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Articles 511 - 540 of 771

Full-Text Articles in Law and Economics

Insuring Against Terrorism -- And Crime, Saul Levmore, Kyle D. Logue Jan 2003

Insuring Against Terrorism -- And Crime, Saul Levmore, Kyle D. Logue

Articles

The attacks of September 11th produced staggering losses of life and property. They also brought forth substantial private-insurance payouts, as well as federal relief for the City of New York and for the families of individuals who perished on that day. The losses suffered during and after the attacks, and the structure of the relief effort, have raised questions about the availability of insurance against terrorism, the role of government in providing for, subsidizing, or ensuring the presence of such insurance, as well as the interaction between relief and the incentives for taking precautions against similar losses in the future. …

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Redistributing Optimally: Of Tax Rules, Legal Rules, And Insurance, Kyle D. Logue, Ronen Avraham Jan 2003

Redistributing Optimally: Of Tax Rules, Legal Rules, And Insurance, Kyle D. Logue, Ronen Avraham

Articles

From the beginning of the law and economics movement, normative legal economists have focused almost exclusively on evaluating the efficiency of alternative legal rules. The distributional consequences of legal rules, therefore, have largely been ignored. It is tempting to conclude that legal economists are hostile or indifferent to concerns of distributional fairness. In fact, however, the discipline of economics has a great deal to say about distributional policy. The normative branch of economics, known as welfare economics, has always been deeply concerned with distributional issues. It is not that welfare economists purport to know a priori the "right" or "optimal" …

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The Genie And The Bottle: Collateral Sources Under The September 11th Victim Compensation Fund, Kenneth S. Abraham, Kyle D. Logue Jan 2003

The Genie And The Bottle: Collateral Sources Under The September 11th Victim Compensation Fund, Kenneth S. Abraham, Kyle D. Logue

Articles

The September 11th Victim Compensation Fund of 2001 (the Fund) was part of legislation enacted just eleven days after the terrorist attacks of September 11th in the wake of extraordinary national loss. It is possible, therefore, that the Fund will always be considered an urgent and unique response to the unprecedented events of September 11th. On that view, the character of the Fund will have little longterm policy significance. It is equally possible, however, that the enactment of the Fund will prove to be a seminal moment in the history of tort and compensation law. The Fund adopts a new …

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Legal Transitions, Rational Expectations, And Legal Progress, Kyle D. Logue Jan 2003

Legal Transitions, Rational Expectations, And Legal Progress, Kyle D. Logue

Articles

In the literature on legal transitions, the term "transition policy" is generally understood to mean a rule or norm that influences policymakers' decisions concerning the extent to which legal change should be accompanied by transition relief, whether in the form of grandfathering or phase-ins or direct compensation. Legal change within this literature is defined broadly, and somewhat counter-intuitively, to include any resolution of the uncertainty regarding what the law will be in the future or how the law will be applied to future circumstances. Thus, a legal change would obviously include an unexpected repeal of a tax provision, such as …

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Internalizing Outsider Trading, Ian Ayres, Stephen Choi Nov 2002

Internalizing Outsider Trading, Ian Ayres, Stephen Choi

Michigan Law Review

Investing in the United States has become a hobby for many. Individual ownership of equity, moreover, has increased over the past decade due in part to the introduction of internet-based trading. While providing the possibility for greater returns compared with bank savings accounts, among other investment alternatives, the public capital markets also pose greater risks for investors. Many individual investors lack both the resources and the incentive to analyze the value of any particular security in the market. Such investors thus trade at a systematic disadvantage relative to more informed parties. In response, regulators have asserted that certain informational disparities …

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The Fable Of Entry: Bounded Rationality, Market Discipline, And Legal Policy, Avishalom Tor Nov 2002

The Fable Of Entry: Bounded Rationality, Market Discipline, And Legal Policy, Avishalom Tor

Michigan Law Review

Legal scholars have recently advanced a behavioral approach to the law and economics school of thought in an attempt to improve its external validity and predictive power. The hallmark of this new approach is the replacement of the perfectly rational actor with a "boundedly rational" decisionmaker who, apart from being affected by emotion and motivation, has only limited cognitive resources. To function effectively in a complex :world, boundedly rational individuals must rely on cognitive heuristics - simplifying mental shortcuts - that inevitably lead people to make some systematic decision errors; as a result, their behavior necessarily deviates from that predicted …

