Law and Economics Commons^™

Liquidity, Systemic Risk, And The Bankruptcy Treatment Of Financial Contracts, Rizwaan J. Mokal

Brooklyn Journal of Corporate, Financial & Commercial Law

No abstract provided.

Public Actors In Private Markets: Toward A Developmental Finance State, Robert C. Hockett, Saule T. Omarova

Cornell Law Faculty Publications

The recent financial crisis brought into sharp relief fundamental questions about the social function and purpose of the financial system, including its relation to the “real” economy. This Article argues that, to answer these questions, we must recapture a distinctively American view of the proper relations among state, financial market, and development. This programmatic vision – captured in what we call a “developmental finance state” – is based on three key propositions: (1) that economic and social development is not an “end-state” but a continuing national policy priority; (2) that the modalities of finance are the most potent means of …

The Economics Of Class Actions And Class Action Waivers, Keith N. Hylton

Faculty Scholarship

Class action litigation has generated a series of recent Supreme Court decisions imposing greater federal court supervision over the prosecution of collective injury claims. This group of cases raises the question whether class action waivers should be permitted on policy grounds. I examine the economics of class actions and waivers in this paper. I distinguish between the standard one-on-one litigation environment and the class action environment. In the standard environment, waivers between informed agents enhance society's welfare. In the class action environment, in contrast, not all waivers are likely to enhance society's welfare.

Economic Theory, Divided Infringement And Enforcing Interactive Patents, W. Keith Robinson

Faculty Journal Articles and Book Chapters

High tech companies – especially in the emerging areas of the Internet of Things, wearable devices, and personalized medicine – have found it difficult to enforce their patents on interactive technologies. This is especially true when multiple parties combine to perform all of the steps of a claimed method. This problem is referred to as joint or divided infringement, and some commentators advocate that “interactive” patents susceptible to divided infringement should not be enforced.

In contrast, this article argues that economic theory supports the enforcement of interactive patents. Previous papers have analyzed divided infringement problems from a doctrinal and policy …

Comments On The Oecd's "Due Diligence Guidance For Meaningful Stakeholder Engagement In The Extractives Sector", Lisa J. Laplante, Erika George

Faculty Scholarship

Professor Lisa Laplante of New England Law | Boston’s Center for International Law and Policy (CILP) and Professor Erika George of the University of Utah S.J. Quinney College of Law’s Center for Global Justice respectfully submitted this collaborative commentary in response to the OECD’s Draft Due Diligence Guidance for Meaningful Stakeholder Engagement in the Extractives Sector which build off of the OECD Guidelines for Multinational Enterprises which offer comprehensive recommendations to promote responsible business conduct. The 2011 revisions to the OECD MNE Guidelines introduced an important new provision on stakeholder engagement. Pursuant to the provision, multinational enterprises should: “engage with …

Precarious Existence And Capitalism: A Permanent State Of Exception, Tayyab Mahmud

Faculty Articles

The contemporary neoliberal era is marked by an exponential expansion of contingent and precarious labor markets. In this context, the construct of precarity emerged to signify labor conditions of permanent insecurity and precariousness. Coming at the heels of the era of Keynesian welfare, precarity is mostly seen as an exception to the normal trajectory of capitalist formations. The basic argument of this paper is that under capitalism, for the working classes precarious existence is the norm rather than the exception. Precarity is the outcome not only of insecurities of labor markets but also of capital’s capture and colonization of life …

The Once And Future Irrelevancy Of Section 12(G), Usha Rodrigues

Scholarly Works

Among more fundamental reforms, the JOBS ACt of 2012 amended Section 12(g) of the Securities Exchange Act and sought to increase the number of shareholders (from 500 to 2000) that a firm must have before it must make public disclosures. Argument on the floor of Congress focused on the undue burden the provision placed on companies. This Article examines data that invalidates those anecdotal concerns.

