Law and Economics Commons^™

Opinion: How Software Stifles Competition And Innovation, James Bessen

Faculty Scholarship

Innovation is not what it used to be, and software is part of the reason. In many industries—industries well beyond Big Tech—dominant firms have built large software-based platforms delivering important consumer benefits, but these platforms also slow the rise of innovative rivals, including productive startups.5 Because access to these platforms is limited, competition has been constrained, creating a troubling market dynamic that slows economic growth.

The Long Shadow Of Inevitable Disclosure, Stacey Dogan, Felicity Slater

Faculty Scholarship

A growing body of evidence has highlighted the human and economic costs associated with contractual restrictions on employee mobility. News accounts describe abusive use of non-compete clauses to prevent low wage workers from seeking better options. Economists, meanwhile, have demonstrated that innovation and economic dynamism may suffer when employers can easily prevent their employees from changing jobs. While state legislatures have attempted to address these concerns by restricting employers' use of non-compete agreements, the Federal Trade Commission recently announced a plan to prohibit them altogether. As policymakers focus attention on contractual limits on employment mobility, however, a more insidious threat …

Layered Fiduciaries In The Information Age, Zhaoyi Li

Indiana Law Journal

Technology companies such as Facebook have long been criticized for abusing customers’ personal information and monetizing user data in a manner contrary to customer expectations. Some commentators suggest fiduciary law could be used to restrict how these companies use their customers’ data.1 Under this framework, a new member of the fiduciary family called the “information fiduciary” was born. The concept of an information fiduciary is that a company providing network services to “collect, analyze, use, sell, and distribute personal information” owes customers and end-users a fiduciary duty to use the collected data to promote their interests, thereby assuming fiduciary liability …

The Law And Economics Of Freshwater, Bruce R. Huber

Book Chapters

The chapter is a tribute to Klaus Mathis for his invaluable contributions at the intersection of law and economics.

Law and Economics in all seinen Facetten Festschrift zu Ehren von Klaus Mathis trans: Law and Economics in All His Facets: Festschrift in Honor of Klaus Mathis

Series: Schriften zur Rechtstheorie, vol. 309

Illusory Policy Implications Of Behavioral Law & Economics, Terrance O'Reilly

Marquette Law Review

Behavioral law and economics has achieved notable policy influence promoting soft paternalism—using nudges to encourage better choices without limiting options. Recently, some behavioral scholars have suggested that positive behavioral models actually support hard paternalism—imposing mandates. This Article challenges the insinuation that behavioral law and economics supports mandates.

Trial Selection And Estimating Damages Equations, Keith N. Hylton

Faculty Scholarship

Many studies have employed regression analysis with data drawn from court opinions. For example, an analyst might use regression analysis to determine the factors that explain the size of damages awards or the factors that determine the probability that the plaintiff will prevail at trial or on appeal. However, the full potential of multiple regression analysis in legal research has not been realized, largely because of the sample selection problem. We propose a method for controlling for sample selection bias using data from court opinions.

Inflation, Market Failures, And Algorithms, Rory Van Loo

Faculty Scholarship

Inflation is a problem of tremendous scale. But inflation itself is unlikely to cause the greatest economic harm during inflationary periods. Instead, a more likely source of devastation will be policymakers’ response to inflation. Their main anti-inflation tools, most notably increasing interest rates, increase unemployment and the risk of recessions. This Article argues that there is a better approach. Rather than defaulting to interest rate hikes that harm markets, policy makers should prioritize laws that lower prices while improving markets. For decades, businesses have raised prices by manipulating consumers, exercising monopoly power, and lobbying for laws that block competition. Automated …

Can Moral Framing Drive Insurance Enrollment In The Us?, Christopher Robertson, Wendy Netter Epstein, David Yokum, Hansoo Ko, Kevin Wilson, Monica Ramos, Katherine Kettering, Margaret Houtz

Faculty Scholarship

To encourage health insurance uptake, marketers and policymakers have focused on consumers’ economic self-interest, attempting to show that insurance is a good deal or to sweeten the deal, with subsidies or penalties. Still, some consumers see insurance as a bad deal, either because they rationally exploit private risk information (“adverse selection”), or irrationally misperceive the value due to cognitive biases (e.g., optimism). As a result, about 30 million Americans remain uninsured, including many who could afford it.

