Law and Economics Commons^™

Financial Regulatory Reform And Private Funds, Anita Krug

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This white paper comments on the Obama administration's June 2009 proposal for the regulation of hedge fund investment advisers.

The Regulatory Response To Madoff, Anita Krug

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This white paper evaluates investor protection mechanisms in the securities regulatory regime at the time the Madoff fraud was exposed. It considers whether the post-Madoff call for additional regulation of hedge funds and/or their managers - and/or their respective activities - was warranted.

The Hedge Fund Transparency Act Of 2009, Anita Krug

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This white paper provides a review and critique of a bill introduced by Senators Charles Grassley (R-Iowa) and Carl Levin (D-Mich.) in the Senate in early 2009 that, if enacted, would have imposed certain registration and disclosure requirements on hedge funds and certain other private funds.

Competition Law And The Institutional Embeddedness Of Economics, David J. Gerber

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Transnational debates about the role of economics in competition law have paid relatively little systematic attention to the embeddedness of economics in institutions. They typically proceed as if embeddedness were not an issue. The assumption often appears to be that economics looks, acts and functions in the same way wherever it is applied. This assumption is frequently the basis for claims supporting increased use of economics in competition law systems around the world.

This article examines that assumption and argues that the institutional embeddedness of economics needs to be taken into account when we wish to evaluate and analyze the …

The Fundamental Goal Of Antitrust: Protecting Consumers, Not Increasing Efficiency, John B. Kirkwood, Robert H. Lande

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The conventional wisdom in the antitrust community is that the purpose of the antitrust laws is to promote economic efficiency. That view is incorrect. As this article shows, the fundamental goal of antitrust law is to protect consumers.

This article defines the relevant economic concepts, summarizes the legislative histories, analyzes recent case law in more depth than any prior article, and explores the most likely bases for current popular support of the antitrust laws. All these factors indicate that the ultimate goal of antitrust is not to increase the total wealth of society, but to protect consumers from behavior that …

Economics, Law And Institutions: The Shaping Of Chinese Competition Law, David J. Gerber

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China has been considering enactment of an anti-monopoly (antitrust) law since 1993, and it has now enacted such a law. Given the potential importance of this legislation, there is much uncertainty about what the enactment means and what roles it is likely to play in influencing the development of the Chinese economy. This article applies a neo-institutionalist analysis in examining some of the factors that have influenced the shaping of the legislation and that are likely to influence the operation of competition law and its organizations. The main argument is that the central dynamic in both the creation of the …

Turned On Its Head?: Norms, Freedom, And Acceptable Terms In Internet Contracting, Richard Warner

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Is the Internet turning contract law on its head? Many commentators contend it is. Precisely this issue arises in current controversies over end user license agreements (EULAs) and Terms of Use agreements (TOUs, the agreements governing our use of web sites). Commentators complain that, in both cases, the formation process unduly restricts buyers’ freedom; and, that sellers and web site owners exploit the process to impose terms that deprive consumers of important intellectual property and privacy rights. The courts ignore the criticisms and routinely enforce EULAs and TOUs. There is truth on both sides of this court/commentator divide. EULAs and …

Review Of Jonathan Baron, Against Bioethics, Chad Flanders

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This is a short review of a recent book by Jonathan Baron, entitled "Against Bioethics."

Using The "Consumer Choice" Approach To Antitrust Law, Neil W. Averitt, Robert H. Lande

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The current paradigms of antitrust law - price and efficiency - do not work well enough. They were an immense improvement over their predecessors, and they have served the field competently for a generation, producing reasonably accurate results in most circumstances. Accumulated experience has also revealed their shortcomings, however. They are hard to fully understand and are not particularly transparent in their application. Moreover, in a disturbingly large number of circumstances they are unable to handle the important issue of non-price competition.

In this article we suggest replacing the older paradigms with the somewhat broader approach of "consumer choice." The …

How High Do Cartels Raise Prices? Implications For Optimal Cartel Fines, John M. Connor, Robert H. Lande

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This Article examines whether the current penalties in the United States Sentencing Guidelines are set at the appropriate levels to deter cartels optimally The authors analyze two data sets to determine how high on average cartels raise prices. The first consists of every published scholarly economic study of the effects of cartels on prices in individual cases. The second consists of every final verdict in a US. antitrust case in which a neutral finder of fact reported collusive overcharges. They report average overcharges of 49% and 31% for the two data sets, and median overcharges of 25% and 22%. They …

