Law Commons^™

Price Discrimination, Personal Use And Piracy: Copyright Protection Of Digital Works, Michael J. Meurer

Faculty Scholarship

The growth of digital information transmission worries copyright holders who fear the new technology threatens their profits because of greater piracy and widespread sharing of digital works. They have responded with proposals for expanded protection of digital works. Specifically, they seek restrictions on personal use rights regarding digital works provided by the fair use and first sale doctrines. The proposed changes in the allocation of property rights to digital information significantly affect the ability of copyright holders to practice price discrimination. Broader user rights make discrimination more difficult; broader producer rights make discrimination easier. I argue that more price discrimination …

Labor And The Supreme Court: Review Of The 1996-1997 Term, Keith N. Hylton

Faculty Scholarship

The U.S. Supreme Court's 1996-1997 Term will surely not be remembered among lawyers for its decisions in the employment area. Most of these decisions involved narrow questions of statutory interpretation, and for the most part the Court has handed down opinions consistent with existing case law. There was not one National Labor Relations Act (NLRA) decision this Term and the two employment discrimination cases involved fairly technical issues of statutory interpretation. The feeling of a quiet year is put across by simply reading the statutes at issue other than Title VII: the Federal Employers' Liability Act (FELA) (one case), the …

Legal Differences Without Economic Distinctions: Points, Penalties, And The Market For Mortgages, Alan L. Feld

Faculty Scholarship

Economic analysis can serve many functions when applied to the law, most notably prediction (how people' react to laws and lawmaking processes), evaluation (whether these reactions result in social efficiency), and description (which features of laws, and lawmaking are salient). Here we propose to describe. We use economic analysis to show a legal difference without an economic distinction. We demonstrate the economic equivalence of two practices in the mortgage market. Interestingly, widespread bans exist on one of these practices, but no restrictions exist on the other.

Specifically, in this essay we examine the relationship among points, prepayment penalties, and financial …

The Bylaw Battlefield: Can Institutions Change The Outcome Of Corporate Control Contests?, John C. Coffee Jr.

Faculty Scholarship

What, if anything, can institutional investors do to influence the course and outcome of corporate control contests? The traditional answer was relatively little. To be sure, institutions could tender their shares in a tender offer or vote in a proxy contest to oust the incumbent board, but such a role was essentially reactive and contingent. It required that an offer actually be made before institutions could respond on an after-the-fact basis. Similarly, institutions have occasionally conducted precatory proxy campaigns calling upon the board to redeem its poison pill, but management was free to ignore these requests (and has done so).

Indemnity Of Legal Fees, Avery W. Katz

Faculty Scholarship

This article surveys the effects of legal fee shifting on a variety of decisions arising before and during the litigation process. Section 2 provides a brief survey of the practical situations in which legal fee shifting does and does not arise. Section 3 analyzes the effects of indemnification on the incentives to expend resources in litigated cases. Section 4 examines how indemnification influences the decisions to bring and to defend against suit, and Section 5 assesses its effects on the choice between settlement and trial. Section 6 addresses the interaction between the allocation of legal fees and the parties' incentives …

The Rise Of Sublocal Structures In Urban Governance, Richard Briffault

Faculty Scholarship

The dominant law and economics model of local government, based on the work of Charles M. Tiebout, assumes that decentralization of power to local governments promotes the efficient delivery of public goods and services. In his seminal article, A Pure Theory of Local Expenditures, Tiebout contended that the existence of a large number of local governments in any given area permits a "market solution" to the question of how to determine the level and mix of government services that people desire. The multiplicity of local governments in an area means that, as long as each locality is free to …

International Aspects Of Fundamental Tax Reconstructing: Practice Or Principle, Michael J. Graetz

