Law and Economics Commons^™

Actavis, The Reverse Payment Fallacy, And The Continuing Need For Regulatory Solutions, Daniel A. Crane

Articles

The Actavis decision punted more than it decided. Although narrowing the range of possible outcomes by rejecting the legal rules at the extremes and opting for a rule of reason middle ground, the opinion failed to grapple with the most challenging issues of regulatory policy raised by pharmaceutical patent settlements. In particular, it failed to clearly delineate the social costs of permitting and disallowing patent settlements, avoided grappling with the crucial issues of patent validity and infringement, and erroneously focused on “reverse payments” as a distinctive antitrust problem when equally or more anticompetitive settlements can be crafted without reverse payments. …

Preliberal Autonomy And Postliberal Finance, Robert C. Hockett

Cornell Law Faculty Publications

Even American Founders whose views diverged as dramatically as those of Jefferson and Hamilton shared a view of finance and of enterprise that one might call “productive republican.” Pursuant to this vision, financial and other forms of market activity are instrumentally rather than intrinsically good — and for that very reason are of interest to the public qua public rather than to the public qua aggregate of “private” individuals. Citizens are best left free to engage in financial and other market activities, per this understanding, only insofar as these are consistent with sustainable collective republic-making. And the republic — the …

Materializing Citizenship: Finance In A Producers' Republic, Robert C. Hockett

Cornell Law Faculty Publications

This invited essay critically assesses a movement of which I consider myself to be part – the movement to “redemocratize” financial institutions in a manner that restores, to non-wealthy citizens, access to basic financial services comparable to those enjoyed by wealthy citizens. I argue that while financial redemocratization of this sort is necessary to the larger project from which it draws most of its meaning – viz that of redemocratizing access to the resources requisite to productive enterprise and meaningful citizenship more generally – it is far from sufficient to this task. We must therefore take special care not to …

A Way Forward For Tax Law And Economics? A Response To Osofsky's "Frictions, Screening, And Tax Law Design", David Gamage

Buffalo Law Review

No abstract provided.

A Court For The One Percent: How The Supreme Court Contributes To Economic Inequality, Michele Gilman

Utah Law Review

This Article explores the United States Supreme Court’s role in furthering economic inequality. The Occupy Wall Street movement in 2011 not only highlighted growing income and wealth inequality in the United States, but also pointed the blame at governmental policies that favor business interests and the wealthy due to their outsized influence on politicians. Numerous economists and political scientists agree with this thesis. However, in focusing ire on the political branches and big business, these critiques have largely overlooked the role of the judiciary in fostering economic inequality. The Court’s doctrine touches each of the major causes of economic inequality, …

The Possible Advantages Of Islamic Financial Jurisprudence: An Empirical Study Of The Dow Jones Islamic Market Index, Russell Powell, Arthur Delong

Faculty Articles

The Islamic financial system experienced a disproportionately smaller economic hardship in 2008 and 2009 because adherence to Shariʿa tends to encourage conservative investment approaches. Islamic mutual funds were prohibited from investing in the non-Islamic financial sector, highly leveraged companies, and various derivative instruments. Ultimately, this conservative investment approach may have been an effective strategy for mitigating downside risk. The article analyzes the fundamental classical legal requirements that pertain to modern Islamic finance, compares the modern view of Islamic equity investing and its secular capitalist counterpart, explores whether adherence to Shariʿa principles, as defined by the Dow Jones Islamic Market Index, …

Inside The Blackwall Box: Explaining U.S. Marine Salvage Awards, Joshua C. Teitelbaum

Georgetown Law Faculty Publications and Other Works

Under U.S. maritime law, a salvor of imperiled maritime property on navigable waters is entitled to a monetary award from the owner. When the salvage service is rendered voluntarily in the absence of a contract, the court determines the salvage award according to six factors enumerated by the Supreme Court in The Blackwall, 77 U.S. 1 (1869). The law, however, does not specify a precise formula or rule for calculating awards on the basis of the Blackwall factors. How do courts turn their findings on the Blackwall factors into salvage awards? This article addresses this question by examining the …

