Law and Economics Commons^™

The Nomos And Narrative Of Matsushita, Nickolai G. Levin

ExpressO

Twenty-one years ago, Robert Cover left an indelible mark on legal scholarship with his epic tale of world formation and development, Nomos and Narrative. He posited the idea that our culture consists of a multitude of insular communities (nomoi), each of whose experiences is guided by those texts and events (narratives) that give its legal precepts normative meaning, thereby connecting the communities’ vision of reality to its ideal. Occasions arose, however, where different community’s visions of the ideal could not be contained within each community alone and thus came into conflict. Resolution required reconciliation of those narratives that provided each …

Virtual Markets For Virtual Goods: The Mirror Image Of Digital Copyright?, Peter D. Eckersley

ExpressO

The Internet and Copyright Law are particularly ill-suited to each other. One is designed to give as much information as possible to everyone who wants it; the other allows authors, artists and publishers to earn money by restricting the distribution of works made out of information. The beneficiaries of copyright law are lobbying for the re-design of computers and the Internet to instate "content control" and "digital rights management" (DRM). These technologies are intended to make copyright workable again by re-imposing limits on access to information goods, but they carry high direct and indirect social costs.

One alternative, which has …

Corporate Defendants And The Protections Of Criminal Procedure: An Economic Analysis, Vikramaditya S. Khanna

Law & Economics Working Papers Archive: 2003-2009

Corporations are frequently treated as “persons” under the law. One of the fundamental questions associated with this treatment is whether corporations should receive the same Constitutional protections and guarantees as natural persons. In particular, should corporations receive the Constitutional protections of Criminal Procedure? After all, corporations cannot be sent to jail so the sanctions they face are essentially the same as in civil proceedings. If so, then why not have the same procedural protections for corporate defendants in civil and criminal cases? Little scholarly analysis has focused on this issue from an economic perspective and this article aims to fill …

The Market For Private Dispute Resolution Services--An Empirical Re-Assessment Of Icann-Udrp Performance, Jay P. Kesan, Andres A. Gallo

ExpressO

The impressive growth of the Internet in the 1990s and the boom of the e-economy generated a competition for domain names in the most coveted of the top level domain names, i.e., the .com space. The other original generic top-level domain names (gTLDs) open to commercial use, .org, and .net, were also in demand from businesses. Other types of top-level domain names, especially the country code TLDs (ccTLDs), were of little commercial value, and their registrations were not as important as the gTLDs.

In 1997, partly because of the expansion of the Internet to the international sphere, the U.S. government …

The Market For Criminal Justice: Federalism, Crime Control And Jurisdictional Competition, Doron Teichman

Law & Economics Working Papers Archive: 2003-2009

For the most part, the United States has a decentralized criminal justice system. State legislatures define the majority of crimes and set out the punishments for those crimes. In addition, the enforcement of criminal laws lies, in most cases, in the hands of local law enforcement agencies. This article points out how this decentralized structure drives local jurisdictions to harshen their criminal justice system in order to displace crime to neighboring jurisdictions. More precisely, local jurisdictions can attempt to displace crime in two distinct ways. First, they can raise the expected sanction to a level that is higher than that …

Sex, Shame, And The Law: An Economic Perspective On Megan's Law, Doron Teichman

Law & Economics Working Papers Archive: 2003-2009

This Article focuses on the question, how should policymakers aiming to minimize the cost of sanctioning utilize legal and nonlegal sanctions when designing a system of criminal sanctions. After presenting the general economic case for the use of nonlegal sanctions the article turns to present a model of shaming, which unlike existing models, incorporates the endogenous effects of legal and nonlegal sanctions. This model demonstrates that tailoring an efficient regime that combines legal and nonlegal sanctions might be more difficult than previously perceived by law and economics scholars. A specific case study presented in this article is of the current …

Economic Theories Of Bundling And Their Policy Implications In Abuse Cases: An Assessment In Light Of The Mircrosoft Case, Kai-Uwe Kuhn

Law & Economics Working Papers Archive: 2003-2009

No abstract provided.