Faculty Scholarship

The globalization of economic activity, including the expansion of international trade, the amazing ability of international capital markets to transfer capital rapidly across borders, and the movement in Europe toward greater economic unification, have made it more difficult for nations independently to fashion tax laws that properly balance their own equity, economic efficiency and simplicity goals. This is what makes this conference to analyze the international aspects of recent proposals to replace the federal income tax with some form of consumption tax, with particular emphasis on the Nunn-Domenici "USA" tax and the Armey-Shelby flat tax ("flat tax"), so important. As …

Strategy And Force In The Liquidation Of Secured Debt, Ronald J. Mann

Faculty Scholarship

The question of why parties use secured debt is one of the most fundamental questions in commercial finance. The commonplace answer focuses on force: A grant of collateral to a lender enhances the lender's ability to collect its debt by enhancing the lender's ability to take possession of the collateral by force and sell it to satisfy the debt. That perspective draws considerable support from the design of the major legal institutions that support secured debt: Article 9 of the Uniform Commercial Code and the less uniform state laws regarding real estate mortgages.

Both of those institutions are designed solely …

Explaining The Pattern Of Secured Credit, Ronald J. Mann

Faculty Scholarship

Granting collateral to secure loans is a prominent feature of the U.S. economy, but, surprisingly, we do not understand how borrowers and lenders decide whether to engage in a secured or an unsecured transaction. In this Article, Professor Mann argues that existing theories of secured lending are inadequate because the theories' predictions have not been tested against empirical data. To understand the actual pattern of secured credit, Professor Mann interviewed more than twenty borrowers and lenders in various sectors of the economy. Based on the evidence gathered in these interviews, as well as on preexisting empirical studies, this Article develops …

Private Ownership And Corporate Performance: Some Lessons From Transition Economies, Roman Frydman, Cheryl W. Gray, Marek P. Hessel, Andrzej Rapaczynski

Faculty Scholarship

Data on mid-sized firms in three transition economies provide strong evidence that private ownership – for worker ownership – improves corporate performance. And the privatized firms' superior ability to generate revenues allows those firms to sustain or expand employment.

Using a large sample of data on mid-sized firms in the Czech Republic, Hungary, and Poland, Frydman, Gray, Hessel, and Rapacynski compare the performance of privatized and state firms in the environment of the postcommunist transition.

They find strong evidence that private ownership – for worker ownership – improves corporate performance. They find no evidence of the privatization shock that was …

Contract Formation And Interpretation, Avery W. Katz

Faculty Scholarship

Much research in law and economics, following Coase's insight that the effects of a legal rule depend on the ability of those whom it governs to bargain around it, has undertaken to explain how substantive entitlements such as property rights influence the bargaining process. Perhaps more important than any substantive rights or duties in this regard, however, is the extensive body of contract doctrine that governs the procedural mechanics of exchange. The formal rules of contract formation, by attaching consequences to the various acts and omissions that bargainers can choose from in a negotiation, affect the parties' incentives to make …

Standard Form Contracts, Avery W. Katz

Faculty Scholarship

Among legal commentators, standard form contracts have long been received with distrust, and the rules governing their interpretation have engendered considerable controversy. While economic analysis has little to say regarding the libertarian objection to standard form contracts or their relationship to personal autonomy, it can help evaluate their effects on efficiency and the distribution of the gains from trade. From such a perspective, standard forms should be analyzed like any other productive input, comparable to design, marketing, and technical support. Whether their use raises any special regulatory or policy concerns, therefore, depends on their implications for the standard litany of …

Commodification And Women's Household Labor, Katharine B. Silbaugh

Faculty Scholarship

A woman washes a kitchen floor. She puts the mop away and drives to the comer market. She consults a shopping list, and purchases groceries from it, carefully choosing the least expensive options. A four-year-old child is tugging at her leg while she does this, and she tries to entertain him, talking to him about the mopped floor, the grocery items. When she returns from the store, she prepares lunch from what she has brought home with her. She and the child both eat lunch. After lunch, she and the child collect laundry and she runs a load. She takes …