Lessons From Sec V. Citigroup: The Optimal Scope For Judicial Review Of Agency Consent Decrees, Dorothy S. Lund

Faculty Scholarship

On November 28, 2011, Judge Jed S. Rakoff of the United States District Court for the Southern District of New York in Manhattan declined to approve a consent judgment between the Securities and Exchange Commission (SEC) and Citigroup. Because Citigroup had not admitted or denied the allegations in the consent decree, Judge Rakoff concluded that he was unable to make an informed judgment about the merits of the settlement. Judge Rakoffs decision has garnered serious criticism from legal observers and rekindled discussion about the scope of judicial review of agency consent decrees, which have become a valuable agency enforcement tool. …

Bitcoin, The Law And Emerging Public Policy: Towards A 21st Century Regulatory Scheme, Gregory M. Karch

Florida A & M University Law Review

Bitcoin is the world's first decentralized digital currency. According to Lawrence Lessig, cryptography is "the most important technological breakthrough in the last one thousand years" and will be transformative. Bitcoin, capitalizing on cryptography, is a revolutionary digital currency protocol--a software system capable of tracking financial transactions without the need for a third party intermediary. The Bitcoin software is a "community-driven open source project released under an MIT license.”

This paper begins by briefly reviewing the mechanics of Bitcoin in Section I. Section II then surveys the rapidly expanding uses of Bitcoin, as well as the emerging application of Bitcoin. Since …

Sustainability Policy’S Inherent Dilemmas – Exemplified Via Critical Examination Of The Las Vegas Metropolitan Sustainability Campaign, Kathryn A. Zimmerman

All Master's Theses

In response to a dual problem of critical water scarcity and rapid population growth, leaders of metropolitan Las Vegas implemented a region-wide, internationally marketed sustainability campaign. Preliminary studies found that, while sustainability policy attains its rhetorical goals, solutions initiated not only perpetuate but also purposefully expand the original dual problem to justify continuous water resource acquisitions. To examine this sustainability conundrum constructed by leadership—problem-perpetuation rather than problem-resolution—a critical examination in resource management asked two basic questions: what is being sustained and by what means? Via this inquiry, specific processes by which leaders perpetuate problems can be identified; and, so-informed, new …

Book Review: Lawless Capitalism: The Subprime Crisis And The Case For An Economic Rule Of Law, William K. Black

Faculty Works

No abstract provided.

Inmates For Rent, Sovereignty For Sale: The Global Prison Market, Benjamin Levin

Scholarship@WashULaw

In 2009, Belgium and the Netherlands announced a deal to send approximately 500 Belgian inmates to Dutch prisons, in exchange for an annual payment of £26 million. The arrangement was unprecedented, but justified as beneficial to both nations: Belgium had too many prisoners and not enough prisons, whereas the Netherlands had too many prisons and not enough prisoners. The deal has yet to be replicated, nor has it triggered sustained criticism or received significant scholarly treatment. This Article aims to fill this void by examining the exchange and its possible implications for a global market in prisoners and prison space. …

Transparency In International Economic Relations And The Role Of The Wto, Padideh Ala'i, Matthew D'Orsi

Contributions to Books

No abstract provided.

On The Usefulness Of A Flat Economics To The World Of Faith, Andrew P. Morriss

Faculty Scholarship

Is economics unduly flat? Perhaps, sometimes. But part of the power of economics comes from the parsimony of its approach to human nature. If and when we search for more complex approaches, we will need to understand the tradeoffs involved in choosing between that power and simplicity and the alternatives. Rather than deepening our economics with faith, it may be that we are better off using a relatively flat economics to enrich religious understandings.

Concentrated Ownership And Corporate Control: Wallenberg Sphere And Samsung Group, Hwa-Jin Kim

Articles

Samsung Group’s success cannot be attributed to its corporate governance structure, at least thus far. The corporate governance of Samsung has been rather controversial. As the group faces the succession issue the corporate governance has become as crucial as their new products and services. Samsung has discovered a role model on the other side of the planet, Wallenberg Sphere in Sweden. Much effort has been made to learn about Wallenberg’s arrangements and key to its success. However, a fundamental difference between the institutions in Sweden and Korea has made the corporate structures of the two groups radically different. Wallenberg uses …

High-Frequency Trading: A Regulatory Strategy, Charles R. Korsmo

University of Richmond Law Review

No abstract provided.