Economic Efficiency And The Parameters Of Fairness: A Marriage Of Marketplace Morals And The Ethic Of Care, Barbara Ann White

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This article provides resolutions to a number of conundrums that have vexed policy-makers and scholars for some decades. The most significant conclusion is that efficiency and fairness concerns do not conflict but rather mutually support each other in the goal of maximizing social welfare. This is contrary to the more widely-held view by both advocates of law and economic reasoning and those favoring deontological concerns that a trade-off between fairness and efficiency is inevitable. This article demonstrates how the coalescence of the two frameworks, the cultivation of fairness with law and economics' efficiency maximization, yields greater enhancements of social welfare …

Book Review, J.O. Haley's Antitrust In Germany And Japan, The First Fifty Years, 1947-1998, David J. Gerber

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No abstract provided.

Hand, Posner, And The Myth Of The "Hand Formula", In Symposium, Negligence In The Law, Richard W. Wright

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There is a striking incongruence between the discussions of negligence in the legal literature, including the American Law Institute's Restatement of Torts, and the understandings of ordinary people and the actual practice of the courts. The legal literature generally assumes that an aggregate-risk-utility test is employed to determine whether conduct was reasonable or negligent. This test was invented by legal academics and inserted in the first Restatement during the first part of the twentieth century, although, as recent studies all conclude, it had almost no support in the cases prior to its adoption in the Restatement and for several decades …

Justice And Reasonable Care In Negligence Law, Richard W. Wright

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The academic literature generally assumes that an aggregate-risk-utility test is employed to determine whether conduct was reasonable or negligent. This aggregate-risk-utility test is a transparent implementation of the basic impartiality and aggregation principles of utilitarianism and the most popular (Kaldor-Hicks) interpretation of economic efficiency. Thus, the test's assumed prevalence as the criterion of reasonableness in negligence law has been highlighted by legal economists as confirmation of the utilitarian efficiency foundations of tort law, while those, including Ronald Dworkin, who think that the law, including tort law, is or should be grounded on principles of justice have sought to demonstrate that, …

Book Review, G.B. Doern & S. Wilks Eds., Comparative Competition Policy: National Institutions In A Global Market (1996), David J. Gerber

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No abstract provided.

Resurrecting Incipiency: From Von's Grocery To Consumer Choice, Robert H. Lande

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The merger incipiency doctrine is virtually ignored in the courts today. This article argues that it should be resurrected, and it also explores the ways that effectuating Congressional intent in the area would reinvigorate merger policy.

The article documents how the legislative history of the antimerger statutes shows that Congress intended mergers to be evaluated under an incipiency approach, and explores the possible meanings of this idea. It then shows that this is a strong basis for reviving significantly stricter or more prophylactic merger enforcement.

The article shows how there are aspects of the doctrine that could be revived without …

Afterword: Antitrust And American Business Abroad Revisited, David J. Gerber

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No abstract provided.

The Three Types Of Collusion: Fixing Prices, Rivals, And Rules, Robert H. Lande, Howard P. Marvel

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Collusion can profitably be classified into three distinct types. In our classification, "Type I" collusion is the familiar direct agreement among colluding firms (a cartel) to raise prices or, equivalently, restrict output. Alternatively, firms can collude to disadvantage rivals in ways that causes those rivals to cut output. We term this "Type II" collusion. Its indirect effect is an increase in market prices.

A number of important collusion cases neither direct manipulation of prices or output, nor direct attacks on rivals. Examples include Supreme Court cases such as National Society of Professional Engineers v. US, Bates v. State Bar of …

The Evolution Of United States Antitrust Law: The Past, Present, And (Possible) Future, Albert A. Foer, Robert H. Lande

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As the world’s nations rapidly move from systems in which central planning and monopoly are replaced by free markets,2 it becomes increasingly valuable to consider the histories of competition policy experienced in different nations, on a comparative basis.3 In this article, we focus on the history of antitrust in the United States, the first nation to develop and fully-articulate a competition policy, drawing out themes that may be useful to other countries as they contemplate the shape and direction of their own competition regimes. We show that the American competition policy has reflected an underlying stability and bi-partisanship, but that …

Feminist Foundations For The Law Of Business: One Law And Economics Scholar's Survey And (Re)View, Barbara Ann White

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The purpose of this Essay is to suggest frameworks and modes of inquiry for applying feminist legal analysis to business law and the related theory of law and economics. It does so in two ways. One is to assess works already written by feminist scholars in the business law arena, highlighting how those contributions have begun to pave the way towards enriching the scope of business law analysis. The other is to offer two new roles for feminist jurisprudence. One role is to define just (that is, fair) distributions of rights and the other role is to define social judgments …