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Theorizing Behavioral Law And Economics: A Defense Of Evolutionary Analysis And The Law, Neel P. Parekh Oct 2002

Theorizing Behavioral Law And Economics: A Defense Of Evolutionary Analysis And The Law, Neel P. Parekh

University of Michigan Journal of Law Reform

Behavioral law and economics (BLE) provides a steady stream of empirical evidence that counters the predictions of law and economics. Despite this research and data, however, many theorists argue that BLE ultimately fails because it posits no underlying theory. This Note argues that perspectives from evolutionary biology, evolutionary psychology, and the brain sciences can provide the missing motivational theory for BLE's empirical findings. The Note also examines the implications a more consistent and reasoned consideration of evolutionary analysis and the law (EA) has for our legal regime. In theorizing BLE and defending EA, this Note aims to show how evolutionary …

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Regret Theory - Explanation, Evaluation And Implications For The Law, Grant B. Gelberg Oct 2002

Regret Theory - Explanation, Evaluation And Implications For The Law, Grant B. Gelberg

University of Michigan Journal of Law Reform

This Note discusses regret theory, which offers an alternative explanation of rational behavior in risky or uncertain situations. Unlike traditional law and economics, which is based on expected utility theory, regret theory posits that individuals either rejoice or experience regret after making a decision, and that the anticipation of these feelings influences choices ex ante. In recent years, studies have shown the robustness of regret theory, particularly when individuals compare action to inaction, in disparate feedback environments, and when decisional agency is altered. These, and other factors, influence regret theory's impact on litigant behavior, as well as on the …

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Paradigm Shifts And Access Controls: An Economic Analysis Of The Anticircumvention Provisions Of The Digital Millennium Copyright Act, Melissa A. Kern Jun 2002

Paradigm Shifts And Access Controls: An Economic Analysis Of The Anticircumvention Provisions Of The Digital Millennium Copyright Act, Melissa A. Kern

University of Michigan Journal of Law Reform

This Note addresses the broadened scope of protection granted to copyright holders under the anticircumvention provisions of the Digital Millennium Copyright Act of 1998 (DMCA). This broadened scope extends to copyright holders the right to control access to their works, diminishing the consumer's 'fair use" of those works that previously served as a defense to alleged copyright infringements. While access controls are supported by economists who believe they are useful in correcting market inefficiencies and excluding free riders, this Note suggests that access controls cannot correct all market inefficiencies. Furthermore, such access controls deny access and use of copyrighted material …

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Accountability Conceptions And Federalism Tales: Disney's Wonderful World?, William W. Buzbee May 2002

Accountability Conceptions And Federalism Tales: Disney's Wonderful World?, William W. Buzbee

Michigan Law Review

Richard Foglesong's Married to the Mouse: Walt Disney World and Orlando, may not offer the thrills of an entertainment park, but it is an uncommonly good read. In a book focused on approximately four decades of Disney's interactions with Orlando and state officials, political scientist Foglesong tells the tale of how Walt Disney ended up locating his new East Coast entertainment park in Orlando, Florida and what happened in subsequent government-Disney company interactions. Using chapter headings based on stages in a personal relationship's progression ("Serendipity" to "Seduction" through "Marriage," and ultimately, after interim stages, "Therapy"), Foglesong shows that while the …

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A Life In The Craft Of Comparative Law, John C. Reitz May 2002

A Life In The Craft Of Comparative Law, John C. Reitz

Michigan Law Review

It is obvious to specialists in the law of the European Union ("E.U.") - a relatively small but steadily growing group in the United States - that a "retrospective" collection of Eric Stein's writings would be of great interest. From his 1955 article in the Columbia Law Review, the first article about the Court of Justice of the European Coal and Steel Community to appear in English (p. 473), he has been one of the dominant U.S. scholars of what was initially called "European Community" ("E.C.") law after the three original European Communities2 and more recently has been rechristened "European …

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Venture Capital On The Downside: Preferred Stock And Corporate Control, William W. Bratton Mar 2002

Venture Capital On The Downside: Preferred Stock And Corporate Control, William W. Bratton

Michigan Law Review

When stock indices drop precipitously, when the startup companies fizzle out, and when it stops raining money on places like Wall Street and Silicon Valley, attention turns to downside contracting. Law and business lawyers, sitting in the back seat as mere facilitators on the upside, move up to the front and sometimes even take the wheel. The job is the same on both the upside and downside: to maximize the value of going concern assets. But what comes easily on the upside can be dirty work on the down, where assets need to be separated from dysfunctional teams of business …

