Law Commons^™

The Fashion Lottery: Cooperative Innovation In Stochastic Markets, Jonathan Barnett, Gilles Grolleau, Sana El Harbi

Jonathan M Barnett

The fashion market is an anomaly: innovation is vigorous but original producers are substantially unprotected against imitation, which proliferates under an incomplete property regime consisting of strong trademark protections and weak design protections. We account for this anomaly through a “cooperative innovation” model where producers prefer an incomplete property regime that permits some imitation to alternative regimes that permit no imitation or all imitation, independent of budget constraints. A property regime that permits positive but limited levels of imitation operates as a form of group insurance that alleviates the risk of recoupment failure in a market characterized by demand uncertainty, …

Copyright Without Creators, Jonathan M. Barnett

Jonathan M Barnett

Copyright is typically justified by the rationale that profits induce authors and other artists to invest resources in cultural production. This rationale is vulnerable to the objection that some artists have intrinsic incentives to invest in cultural production and do not require significant capital to do so. Even accepting this objection, copyright is justified by an alternative rationale: it supports the profit-motivated intermediaries that bear the high costs and risks involved in evaluating, distributing and marketing content in mass-cultural markets. This “authorless” rationale is consistent with the intermediated structure of mature mass-cultural markets and accounts for long-standing features of copyright …

The Host's Dilemma: Strategic Forfeiture In Platform Markets For Informational Goods, Jonathan M. Barnett

Jonathan M Barnett

Voluntary forfeiture of intellectual assets—often, exceptionally valuable assets--is surprisingly widespread in information technology markets. A simple economic rationale can account for these practices. By giving away access to core technologies, a platform holder commits against expropriating (and thereby induces) user investments that support platform value. To generate revenues that cover development and maintenance costs, the platform holder must regulate access to other goods and services within the total consumption bundle. The tradeoff between forfeiting access (to induce adoption) and regulating access (to recover costs) anticipates the substantial convergence of open and closed innovation models. Organizational patterns in the software and …

Intermediaries Revisited: Is Efficient Certification Consistent With Profit Maximization?, Jonathan M. Barnett

Jonathan M Barnett

Private certification mechanisms are a key component of the regulatory infrastructure in the financial sector and other commercial settings. It is generally assumed that certification intermediaries have profit-based incentives to deliver accurate information to the certified market. But this view does not account for repeated failures in certification markets. Those failures can be explained by an inherent defect in the incentive structure of certification intermediaries: entry barriers both support and undermine the consistent supply of accurate information to the certified market. Certification markets tend to converge on a handful of providers protected by switching costs, product opacity and reputational noise. …

Intellectual Property As A Law Of Organization, Jonathan M. Barnett

Jonathan M Barnett

The incentive thesis for patents is challenged by the existence of alternative means by which firms can capture returns on innovation. Taking into account patent alternatives yields a robust reformulation of the incentive thesis as mediated by organizational form. Patents enable innovators to make efficient selections of firm scope by transacting with least-cost suppliers of commercialization inputs. These expanded transactional opportunities reduce the minimum size of the market into which any innovator—or the supplier of any other technological or production input—can attempt entry. Disaggregation of the innovation and commercialization process then induces the formation of secondary markets in disembodied technology …

Is Intellectual Property Trivial?, Jonathan M. Barnett

Jonathan M Barnett

We typically assume that intellectual property makes a substantial difference in regulating access to intellectual goods and thereby provides incentives for the production of intellectual goods. But the existence of alternative instruments by which to appropriate innovation returns suggests that even substantial changes in intellectual property may often make little difference in regulating access, which in turn means that those changes may often make little difference in regulating innovation incentives. This raises a conundrum: in markets where “more or less IP” exerts no substantial effect on access costs and innovation gains, why do firms expend resources on influencing changes in …

Property As Process: How Innovation Markets Select Innovation Regimes, Jonathan M. Barnett

Jonathan M Barnett

It is commonly asserted that innovation markets suffer from excessive intellectualproperty protections, which in turn stifle output. But empirical inquiries can neither confirm nor deny this assertion. Under the “agnostic” assumption that we cannot assess directly whether intellectual-property coverage is excessive, an alternative query is proposed: can the market assess if any “propertization outcome” is excessive and then undertake actions to yield a socially preferable outcome? Grounded in the “bottom up” methodology of new institutional economics, this process-based approach takes the view that innovator populations make rent-seeking investments that continuously “select” among a range of “innovation regimes” that trade off …

