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Full-Text Articles in Law
Unemployment And Regulatory Policy, Eric A. Posner, Jonathan Masur
Unemployment And Regulatory Policy, Eric A. Posner, Jonathan Masur
Coase-Sandor Working Paper Series in Law and Economics
No abstract provided.
Do Exclusionary Rules Convict The Innocent?, Dhammika Dharmapala, Nuno Garoupa, Richard H. Mcadams
Do Exclusionary Rules Convict The Innocent?, Dhammika Dharmapala, Nuno Garoupa, Richard H. Mcadams
Coase-Sandor Working Paper Series in Law and Economics
Rules excluding various kinds of evidence from criminal trials play a prominent role in criminal procedure, and have generated considerable controversy. In this paper, we address the general topic of excluding factually relevant evidence, that is, the kind of evidence that would rationally influence the jury's verdict if it were admitted. We do not offer a comprehensive analysis of these exclusionary rules, but add to the existing literature by identifying a new domain for economic analysis, focusing on how juries respond to the existence of such a rule. We show that the impact of exclusionary rules on the likelihood of …
The Antitrust Analysis Of Multi-Sided Platform Businesses, David S. Evans, Richard Schmalensee
The Antitrust Analysis Of Multi-Sided Platform Businesses, David S. Evans, Richard Schmalensee
Coase-Sandor Working Paper Series in Law and Economics
This Chapter provides a survey of the economics literature on multi-sided platforms with particular focus on competition policy issues, including market definition, mergers, monopolization, and coordinated behavior. It provides a survey of the general industrial organization theory of multi-sided platforms and then considers various issues concerning the application of antitrust analysis to multi-sided platform businesses. It shows that it is not possible to know whether standard economic models, often relied on for antitrust analysis, apply to multi-sided platforms without explicitly considering the existence of multiple customer groups with interdependent demand. It summarizes many theoretical and empirical papers that demonstrate that …
On The Interpretability Of Law: Lessons From The Decoding Of National Constitutions, James Melton, Zachary Elkins, Tom Ginsburg, Kalev Leetaru
On The Interpretability Of Law: Lessons From The Decoding Of National Constitutions, James Melton, Zachary Elkins, Tom Ginsburg, Kalev Leetaru
Coase-Sandor Working Paper Series in Law and Economics
An implicit element of many theories of constitutional enforcement is the degree to which those subject to constitutional law can agree on what its provisions mean (call this constitutional interpretability). Unfortunately, there is little evidence on baseline levels of constitutional interpretability or the variance therein. This article seeks to fill this gap in the literature, by assessing the effect of contextual, textual and interpreter characteristics on the interpretability of constitutional documents. Constitutions are found to vary in their degree of interpretability. Surprisingly, however, the most important determinants of variance are not contextual (for example, era, language or culture), but textual. …
Attributes Of Ownership, Reid Thompson, David A. Weisbach
Attributes Of Ownership, Reid Thompson, David A. Weisbach
Coase-Sandor Working Paper Series in Law and Economics
We examine the tax rules for ownership of fungible securities in light of three recent cases addressing this issue, Samueli, Calloway, and Anschutz. We argue that ownership has no economic basis under an income tax because under a pure income tax ownership would not be needed to measure income. Rather than acting as a bedrock principle based in economics, ownership in a realization-based income tax acts as a default rule for assigning tax characteristics to positions. For example, ownership determine characteristics such as holding periods, eligibility for special tax benefits such as the dividends received deduction, counting toward control or …
The Role Of Keyword Advertising In Competition Among Rival Brands, Elisa V. Mariscal, David S. Evans
The Role Of Keyword Advertising In Competition Among Rival Brands, Elisa V. Mariscal, David S. Evans
Coase-Sandor Working Paper Series in Law and Economics
This paper considers recent proposals for restricting keyword advertising using competitor brand names. Keyword advertising is similar to many other widely used and valuable methods of marketing to the customers of rivals that increase competition and facilitate entry. Queries for products or services using search engines help inform consumers about other competitive alternatives and may enable them to compare different product offerings. Economists have found overwhelmingly that this type of informative and comparative advertising benefits consumers and, conversely, that restricting such advertising harms consumers. Complainants in some recent keyword advertising cases have sought to forbid search engines from using trademarked …
Balance-Of-Powers Arguments And The Structural Constitution, Eric A. Posner
Balance-Of-Powers Arguments And The Structural Constitution, Eric A. Posner
Coase-Sandor Working Paper Series in Law and Economics
Balance-of-powers arguments are ubiquitous in judicial opinions and academic articles that address separation-of-powers disputes over the president's removal authority, power to disregard statutes, authority to conduct foreign wars, and much else. However, the concept of the balance of powers has never received a satisfactory theoretical treatment. This Essay examines possible theories of the balance of powers and rejects them all as unworkable and normatively questionable. Judges and scholars should abandon the balance-of-powers metaphor and instead address directly whether bureaucratic innovation is likely to improve policy outcomes.