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Why Tax The Rich? Efficiency, Equity, And Progressive Taxation, Reuven S. Avi-Yonah Jan 2002

Why Tax The Rich? Efficiency, Equity, And Progressive Taxation, Reuven S. Avi-Yonah

Reviews

In Greek mythology, Atlas was a giant who carried the world on his shoulders. In Ayn Rand’s 1957 novel Atlas Shrugged, Atlas represents the “ prime movers”—the talented few who bear the weight of the world’s economy.1 In the novel, the prime movers go on strike against the oppressive burden of excessive regulation and taxation, leaving the world in disarray and demonstrating how indispensable they are to the rest of us (the “second handers” ).

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How The Corporation Conquered John Bull, A.W. Brian Simpson Jan 2002

How The Corporation Conquered John Bull, A.W. Brian Simpson

Michigan Law Review

This is a study of the evolution of the forms of business organization during the industrial revolution. Historians never fully agree about anything at all, and often with good reason, but there is really no doubt that the period covered by this book is one that saw major changes in agricultural and industrial production, and in commercial practice and organization. It is convenient to refer broadly to the changes which took place in terms of a revolution, industrial, agricultural, or less commonly, commercial in nature. Long before the starting date for this study, which is the date of the Bubble …

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Pragmatism Regained, Christopher Kutz Jan 2002

Pragmatism Regained, Christopher Kutz

Michigan Law Review

Jules Coleman's The Practice of Principle serves as a focal point for current, newly intensified debates in legal theory, and provides some of the deepest, most sustained reflections on methodology that legal theory has seen. Coleman is one of the leading legal philosophers in the Anglo-American world, and his writings on tort theory, contract theory, the normative foundations of law and economics, social choice theory, and analytical jurisprudence have been the point of departure for much of the most interesting activity in the field for the last three decades. Indeed, the origin of this book lies in Oxford University's invitation …

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Poverty And Equality: A Distant Mirror, Gene R. Nichol Jan 2002

Poverty And Equality: A Distant Mirror, Gene R. Nichol

Michigan Law Review

In one sense, Joel Schwartz's new effort, Fighting Poverty with Virtue, is tremendously timely. Bill Clinton's Personal Responsibility and Work Opportunity Reconciliation Act of 1996 was designed to "end welfare as we know it," turning greater attention to poor people's habits than to their pocketbooks. George Bush's compassionate conservatism is meant to pick up the pace, overtly seeking "to save and change lives." The White House's ominously entitled "Office of Faith-Based and Community Initiatives" is apparently set to unleash new waves of moral reformers. Schwartz's book seeks to provide moral, philosophical and historical sustenance for these initiatives. He focuses on …

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Toward A Jurisprudence Of Cost-Benefit Analysis, Michael Abramowicz Jan 2002

Toward A Jurisprudence Of Cost-Benefit Analysis, Michael Abramowicz

Michigan Law Review

In 1989, Cass Sunstein published an article entitled On the Costs and Benefits of Aggressive Judicial Review of Agency Action. Sunstein apparently meant the words "costs" and "benefits" in an informal sense, as the article considered the advantages and disadvantages of aggressive judicial review without pretense of explicit quantification. That article was several generations ago in Sunstein scholarship, almost 100 articles and over a dozen books. The central concerns of that article, however, are relevant to an assessment of Sunstein's latest book, whose title, The Cost-Benefit State, uses the words "costs" and "benefits" as labels for quantitative assessments of the …

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The Electrical Deregulation Fiasco: Looking To Regulatory Federalism To Promote A Balance Between Markets And The Provision Of Public Goods, Jim Rossi Jan 2002

The Electrical Deregulation Fiasco: Looking To Regulatory Federalism To Promote A Balance Between Markets And The Provision Of Public Goods, Jim Rossi

Michigan Law Review

Over the last thirty years, regulators have deregulated just about every regulated industry. In no industry has deregulation raised as much fear and concern as in electric power markets. Even before the Enron debacle, a crisis that is more about the failures of corporate than regulatory law, it was clear that something had gone seriously wrong in the turn towards deregulation of electric power. Recent events in California are illustrative. In early 2000, consumers in California, the first state to deregulate retail power markets on a mass scale, saw repeated months of power interruptions. Many utility customers experienced a risk …

