Law and Economics Commons^™

Racism Pays: How Racial Exploitation Gets Innovation Off The Ground, Daria Roithmayr

Michigan Journal of Race and Law

Recent work on the history of capitalism documents the key role that racial exploitation played in the launch of the global cotton economy and the construction of the transcontinental railroad. But racial exploitation is not a thing of the past. Drawing on three case studies, this Paper argues that some of our most celebrated innovations in the digital economy have gotten off the ground by racially exploiting workers of color, paying them less than the marginal revenue product of their labor for their essential contributions. Innovators like Apple and Uber have been able to racially exploit workers of color because …

The Futures Of Law, Lawyers, And Law Schools: A Dialogue, Sameer M. Ashar, Benjamin H. Barton, Michael J. Madison, Rachel F. Moran

Articles

On April 19 and 20, 2023, Professors Bernard Hibbitts and Richard Weisberg convened a conference at the University of Pittsburgh School of Law titled “Disarmed, Distracted, Disconnected, and Distressed: Modern Legal Education and the Unmaking of American Lawyers.” Four speakers concluded the event with a spirited conversation about themes expressed during the proceedings. Distilling a lively two days, they asked: what are the most critical challenges now facing US legal education and, by extension, lawyers and the communities they serve? Their agreements and disagreements were striking, so much so that Professors Hibbitts and Weisberg invited those four to extend their …

Leases As Forms, David A. Hoffman, Anton Strezhnev

All Faculty Scholarship

We offer the first large scale descriptive study of residential leases, based on a dataset of ~170,000 residential leases filed in support of over ~200,000 Philadelphia eviction proceedings from 2005 through 2019. These leases are highly likely to contain unenforceable terms, and their pro-landlord tilt has increased sharply over time. Matching leases with individual tenant characteristics, we show that unlawful terms are surprisingly likely to be associated with more expensive leaseholds in richer, whiter parts of the city. This result is linked to landlords' growing adoption of shared forms, originally created by non-profit landlord associations, and more recently available online …

Diversifying Nuclear Technology: A Technical Analysis On Small Modular Reactors And Its Impact On Nuclear Energy Policy, Carolina Lugo Mejia, Marcos Lugo

Helm's School of Government Conference - American Revival: Citizenship & Virtue

The energy policy debate in the United States has revolved around the diversification of energy sources while promoting advantageous economic profits. One drive for this has been the discussion of anthropogenic, environmental endangerment concerns (Vlassopoulous 2011, 104). However, despite the environmental concerns, the U.S. has for some time only relied on one type of energy source—fossil fuels. Fossil fuels are categorized as natural gas, coal, petroleum, and other gases responsible (U.S. Energy Administration 2019). Natural gas is responsible for 38.4%, coal for 23.4%, petroleum for 0.4%, and other gases for 0.3% of the U.S.’s electrical generation (U.S. Energy Administration 2019). …

Is The Digital Economy Too Concentrated?, Jonathan Klick

All Faculty Scholarship

Concentration in the digital economy in the United States has sparked loud criticism and spurred calls for wide-ranging reforms. These reforms include everything from increased enforcement of existing antitrust laws, such as challenging more mergers and breaking up firms, to an abandonment of the consumer welfare standard. Critics cite corruption and more systemic public choice problems, while others invoke the populist origins of antitrust to slay the digital Goliaths. On the other side, there is skepticism regarding these arguments. This chapter continues much of that skepticism.

Tech, Regulatory Arbitrage, And Limits, Elizabeth Pollman

All Faculty Scholarship

Regulatory arbitrage refers to structuring activity to take advantage of gaps or differences in regulations or laws. Examples include Facebook modifying its terms and conditions to reduce the exposure of its user data to strict European privacy laws, and Uber and other platform companies organizing their affairs to categorize workers as non-employees. This essay explores the constraints and limits on regulatory arbitrage through the lens of the technology industry, known for its adaptiveness and access to strategic resources. Specifically, the essay explores social license and the bundling of laws and resources as constraining forces on regulatory arbitrage, and the legal …

Corporate Disobedience, Elizabeth Pollman

All Faculty Scholarship

Corporate law has long taken a dim view of corporate lawbreaking. Corporations can be chartered only for lawful activity. Contemporary case law characterizes intentional violations of law as a breach of the fiduciary duties of good faith and loyalty. While recognizing that rule breaking raises significant social and moral concerns, this Article suggests that corporate law and academic debate have overlooked important aspects of corporate disobedience. This Article provides an overview of corporate disobedience and illuminates the role that it has played in entrepreneurship and legal change. Corporations violate laws for a variety of reasons, including as part of efforts …

Startup Governance, Elizabeth Pollman

All Faculty Scholarship

Although previously considered rare, over three hundred startups have reached valuations over a billion dollars. Thousands of smaller startups aim to follow in their paths. Despite the enormous social and economic impact of venture-backed startups, their internal governance receives scant scholarly attention. Longstanding theories of corporate ownership and governance do not capture the special features of startups. They can grow large with ownership shared by diverse participants, and they face issues that do not fit the dominant principal-agent paradigm of public corporations or the classic narrative of controlling shareholders in closely held corporations.