Negligence Liability For Non-Negligent Behavior, Ariel Porat
Negligence Liability For Non-Negligent Behavior, Ariel Porat
Coase-Sandor Working Paper Series in Law and Economics
Should a doctor who performed a vaginal delivery be held liable for the harm that delivery by cesarean section would have prevented, if according to the information available prior to delivery, the baby's estimated size warranted a c-section but after delivery, its actual size emerged to be less and not mandating cesarean delivery? More generally, consider an injurer whose injurious behavior is considered reasonable according to the information available to the court at the time of the trial: Should he be held liable under negligence law for the harm that resulted from his behavior if according to the information that …
Replacing The Libor With A Transparent And Reliable Index Of Interbank Borrowing: Comments On The Wheatley Review Of Libor Initial Discussion Paper, David S. Evans, Rosa M. Abrantes-Metz
Replacing The Libor With A Transparent And Reliable Index Of Interbank Borrowing: Comments On The Wheatley Review Of Libor Initial Discussion Paper, David S. Evans, Rosa M. Abrantes-Metz
Coase-Sandor Working Paper Series in Law and Economics
We propose an alternative to the LIBOR based on three pillars. 1) Banks that participate in the rate setting process would have to submit bid and ask quotes for interbank lending and commit that they would conduct transactions within that range. If they traded outside of those ranges they would have to justify and face a penalty. This leads to the CLIBOR—for "committed" LIBOR. (2) All large banks would have to submit interbank transactions including rates to a data-clearing house. The data-clearing house would use the actual transactions to verify the commitment of the banks to the submitted rates. It …
Another Look At The Eurobarometer Surveys, William Hubbard
Another Look At The Eurobarometer Surveys, William Hubbard
Coase-Sandor Working Paper Series in Law and Economics
The current proposal for a Common European Sales Law (CESL) makes a number of empirical claims in support of its argument that differences in contract law among Member States are stifling trade, and that CESL will address these barriers to cross-border trade. These empirical claims rest largely on citations to a number of Flash Eurobarometer surveys and other surveys of businesses and consumers. A closer look at these surveys reveals that the cited statistics do not support the claims that contract-law-related obstacles present special barriers to cross-border trade for small- and medium-sized enterprises and consumers. Instead, a more ambiguous picture …
Becoming The Fifth Branch, M. Todd Henderson, William A. Birdthistle
Becoming The Fifth Branch, M. Todd Henderson, William A. Birdthistle
Coase-Sandor Working Paper Series in Law and Economics
Observers of our federal republic have long acknowledged that a fourth branch of government comprising administrative agencies has arisen to join the original three established by the Constitution. In this article, we focus our attention on the emergence of perhaps yet another, comprising financial self-regulatory organizations. In the late eighteenth century, long before the creation of state and federal securities authorities, the financial industry created its own self-regulatory organizations. These private institutions then coexisted with the public authorities for much of the past century in a complementary array of informal and formal policing mechanisms. That equilibrium, however, appears to be …
Voice Versus Exit In Health Care Policy, M. Todd Henderson
Voice Versus Exit In Health Care Policy, M. Todd Henderson
Coase-Sandor Working Paper Series in Law and Economics
This essay uses the recent controversy over President Obama's mandate that insurance companies provide generous birth control coverage to explore larger issues about the optimal locus of health care decision making. Mandates may be justified in some instances, but they sacrifice choice and local variation and perhaps lead to worse social outcomes. The key question for policy makers is whether market processes or rule by expert is more likely to strike the right balance of choice and mandate. Keywords: law and economics, federalism, health care policy, birth control.
