Law and Economics Commons^™

Reflections On The Newtown Shooting One Year Later, John J. Donohue

John Donohue

One year has passed since the horrific Newtown school shooting of December 14, 2012, and we have likely learned all that will be known about the tragic events of that day. As we reflect back on the event and the subsequent political and legislative responses, a few points should be noted.

Fiscal Rules As An Instrument Of Fiscal Consolidation (Chosen Issues), Krystyna Niziol

Bocconi Legal Papers

Chosen issues connected with fiscal rules will be analyzed in this paper. These rules can be used as an instrument of fiscal consolidation, which aim is to limit deficit and public debt. This issue is particularly important in times of a sovereign debt crisis, which many EU countries have to cope with. Regulations of the EU and Polish Fiscal Law concerning the analyzed issues will be discussed in this paper.

Us/Eu Trade For Cross-Border Alternative Societies Labor And Industrial Relations In The Transatlantic Free-Trade Agreement Guidelines, Michele Faioli

Michele Faioli

No abstract provided.

What Do We Worry About When We Worry About Price Discrimination? The Law And Ethics Of Using Personal Information For Pricing, Akiva A. Miller

Akiva A Miller

New information technologies have dramatically increased sellers’ ability to engage in retail price discrimination. Debates over using personal information for price discrimination frequently treat it as a single problem, and are not sufficiently sensitive to the variety of price discrimination practices, the different kinds of information they require in order to succeed, and the different ethical concerns they raise. This paper explores the ethical and legal debate over regulating price discrimination facilitated by consumers’ personal information. Various kinds of “privacy remedies”—self-regulation, technological fixes, state regulation, and legislating private causes of legal action—each have their place. By drawing distinctions between various …

Law, Bubbles, And Financial Regulation, Erik F. Gerding

Erik F. Gerding

This introductory chapter of the book "Law, Bubbles, and Financial Regulation" outlines how financial regulation can fail when it is needed the most. The dynamics of asset price bubbles weaken financial regulation just as financial markets begin to overheat and the risk of crisis spikes. At the same time, the failure of financial regulations adds further fuel to a bubble.

This book examines the interaction of bubbles and financial regulation through over three centuries of history of financial crises. This perspective reveals that law is crucial to the story of bubbles and that the legal history of the current global …

La Patentes Como Límite A La Innovación Tecnológica, Alejandro Pérez Y Soto Dominguez, Katherine Flórez Pinilla

Alejandro Pérez y Soto Dominguez

El presente artículo analiza, desde el marco de la Escuela Austriaca, la propiedad intelectual reflejada en las patentes, entendidas como un mecanismo del legislador para incentivar una conducta empresarial que propenda por la innovación y el desarrollo tecnológico. Se tomó como caso las patentes en el sector farmacéutico, obteniendo a partir de éste evidencia empírica la corroboración de las hipótesis de la escuela, por medio de un análisis teórico a la luz de los problemas identificados alrededor de la patente, tales como: discriminación de precios, investigación parcializada en ciertas enfermedades, poder de mercado ilimitado, barreras al desarrollo tecnológico nacional, altos …

Strategic Default In Joint Liability Groups: Evidence From A Natural Experiment In India, Xavier Gine, Karuna Krishnaswamy, Alejandro Ponce

Alejandro Ponce

Despite the high repayment rates claimed by microcredit programs around the world, some groups of borrowers eventually default and are subsequently disbanded. Exposure to common shocks and strategic default are reasons for the deterioration in group repayment but identification of the precise mechanism is difficult. In this paper we exploit an announcement issued by the Anjuman Committee of a town in southern India banning all Muslims from repaying their microfinance loans. Using administrative data we find that borrowers in Muslim-dominated groups have higher default rates after the announcement compared to the same borrowers with loans in Hindu-dominated groups. We conclude …

Patentes Como Límite A La Innovación Tecnológica, Katherine Florez Pinilla, Alejandro Perez Y Soto Domínguez

KATHERINE FLOREZ PINILLA

El presente artículo pretende analizar, desde el marco de la Escuela Austriaca, la propiedad intelectual reflejada en las patentes, entendidas como un mecanismo del legislador para incentivar una conducta empresarial que propenda por la innovación y el desarrollo tecnológico. Se tomó como caso las patentes en el sector farmacéutico, obteniendo a partir de éste evidencia empírica la corroboración de las hipótesis de la escuela, por medio de un análisis teórico a la luz de los problemas identificados alrededor de la patente, tales como: discriminación de precios, investigación parcializada en ciertas enfermedades, poder de mercado ilimitado, barreras al desarrollo tecnológico nacional, …

