Law and Economics Commons^™

Social Value Orientation And The Law, Rebecca Hollander-Blumoff

William & Mary Law Review

Social value orientation is a psychological trait defined as an individual’s natural preference with respect to the allocation of resources. Law and economics scholarship takes as its starting point the rational actor, who is by definition interested solely in maximizing her own personal utility. But social psychology research demonstrates that, in study after study, approximately half of individuals demonstrate a “prosocial” orientation, meaning that they are interested in maximizing the total outcome of the group and are dedicated to an equal split of resources. Only around a quarter of individuals identify as “proself” individualists who prefer to maximize their own …

The Problem Of Creative Collaboration, Anthony J. Casey, Andres Sawicki

William & Mary Law Review

In this Article, we explore a central problem facing creative industries: how to organize collaborative creative production. We argue that informal rules are a significant and pervasive—but nonetheless underappreciated—tool for solving the problem. While existing literature has focused on how informal rules sustain incentives for producing creative work, we demonstrate how such rules can facilitate and organize collaboration in the creative space.

We also suggest that informal rules can be a better fit for creative organization than formal law. On the one side, unique features of creativity, especially high uncertainty and low verifiability, lead to organizational challenges that formal law …

Doux Commerce, Religion, And The Limits Of Antidiscrimination Law, Nathan B. Oman

Faculty Publications

Recent cases involving religious businesses owners who object to providing services for same-sex weddings and resulting lawsuits have generated a vigorous academic and popular debate. That debate centers in part on the proper role of religion in the market. This article develops three theories of the proper relationship between commerce and religion and applies them to these conflicts. The first approach would apply the norms of liberal democratic governments to market actors. The second approach posits that any market outcome is legitimate so long as it results from voluntary contracts. These approaches yield contradictory and indeterminate advice on the conflicts …

The Logic Of Contract In The World Of Investment Treaties, Julian Arato

William & Mary Law Review

Investment treaties protect foreign investors who contract with sovereign states. It remains unclear, however, whether parties are free to contract around these treaty rules, or whether treaty provisions should be understood as mandatory terms that constrain party choice. While investment treaties clearly apply to contracts in some way, they are silent as to how these instruments ultimately interact. Moreover, arbitral jurisprudence has varied wildly on this point, creating significant problems of certainty, efficiency, and fairness—for states and foreign investors alike.

This Article reappraises the treaty/contract issue from the ex ante perspective of contracting states and foreign investors. I advance three …

Friendly Precedent, Anthony Niblett, Albert H. Yoon

William & Mary Law Review

This Article explores which legal precedents judges choose to support their decisions.When describing the legal landscape in a written opinion, which precedent do judges gravitate toward? We examine the idea that judges are more likely to cite “friendly” precedent. A friendly precedent, here, is one that was delivered by Supreme Court Justices who have similar political preferences to the lower court judges delivering the opinion. In this Article, we test whether a federal Court of Appeals panel is more likely to engage with binding Supreme Court precedent when the political flavor of that precedent is aligned with the political composition …

Non-Compete Legislation Is Getting Worse With Latest Revisions, Nathan B. Oman

Popular Media

No abstract provided.

Community Versus Market Values Of Life, Robert Cooter, David Depianto

William & Mary Law Review

Individuals and communities make choices affecting the risk of accidental death. Individuals balance risk and cost in market choices, for example, by purchasing costly safety products or taking a dangerous job for higher pay. Communities balance risk and cost through social norms of precaution, which prescribe how much risk people may impose on others and on themselves. For example, social norms dictate that bicyclists should wear helmets and automobile passengers should wear seat belts. In both cases, the balance between the fatality risk and the cost of reducing it reveals an implicit value of a statistical life, or “VSL”— an …

Liability And Compensation For Damage Resulting From Co2 Storage Sites, Michael Faure

William & Mary Environmental Law and Policy Review

This Article follows the economic analysis of law as the methodology for analyzing appropriate liability and compensation mechanisms with respect to damages resulting from CO2 storage sites. There are various reasons for employing this approach. One reason is that many have already discussed the design of a liability and compensation scheme for CCS-related damages. But these earlier studies have not yet approached the issue from the angle of an economic analysis of law. The advantage of thismethodology is that attention is paid to the way in which various liability and compensation schemes affect the incentives for prevention of the various …

The Case For Vertical Integration In The Developing Bioenergy Industry, Isabel F. Peres, Timothy A. Slating, Jay P. Kesan

William & Mary Environmental Law and Policy Review

For many countries, money grows on trees: woody biomass is one of the most important sources of renewable energy in the European Union. In the United States, biomass was the input for almost half of the renewable energy generated in 2000; of the energy generated by biomass, seventy-six percent was produced from wood.1 Currently, biomass is the largest source of renewable energy in the country. The ability to secure a reliable and stable supply of biomass is therefore extremely important for the future of the renewable energy industry. According to the United States Department of Energy, the success of the …

Delaware’S Familiarity, Brian J. Broughman, Darian M. Ibrahim

Popular Media

No abstract provided.

