Law and Economics Commons^™

Comment: On Contractual Defaults And Experimental Law And Economics, Avishalom Tor

Journal Articles

It is possible that contract default rules, whose relevance is contingent upon parties' agreement to contract, differ from other default states. Parties therefore might not perceive contingent contractual defaults as relevant reference points. Ironically, however, Sloof, Oosterbeek and Sonnemans' (SOS) "default contract" applied inevitably whenever proposed and whenever Respondents rejected a non-default proposal, bearing greater resemblance to a legal right than to a contractual default. Thus, the contingency of typical contractual defaults cannot account for the No Bias Finding. Other aspects of the SOS experimental design, on the other hand, may explain the No Bias Finding.

Tenant Stories: Obstacles And Challenges Facing Tenants Today, 40 J. Marshall L. Rev. 407 (2007), Mary Spector

UIC Law Review

No abstract provided.

Business Implications Of Divergences In Multi-Jurisdictional Merger Review By International Competition Enforcement Agencies, W. Adam Hunt

Northwestern Journal of International Law & Business

Antitrust and competition laws lie at the nexus of international law and business. Since 1890, antitrust law has expanded from its origins of regulating trusts in the United States to what is now a global body of law. However, this expansion has not come without drawbacks. As the number of worldwide competition review and enforcement agencies in both developing and developed nations continues to increase, multinational businesses contemplating mergers are faced with growing uncertainty and transaction costs. These escalating costs have led business community leaders to conclude "that greater harmonization of merger law enforcement, at both the substantive and the …

Banking The Poor: Overcoming The Financial Services Mismatch, Michael S. Barr

Book Chapters

Low-income households often lack access to bank accounts and face high costs for transacting basic financial services through check cashers and other alternative financial service providers. Twenty-two percent of low- and moderateincome American households do not have a checking or savings account. Many other "underbanked" families have bank accounts but still rely on high-cost financial services. These households 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 …

Exchange Asymmetries Incorrectly Interpreted As Evidence Of Endowment Effect Theory And Prospect Theory?, Charles R. Plott, Kathryn Zeiler

Faculty Scholarship

Systematic asymmetries in exchange behavior have been widely interpreted as support for endowment effect theory, an application of prospect theory positing that loss aversion associated with ownership explains observed exchange asymmetries. We offer an alternative explanation. Specifically, we conjecture that observed asymmetries can be explained by procedure-driven theories grounded in classical preference theory. To test this alternative explanation, we alter the procedures to preserve the predictions of endowment effect theory while ruling out procedure-driven explanations grounded in classical preference theory. The data reject endowment effect theory in favor of procedure-driven theories.

Knowledge, Competition And The Innovation: Is Stronger Ipr Protection Really Needed For More And Better Innovations, Giovanni Dosi, Luigi Marengo, Corrado Pasquali

Michigan Telecommunications & Technology Law Review

The main questions addressed in this Article are thus: given that growth is a highly desirable phenomenon and that it is primarily spurred by technological innovation, how should society solve the problem of favoring a sufficient level of investments in R&D? In particular, is it necessarily true and always desirable that, independent of any other consideration, society should protect innovators from competition and shelter them in a legally protected and enforced monopoly? Is it true that the real source of economic value of new recipes is only found in the blueprints of ideas that those recipes implement? Is it necessarily …

Copyright Under Siege: An Economic Analysis Of The Essential Facilities Doctrine And The Compulsory Licensing Of Copyrighted Works, Daryl Lim

Faculty Scholarly Works

No abstract provided.

Why Do Landlords Still Discriminate (And What Can Be Done About It)?, 40 J. Marshall L. Rev. 455 (2007), Robert G. Schwemm

UIC Law Review

No abstract provided.

Boxing Out The Big Box Retailers: The Legal And Social Impact Of Big Box Living Wage Legislation, 40 J. Marshall L. Rev. 1339 (2007), Christine Niemczyk

UIC Law Review

No abstract provided.