An Economic Approach To Collective Rights And Their Means Of Supply: The Case Of Right To "The Enjoyment Of A Healthy Environment" And The Right To "Rational Management And Use Of Natural Resources" [En Español], Daniel A. Monroy

Daniel A Monroy C

This paper has two main objectives (i) Demonstrate that the defining characteristic of collective rights related to non-excludable of the benefits derived from the "means" of supply and the material "objects" of rights, is consistent with the microeconomic defining characteristic of so-called "public goods" and "commons " (together we call these as non-excludable resources). On the other hand, (ii) Demonstrate that when we analyze the collective rights as non-excludable resources this aims important omitted challenges by traditional legal doctrine related with the adequate supply of collective rights, this happens because the problems of the -Olsonian- logic of collective action. For …

Efficient Breach In The Common European Sales Law (Cesl), Wenqing Liao

Wenqing Liao

In the classic economic theory, it is suggested that contract law should be structured in such a way that efficient breaches (i.e. those increasing social welfare) would be promoted. The default remedy of expectation damages was justified on this cognition. Nowadays, more and more suspects and critiques are raised against the so called simple efficient breach model. The aim of this paper is to re-sketch the theory of efficient breach and to compare the consequences resulting from economic analysis with the remedy rules of the Common European Sales Law (CESL). It is proposed that the doctrine of efficient breach has …

The Commons, Capitalism, And The Constitution, George Skouras

George Skouras

Thesis Summary: the erosion of the Commons in the United States has contributed to the deterioration of community and uprooting of people in order to meet the dynamic demands of capitalism. This article suggests countervailing measures to help remedy the situation.

Should The Commercial Landlord Have A Duty To Mitigate Damages After The Tenant Abandons?: A Legal And Economic Analysis, David Crump

David Crump

When a commercial tenant abandons the premises, the landlord’s costs continue. Does the landlord, then, have the burden of mitigating damages for a suit against the tenant? Two different rules apply in different states. Some states, including Pennsylvania, put the burden of mitigation on the breaching party: the commercial tenant. Other states, however, put the burden entirely on the non-breaching party: the landlord. Texas follows this latter approach, placing the burden solely on the innocent party and not on the breaching party. The Texas rule, which puts the burden of mitigation on the non-breaching commercial landlord, has serious disadvantages. First, …

Beyond Finality: How Making Criminal Judgments Less Final Can Further The Interests Of Finality, Andrew Chongseh Kim

Andrew Chongseh Kim

Courts and scholars commonly assume that granting convicted defendants more liberal rights to challenge their judgments would harm society’s interests in “finality.” According to conventional wisdom, finality in criminal judgments is necessary to conserve resources, encourage efficient behavior by defense counsel, and deter crime. Thus, under the common analysis, the extent to which convicted defendants should be allowed to challenge their judgments depends on how much society is willing to sacrifice to validate defendants’ rights. This Article argues that expanding defendants’ rights on post-conviction review does not always harm these interests. Rather, more liberal review can often conserve state resources, …

The Death Penalty, John J. Donohue

John Donohue

A system of punishment involving the execution of individuals convicted of a capital crime.

The issue of the death penalty has been an area of enormous academic and political ferment in the United States over the last forty years, with the country flirting with abolition in the 1970s, followed by a period of renewed use of the death penalty, and then a period of retrenchment, reflected in a declining number of death sentences and executions and a recent trend leading six states to abolish the death penalty in the last six years. Internationally, there is a steady movement away from …

Comentarios En Torno Al Ámbito Subjetivo Del Nuevo Estatuto Del Consumidor En Colombia, Entre La Técnica Y La Idoneidad (Comments About The Subjective Scope Of The New Consumer Protection Act In Colombia, Between The Technique And The Suitability), Jesús A. Soto

Jesús Alfonso Soto Pineda

El artículo analiza la intencionalidad adherida al acto de consumo y el elemento subjetivo de la relación, con el objetivo de determinar el ámbito de aplicabilidad del Estatuto del consumidor en Colombia, Ley 1480 de 2011. Identificando un compendio de caracteres que reducen la aplicación de la norma de acuerdo al objetivo privado perseguido por las partes con la celebración de un acto. Evaluando igualmente la relación que ahora parece existir, –gracias al texto adherido al Estatuto– entre las normas de consumo y el ejercicio de profesiones liberales.