Indeed, the data reveal important insights: First, my hand-collected dataset shows that, contrary to public concerns about Section 12(g)'s onerous burdens, it only affects a few firms - (less than three percent of those going …

Latcrit Praxis @ Xx: Toward Equal Justice In Law, Education And Society, Tayyab Mahmud, Athena D. Mutua, Francisco Valdes

Journal Articles

This article marks the twentieth anniversary of Latina and Latino Critical Legal Theory or the LatCrit organization, an association of diverse scholars committed to the production of knowledge from the perspective of Outsider or OutCrit jurisprudence. The article first reflects on the historical development of LatCrit’s substantive, methodological, and institutional commitments and practices. It argues that these traditions were shaped not only by its members’ goals and commitments but also by the politics of backlash present at its birth in the form of the “cultural wars,” and which have since morphed into perpetual “crises” grounded in neoliberal policies. With this …

Reservations And The Cisg: The Borderland Of Uniform International Sales Law And Treaty Law After Thirty-Five Years, Ulrich G. Schroeter

Brooklyn Journal of International Law

No abstract provided.

Markets, Morals, And Limits In The Exchange Of Human Eggs, Kimberly D. Krawiec

Faculty Scholarship

No abstract provided.

The Federal Reserve: A Study In Soft Constraints, Kathryn Judge

Faculty Scholarship

In response to the greatest financial crisis since the Great Depression, the Federal Reserve (the Fed) took a number of unprecedented steps to try to minimize the adverse economic consequences that would follow. From providing liquidity injections to save companies like Bear Stearns and American International Group (AIG) to committing to a prolonged period of exceptionally low interest rates and buying massive quantities of longer-term securities to further reduce borrowing costs, the Fed's response to the 2007 through 2009 financial crisis (the Crisis) has been creative and aggressive. These actions demonstrated that the Fed is uniquely powerful among federal agencies, …

A Comment On Metzger And Zaring: The Quicksilver Problem, Thomas W. Merrill

Faculty Scholarship

It is a pleasure to comment on the fine institutional studies in this issue by Gillian Metzger and David Zaring. Professor Metzger explores the many ways in which financial regulation, as reflected in the regulatory functions of the Federal Reserve (the Fed), differs from mainstream administrative law, as represented by the Environmental Protection Agency (EPA). She describes the historical roots of the divergence, explains how it has persisted over time, and offers some intriguing thoughts about the possibilities for convergence in the future. Professor Zaring paints a fascinating portrait of the Federal Open Market Committee (FOMC), the entity within the …

Antitrust, Competition Policy, An Inequality, Jonathan Baker, Steven Salop

Scholarly Articles in Law Reviews & Journals

Economic inequality recently has entered the political discourse in a highly visible way. This political impact is not a surprise. As the U.S. economy has begun to recover from the Great Recession since mid-2009, economic growth has effectively been appropriated by those already well off, leaving the median household less well off. The serious economic, political and moral issues raised by inequality can be addressed through a panoply of public policies including competition policy, the focus of this article. The article describes the channels through which market power contributes to inequality, and sets forth a range of possible antitrust policy …

Introduction To Worker Cooperatives And Their Role In The Changing Economy, Priya Baskaran

Scholarly Articles in Law Reviews & Journals

This article advocates for cooperatives as a vehicle for protecting and empowering vulnerable workers, like those in New York’s nail salons. Some may argue that worker cooperatives are unnecessary and that advocacy groups and legislation would be just as effective. California has a nonprofit, the California Healthy Nail Salon Collaborative (CHNSC), which is dedicated to advocating for healthy working conditions for nail workers. The organization is composed of key stakeholders in the nail salon industry, including individual manicurists, environmental organizations, researchers, reproductive justice groups, and government agencies. CHNSC created a “healthy nail salon” certification as an incentive for owners to …

The Diversity Challenge: Exploring The 'Invisible College' Of International Arbitration, Susan Franck

Scholarly Articles in Law Reviews & Journals

As diversity can affect the perceived legitimacy of a state’s dispute resolution system and the quality of judicial decisions, diversity levels in the national bench and bar have been an area of transnational concern. By contrast, little is known about diversity of adjudicators and counsel in international arbitration. With a lack of accurate, complete, and publicly available data about international arbitrators and practitioners, speculation about membership in the “invisible college” of international arbitration abounds. Using data from a survey of attendees at the prestigious and elite biennial Congress of the International Council for Commercial Arbitration permitted one glimpse into the …

Sustainability And Infrastructure Investment: National Development Banks In Africa, Daniel D. Bradlow, Christopher Strong Humphrey

Scholarly Articles in Law Reviews & Journals

The need for infrastructure finance in Africa is tremendous. A 2009 report by the World Bank suggests that the continent faces needs of US$93 billion per year. More recent studies, pointing to economic and population growth trends and using more sophisticated methods of assessing needs, indicate that infrastructure needs are actually much higher. Existing financing sources have not been able to keep pace.