Banking The Poor: Policies To Bring Low-Income Americans Into The Financial Mainstream, Michael S. Barr

Law & Economics Working Papers Archive: 2003-2009

Low-income households in the United States often lack access to bank accounts and face high costs for conducting basic financial transactions through check cashers and other alternative financial service providers. These families find it more difficult to save and plan financially for the future. Living paycheck to paycheck leaves them vulnerable to medical or job emergencies that may endanger their financial stability, and lack of longer-term savings undermines their ability to improve skills, purchase a home, or send their children to college. High-cost financial services and inadequate access to bank accounts may undermine widely-shared societal goals of reducing poverty, moving …

Small Business And The False Dichotomies Of Contract Law, Larry Garvin

The Ohio State University Moritz College of Law Working Paper Series

The article explores the classic consumer- merchant dichotomy from the vantage of small businesses. Using empirical data and the psychology, economics, and management literature, it shows that small businesses, treated like large businesses throughout most of contract and commercial law, in fact behave more like consumers. Small businesses lack the financial strength of large businesses. They generally lack the information gathering ability of large businesses. Finally, they generally are more prey to cognitive errors than are large businesses. As a result, small businesses lose in two ways. When they deal with consumers, they are presumed to have the power, information, …

The Economics Of Race: When Making It To The Middle Is Not Enough, Elizabeth Warren

Washington and Lee Law Review

No abstract provided.

Can A Bankrupt Company Assign Its Patent License To The Highest Bidder, Even When The License Itself Forbids Assignment? Why Everex Systems, Inc. V. Cadtrak Corp. Gives An Unconvincing Answer, Matthew D. Siegel

ExpressO

A patent licensee that declares bankruptcy will often want to assign its rights under the license to another party in exchange for much-needed cash. The Bankruptcy Code generally allows debtors to assign executory contracts, including patent licenses, in this way. Indeed, the Code permits debtors to assign a contract even if the contract itself contains a “no-assign” clause, i.e., a clause expressly forbidding assignment. But there is an exception: The Code will defer to certain kinds of otherwise applicable non-bankruptcy law that would normally prevent the contract from being assigned. In particular, the Code will not allow assignment by a …

Cap And Trade: How The Sulfur Dioxide Allowance Market Works, And How It Could Work Better, Jacob R. Kreutzer

ExpressO

This Article provides an overview of the sulfur dioxide allowances market, and identifies ways in which could be improved. This information can be used to improve the performance of the sulfur dioxide allowances market, and incorporated into new emissions allowance markets to improve their operation. Part I of this Article provides background information on the creation and operation of the sulfur dioxide allowances market. Part II reports and analyzes data regarding the actual behavior of the market from 1995 to 2003. Part III engages in an economic analysis of the interaction between the allowances market and the power industry. Part …

Some Antitrust Foundations Of Payment Card Associations, Koki Arai

ExpressO

In this study we analyze platforms and rejections in two-sided markets with network externalities, using the specific context of a payment card association. We look at the cooperative antitrust determination of the interchange fee by member banks, using a framework in which banks and merchants may have market power and consumers and merchants decide rationally on whether to buy or accept a payment card developed by Rochet and Tirole (2002). After showing the welfare implications of a cooperative determination of the interchange fee and antitrust conduct, we describe in detail the factors affecting merchant resistance, compare cooperative and for-profit business …

Good Faith In The Cisg: Interpretation Problems In Article 7, Benedict C. Sheehy

ExpressO

ABSTRACT: This article examines the dispute concerning the meaning of Good Faith in the CISG. Although there are good reasons for arguing a more limited interpretation or more limited application of Good Faith, there are also good reasons for a broader approach. Regardless of the correct interpretation, however, practitioners and academics need to have a sense of where the actual jurisprudence is going. This article reviews every published case on Article 7 since its inception and concludes that while there is little to suggest a strong pattern is developing, a guided pattern while incorrect doctrinally is preferable to the current …

On The Misuse Of The Nash Bargaining Solution In Law And Economics, Abraham L. Wickelgren

ExpressO

Bargaining plays a very important role in a great deal of legal scholarship, particularly in law and economics scholarship. Scholars often assume that the Nash bargaining solution determines the bargaining outcome, where the parties equally split the joint benefit created by the agreement. This solution, however, is inappropriate when parties have outside options, alternatives that only provide a payoff if the bargainer terminates the original bargaining. Most legal bargaining problems involve outside options. This article explains why the Nash bargaining solution generates an inappropriate outcome in this situation. Then, it examines several different prior articles that have used the Nash …