This Article offers an original, comprehensive framework …

Teva And The Process Of Claim Construction, Lee Petherbridge Ph.D., R. Polk Wagner

All Faculty Scholarship

In Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., the Supreme Court addressed an oft-discussed jurisprudential disconnect between itself and the U.S. Court of Appeals for the Federal Circuit: whether patent claim construction was “legal” or “factual” in nature, and how much deference is due to district court decisionmaking in this area. In this Article, we closely examine the Teva opinion and situate it within modern claim construction jurisprudence. Our thesis is that the Teva holding is likely to have only very modest effects on the incidence of deference to district court claim construction but that for unexpected reasons the …

Reasonable Patent Exhaustion, Herbert J. Hovenkamp

All Faculty Scholarship

A lengthy tug of war between the Supreme Court and the Federal Circuit Court of Appeals may have ended when the Supreme Court held that the sale of a patented article exhausts the patentee seller’s rights to enforce restrictions on that article through patent infringement suits. Further, reversing the Federal Circuit, the parties cannot bargain around this rule through the seller’s specification of conditions stated at the time of sale, no matter how clear. No inquiry need be made into the patentee’s market power, anticompetitive effects, or other types of harms, whether enforcement of the condition is socially costly or …

Antitrust And The Design Of Production, Herbert J. Hovenkamp

All Faculty Scholarship

Both economics and antitrust policy have traditionally distinguished “production” from “distribution.” The former is concerned with how products are designed and built, the latter with how they are placed into the hands of consumers. Nothing in the language of the antitrust laws suggests much concern with production as such. Although courts do not view it that way, even per se unlawful naked price fixing among rivals is a restraint on distribution rather than production. Naked price fixing assumes a product that has already been designed and built, and the important cartel decision is what should be each firm’s output, or …

Standing Voting Instructions: Empowering The Excluded Retail Investor, Jill E. Fisch

All Faculty Scholarship

Despite the increasing importance of shareholder voting, regulators have paid little attention to the rights of retail investors who own approximately 30% of publicly traded companies but who vote less than 30% of their shares. A substantial factor contributing to this low turnout is the antiquated mechanism by which retail investors vote. The federal proxy voting rules place primary responsibility for facilitating retail voting in the hands of custodial brokers who have limited incentives to develop workable procedures, and current regulatory restrictions impede market-based innovation that incorporate technological innovations.

One of the most promising such innovations is standing voting instructions …

Optimizing Government For An Optimizing Economy, Cary Coglianese

All Faculty Scholarship

Much entrepreneurial growth in the United States today emanates from technological advances that optimize through contextualization. Innovations as varied as Airbnb and Uber, fintech firms and precision medicine, are transforming major sectors in the economy by customizing goods and services as well as refining matches between available resources and interested buyers. The technological advances that make up the optimizing economy create new challenges for government oversight of the economy. Traditionally, government has overseen economic activity through general regulations that aim to treat all individuals equally; however, in the optimizing economy, business is moving in the direction of greater individualization, not …

Motivating Without Mandates: The Role Of Voluntary Programs In Environmental Governance, Cary Coglianese, Jennifer Nash

All Faculty Scholarship

For the last several decades, governments around the world have tried to use so-called voluntary programs to motivate private firms to act proactively to protect the environment. Unlike conventional environmental regulation, voluntary programs offer businesses flexibility to adopt cost-effective measures to reduce environmental impacts. Rather than prodding firms to act through threats of enforcement, they aim to entice firms to move forward by offering various kinds of positive incentives, ranging from public recognition to limited forms of regulatory relief. Despite the theoretical appeal of voluntary programs, their proper role in government’s environmental toolkit depends on the empirical evidence of how …

Telecommunications: Competition Policy In The Telecommunications Space, Gene Kimmelman, Maureen K. Ohlhausen, Michael O’Rielly, Christopher S. Yoo, Stephen F. Williams

