Law and Economics Commons^™

The Idea Of Fairness In The Law Of Enterprise Liability, Gregory C. Keating

Michigan Law Review

The theory and practice of enterprise liability are oddly disjoined. On the one hand, case rhetoric insists that considerations of fairness are among the primary justifications for imposing enterprise liability. On the other hand, normatively inclined and theoretically ambitious scholarship on enterprise liability is overwhelmingly economic in cast. Economically inclined scholars have flocked to the field, while other kinds of tort theorists have shunned it, implicitly or explicitly conceding it to economic analysis. This paper argues that, contrary to this consensus, there is a powerful and important fairness case to be made for enterprise liability. This case fits the rhetoric …

Is Turn About Fair Play? Copyright Law And The Fair Use Of Computer Software Loaded Into Ram, Chad G. Asarch

Michigan Law Review

Computer systems, especially those in heavy-use commercial settings, often require routine maintenance to continue functioning properly. Many businesses turn to an independent service organization ("IS0") to provide computer maintenance services because ISOs frequently charge less than the original equipment manufacturer ("OEM") for those services. The tremendous growth in computer use has spawned a multi-billion dollar computer maintenance industry in the United States, and ISOs and OEMs have become engaged in fierce competition for this computer service business. The struggle between ISOs and OEMs to capture this expanding market has spilled over into the courts, spawning a number of recent decisions …

Revitalizing Environmental Federalism, Daniel C. Esty

Michigan Law Review

Politicians from Speaker Newt Gingrich to President Bill Clinton, cheered on by academics such as Richard Revesz, are eagerly seeking to return authority over environmental regulation to the states. In the European Union, localist opponents of environmental decisionmaking in Brussels rally under the banner of "subsidiarity." And in debates over international trade liberalization, demands abound for the protection of "national sovereignty" in environmental regulation. All of these efforts presume that a decentralized approach to environmental policy will yield better results than more centralized programs. This presumption is misguided. While the character of some environmental concerns warrants a preference for local …

Antitrust Balancing In A (Near) Coasean World: The Case Of Franchise Tying Contracts, Alan J. Meese

Michigan Law Review

Antitrust law has largely succumbed to the hegemony of balancing. Courts applying the rule of reason are told to balance a restraint's procompetitive effects against its anticompetitive impact. Mergers once deemed anticompetitive solely because they facilitated the exercise of market power are now evaluated by weighing the anticompetitive effects of such increased power against any efficiencies created by the transaction. Finally, some activities once deemed per se illegal are now subject to a balancing approach, either by explicit application of the rule of reason, or by recognition of certain affirmative defenses to otherwise per se violations. Unlike many other balancing …

Securing Russia's Future: A Plea For Reform In Russian Secured Transactions Law, Jason J. Kilborn

Michigan Law Review

After many turbulent years of uneasy transition to a market economy, Russia is finally "open for business." Nonetheless, the transitional period remains far from over, and Russian enterprises are still starved for capital that they desperately need for retooling to convert from military to consumer production, for acquiring new equipment to replace old and worn machinery, and for undertaking new and lucrative projects. While Russian financial institutions may provide significant funding, their reserves are limited; they could not hope to finance independently the multitude of existing and potential enterprises within the expansive Russian territory. Therefore, much of the financing for …

Positivism And The Separation Of Law And Economics, Avery Wiener Katz

Michigan Law Review

The goal of this essay is to explain this problem and to translate the meaning of positivism between legal and economic cultures, in order to show economists and lawyers why much of the debate about the jurisprudential merits of law and economics misses the mark. My thesis is that it is positivism, and the way economic culture treats the positive-normative distinction, that is responsible for much of the gulf between law and economics - but that it is also positivism that makes economics so appealing to so many lawyers and legal scholars. For a positivist approach can be useful to …

Game Theory And The Law: Ready For Prime Time?, Stephen W. Salant, Theodore S. Sims

Michigan Law Review

A Review of Douglas G. Baird, Robert H. Gertner, and Randal C. Picker, Game Theory and the Law

Further Evidence Of Discrimination In New Car Negotiations And Estimates Of Its Cause, Ian Ayres