In this context, the role of national development banks (NDBs) in the continent merits attention. As will be shown below, many African countries have NDBs, although the vast majority are quite small, with limited access to finance …

Putting The 'Financial Stability' In Financial Stability Oversight Council, Hilary Allen

Scholarly Articles in Law Reviews & Journals

For all the ink that has been spilled on the topic of financial regulation since the financial crisis of 2007-2008, there has been little examination of the competing normative goals of financial regulation. Should the financial system be treated as an end in itself such that the efficiency of that system is the primary goal? Or should financial regulation instead treat the financial system as a means to the end of broader economic growth? This Article argues for the latter approach, and stakes out the controversial normative position that financial stability, rather than efficiency, should be the paramount focus of …

"Economic Property Rights" As "Nonsense Upon Stilts": A Comment On Hodgson, Daniel H. Cole

Articles by Maurer Faculty

Hodgson's (2015) critique of extra-legal 'property rights' - in this case, so-called 'economic property rights' - is right on target. This Comment contributes two further points to his critique. First, the notion of 'economic property rights' is based on what Gilbert Ryle (1949) referred to as a 'category mistake', conflating physical possession, which is a brute fact about the world, with the right or entitlement to possession, which is a social or institutional fact that cannot exist in the absence of some social contract, convention, covenant, or agreement. The very notion of a non-institutional 'right' is oxymoronic. Second, the fact …

Concept And Contract In The Future Of International Law, John Linarelli

Scholarly Works

This is an article written for a symposium on Joel Trachtman’s book, The Future of International Law. I first deal with the contractarian features of Trachtman’s approach to understanding international law. Using the tools of new institutional economics and constitutional economics, Trachtman seeks to describe the features of an international legal system. This is positive political theory or at least relates substantially to the methods of positive political theory. I explore a different approach, one connecting to normative political theory. In its ambitious sense, my approach would see international law as a form of moral argument, but in its modest …

In Praise Of Ex Ante Regulation, Brian Galle

Georgetown Law Faculty Publications and Other Works

Timing is an important consideration in regulatory design. Corrective taxes are usually imposed before or contemporaneously with the harmful activity they are aimed at preventing, while tort awards are assessed ex post, in its aftermath. Patents and research grants both can encourage innovation, but patents pay off only after the invention is marketed. In a world of perfect information, fully rational actors, and complete credit or insurance markets, time would not matter. In the real world, though, the failure of one or more of these assumptions can change dramatically the impact of a regulatory option. For example, prior commentators have …

The Surprising Relevance Of Medical Malpractice Law, Michael D. Frakes

Faculty Scholarship

The academic community has largely reached a consensus that medical malpractice reform is unlikely to be a meaningful source of health-care cost containment. This Article suggests that it would be premature to conclude based on the evidence underlying this academic sentiment that physicians are universally insensitive to the parameters of medical malpractice law and that liability reform has no role to play in the health-care-costs debate. On the contrary, this Article demonstrates that the medical-liability system, under particular structures and conditions, may indeed have a meaningful connection to health-care spending patterns.

The shortcoming of the existing empirical literature that has …

Do Physicians Respond To Liability Standards?, Michael D. Frakes, Matthew Frank, Seth Seabury

Faculty Scholarship

In this paper, we explore the sensitivity in the clinical decisions of physicians to the standards of care expected of them under the law, drawing on the abandonment by states over time of rules holding physicians to standards determined by local customs and the contemporaneous adoption of national-standard rules. Using data on broad rates of surgical interventions at the county-by-year level from the Area Resource File, we find that local surgery rates converge towards national surgery rates upon the adoption of national-standard rules. Moreover, we find that these effects are more pronounced among rural counties.