All Faculty Scholarship

In today’s rapidly evolving telecommunications landscape, the development of new technologies and distribution platforms are driving innovation and growth at a breakneck speed across the Internet ecosystem. Broadband connectivity is increasingly important to our civil discourse, our economy, and our future. What is the proper role of government in facilitating robust investment and competition in this critical sector? When technology companies constantly have to reinvent themselves and adapt to survive – what role should government play? This panel of experts at the Federalist Society’s 2014 National Lawyers Convention discussed the current regulatory environment and how government policies – particularly regarding …

Preparing For Service: A Template For 21st Century Legal Education, Michael J. Madison

Articles

Legal educators today grapple with the changing dynamics of legal employment markets; the evolution of technologies and business models driving changes to the legal profession; and the economics of operating – and attending – a law school. Accrediting organizations and practitioners pressure law schools to prepare new lawyers both to be ready to practice and to be ready for an ever-fluid career path. From the standpoint of law schools in general and any one law school in particular, constraints and limitations surround us. Adaptation through innovation is the order of the day.

How, when, and in what direction should innovation …

U.S. Vs. European Broadband Deployment: What Do The Data Say?, Christopher S. Yoo

All Faculty Scholarship

As the Internet becomes more important to the everyday lives of people around the world, commentators have tried to identify the best policies increasing the deployment and adoption of high-speed broadband technologies. Some claim that the European model of service-based competition, induced by telephone-style regulation, has outperformed the facilities-based competition underlying the US approach to promoting broadband deployment. The mapping studies conducted by the US and the EU for 2011 and 2012 reveal that the US led the EU in many broadband metrics.

• High-Speed Access: A far greater percentage of US households had access to Next Generation Access (NGA) …

Toward A Closer Integration Of Law And Computer Science, Christopher S. Yoo

All Faculty Scholarship

Legal issues increasingly arise in increasingly complex technological contexts. Prominent recent examples include the Stop Online Piracy Act (SOPA) and the Protect Intellectual Property Act (PIPA), network neutrality, the increasing availability of location information, and the NSA’s surveillance program. Other emerging issues include data privacy, online video distribution, patent policy, and spectrum policy. In short, the rapid rate of technological change has increasingly shown that law and engineering can no longer remain compartmentalized into separate spheres. The logical response would be to embed the interaction between law and policy deeper into the fabric of both fields. An essential step would …

Competition For Innovation, Herbert J. Hovenkamp

All Faculty Scholarship

Both antitrust and IP law are limited and imperfect instruments for regulating innovation. The problems include high information costs and lack of sufficient knowledge, special interest capture, and the jury trial system, to name a few. More fundamentally, antitrust law and intellectual property law have looked at markets in very different ways. Further, over the last three decades antitrust law has undergone a reformation process that has made it extremely self conscious about its goals. While the need for such reform is at least as apparent in patent and copyright law, very little true reform has actually occurred.

Antitrust has …

Harm To Competition Or Innovation, Herbert J. Hovenkamp

All Faculty Scholarship

This book of CASES AND MATERIALS ON INNOVATION AND COMPETITION POLICY is intended for educational use. The book is free for all to use subject to an open source license agreement. It differs from IP/antitrust casebooks in that it considers numerous sources of competition policy in addition to antitrust, including those that emanate from the intellectual property laws themselves, and also related issues such as the relationship between market structure and innovation, the competitive consequences of regulatory rules governing technology competition such as net neutrality and interconnection, misuse, the first sale doctrine, and the Digital Millennium Copyright Act (DMCA). Chapters …

Innovation And Competition Policy, Chapter 6 (2d Ed): Restraints On Innovation, Herbert J. Hovenkamp

All Faculty Scholarship

This book of CASES AND MATERIALS ON INNOVATION AND COMPETITION POLICY is intended for educational use. The book is free for all to use subject to an open source license agreement. It differs from IP/antitrust casebooks in that it considers numerous sources of competition policy in addition to antitrust, including those that emanate from the intellectual property laws themselves, and also related issues such as the relationship between market structure and innovation, the competitive consequences of regulatory rules governing technology competition such as net neutrality and interconnection, misuse, the first sale doctrine, and the Digital Millennium Copyright Act (DMCA). Chapters …

Competition And Innovation In Copyright And The Dmca, Herbert J. Hovenkamp

All Faculty Scholarship

This book of CASES AND MATERIALS ON INNOVATION AND COMPETITION POLICY is intended for educational use. The book is free for all to use subject to an open source license agreement. It differs from IP/antitrust casebooks in that it considers numerous sources of competition policy in addition to antitrust, including those that emanate from the intellectual property laws themselves, and also related issues such as the relationship between market structure and innovation, the competitive consequences of regulatory rules governing technology competition such as net neutrality and interconnection, misuse, the first sale doctrine, and the Digital Millennium Copyright Act (DMCA). Chapters …