Up Close And Personal With Delaware, Darian M. Ibrahim, Brian J. Broughman

Popular Media

No abstract provided.

When Should Bankruptcy Be An Option (For People, Places, Or Things)?, David A. Skeel Jr.

William & Mary Law Review

When many people think about bankruptcy, they have a simple left-to-right spectrum of possibilities in mind. The spectrum starts with personal bankruptcy, moves next to corporations and other businesses, and then to municipalities, states, and finally countries. We assume that bankruptcy makes the most sense for individuals; that it makes a great deal of sense for corporations; that it is plausible but a little more suspect for cities; that it would be quite odd for states; and that bankruptcy is unimaginable for a country.

In this Article, I argue that the left-to-right spectrum is sensible but mistaken. After defining “bankruptcy,” …

Kickstarter My Heart: Extraordinary Popular Delusions And The Madness Of Crowdfunding Constraints And Bitcoin Bubbles, David Groshoff

William & Mary Business Law Review

This Article builds on my existing research program that (a) broadly seeks to analyze laws, regulations, instruments, and policy levers that inhibit a market’s ability to recognize an asset’s intrinsic value, whether in terms of financial, social, or human capital, and (b) explores and advances interdisciplinary corporate governance theories by employing a heterodox economic analytic to derive its proposal to the paradox of an unregulated virtual currency market (Bitcoins) and an overly regulated crowdfunding market (Kickstarter).

The Article functions not only as an homage to Charles MacKay’s legendary 1841 book, Extraordinary Popular Delusions and the Madness of Crowds, which described …

Free Trade In Patented Goods: International Exhaustion For Patents, Sarah R. Wasserman Rajec

Faculty Publications

Modern international trade law seeks to increase global welfare by lowering barriers to trade and encouraging international competition. This “free trade” approach, while originally applied to reduce tariffs on trade, has been extended to challenge non-tariff barriers, with modern trade agreements targeting telecommunication regulations, industrial and product safety standards, and intellectual property rules. Patent law, however, remains inconsistent with free-trade principles by allowing patent holders to subdivide the world market along national borders and to forbid trade in patented goods from one nation to another. This Article demonstrates that the doctrines thwarting free trade in patented goods are protectionist remnants …

The Cost Of Securities Fraud, Urska Velikonja

William & Mary Law Review

Under the dominant account, fraudulent financial reporting by public firms harms the firms' shareholders and, more generally, capital markets. This Article contends that the account is incomplete. In addition to undermining investor confidence, misreporting distorts economic decision making by all firms, both those committing fraud and those not. False information impairs risk assessment by those who provide human or financial capital to fraudulent firms, the firms' suppliers and customers, and thus misdirects capital and labor to subpar projects. Efforts to hide fraud and avoid detection further distort fraudulent firms' business decisions, as well as decisions by their rivals, who mimic …

Cyberfinancing For Economic Justice, Lisa T. Alexander

William & Mary Business Law Review

This Article argues for the socially optimal regulation of online peer-to- peer (P2P) lending and crowdfunding to advance economic justice in the United States. Peer-to-peer lending websites, such as Prosper.com or Kiva.org, facilitate lending transactions between individuals online without the involvement of a traditional bank or microfinance institution. Crowdfunding websites, such as Kickstarter.com, enable individuals to obtain financing from large numbers of contributors at once through an open online request for funds. These web-based transactions, and the intermediary organizations that facilitate them, constitute emerging cyberfinancing markets. These markets connect many individuals at once, across class, race, ethnicity, nationality, space, and …

Congressional Silence And The Statutory Interpretation Game, Paul Stancil

William & Mary Law Review

This Article explores the circumstances under which the federal legislative apparatus may be unable to respond to a politically objectionable statutory interpretation from the Supreme Court. The Article builds upon existing economic models of statutory interpretation, incorporating transaction costs into the analysis for the first time. The Article concludes by identifying recent real-world disputes in which transaction costs likely constrained Congress and the President from overriding the Court.