Conflicts Of Interest, Ellen Y. Suni

Faculty Works

No abstract provided.

Messages From The Front: Hard Earned Lessons On Information Security From The Ip Wars, 16 Mich. St. J. Int'l L. 71 (2007), Doris E. Long

UIC Law Open Access Faculty Scholarship

Cyberspace is often a battlefield with a wide array of armies posed to challenge one another across the increasing array of rhetoric and technology that has made it such a potent arena for global digital commerce. Perry Barlow's infamous demand that cyberspace be left to its own devices because of its unique unregulated nature may have been answered by Larry Lessig's reply that code may in fact be used to regulate cyberspace, but the reality is that social norming demands, the evanescence of technological controls, and the perceived utility of illicit conduct utilizing the internet make any regulation problematic at …

A Proposed Solution To The Scholarly Communication Crisis, Chad J. Schatzle

Scholarly Works

After reviewing the history and parameters of the scholarly communications crisis, particularly in regard to skyrocketing prices for journals in the natural sciences, the author reviews and rejects previously attempted solutions. He then employs the principles of game theory in proposing a new solution to the crisis.

Vertical Flip, 13 Tex. Wesleyan L. Rev. 729 (2007), Allen R. Kamp

UIC Law Open Access Faculty Scholarship

No abstract provided.

Copyright Under Siege: An Economic Analysis Of The Essential Facilities Doctrine And The Compulsory Licensing Of Copyrighted Works, 17 Alb. L.J. Sci. & Tech. 481 (2007), Daryl Lim

UIC Law Open Access Faculty Scholarship

No abstract provided.

Transactional Economics: Victor Goldberg's Framing Contract Law, Mark P. Gergen, Victor P. Goldberg, Stewart Macaulay, Keith A. Rowley

Faculty Scholarship

Professor Mark Gergen: Thank you. It is an honor to speak to this group and to be on a panel with Stewart Macaulay, Keith Rowley, and Victor Goldberg. I have an enormous amount of respect for the three. Keith had the misfortune of being a student of mine in Federal Income Tax.

Framing Contract Law offers a wealth of information about familiar cases. Victor argues that in construing contracts, courts should be attentive to how people engineer contracts to minimize transaction costs. He shows that courts often err in this regard, imposing unnecessary costs. To make his case, Victor delves …

Does Nonprofit Ownership Matter?, Jill R. Horwitz

Articles

In recent years, policymakers have increasingly questioned whether nonprofit institutions, particularly hospitals, merit tax exemption. They argue that nonprofit hospitals differ little from their for-profit counterparts in the provision of charity care and, therefore, should either lose their tax-exempt status or adhere to new, strict, and specific requirements to provide free services for the poor. In this Article, I present evidence that hospital ownership-whether it is for-profit, nonprofit, or government owned-has a significant effect on the mix of medical services it offers. Despite notoriously weak enforcement mechanisms, nonprofit hospitals act in the public interest by providing services that are unlikely …

Reconfiguring Industrial Policy: A Framework With An Application To South Africa, Ricardo Hausmann, Dani Rodrik, Charles F. Sabel

Faculty Scholarship

The main purpose of industrial policy is to speed up the process of structural change towards higher productivity activities. This paper builds on our earlier writings to present an overall design for the conduct of industrial policy in a low- to middle-income country. It is stimulated by the specific problems faced by South Africa and by our discussions with business and government officials in that country. We present specific recommendations for the South African government in the penultimate section of the paper.