Michigan Law Review

A 1991 test of new car dealerships in Chicago indicated that dealerships offered significantly lower prices to white male testers than to similarly situated black and-or female testers: white female testers were asked to pay 40% higher markups than white male testers; black male testers were asked to pay more than twice the markup of white male testers; and black female testers were asked to pay more than three times the markup of white male testers. This article extends the results of this initial test by presenting not only more authoritative evidence of discrimination but also a new quantitative method …

Risk Regulations And Its Hazards, Stephen F. Williams

Michigan Law Review

A Review of Breaking the Vicious Circle: Toward Effective Risk Regulation by Stephen Breyer

Liberal Markets, Jeremy Waldron

Michigan Law Review

A Review of Risks and Wrongs by Jules L. Coleman

Repossession: Of History, Poverty, And Dissent, Martha Minow

Michigan Law Review

A Review of The Dispossessed: America's Underclasses from the Civil War to the Present by Jacqueline Jones

Incompletely Reasoned Sex: A Review Of Posner's Somewhat Misleading Guide To The Economic Analysis Of Sex And Family Law, Martin Zelder

Michigan Law Review

A Review of Sex and Reason by Richard A. Posner

Microeconomics Made (Too) Easy: A Casebook Approach To Teaching Law And Economics, Gregory S. Crespi

Michigan Law Review

A Review of Cases and Materials on Law and Economics by David W. Barnes and Lynn A. Stout

A Bargaining Analysis Of American Labor Law And The Search For Bargaining Equity And Industrial Peace, Kenneth G. Dau-Schmidt

Michigan Law Review

In this article, I present an alternative economic analysis of unions and collective bargaining that utilizes recent advances in labor economics and some simple applications of game theory to address the deficiencies of the traditional monopoly model.

The article proceeds in four parts. In Part I, I provide a brief primer on the economic analysis of unions and collective bargaining. I discuss the various possible sources of union wage increases, possible employer responses to union wage demands, and alternative models of the costs of collective bargaining. In Part II, I outline the traditional monopoly theory of unions by combining the …

Three Attorney Fee-Shifting Rules And Contingency Fees: Their Impact On Settlement Incentives, Bradley L. Smith

Michigan Law Review

This Note seeks to predict the direction and magnitude of the change in settlement frequency under the three fee-shifting rules: American, British, and the British rule as modified by the PCC. Part I analyzes the proposed rule using the theoretical model of litigation and settlement developed by Hause. Part II examines the impact of fee-shifting when the plaintiff's lawyer receives reimbursement via a contingency fee. Analysis of indemnification in a contingency fee context raises several policy issues which section II.A addresses. Section II.B discusses the terms and assumptions made in adjusting Hause's model to reflect the standard contingency fee arrangement, …

Law And Public Choice: A Critical Introduction, William Dubinsky

Michigan Law Review

A Review of Law and Public Choice: A Critical Introduction by Daniel A. Farber and Philip P. Frickey

Scholarship Of The Absurd: Bob Bork Meets The Bald Soprano, Alex Kozinski

Michigan Law Review

A Review of Antitrust Economics on Trial: A Dialogue on the New Laissez-Faire by Walter Adams and James W. Brock

The Strategic Structure Of Offer And Acceptance: Game Theory And The Law Of Contract Formation, Avery Katz

Michigan Law Review

The purpose of this article is to promote a particular research program; namely, the use of game theory to analyze the law of contract formation. Although I will often simply speak of offer and acceptance in my discussion, I mean to refer to a broader set of issues than are commonly denoted by this doctrinal label. My program transcends the narrow issue of whether particular communications technically should be classified as offers and acceptances, and includes questions often analyzed under the rubrics of implication and interpretation. At its broadest, my argument addresses all legal rules that answer two types of …

The Role Of The Democratic And Republican Parties As Organizers Of Shadow Interest Groups, Jonathan R. Macey

Michigan Law Review

This article advances a new theory to explain the relationship between political parties and interest groups. Among the as yet unanswered questions that I resolve are: (1) why many politicians -both Republicans and Democrats - develop a reputation for "party loyalty" despite the parties' inability to employ any meaningful sanctions against politicians who deviate from the party line; (2) why candidates for public office run in contested primaries when running as an independent generally would be a less costly mechanism for getting on the ballot; (3) why the two major U.S. political parties continue to attract resources from contributors and …

Groping And Coping In The Shadow Of Murphy's Law: Bankruptcy Theory And The Elementary Economics Of Failure, James W. Bowers