Estimating The Cost Of Civil Litigation, Paula Hannaford-Agor, Nicole L. Waters

Faculty Publications

To obtain reliable estimates of litigation costs, the National Center for State Courts (NCSC) has developed an alternative method of cost estimation: the Civil Litigation Cost Model (CLCM). The NCSC model relies on the amount of time expended by attorneys in various litigation tasks in a variety of civil cases filed in state courts. This event-based approach to estimating litigation costs is an adaptation of the methods employed by the NCSC for court workload studies. Because these tasks take place sequentially in civil litigation, the use of this approach permits the NCSC to estimate litigation costs for cases that resolve …

Markets As A Moral Foundation For Contract Law, Nathan B. Oman

Faculty Publications

No abstract provided.

Rethinking Microfinance, Lan Cao

Faculty Publications

No abstract provided.

Section 2 Enforcement And The Great Recession: Why Less (Enforcement) Might Mean More (Gdp), Alan J. Meese

Faculty Publications

The Great Recession has provoked calls for more vigorous regulation in all sectors, including antitrust enforcement. After President Obama took office, the Antitrust Division of the Department of Justice abandoned the Bush Administration’s standard of liability under section 2 of the Sherman Act, which forbids unlawful monopolization, as insufficiently interventionist. Based on the premise that similarly lax antitrust enforcement caused and deepened the Great Depression, the Obama Administration outlined a more intrusive and consumer-focused approach to section 2 enforcement as part of a larger national strategy to combat the “extreme” economic crisis the nation was then facing.

This Essay draws …

Compatible Or Conflicting: The Promotion Of A High Level Of Employment And The Consumer Welfare Standard Under Article 101, Tom C. Hodge

William & Mary Business Law Review

The antitrust, or competition, regime of the European Union (EU) differs substantially from that of the United States, because EU competition law forms part of the EU Treaties and is therefore imbibed with the multiple values of the European Union itself. Accordingly, it is by no means clear or settled if the anti-cartel law of the European Union, Article 101 TFEU, must focus solely on a consumer welfare standard or must also consider the broad and multiple policy aims enshrined in the EU Treaties. If Article 101 must balance multiple aims, this would be in stark contrast to Section 1 …

Reframing Antitrust In Light Of Scientific Revolution: Accounting For Transaction Costs In Rule Of Reason Analysis, Alan J. Meese

Faculty Publications

This Article contends that modern rule of reason analysis, informed by workable competition’s partial equilibrium trade-off paradigm, is suitable for evaluating only a subset of agreements that may reduce transaction costs. The Article distinguishes between “technological” and “non-technological” transaction costs. Technological transaction costs entail the bargaining and information costs first emphasized by Ronald Coase, while non-technological transaction costs result from more fundamental departures from perfect competition, departures creating a risk of opportunism that accompanies relationship-specific investments. Modern law does accurately assess restraints that may reduce technological transaction costs—costs that are analogous to the sort of production costs recognized by the …

The Hidden Cost Of Auto Bailouts, Nathan B. Oman

Popular Media

No abstract provided.

Money Or Nothing: The Adverse Environmental Consequences Of Uncompensated Land Use Controls, Jonathan H. Adler

Faculty Publications

The conventional wisdom holds that requiring compensation for environmental land use controls would severely limit environmental protection efforts. There are increasing reasons to question this assumption. Both economic theory and recent empirical research--focused primarily on the Endangered Species Act but potentially applicable to other environmental regulations that create similar incentives--demonstrate that failing to compensate private landowners for the costs of regulation discourages voluntary conservation efforts and can encourage the destruction of environmental resources. The lack of a compensation requirement also means that land use regulation is "underpriced" as compared to other environmental protection measures for which government agencies must pay. …

Exclusive Dealing, The Theory Of The Firm, And Raising Rivals' Costs: Toward A New Synthesis, Alan J. Meese

Faculty Publications

No abstract provided.

Market Failure And Non-Standard Contracting: How The Ghost Of Perfect Competition Still Haunts Antitrust, Alan J. Meese

Faculty Publications

No abstract provided.

Monopolization, Exclusion, And The Theory Of The Firm, Alan J. Meese

Faculty Publications

No abstract provided.

Foreword: Property Rights And Economic Development, Eric Kades

William & Mary Law Review

No abstract provided.

Property Rights And Intrabrand Restraints, Alan J. Meese

Faculty Publications

Intrabrand restraints limit the discretion of one or more sellers-usually dealers-with respect to the disposition of a product sold under a single brand. While most scholars believe that such contracts can help assure optimal promotion of a manufacturer's products, there is disagreement about the exact manner in which such restraints accomplish this objective. Many scholars believe that such restraints themselves induce dealers to engage in promotional activities desired by the manufacturer. Others believe that such restraints merely serve as "performance bonds," which dealers will forfeit if they fail to follow the manufacturer's precise promotional instructions. Some scholars reject both approaches, …