ginsburg

No abstract provided.

Economics Of Plea Bargaining, Richard Adelstein

Richard Adelstein

A short summary of earlier work for a sociological audience.

An Economic Model Of Fair Use (With Thomas Miceli), Richard Adelstein

Richard Adelstein

A formal model of the law of fair use.

Knowledge And Power In The Mechanical Firm: Planning For Profit In Austrian Perspective, Richard Adelstein

Richard Adelstein

A theory of central planning employing Austrian themes and applied to private firms and Taylorism.

Equity And Efficiency In Markets For Ideas, Richard Adelstein

Richard Adelstein

Intellectual property and patent protection in light of the AIDS crisis in Africa.

Toward A Comparative Economics Of Plea Bargaining (With Thomas Miceli), Richard Adelstein

Richard Adelstein

A comparison of adversarial and inquisitorial approaches to criminal adjudication and its implications for plea bargaining.

Law And Economics Of English Only, William W. Bratton

All Faculty Scholarship

No abstract provided.

Victims As Cost Bearers, Richard Adelstein

Richard Adelstein

A brief recasting of the price exaction model.

Four Entries, Richard Adelstein

Richard Adelstein

Four entries: "American Institutional Economics and the Legal System" (I: 61-66); "John Rogers Commons" (I: 324-327); Richard Theodore Ely" (II: 28-29); and "Plea Bargaining: A Comparative Approach"