The Same Side Of Two Coins: The Peculiar Phenomenon Of Bet-Hedging In Campaign Finance, Jason Cohen

ExpressO

The paper addresses the propensity of large donors to give to competing candidates or competing party organizations during the same election cycle – for example, giving money to both Bush and Kerry during the 2004 presidential race – a practice here termed 'bet-hedging.' Bet-hedging is analyzed in strategic and game-theoretic terms. The paper explores the prevalence of bet-hedging, the possible motivations behind the practice, and the informational concerns surrounding it. The paper argues that bet-hedging, out of all donation practices, carries with it a uniquely strong implication of ex post favor-seeking: if a donor prefers one side over the other, …

A Public Choice Theory Of Criminal Procedure, Vikramaditya S. Khanna, Keith N. Hylton

ExpressO

We provide a more persuasive justification for the pro-defendant bias in Anglo-American criminal procedure than the most commonly forwarded justifications to date. The most commonly forwarded rationale for the pro-defendant bias is that the costs of false convictions – specifically, the sanctioning and deterrence costs associated with the erroneous imposition of criminal sanctions – are greater than the costs of false acquittals. We argue that this rationale provides at best a partial justification for the extent of pro-defendant procedural rules. Under our alternative justification, pro-defendant protections serve primarily as constraints on the costs associated with improper enforcement or rent seeking …

Media Policy Out Of The Box: Content Abundance, Attention Scarcity, And The Failures Of Digital Markets, Ellen P. Goodman

ExpressO

No abstract provided.

Affirmative Action: More Efficient Than Color Blindness, Abraham L. Wickelgren

ExpressO

One of the most compelling reasons against affirmative action is the principle of color blindness, that is, the idea that race is an irrelevant characteristic that should not affect higher education admissions or hiring decisions. Despite its intuitive appeal, this paper shows that adherence to this principle impedes economic efficiency when there has been past discrimination based on color. Past discrimination creates inefficiencies in the economy that persist across generations. Because of this persistence, race is not an irrelevant characteristic for firms and universities looking to hire or admit the best candidates. Affirmative action, not color-blindness, is necessary to reduce …

Evaluating Work: Enforcing Occupational Safety And Health Standards In The United States, Canada And Sweden, Daniel B. Klaff

ExpressO

The United States’ occupational safety and health enforcement system is breaking down. Klaff argues that much of this breakdown has to do with a fundamental lack of worker participation in the United States’ safety and health system. Klaff makes his case by comparing and contrasting the history and enforcement schemes of the United States, Canada, and Sweden. After arguing for economic rights as human rights, Klaff concludes by offering a set of recommendations for the United States’ occupational safety and health system based upon his value-centered analysis.

“Politics As Markets” Reconsidered: Economic Theory, Competitive Democracy And Primary Ballot Access , David N. Schleicher

ExpressO

No abstract provided.

In The Minds Of Men: A Theory Of Compliance With The Laws Of War, William C. Bradford

ExpressO

Whether, and, if so, why states elect to comply with international law are now the most central questions within the international legal academy. A skein of theories has been woven over the last decade to explain and predict state compliance, and a number of factors, including, inter alia, a desire to generate reciprocity, an interest in reducing transaction costs, normative commitments, domestic considerations, the degree of domestic incorporation of international legal regimes, reputational concerns, and fear of punishment, are purported to be causally linked.

However, as the study of international legal compliance ["ILC"] has matured, intramural divisions have been compounded …

Law, Economics, And The Theory Of The Firm, Michael J. Meurer

Faculty Scholarship

Economic analysis of the law assumes the "shadow of the law" influences the behavior of businesses. Thus, business people consider the costs and benefits of contract litigation when they make decisions about contract performance, they consider the costs of tort litigation when they make investments in safety, they consider the costs of violating a regulation when they make decisions about regulatory compliance, and so on. Economic models of law typically abstract from organizational detail and treat businesses as if they are represented by a single manager who controls the firm's behavior and acts to maximize its profit. This abstraction simplifies …

The Mechanics Of Judicial Vote Switching , H. Ron Davidson

ExpressO

In a handful of cases, including one from last Term, the United States Supreme Court was divided between upholding, remanding, and overturning a lower court decision, with no majority in favor of any of these three dispositions. In each of these cases, at least one Justice switched his or her vote to achieve a majority. With the Supreme Court taking ever fewer cases and producing increasingly complicated split decisions, we may expect this pattern to recur more often. This Article, drawing upon game theory and public choice scholarship, addresses how and why this practice of strategic vote switching emerged.