Michigan Law Review

Part I briefly examines the conventional explanation for bankruptcy's defining characteristic, its default distributional rule. It concludes that the conventional explanation is insufficiently informative for us to tell whether the Bankruptcy Code (Code) is actually working or not. Part II argues that the only existing systematic attempt to explain bankruptcy law, the so-called "Creditors' Bargain" Theory, is inadequate for two reasons. First, the predictions it generates are belied by real-world events. Second, it is mistaken on theoretical grounds, primarily because it ignores how debtors are likely to manage their assets. Part III presents the Murphian theory of failing behavior, the …

Can Rights Move Left?, Jeremy Paul

Michigan Law Review

A Review of The Right to Private Property by Jeremy Waldron

Economic Sanctions: A Look Back And A Look Ahead, Andreas F. Lowenfeld

Michigan Law Review

A Review of International Economic Sanctions by Barry E. Carter

The Law's Secrets, Gary T. Marx

Michigan Law Review

A Review of Legal Secrets: Equality and Efficiency in the Common Law by Kim Lane Scheppele

Can Ignorance Be Bliss? Imperfect Information As A Positive Influence In Political Institutions, Michael A. Fitts

Michigan Law Review

In Parts I and II, I shall summarize the law-and-economics and civic virtue perspectives on the value of political information and their proposals for reforms in the political process that would stimulate greater political information. These two literatures are often viewed as distinct in their objectives: one seeking to improve means/ends rationality; the other seeking to improve goal formation - a function that I loosely describe as normative, ethical, or value-based. Nevertheless, they share some common practical approaches where information is concerned. In Part Ill, I shall discuss the instrumental advantages to limiting political information, focusing particularly on the role …

Social Irresponsibility, Actuarial Assumptions, And Wealth Redistribution: Lessons About Public Policy From A Prepaid Tuition Program, Jeffrey S. Lehman

Michigan Law Review

In this article, I shall try to illuminate the question of how governments, as opposed to private insurers, grapple with the problem of intergenerational social irresponsibility. I shall do so by analyzing and criticizing a single public program. That program, the Michigan Education Trust (MET), was the most widely publicized government action in the field of higher education finance during the 1980s. MET allows parents of young children to purchase contracts promising to cover the children's tuition at Michigan public colleges when they enroll up to eighteen years later.

In setting forth this case study, I also attempt to develop …

Antitrust's Protected Classes, Herbert Hovenkamp

Michigan Law Review

For purposes of argument, this essay assumes that efficiency ought to be the exclusive goal of antitrust enforcement. That premise is controversial. Nonetheless, several economic and legal theorists, primarily among the Chicago School of economics and antitrust scholarship, have developed an Optimal Deterrence Model based on this assumption. The Model is designed to achieve the optimum, or ideal, amount of antitrust enforcement. The Model's originators generally believe that there is too much antitrust enforcement, particularly enforcement initiated by private plaintiffs. I intend to show that, even if efficiency is the only antitrust policy goal, a broader array of lawsuits should …

State Takeover Statutes Revisited, Richard A. Booth

Michigan Law Review

I have a confession to make. The title of my article that appeared recently in this review, The Promise of State Takeover Statutes, was deliberately chosen for its shock value. Since few if any reflective works have supported state takeover statutes, it occurred to me that a title suggesting there was something positive in them might get someone's attention. Clearly it did. In a recent piece entitled Missing the Point About State Takeover Statutes, Professors Lyman Johnson and David Millon take issue with my title. I say that they take issue with my title because it does not …

Information Economics And Chemical Toxicity: Designing Laws To Produce And Use Data, Mary L. Lyndon

Michigan Law Review

Just as laws may create entitlements to the use of information, they may also be written to distribute information and to encourage information production. This Article discusses the ways in which law affects the generation and distribution of information related to chemical exposure and toxicity. It describes the economic impact of recently enacted right-to-know laws and proposes that better and more abundant data could be produced if the law paid greater attention to basic economic principles that influence research and information systems.

Coase Defends Coase: Why Lawyers Listen And Economists Do Not, Stewart Schwab

Michigan Law Review

A Review of The Firm The Market and The Law by Ronald Coase

Environmental Faust Succumbs To Temptations Of Economic Mephistopheles, Or, Value By Any Other Name Is Preference, Carol M. Rose

Michigan Law Review

A Review of The Economy of the Earth: Philosophy, Law, and the Environment by Mark Sagoff