Dividend Taxation In Europe: When The Ecj Makes Tax Policy, Alvin C. Warren, Michael J. Graetz

Faculty Scholarship

This article analyzes a complex line of recent decisions in which the European Court of Justice has set forth its vision of a nondiscriminatory system for taxing corporate income distributed as dividends within the European Union. We begin by identifying the principal tax policy issues that arise in constructing a system for taxing cross-border dividends and then review the standard solutions found in national legislation and international tax treaties. Against that background, we examine in detail a dozen of the Court's decisions, half of which have been handed down since 2006. Our conclusion is that the ECJ is applying a …

Insider Trading Rules Can Affect Attractiveness Of Country's Stock Markets, Laura Nyantung Beny

Articles

The academic debate about the desirability of prohibiting insider trading is longstanding and as yet unresolved. Until Henry Manne’s 1966 book, Insider Trading and the Stock Market, the debate centered on whether insider trading is unfair to public investors who are not privy to private corporate information. However, the fairness approach is malleable and indeterminate and thus does not lend itself to clear-cut policy prescriptions. Since Manne’s book, the focus of the debate has been on the effect of insider trading on economic efficiency. Manne argued that, contrary to the prevailing legal and moral opinion of the time, insider trading …

Tax Reform Unraveling, Michael J. Graetz

Faculty Scholarship

The Tax Reform Act of 1986 was widely heralded as the most significant change in our nation’s tax law since the income tax was extended to the masses during World War II. It was the crowning domestic policy achievement of President Ronald Reagan, who proclaimed it “the best antipoverty measure, the best pro-family measure and the best job-creation measure ever to come out of the Congress of the United States” (Reagan, 1986). This journal published a symposium on the Tax Reform Act in its first issue. The law’s rate reductions and base broadening reforms were mimicked throughout the countries belonging …

Law And Capitalism: What Corporate Crises Reveal About Legal Systems And Economic Development Around The World, Curtis J. Milhaupt, Katharina Pistor

Faculty Scholarship

This book explores the relationship between legal systems and economic development by examining, through a methodology we call the institutional autopsy, a series of high profile corporate governance crises around the world over the past six years. We begin by exposing hidden assumptions in the prevailing view on the relationship between law and markets, and provide a new analytical framework for understanding this question. Our framework moves away from the canonical distinction between common law and civil law regimes. It emphasizes the constant, iterative, rolling relationship between law and markets, and suggests that how a given country's legal system rolls …

Time To Step Up: Modeling The African American Ethnivestor For Self-Help Entrepreneurship In Urban America, Roger M. Groves

Michigan Journal of Race and Law

When the United States Congress passed legislation in late 2000 to revitalize the urban core with incentives for equity investors, African Americans were inconspicuously absent as stakeholders in the enterprise. Subsidies in the form of tax credits were instead gobbled up by investor groups who developed upscale hotel-convention centers, high priced condominiums, and symphony orchestra venues that the pre-existing poor residents could not afford. The focus of this Article is not to blame those investors who took advantage of the opportunity, though they perverted the purpose of the subsidy. Rather, this Article seeks to identify a new substrata of the …

When Fragile Become Friable: Endemic Control Fraud As A Cause Of Economic Stagnation And Collapse, William K. Black

Book Chapters

Individual “control frauds” cause greater losses than all other property crime combined. They are financial super-predators. Control frauds are crimes by the head of state or CEO that use the nation or company as a “weapon.” Waves of “control fraud” can cause economic collapses, discredit institutions vital to governance, and erode trust. Fraud’s defining element is deceit – the criminal creates and then betrays trust. Fraud erodes trust. Endemic control fraud causes institutions and trust to crumble and produces economic stagnation.