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A Control-Based Approach To Shareholder Liability For Corporate Torts, Nina A. Mendelson Jan 2002

A Control-Based Approach To Shareholder Liability For Corporate Torts, Nina A. Mendelson

Articles

Some commentators defend limited shareholder liability for torts and statutory violations as efficient, even though it encourages corporations to overinvest in and to externalize the costs of risky activity. Others propose pro rata unlimited shareholder liability for corporate torts. Both approaches, however, fail to account fully for qualitative differences among shareholders. Controlling shareholders, in particular, may have lower information costs, greater influence over managerial decisionmaking, and greater ability to benefit from corporate activity. This Article develops a control-based approach to shareholder liability. It first explores several differences among shareholders. For example, a controlling shareholder can more easily curb managerial risk …

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Property Rights And Liability Rules: The Ex Ante View Of The Cathedral, Lucian Arye Bebchuk Dec 2001

Property Rights And Liability Rules: The Ex Ante View Of The Cathedral, Lucian Arye Bebchuk

Michigan Law Review

This Article aims to contribute to the study of how the law should allocate and protect entitlements in the presence of externalities. In their classic article published thirty years ago, Calabresi and Melamed studied such questions and offered what they labeled "one view of the Cathedral." I seek to add to the inquiry started by Calabresi and Melamed by offering an ex ante perspective and analyzing how allocations of entitlements affect parties' ex ante actions and investments. Suppose that an upstream Factory would benefit from an activity that would pollute a river and harm an activity conducted by a downstream …

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The Economic Analysis Of Evidence Law: Common Sense On Stilts, Richard O. Lempert Dec 2001

The Economic Analysis Of Evidence Law: Common Sense On Stilts, Richard O. Lempert

Articles

There was a time when the empire of Law was not overrun by economists. The economists had their own fiefdoms to be sure-there was the Duchy of Antitrust and the Kingdom of Regulatory Law-but the economists lived in peace within these borders, welcoming many unlike themselves into their midst, only gently proselytizing their students in the first few classes of a term, and swearing fealty to the law. It is true that a few marauders from beyond the borders saw the wealth of the empire and sought to colonize it, but even the most daring, Archbishop Coase and Duke Gary …

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Optimal Delegation And Decoupling In The Design Of Liability Rules, Ian M. Ayres, Paul M. Goldbart Oct 2001

Optimal Delegation And Decoupling In The Design Of Liability Rules, Ian M. Ayres, Paul M. Goldbart

Michigan Law Review

Calabresi and Melamed began a scholarly revolution by showing that legal entitlements have two readily distinguishable forms of protection: property rules and liability rules. These two archetypal forms protect an entitlement holder's interest in markedly different ways - via deterrence or compensation. Property rules protect entitlements by trying to deter others from taking. Liability rules, on the other hand, protect entitlements not by deterring but by trying to compensate the victim of nonconsensual takings. Accordingly, the compensatory impetus behind liability rules focuses on the takee's welfare - making sure the sanction is sufficient to compensate the takee. The deterrent impetus …

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Cost-Benefit Default Principles, Cass R. Sunstein Jun 2001

Cost-Benefit Default Principles, Cass R. Sunstein

Michigan Law Review

Courts should be reluctant to apply the literal terms of a statute to mandate pointless expenditures of effort. . .. Unless Congress has been extraordinarily rigid, there is likely a basis for an implication of de minimis authority to provide exemption when the burdens of regulation yield a gain of trivial or no value. It seems bizarre that a statute intended to improve human health would .. . lock the agency into looking at only one half of a substance's health effects in determining the maximum level for that substance. [I]t is only where there is "clear congressional intent to …

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Ever The Twain Shall Meet, Fred S. Mcchesney May 2001

Ever The Twain Shall Meet, Fred S. Mcchesney

Michigan Law Review

Instinctively, corruption is deplorable. Nobody likes private citizens paying governmental officials for special favors. Few have deplored corruption longer or in greater detail than economist Susan Rose-Ackerman. In Corruption and Government, Professor Rose-Ackerman discusses how corruption starts ("causes"), why it is bad ("consequences"), and how to stop it ("reform"), principally from an economic perspective. Professor Rose-Ackerman's interest in corruption derives partly from her outside work with international agencies, especially time spent at the World Bank - "a transformative experience" (p. xi). Her twenty-two page bibliography ranges across sources in economics and politics, plus many documents from the World Bank and …

