Law and Economics Commons^™

A Conversation With President Obama: A Dialogue About Poverty, Race, And Class In Black America, Joseph Karl Grant

Journal Publications

The date is November 13, 2012.1 Just mere days ago, I received the invitation of a lifetime. Last night, I arrived in Washington, D.C. I am staying in the Hay-Adams Hotel on the third floor. I still cannot believe the extent of my life's journey. I have just been summoned to the White House by second term President-elect Barack Obama, who defeated Mitt Romney, the Republican nominee for President on November 6, 2012. The 2012 Presidential Election was a hard-fought battle between Barack Obama on the Democratic side, and Mitt Romney on Republican side. The election was a like the …

Neo-Classical Economic Theories, Methodology, And Praxis Optimize Criminogenic Environments And Produce Recurrent, Intensifying Crises, William K. Black

Faculty Works

Control frauds” are seemingly legitimate entities controlled by persons that use them as a fraud “weapon.” A single control fraud can cause greater losses than all other forms of property crime combined. This article focuses on the role of neo-classical economic theory, methodology, and praxis is optimizing criminogenic environments that hyper-inflate financial bubbles and produce recurrent, intensifying financial crises. Financial control frauds’ “weapon of choice” is accounting. Neoclassical theory, which dominates law & economics, is criminogenic because it assumes that control fraud cannot exist while recommending legal policies that optimize an industry for control fraud. Its hostility to regulation, endorsement …

Those Who Ignore The Successes Of The Past Suffer Recurrent, Intensifying Crises, William K. Black

Faculty Works

No abstract provided.

Bricks, Mortar, And Google: Defining The Relevant Antitrust Market For Internet-Based Companies, Jared Kagan

NYLS Law Review

No abstract provided.

Meaningful Good Faith: Managerial Motives And The Duty To Obey The Law, Peter C. Kostant

NYLS Law Review

No abstract provided.

Director Liability For Corporate Crimes: Lawyers As Safe Haven?, John A. Humbach

NYLS Law Review

No abstract provided.

Duty Of Obedience: The Forgotten Duty, Alan R. Palmiter

NYLS Law Review

No abstract provided.

The Role Of Good Faith In Delaware: How Open-Ended Standards Help Delaware Preserve Its Edge, Renee M. Jones

NYLS Law Review

No abstract provided.

What Directors Do (And Fail To Do): Some Comparative Notes On Board Structure And Corporate Governance, Simon Deakin

NYLS Law Review

No abstract provided.

The Short, But Interesting Life Of Good Faith As An Independent Liability Rule, Robert B. Thompson

NYLS Law Review

No abstract provided.

Good Faith In Revlon-Land, Christopher M. Bruner

NYLS Law Review

No abstract provided.

Producing Corporate Text: Courtrooms, Conference Rooms, And Classrooms, Mae Kuykendall

NYLS Law Review

No abstract provided.

Deconstructing Lyondell: Reconstructing Revlon, Lawrence Lederman

NYLS Law Review

No abstract provided.

Good Faith After Disney: Justice Berger’S Closing Discussion, Carolyn Berger

NYLS Law Review

No abstract provided.

Corporate Governance Reform For The 21st Century: A Critical Reassessment Of The Shareholder Primacy Model, Carol Liao

All Faculty Publications

This article questions the efficiency of the shareholder primacy model of corporate governance in light of the financial calamities that have plagued the first decade of the 21st century. Reform efforts following the global financial crisis have focused on failures in securities regulation, but that is only part of the story. Effective reform measures must also address the legal and normative prescriptions found within existing governance structures, and the collateral effect those prescriptions have on political and regulatory inaction.

There was strong ideological support for the shareholder primacy model at the start of the century. Following the corporate and accounting …

The Brains Behind Mediation: Reflections On Neuroscience, Conflict Resolution And Decision-Making, Daniel Weitz

Cardozo Journal of Conflict Resolution

On September 13, 1848, an explosives charge sent a three-foot tamping iron about an inch in diameter through the head of Phineas Gage. Although Gage survived, the tamping iron, which entered just under the left eye and exited through the frontal portion of his head, destroyed his prefrontal cortex. Prior to the accident, Gage was a popular foreman of a railroad construction crew. After the accident, he was a tactless, profane, and impulsive man with a dramatically altered personality.