The article analyses the motives attached to the act of consumption and …

Lawyering In The Shadow Of Data, Dru Stevenson, Nicholas J. Wagoner

Dru Stevenson

Attorney bargaining has traditionally taken place in the shadow of trial, as litigants alter their pretrial behavior—including their willingness to negotiate a settlement – based on perceptions of likely outcomes at trial and anticipated litigation costs. Lawyers practicing in the shadow of trial have, in turn, traditionally formed their perception of the likely outcome at trial based on their knowledge of case precedents, intuition, and previous interactions with the presiding judge and opposing counsel in similar cases. Today, however, technology for leveraging legal data is moving the practice of law into the shadow of the trends and patterns observable in …

"Shut Up. Pay More. This Is What You Voted For." Why You Don't See Me At San Francisco's Hall Of Justice., David D. Butler

David D. Butler

This 2,285 essay combines California's often violent history with European and American high and low culture to explain my decision to leave San Francisco in the 1970's and to study and practice law in other states. At the time, I was platflorm man (operator) on the 30 Stockton electric trolley through South of Market, the Financial District, Chinatown, Pacific Heights, and the Marina. Nevertheless, at the time the Nation of Islam had at least one armed group, the Zebra killers, murdering Whites, often slowly with machetes. I joined the White, Middle-Class, Taxpaying majority in their diaspora to safer places. My …

Lessons From Metaethics, Cognitive Neuroscience, Moral Psychology, And Behavioral Economics: The Use Of Ethical Intuition In Legal Compliance For Business Entities, Eric C. Chaffee

Eric C. Chaffee

This article challenges the widely held view in legal education and in practice that what lawyers should be doing in providing legal advice consists solely of engaging in legal research and analytic reasoning. This article suggests that ethical intuition—i.e., the unconscious recognition that a specific action is good, evil, or morally neutral—may have a useful role to play in making legal compliance decisions for business entities.

Although largely ignored by the legal academy, scholars in numerous disciplines have acknowledged the role that intuition plays in decision making. Philosophers and religious scholars initially recognized role of intuition in moral decision making …

The Market In Unmatured Tort Claims: Twenty-Five Years Later, Stephen G. Marks

Stephen G Marks

Twenty-five years ago, in 1989, Professor Robert Cooter, writing in the Virginia Law Review, proposed changes in the law that would facilitate the development of a market in unmatured tort claims. On this twenty-fifth anniversary of this groundbreaking paper, it is fitting to reexamine this proposal, speculate on why it has not been adopted, and to explore whether revisions in the proposal might lead to greater legislative acceptance. In this paper I reexamine the proposal as to its likely intended and unintended effects. This article argues that, for such a market in unmatured tort claims to work, three modifications must …

A Market For Tax Compliance, Walter E. Afield Iii

Walter E Afield III

It is becoming increasingly clear that, due to political realities and budgetary constraints, the IRS is going to have to attempt to enforce the tax laws by doing more with less. Current enforcement efforts have yielded a tax gap (i.e., the difference between the amount of taxes that should be paid and the amount that are collected) of roughly $450 billion annually. Faced with this task, one of the steps that the IRS has recently taken is to try to improve the quality in services performed by paid tax preparers, a group that historically has been subject to little IRS …

Moving Money: International Financial Flows, Taxes, Money Laundering & Transparency, Richard Gordon, Andrew P. Morriss

Andrew P Morriss

Recent publicity over enormous estimates of “missing” wealth and the use of sophisticated tax strategies by companies like Apple, Google, and Starbucks have produced a demand that the wealthy pay a “fair” amount of tax regardless of their compliance with the letter of tax laws. In particular, the Tax Justice Network’s claim that $21-$32 trillion of “hidden” wealth remains untaxed has garnered considerable attention. In this paper we argue that these claims rest on poor data and analysis and mistakes about how financial transactions work. We further argue that the disputes are about fundamentally conflicting visions of how financial transactions …

The Underutilized Foreign Investor, Griffin Weaver

Griffin Weaver

For most states, if not all, the push for economic advancement is at the front of every administration’s agenda. This is especially true for developing countries in the Middle East whose standard of living and international power is largely tied to its economic condition. An important indicator, if not condition, of a state’s economic health is the level of foreign direct investment (FDI) received by the state. This inflow of money is essential for the growth and stability of a state’s economy. As one U.S. official once noted, the United States “need[s] a net inflow of capital of $3 billion …

Presentación Del Número 84 De La Revista Alegatos, Rafael Ramírez Villaescusa

Rafael Ramírez Villaescusa

Presentación del contenido del número 84 de la Revista Alegatos, por el Dr. Rafael Ramírez Villaescusa