Reclaim This! Getting Credit Seller Rights In Bankruptcy Right, Lawrence Ponoroff

University of Richmond Law Review

No abstract provided.

Synthetic Cdos, Conflicts Of Interest, And Securities Fraud, Jennifer O'Hare

University of Richmond Law Review

No abstract provided.

The Law And Economics Of Corporate Social Responsibility And Greenwashing, Miriam A. Cherry

Faculty Publications

In this symposium article, I explore the link between corporate social responsibility (CSR) and the threat of greenwashing. In the first part of the article, I start with first principles, examining the origins of greenwashing, structuring its definitions, and identifying the economic incentives that lead firms into the practice. The second part of this article examines the legal structure that allows greenwashing to occur, and with it, explores the pervasiveness and extent of greenwashing. The third part of this article articulates the harms of greenwashing. Intuitively, greenwashing involves deception, falsity, and hypocrisy that reflexively seem problematic. Identifying the actual harm …

Aboriginal Food Security In Northern Canada: An Assessment Of The State Of Knowledge, Harriet Kuhnlein, Fikret Berkes, Laurie Hing Man Chan, Treena Wasonti:Io Delormier, Asbjørn Eide, Chris Furgal, Murray Humphries, Henry Huntington, Constance Macintosh, Ian Mauro, David Natcher, Barry Prentice, Chantelle Richmond, Cecilia Rocha, Kue Young

Reports & Public Policy Documents

As the world’s population increases, as global markets become more interconnected, and as the effects of climate change become clearer, the issue of food insecurity is gaining traction at local, national, and international levels. The recent global economic crisis and increased food prices have drawn attention to the urgent situation of the world’s 870 million chronically undernourished people who face the number one worldwide risk to health: hunger and malnutrition. Although about 75% of the world’s undernourished people live in low-income, rural regions of developing countries, hunger is also an issue in Canada. In 2011, 1.6 million Canadian households, or …

Penalty Default Licenses: A Case For Uncertainty, Kristelia A. García

Publications

Research on the statutory license for certain types of copyright-protected content has revealed an unlikely symbiosis between uncertainty and efficiency. Contrary to received wisdom, which tells us that in order to increase efficiency, we must increase stability, this Article suggests that uncertainty can actually be used to increase efficiency in the marketplace. In the music industry, the battle over terrestrial performance rights--that is, the right of a copyright holder to collect royalties for plays of a sound recording on terrestrial radio--has raged for decades. In June 2012, in a deal that circumvented the statutory license for sound recordings for the …

Coasean Bargaining In Consumer Bankruptcy, Edward R. Morrison

Faculty Scholarship

During my first weeks as a graduate student in economics, a professor described the Coase Theorem as “nearly a tautology:” Assume a world in which bargaining is costless. If there are gains from trade, the Theorem tells us, the parties will trade. The initial assignment of property rights will not affect the final allocation because the parties will bargain (costlessly) to an efficient outcome. “How can that be a theorem?,” I remember thinking at the time.

Toward A Regulatory Framework For Third-Party Funding Of Litigation, Keith N. Hylton

Faculty Scholarship

Because third-party funding and sales of legal rights are equivalent in terms of their economics, I examine arrangements in which third-party sales of legal rights are permitted today; those arrangements include waiver, subrogation, and settlement agreements. These existing arrangements provide valuable lessons for the appropriate regulatory approach to third-party financing of litigation.