What's So Bad About Stealing?, Jonathan M. Barnett

Jonathan M Barnett

The moral prohibition against theft, and legal causes of action against trespass and like activities, are usually stated in absolutist terms that admit few exceptions. But application of the theft prohibition to creative goods is incomplete and unstable across industries, regions and periods. Existing economic explanations for the theft prohibition either overestimate its scope of application in creative environments or fail to specify a mechanism by which adjustments in its scope are implemented. A “power” approach that ties changes in the moral and legal treatment of “creative theft” to the distribution of formal and informal “influence capacities” across affected populations …

Certification Drag: The Opinion Puzzle And Other Transactional Curiosities, Jonathan Barnett

Jonathan M Barnett

The law-and-economics literature typically depicts certification intermediaries, such as law firms, auditors, underwriters, investment banks and rating agencies, as socially valuable market participants who ameliorate informational asymmetries that would otherwise distort pricing or transaction structures. This standard view is incomplete. Using the example of the “closing opinion”, a third-party legal opinion commonly delivered at the consummation of a variety of business transactions, I argue that intermediaries, even when operating under substantially competitive conditions and in sophisticated market settings, may supply widely consumed certification products that fail to mitigate informational asymmetries while increasing transaction costs. Based on the highly qualified language …

Hollywood Deals: Soft Contracts For Hard Markets, Jonathan Barnett

Jonathan M Barnett

Hollywood film studios, talent and other deal participants regularly commit to, and undertake production of, high-stakes film projects on the basis of unsigned “deal memos”, informal communications or draft agreements whose legal enforceability is uncertain. These “soft contracts” constitute a hybrid instrument that addresses a challenging transactional environment where neither formal contract nor reputation effects adequately protect parties against the holdup risk and project risk inherent to a film project. Parties negotiate the degree of contractual formality, which correlates with legal enforceability, as a proxy for allocating these risks at a transaction-cost savings relative to a fully formalized and specified …

From Patent Thickets To Patent Networks: The Legal Infrastructure Of The Digital Economy, Jonathan M. Barnett

Jonathan M Barnett

Scholarly and popular commentary often assert that markets characterized by intensive patent issuance and enforcement suffer from “patent thickets” that suppress innovation. This assertion is difficult to reconcile with continuous robust levels of R&D investment, coupled with declining prices, in technology markets that have operated under intensive patent issuance and enforcement for several decades. Using network visualization software, I show that information and communication technology markets rely on patent pools and other cross-licensing structures to mitigate or avoid patent thickets and associated inefficiencies. Based on the composition, structure, terms and pricing of selected leading patent pools in the ICT market, …

Anti-Waste, Michael Pappas

Michael Pappas

It may be a bad idea to waste resources, but is it illegal? Legally speaking, what does “waste” even mean? Though the concept may appear completely subjective, this Article builds a framework for understanding how the law identifies and addresses waste. Drawing upon property and natural resource doctrines, the Article finds that the law selects from a menu of five specific, and sometimes competing, societal values to define waste. The values are: 1) economic efficiency, 2) human flourishing, 3) concern for future generations, 4) stability and consistency, and 5) ecological concerns. The law recognizes waste in terms of one or …

Law And Economic Development: A New Beginning?, Lan Cao

Lan Cao

No abstract provided.

The Diaspora Of Ethnic Economies: Beyond The Pale?, Lan Cao

Lan Cao

No abstract provided.

The Cat That Catches Mice: China's Challenge To The Dominant Privatization Model, Lan Cao

Lan Cao

No abstract provided.

Reflections On Market Reform In Post-War, Post-Embargo Vietnam, Lan Cao

Lan Cao

No abstract provided.

The Worst Test Of Truth: The "Marketplace Of Ideas" As Faulty Metaphor, Thomas W. Joo

Thomas W Joo

In his famous dissent in Abrams v. United States, Justice Holmes proclaimed that “the best test of truth is the power of the thought to get itself accepted in the competition of the market.” This Article critiques the basic argument against speech regulation that has developed from the “marketplace of ideas” metaphor: that speech should be “free” because markets are “free,” and because free markets produce “truth.” These assertions about markets are taken for granted, but they portray markets and market regulation inaccurately; thus economic markets provide a poor analogy for the deregulation of speech.