Algunas Consideraciones Sobre La Aplicación Pública De La Ley Penal, Rafael Ramírez Villaescusa

Rafael Ramírez Villaescusa

Uno de los temas en los que el análisis económico del derecho ha puesto particular atención es el de la llamada aplicación óptima de la ley. Para el movimiento de la economía del derecho, las normas deben ser juzgadas bajo criterios de eficiencia económica, por tanto cabe cuestionarse cuántos recursos públicos deben destinarse para garantizar el cumplimiento del derecho, máxime si tomamos en cuenta que los recursos económicos con los que cuenta la sociedad son escasos y tienen diversos usos. Lo anterior, en pocas palabras, significa que el costo de oportunidad de invertir en el sistema de justicia es aquello …

The Problem Of Nonprofit Executive Pay?: Evidence From U.S. Colleges And Universities, Brian D. Galle, David I. Walker

Brian D. Galle

Nonprofit organizations suffer from agency problems that are similar to or perhaps even more severe than those observed at for-profit companies. As a result, one might expect the executive pay setting process in the two sectors to reflect similar deficiencies. This Article explains why the managerial power theory that was developed to help explain for-profit executive pay is plausibly applicable to nonprofits. More importantly, this Article offers new evidence based on data from a large panel of colleges and universities collected across a nine year period that supports the idea that potential stakeholder outrage plays a role in limiting nonprofit …

Legal Mirrors Of Entrepreneurship, Mirit Eyal-Cohen

Mirit Eyal-Cohen

Small businesses are regarded the engine of the economy. But just what is a “small” business? Depending on where one looks in the law, the definitions vary and they differ from one section to another. Unfortunately, what these various size classifications fail to assess, are the policy considerations and the legislative intent for granting regulatory preferences to small concerns to begin with.

In the last century, the U.S. government has been cultivating one such policy of fiscal and economic growth. Consequently, Congress and private institutions have been acting to incentivize, support and reward entrepreneurship through the law in order to …

Re-Envisioning The Controlling Shareholder Regime: Why Controlling Shareholders And Minority Shareholders Embrace Each Other, Sang Yop Kang

Sang Yop Kang

According to conventional corporate governance scholarship, controlling shareholder regimes exist in jurisdictions where minority shareholders are not well protected by controlling shareholders’ expropriation. However, Professor Ronald Gilson raises a critical point against the conventional view; if laws are inefficient and do not protect investors, as the conventional view explains, why do we observe any minority shareholders at all in such “bad-law” countries? One possible reason is that in response to controlling shareholders’ expropriation, minority shareholders discount severely shares that corporations issue. Then, a related question is: if it is true, why do some controlling shareholders in bad-law countries have many …

Expanding The Inner Circle: How Welfarist Norms Escape In-Groups, Alexander D. Jakle

Alexander D. Jakle

I explore the influence of social mechanisms by which welfarist norms come to be appropriate by those outside the social group for which they were developed, and how they lead to patterned deviance from the law. Drawing on literature from law and society, law and economics, political science, social theory, and other fields, I use original research from a qualitative study of amateur baseball players to analyze the interplay between norms, groups, and deviance. Relationships with agents is widespread, despite being against both NCAA Bylaws and most players economic incentives. To explain this seemingly irrational pattern of rule-breaking, I argue …

The Lies We Tell Ourselves: Confidence, Self-Deception, And Their Effects On "Rationality" And Deviance, Alexander D. Jakle

Alexander D. Jakle

Law and economics suggests that we behave in ways that maximize our preferences, but what if we are deceived about what we want or how best to get it? This article explores how the psychology of self-deception can be marshaled to explain unexpected patterns of law-breaking and deviance. Using original research from a qualitative case study of amateur NCAA baseball players, I examine the ways in which self-deception leads us to systematically reinterpret and process information, fundamentally changing how we weigh the costs and benefits associated with breaking rules. Our preferences are inextricably interwoven with our identities, and we go …

Present At The Creation: Reflections On The Early Years Of The National Association Of Corporate Directors, Lawrence J. Trautman

Lawrence J. Trautman Sr.

Effective corporate governance is critical to the productive operation of the global economy and preservation of our way of life. Excellent governance execution is also required to achieve economic growth and robust job creation in any country. In the United States, the premier director membership organization is the National Association of Corporate Directors (NACD). Now over 36 years old, NACD plays a major role in fostering excellence in corporate governance in the United States and beyond. Over the past thirty-six years NACD has grown from a mere realization of the importance of corporate governance to become the only national membership …