Economic theory about fraud is underdeveloped, economists are not taught about fraud mechanisms, and economists minimize the incidence and …

Globalization Of Law Firms: A Survey Of The Literature And A Research Agenda For Further Study, D. Daniel Sokol

UF Law Faculty Publications

The international expansion of law firms plays a critical role in understanding the business of law and the nature of globalization. This article responds to two articles on law firm expansion in the Indiana University - Bloomington Law School symposium on the Globalization of the Legal Profession. The article utilizes management studies' theoretical work on internationalization and applies it to law firm expansion to explain law firm strategic decision-making. The author creates a six part taxonomy for types of law firm expansion and provides a snapshot of the increasing U.S./U.K. dominance of capital markets, corporate and mergers and acquisitions legal …

Tax And Economic Policy Responses To The Medicaid Long-Term Care Financing Crisis: A Behavioral Economics Approach, Diane Lourdes Dick

Cardozo Public Law, Policy & Ethics Journal

The article examines the escalating strain on Medicaid due to rising long-term care costs and an aging population, emphasizing the ineffectiveness of current policies promoting private insurance. It critiques traditional economic models for neglecting behavioral factors like emotional resistance to planning for aging and underestimating future care needs. The analysis concludes that voluntary measures, such as tax incentives and partnership programs, are insufficient and advocates for a universal compulsory program to ensure adequate preparation for long-term care, thereby reducing Medicaid reliance.

Promotion Of The Concept Of The Rule Of Law Through The Implementation Of The Central America Free Trade Agreement, Phillip A. Buhler

Articles, Book Chapters, & Popular Press

Quoting the Eighteenth Century philosopher Charles de Secondat Montesquieu, “We are free because we live under civil laws.” In the summer of 2006 lawyers and businessmen in the Dominican Republic, the United States and most of Central America experienced full implementation of the Dominican Republic – Central America Free Trade Agreement (hereinafter CAFTA). This regional trade agreement, following on the general model of the North American Free Trade Agreement (NAFTA) and the parameters of the General Agreement on Tariffs and Trade (GATT), is intended to establish a comprehensive legal regime to reduce and eventually eliminate most national barriers to the …

Gendered Risks Of Retirement: The Legal Governance Of Defined Contribution Pensions In Canada, Mary G. Condon

Articles & Book Chapters

This paper examines how the governance of new employer-sponsored pension arrangements in Canada mediates the relationship between gender and discourses of economic risk. It considers the role played by these pension regimes in maintaining gendered forms of financial self-governance and economic insecurity. It asks whether evolving precepts of pension regulation assist or hinder women who wish to resist the disciplinary reach of policy restructurings in the employer-based pension sector.

Timbers Of Inwood Forest, The Economics Of Rent, And The Evolving Dynamics Of Chapter 11, Edward R. Morrison

Faculty Scholarship

The Supreme Court's decision in Timbers of Inwood Forest occupies an unhappy position in bankruptcy case law. It is often remembered as a troubled interpretation of the Code, denying undersecured creditors compensation for an important source of depreciation – depreciation in the real value of a creditor's claim during a lengthy reorganization process. But Timbers was not a simple case in which a bank was denied adequate protection for lost investment opportunities. It was instead a case in which the bank tried to opt out of the bankruptcy process itself. The debtor was an apartment complex. After it entered bankruptcy, …

Economic Policy In The Public Interest, Jagdish N. Bhagwati

Faculty Scholarship

Economists, whose discipline has always had a strong relationship to moral philosophy (Adam Smith, the author of The Wealth of Nations, also wrote the celebrated Theory of Moral Sentiments), have always seen their role in society as that of pursuing the public good. They properly see themselves as guardians of the public interest, and to be engaged in public-policy debates against special interests who wish to ‘capture’ policy to advance their narrowly circumscribed, self-serving agendas.

Bankruptcy Decision Making: An Empirical Study Of Continuation, Edward R. Morrison

Faculty Scholarship

Many small businesses attempt to reorganize under Chapter 11 of the U.S. Bankruptcy Code, but most are ultimately liquidated instead. Little is known about this shutdown decision. It is widely suspected that the bankruptcy process exhibits a continuation bias, allowing failing businesses to linger under the protection of the court, which resists liquidation even when it is optimal. This paper examines the shutdown decision in a sample of Chapter 11 bankruptcy cases filed in a typical bankruptcy court over the course of a year. The presence of continuation bias is tested along several dimensions – the extent of managerial control …