Resource Access Costs, Lee Anne Fennell
Resource Access Costs, Lee Anne Fennell
Coase-Sandor Working Paper Series in Law and Economics
No abstract provided.
Becker On Ewald On Foucault On Becker American Neoliberalism And Michel Foucault's 1979 'Birth Of Biopolitics' Lectures, Gary S. Becker, François Ewald, Bernard E. Harcourt
Becker On Ewald On Foucault On Becker American Neoliberalism And Michel Foucault's 1979 'Birth Of Biopolitics' Lectures, Gary S. Becker, François Ewald, Bernard E. Harcourt
Coase-Sandor Working Paper Series in Law and Economics
No abstract provided.
The Problem Of Measuring Legal Change, With Application To Bell Atlantic V. Twombly, William Hubbard
The Problem Of Measuring Legal Change, With Application To Bell Atlantic V. Twombly, William Hubbard
Coase-Sandor Working Paper Series in Law and Economics
Measuring legal change--i.e., change in the way that judges decide cases--presents a vexing problem. In response to a change in the behavior of courts, plaintiffs and defendants will change their patterns of filing and settling cases. Priest and Klein's (1984) selection model predicts that no matter how favorable or unfavorable the legal standard is to plaintiffs, the rate at which plaintiffs prevail in litigation will not pre- dictably change; thus, legal change cannot be measured with data on court outcomes. In this paper, I extend the selection model to develop a methodology for measuring legal change, even in the presence …
Cliff Schmiff, Joseph Isenbergh
Cliff Schmiff, Joseph Isenbergh
Coase-Sandor Working Paper Series in Law and Economics
No abstract provided.
Hiding In Plain Sight: Can Disclosure Enhance Insiders’ Trade Returns?, M. Todd Henderson, Alan Jagolinzer, Karl Muller
Hiding In Plain Sight: Can Disclosure Enhance Insiders’ Trade Returns?, M. Todd Henderson, Alan Jagolinzer, Karl Muller
Coase-Sandor Working Paper Series in Law and Economics
Can voluntary disclosure be used to enhance insiders' strategic trade while providing legal cover? We investigate this question in the context of 10b5-1 trading plans. Prior literature suggests that insiders lose strategic trade value if their planned trades are disclosed. But disclosure might enhance strategic trade because courts can only consider publicly available evidence from defendants at the motion to dismiss phase of trial. This practice can enhance legal protection for firms that disclose planned trades, especially those disclosing detailed information. Consistent with increased legal protection, we find that voluntary disclosure of planned trades increases with firm litigation risk and …
Reverse Regulatory Arbitrage: An Auction Approach To Regulatory Assignments, M. Todd Henderson, Frederick Tung
Reverse Regulatory Arbitrage: An Auction Approach To Regulatory Assignments, M. Todd Henderson, Frederick Tung
Coase-Sandor Working Paper Series in Law and Economics
In the years before the Financial Crisis, banks got to pick their regulators, engaging in a form of regulatory arbitrage that we now know was a race to the bottom. We propose to turn the tables on the banks by allowing regulators, specifically, bank examiners, to choose the banks they regulate. We call this "reverse regulatory arbitrage," and we think it can help improve regulatory outcomes. Building on our prior work that proposes to pay bank examiners for performance—by giving them financial incentives to avoid bank failures—we argue that bank supervisory assignments should be set through an auction among examiners. …
International Law And The Limits Of Macroeconomic Cooperation, Alan O. Sykes, Eric A. Posner
International Law And The Limits Of Macroeconomic Cooperation, Alan O. Sykes, Eric A. Posner
Coase-Sandor Working Paper Series in Law and Economics
The macroeconomic policies of states can produce significant costs and benefits for other states, yet international macroeconomic cooperation has been one of the weakest areas of international law. We ask why states have had such trouble cooperating over macroeconomic issues, when they have been relatively successful at cooperation over other economic matters such as international trade. We argue that although the theoretical benefits of macroeconomic cooperation are real, in practice it is difficult to sustain because optimal cooperative policies are often uncertain and time variant, making it exceedingly difficult to craft clear rules for cooperation in many areas. It is …
The Institutional Structure Of Immigration Law, Eric A. Posner
The Institutional Structure Of Immigration Law, Eric A. Posner
Coase-Sandor Working Paper Series in Law and Economics
Immigration law scholars should give more attention to the institutional structure of immigration law and, in particular, the way that the government addresses problems of asymmetric information in the course of screening potential migrants and attempting to control their behavior once they arrive. Economic models of optimal contracting provide a useful starting point for analyzing this problem. This approach is applied to several current debates in immigration scholarship, including controversies over "crimmigration" and courts' refusal to extend labor and employment rights to undocumented aliens.
