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Full-Text Articles in Law and Economics

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 …


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 …


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 …


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 …


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 …


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 …


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 …


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 …


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 …


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 …