First Amendment jurisprudence invokes the …

The Long Quest For Legal Efficiency. On The Illusion Of A Process-Free Economic Analysis Of Law, Daniele Bertolini

daniele bertolini

In this paper I attempt to reconstruct and scrutinize the long lasting debate on economic efficiency as a legal concern, and to show that the prevailing idea of economic efficiency - which is exclusively referring to the contents of legal rules as disconnected from the features of the lawmaking process - misses the essence of the discipline. I demonstrate that conventional output-oriented approach is susceptible to the following criticisms: (1) it is affected by logical circularity and/or logical incompleteness; (2) it does not provide any guarantee of social welfare increases; (3) it does not account for the presence of losers; …

You Want Insurance With That? Using Behavioral Economics To Protect Consumers From Add-On Insurance Products, Tom Baker, Peter Siegelman

Peter Siegelman

No abstract provided.

The End Of Contractarianism? Behavioral Economics And The Law Of Corporations, Kent Greenfield

Kent Greenfield

Reviews the current state of the scholarship in the field of behavioral economics as it relates to corporate and securities law.

Inclusionary Eminent Domain, Gerald S. Dickinson

Gerald S. Dickinson

This article proposes a paradigm shift in takings law, namely “inclusionary eminent domain.” This new normative concept – paradoxical in nature – rethinks eminent domain as an inclusionary land assembly framework that is equipped with multiple tools to help guide municipalities, private developers and communities construct or preserve affordable housing developments. Analogous to inclusionary zoning, inclusionary eminent domain helps us think about how to fix the “exclusionary eminent domain” phenomenon of displacing low-income families by assembling and negotiating the use of land – prior to, during or after condemnation proceedings – to accommodate affordable housing where condemnation threatens to decrease …

Behavioral Economics And Insurance Law: The Importance Of Equilibrium Analysis, Peter Siegelman, Tom Baker

Peter Siegelman

No abstract provided.

Directors’ Legal Duties And Csr: Prohibited, Permitted Or Prescribed In Contemporary Corporate Law?, Benedict Sheehy, Donald Feaver

Benedict Sheehy

Abstract: The interaction between CSR obligations and directors’ legal duties is seriously under examined. This article addresses that lack by examining directors’ duties in case law and legislation across the major commonwealth countries and the USA. It provides an analysis of leading cases and examines how they deal with the issues of the shareholder primacy doctrine, corporate legal theory, CSR and directors’ duties. The article reviews fiduciary relations and duties, analyses the directors’ duties to exercise power in the best interests of the company as a whole and for proper purposes. As this area of law is highly contested there …

Gambling On Our Financial Future: How The Federal Government Fiddles While State Common Law Is A Safer Bet To Prevent Another Financial Collapse, Brian M. Mccall

Brian M McCall

The First Thing We Do, Jorge R. Roig

Jorge R Roig

"Show Me The Money!"-Analyzing The Potential State Tax Implications Of Paying Student-Athletes, Kathryn Kisska-Schulze, Adam Epstein

Adam Epstein

On March 26, 2014, the Chicago district (Region 13) of the National Labor Relations Board (NLRB) ruled that Northwestern University football players qualify as employees and can unionize and bargain collectively, a decision which contravenes the National Collegiate Athletic Association’s (NCAA) core principle of amateurism. Shortly after, Northwestern University filed an appeal with the NLRB in Washington, D.C. to quash the prior Region 13 decision. This case has added fuel to the longstanding debate over whether student-athletes should be paid. Amidst arguments both for and against supporting the pay-for-play model from a purely compensatory stance, there has been minimal focus …

The Mask Of Virtue: Theories Of Aretaic Legislation In A Public Choice Perspective, Donald J. Kochan

Donald J. Kochan

Corporate Social Responsibility In A Remedy-Seeking Society: A Public Choice Perspective, Donald J. Kochan

Donald J. Kochan

Written for the Chapman Law Review Symposium on “What Can Law & Economics Teach Us About the Corporate Social Responsibility Debate?,” this Article applies the lessons of public choice theory to examine corporate social responsibility. The Article adopts a broad definition of corporate social responsibility activism to include both (1) those efforts that seek to convince corporations to voluntarily take into account corporate social responsibility in their own decision-making, and (2) the efforts to alter the legal landscape and expand legal obligations of corporations beyond traditional notions of harm and duty so as to force corporations to invest in interests …

A Tributação Estratégica. Introdução À Teoria Dos Jogos No Direito Tributário., Cristiano Carvalho

Cristiano Rosa de Carvalho

O objetivo deste artigo é introduzir o campo de análise estratégica conhecido como Teoria dos Jogos aos operadores do direito tributário brasileiro.