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How To Plot Love On An Indifference Curve, Brian H. Bix May 2001

How To Plot Love On An Indifference Curve, Brian H. Bix

Michigan Law Review

In From Partners to Parents: The Second Revolution in Family Law, June Carbone offers nothing less than a whirlwind tour of the current doctrinal and policy debates of Family Law - an astounding feat in a book whose main text (excluding endnotes and appendices) does not reach 250 pages. There seem to be few controversies about which Carbone has not read widely and come to a conclusion, and usually a fair-minded one: from the effect of no-fault divorce reforms on the divorce rate, to the long-term consequences of slavery for the African-American family (pp. 67-84), to whether the Aid to …

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Applying A Legal Matrix To The World Of Sports, Elsa Kircher Cole May 2001

Applying A Legal Matrix To The World Of Sports, Elsa Kircher Cole

Michigan Law Review

The intensity of fans' love for sports is no modern phenomenon. In ancient Rome, fierce rivalries existed between fans of the Red, Green, Blue, and White factions in chariot racing. Even emperors had their favorites. A foul in a race by a member of one faction could spark a riot in the stands. Winning charioteers would have their busts displayed in public places and were paid salaries far beyond that of the average citizen. Juvenal complained in his Satires that a chariot driver might earn 100 times more than a lawyer! The best drivers even achieved free agency and could …

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Understanding Sprawl: Lessons From Architecture For Legal Scholars, Mark S. Davies May 2001

Understanding Sprawl: Lessons From Architecture For Legal Scholars, Mark S. Davies

Michigan Law Review

What is suburban "sprawl"? Why is it undesirable? Why do many Americans nevertheless choose to live in sprawl? Do local zoning laws contribute to sprawl? Can democratic institutions discourage it? Legal scholars are beginning to study these urgent and complex questions. This Essay reviews Suburban Nation: The Rise of Sprawl and the Decline of the American Dream, by Andres Duany, Elizabeth Plater-Zyberk, and Jeff Speck, leading architects of the influential New Urbanism or traditional town planning movement. This review makes five points about the legal study of sprawl. First, Suburban Nation provides a definition of "sprawl" that the law can …

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The Uneasy Marriage Of Export Incentives And The Income Tax, Mihir A. Desai, James R. Hines Jr. Jan 2001

The Uneasy Marriage Of Export Incentives And The Income Tax, Mihir A. Desai, James R. Hines Jr.

Articles

This paper investigates the economic effect of tax incentives for American exports. These incentives include a partial tax exemption for export profits (available by routing exports through foreign sales corporations) and the allocation of some export profits to foreign-source income for purposes of U.S. taxation. The analysis highlights three important aspects of these policies. First, official figures appear to understate dramatically the tax expenditures associated with some U.S. export incentives. Correctly measured, total export benefits provided through the income tax are equivalent to a 1-percent ad valorem subsidy. Second, the 1984 imposition of more rigorous requirements for obtaining export subsidies …

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The Liberal Commons, Hanoch Dagan, Michael A. Heller Jan 2001

The Liberal Commons, Hanoch Dagan, Michael A. Heller

Articles

Following the Civil War, black Americans began acquiring land in earnest; by 1920 almost one million black families owned farms. Since then, black rural landownership has dropped by more than 98% and continues in rapid decline-there are now fewer than 19,000 black-operated farms left in America. By contrast, white-operated farms dropped only by half, from about 5.5 million to 2.4 million. Commentators have offered as partial explanations the consolidation of inefficient small farms and intense racial discrimination in farm lending. However, even absent these factors, the unintended effects of old-fashioned American property law might have led to the same outcome. …

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The Current Life Insurance Crisis: How The Law Should Respond, Kyle D. Logue Jan 2001

The Current Life Insurance Crisis: How The Law Should Respond, Kyle D. Logue

Articles

This article explores some of the issues raised by the new evidence of underinsurance. Part I explores the initial theoretical question: why do people buy life insurance? Put differently, what function does life insurance serve? Part II provides some background on the life insurance market as it currently exists. Thus, Part II summarizes the major types of life insurance that are currently offered and summarizes the main elements of the current regulatory regime for life insurance companies. Part III then provides support for the claim that households tend to drastically underconsume life insurance. Section A of that Part summarizes the …

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