Clearing And Trade Execution Requirements For Otc Derivatives Swaps Under The Frank-Dodd Wall Street Reform And Consumer Protection Act, Willa E. Gibson

Akron Law Faculty Publications

This paper examines Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act entitled the “Wall Street Transparency and Accountability Act of 2010” (the “Act”). The Act provides a comprehensive regulatory framework for swap transactions that designates the Commodities Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) as the primary regulators of the OTC derivatives swap market. The Act provides a very broad definition of swaps to include most OTC derivatives transactions, and it grants the CFTC regulatory jurisdiction over them with the exception of security-based swaps to which the SEC is granted regulatory jurisdiction. …

Foreign Citizens In Transnational Class Actions, Jay Tidmarsh, Linda Sandstrom Simard

Journal Articles

This Article addresses an increasingly important question: When, if ever, should foreign citizens be included as members of an American class action? The existing consensus holds that courts should exclude from class membership those foreign citizens whose country does not recognize an American class judgment. Our analysis begins by establishing that this consensus is flawed. Rather, to minimize the costs associated with relitigation in a foreign forum, we must distinguish between foreign claimants who are likely to commence a subsequent foreign proceeding from those who are unlikely to do so; distinguishing between those who come from recognizing and nonrecognizing countries …

The Psychological Foundations Of Behavioral Law And Economics, Jeffrey J. Rachlinski

Cornell Law Faculty Publications

Over the past decade, psychological research has enjoyed a rapidly expanding influence on legal scholarship. This expansion has established a new field—“Behavioral Law and Economics” (BLE). BLE’s principal insight is that human behavior commonly deviates from the predictions of rational choice theory in the marketplace, the election booth, and the courtroom. Because these deviations are predictable, and often harmful, legal rules can be crafted to reduce their undesirable influence. Ironically, BLE seldom recognizes that its intellectual origins lie with psychology more so than economics. This failure leaves BLE open to criticisms that can be answered only by embracing the underlying …

The “Non-Cumulation Clause”: An “Other Insurance” Clause By Another Name, Chris French

Faculty Scholarship

How long-tail liability claims such as asbestos bodily injury claims and environmental property damage claims are allocated among multiple triggered policy years can result in the shifting of tens or hundreds of millions of dollars from one party to another. In recent years, insurers have argued that clauses commonly titled, “Prior Insurance and Non-Cumulation of Liability” (referred to herein as “Non-Cumulation Clauses”), which are found in commercial liability policies, should be applied to reduce or eliminate their coverage responsibilities for long-tail liability claims by shifting their coverage responsibilities to insurers that issued policies in earlier policy years. The insurers’ argument …

The Status Of Recognition And Enforcement Of Judgments In The European Union, Michael D. Larobina, Richard L. Pate

WCBT Working Papers

International trade and the free movement of people are inevitably followed by legal disputes. Such litigants require an efficient and predictable dispute resolution mechanism capable of handling cases between diverse nationals. An essential part of such mechanism is a clearly defined process of judgment enforcement across national boundaries. In the past several decades, the European Union (“EU”) has necessarily addressed judgment enforcement across the boundaries of its member nations (“Member States”). Citizens of the EU need to prosecute and defend their legal rights in their home and in other EU member states. Presently, the EU is, again, considering such issues …

Report To Parliament - On The Readiness Of First Nations Communities And Organizations To Comply With The Canadian Human Rights Act, Naiomi Metallic

Reports & Public Policy Documents

Enacted in 1977, the Canadian Human Rights Act (CHRA) aims to ensure equality of opportunity and freedom from discrimination in federal jurisdiction. At the time that the CHRA was passed, however, it was understood that adjustments would have to be made before the federal government and First Nations operating under the Indian Act could be fully compliant with the new law. As a result, section 67 of the CHRA explicitly shielded the federal government and First Nations community governments from complaints of discrimination relating to actions arising from or pursuant to the Indian Act. This was intended to be a …

Economic Crisis And Share Price Unpredictability: Reasons And Implications, Edward G. Fox, Merritt B. Fox, Ronald J. Gilson

Faculty Scholarship

The volatility of share returns for individual companies increased sharply during the recent financial crisis. The larger part of this increase was due to a dramatic rise – five fold as measured by variance – in idiosyncratic risk. We find that this pattern repeats itself during each major economic reversal going back 85 years. Because idiosyncratic risk is what is involved, this increase cannot be explained by changes in predictions concerning the future course of the economy as a whole.