Absolute Preferences And Relative Preferences In Property Law, Lior Strahilevitz
Absolute Preferences And Relative Preferences In Property Law, Lior Strahilevitz
Coase-Sandor Working Paper Series in Law and Economics
No abstract provided.
International Paretianism: A Defense, Eric A. Posner, David A. Weisbach
International Paretianism: A Defense, Eric A. Posner, David A. Weisbach
Coase-Sandor Working Paper Series in Law and Economics
A treaty satisfies what we call International Paretianism if it advances the interests of all states that join it, so that no state is made worse off. The principle might seem obvious, but it rules out nearly all the major proposals for a climate treaty, including proposals advanced by academics and by government officials. We defend International Paretianism, and for that reason urge commentators in the debate over climate justice to abandon efforts to right past wrongs, redistribute wealth, and achieve other abstract ideals through a climate treaty.
The Dynamics Of Contract Evolution, Eric A. Posner, Stephen J. Choi, G. Mitu Gulati
The Dynamics Of Contract Evolution, Eric A. Posner, Stephen J. Choi, G. Mitu Gulati
Coase-Sandor Working Paper Series in Law and Economics
Contract scholarship has given little attention to the production process for contracts. The usual assumption is that the parties will construct the contract ex nihilo, choosing all the terms so that they will maximize the surplus from the contract. In fact, parties draft most contracts by slightly modifying the terms of contracts that they have used in the past, or that other parties have used in related transactions. A small literature on boilerplate recognizes this phenomenon, but little empirical work examines the process. This Article provides an empirical analysis by drawing on a data set of sovereign bonds. We show …
Harmonization, Preferences, And The Calculus Of Consent In Commercial And Other Law, Saul Levmore
Harmonization, Preferences, And The Calculus Of Consent In Commercial And Other Law, Saul Levmore
Coase-Sandor Working Paper Series in Law and Economics
The European Union is exploring a move toward harmonization in the form of a common commercial code (CESL), with some mandatory provisions especially with respect to consumer law, but also incorporating a large dose of business-to-business law that would be optional at the enterprise, rather than jurisdictional, level. This paper begins with the question of when harmonization is preferable to diversity, and not just with respect to commercial law. It tackles the problem from the perspective of the median voters in jurisdictions, some of which have similar preferences and some not. It introduces the ability of a stable and like-minded …
An Fda For Financial Innovation: Applying The Insurable Interest Doctrine To Twenty-First-Century Financial Markets, E. Glen Weyl, Eric A. Posner
An Fda For Financial Innovation: Applying The Insurable Interest Doctrine To Twenty-First-Century Financial Markets, E. Glen Weyl, Eric A. Posner
Coase-Sandor Working Paper Series in Law and Economics
The financial crisis of 2008 was caused in part by speculative investment in complex derivatives. In enacting the Dodd-Frank Act, Congress sought to address the problem of speculative investment, but merely transferred that authority to various agencies, which have not yet found a solution. We propose that when firms invent new financial products, they be forbidden to sell them until they receive approval from a government agency designed along the lines of the FDA, which screens pharmaceutical innovations. The agency would approve financial products if they satisfy a test for social utility that focuses on whether the product will likely …
Should Environmental Taxes Be Precautionary?, David A. Weisbach
Should Environmental Taxes Be Precautionary?, David A. Weisbach
Coase-Sandor Working Paper Series in Law and Economics