Markets In Ip And Antitrust, Herbert J. Hovenkamp

All Faculty Scholarship

The purpose of market definition in antitrust law is to identify a grouping of sales such that a single firm who controlled them could maintain prices for a significant time at above the competitive level. The conceptions and procedures that go into “market definition” in antitrust can be quite different from those that go into market definition in IP law. When the issue of market definition appears in IP cases, it is mainly as a query about the range over which rivalry occurs. This rivalry may or may not have much to do with a firm’s ability to charge a …

Competition Law And Sector Regulation In The European Energy Market After The Third Energy Package: Hierarchy And Efficiency, Michael Diathesopoulos

Michael Diathesopoulos

The aim of this research is to provide the basic parameters for a model for the definition of the relation between the general competition and sector specific frameworks and rules regarding the regulation of the Internal Energy Market, especially after the Third Energy Package. The research considers the recent sector specific framework in relation to a series of recent competition law cases of the Energy Market where structural remedies were applied under the commitments procedure. Essential facilities doctrine and generally competition law tools do not seem to provide a suitable framework for effectively addressing the dynamic competition concept, treating the …

Slides: Adapting To Climate Change: Lessons Learnt From The Australian Water Experience, Will Fargher

Conversation with Water Management Reps from Colorado and Australia: "Adapting to Climate Change: Lessons Learned from Australia" (February 14)

Presenter: Will Fargher, National Water Commission, Australian Government

18 slides [4 have titles only and are missing images]

Antitrust And Innovation: Where We Are And Where We Should Be Going, Herbert J. Hovenkamp

All Faculty Scholarship

For large parts of their history intellectual property law and antitrust law have worked so as to undermine innovation competition by protecting too much. Antitrust policy often reflected exaggerated fears of competitive harm, and responded by developing overly protective rules that shielded inefficient businesses from competition at the expense of consumers. By the same token, the IP laws have often undermined rather than promoted innovation by granting IP holders rights far beyond what is necessary to create appropriate incentives to innovate.

Perhaps the biggest intellectual change in recent decades is that we have come to see patents less as a …

Introduction To Creation Without Restraint: Promoting Liberty And Rivalry In Innovation, Christina Bohannan, Herbert J. Hovenkamp

All Faculty Scholarship

This document contains the table of contents, introduction, and a brief description of Christina Bohannan & Herbert Hovenkamp, Creation without Restraint: Promoting Liberty and Rivalry in Innovation (Oxford 2011).

Promoting rivalry in innovation requires a fusion of legal policies drawn from patent, copyright, and antitrust law, as well as economics and other disciplines. Creation Without Restraint looks first at the relationship between markets and innovation, noting that innovation occurs most in moderately competitive markets and that small actors are more likely to be truly creative innovators. Then we examine the problem of connected and complementary relationships, a dominant feature of …

Third Party Access And Refusal To Deal In European Energy Networks: How Sector Regulation And Competition Law Meet Each Other, Michael Diathesopoulos

Michael Diathesopoulos

In this paper, we will analyse the issue of concurrence between competition and sector rules and the relation between parallel concepts within the two different legal frameworks. We will firstly examine Third Party Access in relation to essential facilities doctrine and refusal of access and we will identify the common points and objectives of these concepts and the extent to which they provide a context to each other’s implementation. Second, we will focus on how Commission uses sector regulation and objectives as a context within the process of implementation of competition law in the energy sector and third, we will …

Torts And Innovation, Gideon Parchomovsky, Alex Stein

All Faculty Scholarship

This Essay exposes and analyzes a hitherto overlooked cost of the current design of tort law: its adverse effect on innovation. Tort liability for negligence, defective products, and medical malpractice is determined by reference to custom. We demonstrate that courts’ reliance on custom and conventional technologies as the benchmark of liability chills innovation and distorts its path. Specifically, the recourse to custom taxes innovators and subsidizes replicators of conventional technologies. We explore the causes and consequences of this phenomenon and propose two possible ways to modify tort law in order to make it more welcoming to innovation.

Schumpeterian Competition And Antitrust, Herbert J. Hovenkamp

All Faculty Scholarship

Joseph Schumpeter's vision of competition saw it as a destructive process in which effort, assets and fortunes were continuously destroyed by innovation. One possible implication is that antitrust's attention on short-run price and output issues is myopic: what seems at first glance to be a monopolistic exclusionary practice might really be an innovative enterprise with enormous payoffs in the long run. While this may be the case, three qualifications are critical. First, one must not confuse the prospect of innovation with the scope of the intellectual property laws; their excesses and special interest capture cast serious doubt on the proposition …