The Economics Of The Restatement And Of The Common Law, Keith N. Hylton

Faculty Scholarship

Perhaps the most optimistic view of the American Law Institute's Restatement project was provided at its inception by Benjamin Cardozo:

When, finally, it goes out under the name and with the sanction of the Institute, after all this testing and retesting, it will be something less than a code and something more than a treatise. It will be invested with unique authority, not to command, but to persuade. It will embody a composite thought and speak a composite voice. Universities and bench and bar will have had a part in its creation. I have great faith in the power of …

The Direct Costs From Npe Disputes, Michael J. Meurer, James Bessen

Faculty Scholarship

In the past, “non-practicing entities” (NPEs), popularly known as “patent trolls,” have helped small inventors profit from their inventions. Is this true today or, given the unprecedented levels of NPE litigation, do NPEs reduce innovation incentives? Using a survey of defendants and a database of litigation, this paper estimates the direct costs to defendants arising from NPE patent assertions. We estimate that firms accrued $29 billion of direct costs in 2011. Although large firms accrued over half of direct costs, most of the defendants were small or medium-sized firms. Moreover, an examination of publicly listed NPEs indicates that little of …

A Unified Framework For Competition Policy And Innovation Policy, Keith N. Hylton

Faculty Scholarship

I describe a model of competition law enforcement that treats competition and innovation policy as the inseparable partners they ought to be. The enforcement authority determines an optimal punishment knowing that if it sets the penalty too high it will reduce firms’ incentives to invest in innovation, and if firms do not invest, new goods and new markets will not be created. The authority therefore moderates the penalty in order to maintain innovation incentives. The implications of this framework for competition policy and for innovation policy are quite different from what is commonly observed today. I discuss implications for competition …

Information And Causation In Tort Law: Generalizing The Learned Hand Test For Causation Cases, Keith N. Hylton

Faculty Scholarship

This paper discusses the economics of causation in tort law, describing precise implications for precautionary incentives when courts are and are not perfectly informed. With precautionary incentives identified, we can ask whether the causation inquiry enhances welfare, and if so under what conditions. Perhaps the most important innovation applies to the Hand Formula. When causation is an issue, the probability of causal intervention should be part of the Hand test, and the generalized Hand test offers a method of distinguishing significant classes of causation cases. I close with implications for the moral significance of causation and for economic analysis of …

A Game Changer For The Political Economy Of Economic Development Incentives, Stephen E. Ellis, Grant M. Hayden, Cynthia L. Rogers

Faculty Journal Articles and Book Chapters

State and local governments have embraced their authority to offer economic development incentives for the purpose of attracting, retaining, or enhancing economic activity within their borders. Collectively, these programs represent an enormous, but largely overlooked, transfer of wealth from public entities to private firms. The increasing use of economic development incentives runs counter to the guidance offered by academic researchers. With their proliferation comes the increasing need for accountability in the decision-making process. The authors consider whether the duty of care standard used in corporate governance should be applied to the public decision-making context regarding economic development incentives.

The Burden Of Deciding For Yourself: The Disutility Caused By Out-Of-Pocket Healthcare Spending, Christopher Robertson, David Yokum

Faculty Scholarship

As part of a larger "consumer-directed healthcare movement," cost-sharing mechanisms, such as copays and deductibles, cause patients to pay out of pocket for a portion of the costs of the healthcare they consume. Cost sharing is intended to reduce costs by changing consumption behavior, and it has been shown to be an effective though incomplete solution to the problem of unsustainable cost growth. It is controversial nonetheless. This Essay distinguishes three different normative problems with cost sharing (including underinsurance, deterrence of high-value care, and a tax on sickness), which can all be fixed through more precision in the design of …

For-Profit Public Enforcement, Margaret H. Lemos, Max Minzner

Faculty Scholarship

This Article investigates an important yet undertheorized phenomenon: financial incentives in public enforcement. Each year, public enforcers assess billions of dollars in penalties and other financial sanctions for violations of state and federal law. Why? If the awards in question were the result of private lawsuits, the answer would be obvious. We expect that private enforcers—the victims of law violations and their fee-seeking attorneys—will attempt to maximize financial recoveries. Record recoveries come as no surprise in private class actions, for example. But dollar signs are harder to explain in the context of public enforcement. Unlike private attorneys, public enforcers are …