The precautionary principle requires that we take additional actions to prevent harms when the harms from an activity are uncertain and possibly irreversible. This paper considers whether environmental or other Pigouvian taxes should similarly be precautionary. Should environmental taxes be set higher than otherwise if harm from pollution is uncertain and irreversible and where we are likely to learn more about the nature of the harm the future. It concludes that environmental taxes should be set equal to expected marginal harm from pollution given the currently available information and should be neither raised or lowered because of the prospect of …
Unilateral Carbon Taxes, Border Tax Adjustments, And Carbon Leakage, Gita Kuhn Jush, Joshua Elliott, Ian Foster, Sam Kortum, Todd Minson
Unilateral Carbon Taxes, Border Tax Adjustments, And Carbon Leakage, Gita Kuhn Jush, Joshua Elliott, Ian Foster, Sam Kortum, Todd Minson
Coase-Sandor Working Paper Series in Law and Economics
We examine the impact of a unilateral carbon tax in developed countries focusing on the expected size of carbon leakage (an increase in emissions in non-taxing regions as a result of the tax) and the effects on leakage of border tax adjustments. We start by analyzing the problem using a simple two-country, three-good general equilibrium model to develop intuitions. We then simulate the expected size of the effects using a new, open-source, computable general equilibrium (CGE) model. We analyze the extent of emissions reductions from a carbon tax in countries that made commitments under the Kyoto Protocol (Annex B countries), …
Excessive Litigation By Business Users Of Free Platform Services, David S. Evans
Excessive Litigation By Business Users Of Free Platform Services, David S. Evans
Coase-Sandor Working Paper Series in Law and Economics
In the last decade a number of Internet-based multi-sided platforms have emerged that provide free services to, in some cases, millions of businesses. More such platforms are being spawned as the Internet-based economy grows. This Article argues that under current norms in adversarial proceedings, such as those involving competition policy, these platforms are likely to face large numbers of complaints in multiple jurisdictions, a substantial likelihood that at least one of these complaints will result in a false-positive decision against the platform, and material risk of a false-positive decision that results in catastrophic consequences. These effects result from a combination …
Mistake Under The Common European Sales Law, Ariel Porat
Mistake Under The Common European Sales Law, Ariel Porat
Coase-Sandor Working Paper Series in Law and Economics
The Common European Sales Law (CESL) sets the conditions in which the mistaken party is entitled to rescission and compensation from the other party. Some of the CESL's provisions, however, are inconsistent with efficiency. First, under the CESL, as long as the mistake is essential, for the mistaken party to be allowed to rescind the contract, it is sufficient that the other party caused the mistake. From an efficiency perspective, however, causation is not enough to allow rescission for mistake. Second, the CESL permits rescission when one party failed to disclose information to the other party that would have revealed …
The Questionable Basis Of The Common European Sales Law: The Role Of An Optional Instrument In Jurisdictional Competition, Eric A. Posner
The Questionable Basis Of The Common European Sales Law: The Role Of An Optional Instrument In Jurisdictional Competition, Eric A. Posner
Coase-Sandor Working Paper Series in Law and Economics
The Common European Sales Law is designed as an optional instrument that European parties engaged in cross-border transactions could choose for their transactions in preference to national law. The goal is to increase cross-border transactions and perhaps to enhance European identity. But the CESL is unlikely to achieve these goals. It raises transaction costs while producing few if any benefits; it is unlikely to spur beneficial jurisdictional competition; its consumer protection provisions will make it unattractive for businesses; and its impact on European identity is likely to be small.