Recent Trends In Merger Enforcement In The United States: The Increasing Impact Of Economic Analysis, Robert H. Lande, James Langenfeld

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From its modern origins more than thirty years ago federal merger policy has centered around the use of standard surrogates for market power to make presumptions about the likely effects of mergers. Since that time it has been evolving towards an increasingly complex approach as economic considerations have expanded their influence on merger policy. This trend was solidified in the 1982 revision of the Department of Justice's Merger Guidelines, accelerated by the Department of Justice and Federal Trade Commission 1992 Horizontal Merger Guidelines' increased emphasis on unilateral (as opposed to collusive) anticompetitive effects, and has reached new heights in the …

Creating Competition Policy For Transition Economies: Introduction, Robert H. Lande

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This is an introduction to a symposium on Creating Competition for Transition Economies. This article provides an overview of the topic, and also briefly introduces the authors of the articles in the symposium; William Kovacic, Eleanor Fox, Spencer Weber Waller, Malcolm Coate, and Armando Rodriguez.

The Implications Of The New Regime For Global Competition Policy: Intellectual Property Rights, Economic Power, And Global Technological Integration, David J. Gerber

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No abstract provided.

Authority, Community And The Civil Law Commentary: An Example From German Competition Law, David J. Gerber

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No abstract provided.

Constitutionalizing The Economy: German Neo-Liberalism, Competition Law And The "New" Europe, David J. Gerber

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No abstract provided.

A Law & Economics Perspective On A "Traditional" Torts Case: Insights For Classroom And Courtroom, Robert H. Lande

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This article is from a symposium, "Five Approaches to Legal Reasoning in the Classroom: Contrasting Perspectives on O'Brien v. Cunard S.S. Co. Ltd.," 57 Missouri L. Rev. 345 (1992). The symposium contains five articles that analyze this case from, respectively, traditionalist, Law & Economics, Critical Legal Studies, Feminist, and Critical Race Theories perspectives.

This article analyzes the O'Brien case from a Law & Economics perspective. It does so in a manner suitable for presentation in a Torts class or a Law & Economics class. It explains the basic terminology and approach. It analyzes the economics underlying the vaccination requirement, whether …

More Lessons From Japan: End Industrywide Collective Bargaining?, Robert H. Lande, Richard O. Zerbe Jr.

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The number of books and articles discussing Japanese management techniques with an eye to transplanting them to the United States is staggering. Americans understandably are impressed by Japanese efficiency and like to think the adoption of some of their techniques will aid our own industries. Often these proposals seem fanciful and fail to recognize the many differences between the two countries, their economic systems and cultures.

The Efficient Consumer Form Contract: Law And Economics Meet The Real World, Michael I. Meyerson

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"Law and economics" has been hailed by its supporters as the only intellectually valid means for analyzing legal issues. Its critics have dismissed law and economics as amoral and biased against the poor. Ironically, each side in this frequently acrimonious debate has much to offer those in the opposing camp. This Article reflects a modest attempt to bridge the chasm.

One need not believe that money is everything in order to believe that the effect a given legal rule has on total societal wealth is relevant in decisionmaking. But this admission does not consign one to a legal world where …

Commentary: Implications Of Professor Scherer's Research For The Future Of Antitrust, Robert H. Lande

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One way to test the accuracy of Professor Scherer's research is to compare it to the best previous work in the area. Prior to his current article the best analysis of the state of economic thinking and knowledge during antitrust's formative period was presented twelve years ago by—Professor Scherer. This was a skeletal precurser to the well-documented version that he now presents, but his overall conclusions are identical. During the twelve years since his conclusions were presented in the Yale Law Journal no one has demonstrated that his research is in any way faulty or misleading, even though many have …

Risk-Utility Analysis And The Learned Hand Formula: A Hand That Helps Or A Hand That Hides?, Barbara Ann White

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Judicial inconsistencies in balancing costs against benefits in legal determinations, sometimes referred to as the Learned Hand Formula, indicate that the implications are not fully understood. The incorporation of more formal economic cost-benefit analysis by some courts has only served to increase the confusion and wariness about fostering such guidelines for social behavior.

This article's purpose is threefold. One is to demonstrate how the use of cost-benefit analysis necessarily imparts the moral and/or political values of the user into his or her decisions. While the cost-benefit technique is itself value-neutral, its application, as will be shown, requires that some moral …