Governance Structures, Legal Systems, And The Concept Of Law, Lewis A. Kornhauser

Chicago-Kent Law Review

Debate over the concept of law currently contrasts conceptual and interpretive accounts. This Article begins to elaborate a social-scientific conception of law as a subset of a concept of a governance structure. To begin, it distinguishes institutional structures, realized institutions, and functioning institutions. Governance structures consist of institutional structures that perform central tasks of governance. Dworkin's interpretive conception of law extends over the domain of functioning institutions; positivist, conceptual accounts of law extend over the domain of institutional structures. From this perspective legal systems may be best understood as governance structures that satisfy the political value legality; different concepts of …

Functional Law And Economics: The Search For Value-Neutral Principles Of Lawmaking, Francesco Parisi, Jonathan Klick

Chicago-Kent Law Review

Functional law and economics, which draws its influence from the public choice school of economic thought, stands as a bridge between the strictly positivist and normative approaches to law and economics. While the positive school emphasizes the inherent efficiency of legal rules and the normative school often views law as a solution to market failure and distributional inequality, functional law and economics recognizes the possibility for both market and legal failure. That is, while there are economic forces that lead to failures in the market, there are also structural forces that limit the law's ability to remedy those failures on …

Legal Analysis Of Economics: Solving The Problem Of Rational Commitment, Bruce Chapman

Chicago-Kent Law Review

This Article offers a "legal analysis of economics" in contradistinction to the prevailing "economic analysis of law." The economic problem that forms the subject matter of the theoretical legal analysis is the problem of rational commitment. The difficulty here is that an agent can have a reason, or a preference, to commit to do something that he will have no reason actually to do, or which will be contrary to preference when the time comes actually to do it. Familiar examples include the problem of making credible threats or promises. This Article develops an account of the rational actor that …

Gödel, Kaplow, Shavell: Consistency And Completeness In Social Decision-Making, Giuseppe Dari Mattiacci

Chicago-Kent Law Review

The recent debate on what criteria ought to guide social decision-making has focused on consistency: it has been argued that criteria contradicting one another—namely, welfare and fairness—should not be simultaneously employed in order for policy assessment to be consistent. This Article raises the related problem of completeness—that is, the question of whether or not a set of consistent criteria is capable of providing answers to all social decision problems. If not, as it is suggested might be the case, then the only way to decide otherwise undecidable issues is to simultaneously employ both welfare and fairness, which implies a certain …

The Unexpected Guest: Law And Economics, Law And Other Cognate Disciplines, And The Future Of Legal Scholarship, Thomas S. Ulen

Chicago-Kent Law Review

This Article argues that law and economics has worked a remarkable but unexpected change on legal scholarship. Many critics mistakenly claim that the most notable effect of law and economics lies in its conclusions about substantive legal rules. This Article argues that this criticism misses the far more radical effect of law and economics on the study of law—namely, its commitment to the scientific method of inquiry, a method that relies upon theorizing, then performing empirical work to verify or refute the theory, and then refining the theory in light of the results. The Article explains why this change has …

Should Law Professors Teach Public Choice Theory?, Guido Pincione

Chicago-Kent Law Review

This Article argues that various philosophically interesting objections to the use of public choice theory in legal education are misguided. Some writers hold that public choice theory, being descriptive, cannot help law students develop the interpretive skills needed by judges and lawyers. I reply that this objection rests on the false assumption that public choice theory lacks resources to accommodate rule following. Others object that public choice theory fosters cynicism and uncooperative attitudes. This rests on an unduly restrictive conception of the theory of rationality presupposed by public choice analysis. The public-choice focus on efficiency has also been disputed. In …