Our first goal is to explain why difficult economic times, which are defined in terms of market wide phenomena, make …

Economics, Behavioral Biology, And Law, Owen D. Jones, Erin O'Hara O'Connor, Jeffrey Evans Stake

Vanderbilt Law School Faculty Publications

The article first compares economics and behavioral biology, examining the assumptions, core concepts, methodological tenets, and emphases of the two fields. Building on this, the article then compares the applied interdisciplinary fields of law and economics, on one hand, with law and behavioral biology, on the other - highlighting not only the most important similarities, but also the most important differences.

The article subsequently explores ways that biological perspectives on human behavior may prove useful, by improving economic models and the behavioral insights they generate. The article concludes that although there are important differences between the two fields, the overlaps …

An Empirical Analysis Of Empirical Legal Scholarship Production, 1990-2009, Michael R. Heise

Cornell Law Faculty Publications

Inspired by the retirement of Professor Tom Ulen of the University of Illinois, the author considers the growth and development of empirical legal scholarship over two decades—a period of time that corresponds, not coincidentally, with Professor Ulen’s career. Starting in the 1990s when empirical scholarship had not yet “caught on,” the author first documents the increase in quantity of empirical scholarship over two decades. Next, the author applies a law and economics perspective to the recent surge in empirical scholarship, explaining that the trend has been fueled by an increase in the number of empirically trained scholars and also by …

Efficient Uncertainty In Patent Interpretation, Harry Surden

Publications

Research suggests that widespread uncertainty over the scopes of issued patents creates significant costs for third-party firms and may decrease innovation. This Article addresses the scope uncertainty issue from a theoretical perspective by creating a model of patent claim scope uncertainty.

It is often difficult for third parties to determine the legal coverage of issued patents. Scope underdetermination exists when the words of a patent claim are capable of a broad range of plausible scopes ex ante in light of the procedures for interpreting patents. Underdetermination creates uncertainty about claim coverage because a lay interpreter cannot know which interpretation will …

Testing As Commodification, Katharine B. Silbaugh

Faculty Scholarship

In this Essay, the author addresses criticism of the testing movement by education experts such as Jonathan Kozol. She explores the similarities in the discourses of philosophical discussions of commodification and behavioural economic discussions of intrinsic motivations. One conclusion that the author draws is that the comparison between the testing movement and commodification literature is not perfect, but they have both been counted, compared and measured, and flattened or thinned out of values.

The Trillion Dollar Problem Of Underwater Homeowners: Avoiding A New Surge Of Foreclosures By Encouraging Principal-Reducing Loan Modifications, Gregory S. Crespi

Faculty Journal Articles and Book Chapters

There are currently well over ten million underwater homeowners whose mortgage obligations exceed the current value of their houses, with an aggregate negative equity position of at least $800 billion and possibly over $1 trillion. The overwhelming majority of these persons continue to make their mortgage payments even though for many their interests would be better served by defaulting. This is therefore an unstable situation that could suddenly erupt with a rapid cascade of millions of strategic defaults, potentially triggering severe macroeconomic dislocations. It is urgent that this situation be defused through the modification of the mortgages of a large …

Mortgage Modification And Strategic Behavior: A Contrarian Reading Of The Countrywide Financial Corporation Settlement, Gregory S. Crespi

Faculty Journal Articles and Book Chapters

Christopher Mayer, Edward Morrison, Thomas Piskorski and Arpit Gupta of Columbia University have recently published in the Law and Finance eJournal a comprehensive study demonstrating the significant impacts on strategic default rates of the widely publicized Countrywide Financial Corporation settlement of 2008. While their study is a solid and convincing descriptive effort, their implicit assumption that strategic defaults are something to be discouraged rather than encouraged, a position that I have criticized in my earlier work, undercuts the usefulness of their work for policy guidance. From their perspective the Countrywide settlement provides a cautionary tale about difficult trade-offs to be …

Biased Advice, Christopher Robertson

Faculty Scholarship

The modern capitalist society, characterized by decentralized decision making and increasingly sophisticated products and services, turns on relationships of epistemic reliance, where laypersons depend upon advisors to guide their most important decisions. Yet many of those advisors lack real expertise and may be biased by conflicting interests. In such situations, laypersons are likely to make suboptimal decisions that sometimes aggregate into systematic failures, from soaring health care costs to market crashes. Regulators can attempt to manage the symptoms and worst abuses, but the fundamental problem of biased advice will remain. There are many potential policy solutions, from outright bans on …