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Corporate Risk Analysis: A Reckless Act?, W. Kip Viscusi
Corporate Risk Analysis: A Reckless Act?, W. Kip Viscusi
Vanderbilt Law School Faculty Publications
Balancing of risk and cost lies at the heart of standard negligence tests and policy analysis approaches to government regulation. Notwithstanding the desirability of using a benefit-cost approach to assess the merits of safety measures, in many court cases juries appear to penalize corporations for having done a risk analysis in instances in which the company decided not to make a safety improvement after the analysis indicated the improvement was unwarranted Automobile accident cases provide the most prominent examples of such juror sanctions. This paper tests the effect of corporate risk analyses experimentally by using a sample of almost 500 …
Trust, Trustworthiness, And The Behavioral Foundations Of Corporate Law, Margaret M. Blair, Lynn A. Stout
Trust, Trustworthiness, And The Behavioral Foundations Of Corporate Law, Margaret M. Blair, Lynn A. Stout
Vanderbilt Law School Faculty Publications
Conventional legal and economic analysis assumes that opportunistic behavior is discouraged and cooperation encouraged within firms primarily through the use of legal and market incentives. This presumption is embodied in the modern view that the corporation is best described as a "nexus of contracts," a collection of explicit and implicit agreements voluntarily negotiated among the selfishly rational parties who join in the corporate enterprise. In this article we take a different approach. We start from the observation that, in many circumstances, legal and market sanctions provide at best imperfect means of regulating behavior within the firm. We consider an alternate …
The Zen Of Corporate Capital Structure Neutrality, Herwig J. Schlunk
The Zen Of Corporate Capital Structure Neutrality, Herwig J. Schlunk
Vanderbilt Law School Faculty Publications
Given the current tax rate structure - where the marginal tax rate of some persons exceeds the corporate tax rate and the marginal tax rate of others is exceeded by it - corporations are generally well advised to employ both debt and equity in their capital structures. The former will be held by low tax rate taxpayers and will serve to lower the effective aggregate tax rate6 on the corporation's taxable income. The latter will be held by high tax rate taxpayers and will serve to keep low the effective aggregate tax rate on the corporation's unrecognized economic income (such …
Timing Matters: Promoting Forum Shopping By Insolvent Corporations, Randall Thomas, Robert K. Rasmussen
Timing Matters: Promoting Forum Shopping By Insolvent Corporations, Randall Thomas, Robert K. Rasmussen
Vanderbilt Law School Faculty Publications
Most commentators decry forum shopping. This general hostility extends to forum shopping by firms filing for bankruptcy. Indeed, Congress is considering legislation designed to reduce forum shopping by companies filing for bankruptcy. This article makes two contributions to this debate. First, we show that the current debate is driven almost exclusively by attorneys trying to protect fees rather than by any principled objection to forum shopping. Second, on the merits, we argue that the hostility to forum shopping is misplaced. The near universal condemnation of forum shopping rests on the premise that, at the time the plaintiff selects a forum, …