The Effect Of Statutory Rape Laws On Teen Birth Rates, Michael D. Frakes, Matthew C. Harding

Faculty Scholarship

Policymakers have often been explicit in expanding statutory rape laws to reduce teenage pregnancies and live births by teenage mothers, often with the goal of reducing associated welfare outlays. In this paper, we explore whether expansions in such laws are indeed associated with reductions in teen birth rates. In order to codify statutory-rape-law expansions, we use a national micro-level sample of sexual encounters to simulate the degree to which such encounters generally implicate the relevant laws. By codifying statutory-rape laws in terms of their potential reach into sexual encounters, as opposed to using crude binary treatment variables, this simulation approach …

Quitting In Protest: A Theory Of Presidential Policy Making And Agency Response, Charles M. Cameron, John M. De Figueiredo, David E. Lewis

Faculty Scholarship

This paper examines the effects of centralized presidential policy-making, implemented through unilateral executive action, on the willingness of bureaucrats to exert effort and stay in the government. Extending models in organizational economics, we show that policy initiative by the president is a substitute for initiative by civil servants. Yet, total effort is enhanced when both work. Presidential centralization of policy often impels policy-oriented bureaucrats ("zealots") to quit rather than implement presidential policies they dislike. Those most likely to quit are a range of moderate bureaucrats. More extreme bureaucrats may be willing to wait out an opposition president in the hope …

Human Equity? Regulating The New Income Share Agreements, Shu-Yi Oei, Diane Ring

Faculty Scholarship

A controversial new financing phenomenon has recently emerged. New "income share agreements" (''ISAs'') enable an individual to raise funds by pledging a percentage of her future earnings to investors for a certain number of years. These contracts, which have been offered by entities such as Fantex, Upstart, Pave, and Lumni, raise important questions for the legal system: Are they a form of modern-day indentured servitude or an innovative breakthrough in human financing? How should they be treated under the law?

This Article comprehensively addresses the public policy and legal issues raised by ISAs and articulates an analytical approach to evaluating …

Lift Not The Painted Veil! To Whom Are Directors’ Duties Really Owed?, Martin Gelter, Geneviève Helleringer

Faculty Scholarship

In this article, we identify a fundamental contradiction in the law of fiduciary duty of corporate directors across jurisdictions, namely the tension between the uniformity of directors’ duties and the heterogeneity of directors themselves. American scholars tend to think of the board as a group of individuals elected by shareholders, even though it is widely acknowledged (and criticized) that the board is often a largely self-perpetuating body whose inside members dominate the selection of their future colleagues and eventual successors. However, this characterization is far from universally true internationally, and it tends to be increasingly less true even in the …

How Improving Decision-Making And Mindfulness Can Improve Legal Ethics And Professionalism, Peter H. Huang

Publications

Lawyers who behave unethically and unprofessionally do so for various reasons, ranging from intention to carelessness. Lawyer misconduct can also result from decision-making flaws. Psychologist Chip Heath and his brother Dan Heath, in their best-selling book, Decisive: How to Make Better Decisions in Life and Work, suggest a process to improve people’s decision-making. They introduce the acronym WRAP as the mnemonic for these decision-making heuristics: (1) Widen your options, (2) Reality-test your assumptions, (3) Attain distance before deciding, and (4) Prepare to be wrong. The WRAP process mitigates these cognitive biases: (1) narrow framing of a decision problem, (2) …

How To Do Things With Hohfeld, Pierre Schlag

Publications

Wesley Newcomb Hohfeld’s 1913 article, Fundamental Legal Conceptions as Applied in Judicial Reasoning, is widely viewed as brilliant. A thrilling read, it is not. More like chewing on sawdust. The arguments are dense, the examples unfriendly, and the prose turgid.

“How to Do Things With Hohfeld” is an effort to provide an accessible and sawdust-free account of Hohfeld’s article, as well as to show how and why his analysis of “legal relations” (e.g., right/duty, etc.) matters. Perhaps the principal reason is that the analysis furnishes a discriminating platform to discern the economic and political import of legal rules and …

The Digital Shareholder, Andrew A. Schwartz

Publications

Crowdfunding, a new Internet-based securities market, was recently authorized by federal and state law in order to create a vibrant, diverse, and inclusive system of entrepreneurial finance. But will people really send their money to strangers on the Internet in exchange for unregistered securities in speculative startups? Many are doubtful, but this Article looks to first principles and finds reason for optimism.

Well-established theory teaches that all forms of startup finance must confront and overcome three fundamental challenges: uncertainty, information asymmetry, and agency costs. This Article systematically examines this “trio of problems” and potential solutions in the context of crowdfunding. …