At the same time, polling suggests that Americans view health insurance through a moral lens, seeking to protect those with pre-existing conditions especially. …

Stagflation In American Jurisprudence, Chad G. Marzen, Michael Conklin

Pace Law Review

No abstract provided.

Resistance Is Not Futile: Challenging Aapi Hate, Peter H. Huang

William & Mary Journal of Race, Gender, and Social Justice

This Article analyzes how to challenge AAPI (Asian American Pacific Islander) hate—defined as explicit negative bias in racial beliefs towards AAPIs. In economics, beliefs are subjective probabilities over possible outcomes. Traditional neoclassical economics view beliefs as inputs to making decisions with more accurate beliefs having indirect, instrumental value by improving decision-making. This Article utilizes novel economic theories about belief-based utility, which economically captures the intuitive notion that people can derive pleasure and pain directly from their and other people’s beliefs. Even false beliefs can offer comfort and reassurance to people. This Article also draws on interdisciplinary and multidisciplinary theories …

Customer Transparency Can Dampen The Growing Human Trafficking Problem, Colin Martell

The Journal of Business, Entrepreneurship & the Law

The beginning of this comment will discuss an abbreviated economic analysis on the business of human trafficking: who the participants are, why they participate, and their pressure points. Section II of this paper will discuss the current state of trafficking and the economic incentives that drive participants into the market. Section III and Section IV will examine what the government and businesses are doing to stop human trafficking. Section V will analyze several policy proposals and consider the solutions and unintended consequences of each.

The Progressives' Antitrust Toolbox, Herbert J. Hovenkamp

All Faculty Scholarship

The period 1900 to 1930 was the Golden Age of antitrust theory, if not of enforcement. During that period courts and scholars developed nearly all of the tools that we use to this day to assess anticompetitive practices under the federal antitrust laws. In subsequent years antitrust policy veered to both the left and the right, but today seems to be returning to a position quite similar to the one that these Progressive adopted. Their principal contributions were (1) partial equilibrium analysis, which became the basis for concerns about economic concentration, the distinction between short- and long-run analysis, and later …

“‘Made In China’ . . . Is A Warning Label”: Is America Doing Enough?, Devin Kathleen Epp

Seattle University Law Review

This Note explores China’s repressive actions against the Uyghur population and calls upon the U.S. to address these human rights violations. Part I discusses the background and human rights violations in Xinjiang, also known as the Xinjiang Uyghur Autonomous Region (XUAR). Part II addresses U.S. economic regulations and sanctions imposed against actors involved in Xinjiang’s forced labor industry. Part III analyzes previous U.S. strategies and sanction regimes implemented to combat human rights violations in other countries. This Note recommends that the U.S. implement a more robust multilateral framework to combat the Xinjiang cultural genocide and impose secondary sanctions against China …

Antitrust Error Costs, Herbert J. Hovenkamp

All Faculty Scholarship

The idea that consideration of error costs should inform judgments about actions with uncertain consequences is well established. When we act on imperfect information, we consider not only the probability of an event, but also the expected costs of making an error. In 1984 Frank Easterbrook used this idea to rationalize an anti-enforcement bias in antitrust, reasoning that markets are likely to correct monopoly in a relatively short time while judicial errors are likely to persist. As a result, false positives (recognizing a problem when there is none) are more costly than false negatives. While the problem of error cost …

A Comprehensive Covid-19 Response—The Need For Economic Evaluation, Govind C. Persad, Ankur Pandya

Sturm College of Law: Faculty Scholarship

Recently, the World Health Organization has exhorted countries to fight the Covid-19 pandemic with other interventions in addition to vaccines. But for countries to mount a comprehensive and effective response, more than exhortation is needed. Policymakers must understand the benefits and burdens associated with various policy options. They also have to be equipped to rigorously and systematically compare these benefits and burdens, both when evaluating individual policies and when determining which policies to include in a legislative or regulatory package.

It’S A Trap: A New Economic Model Addressing American Public Education, Nikhil A. Gulati

Notre Dame Law Review

This Note will argue that, when looking at the quality of a school district, there is some theoretical threshold that determines whether the use of local property tax and zoning by a local government will be effective in increasing the quality of the locality’s schools. This theoretical threshold is conceptually akin to the basic economic idea of a poverty trap. If a locality’s schools are above this quality threshold, the corresponding local government will be able to effectively utilize property taxes and zoning to increase the quality of its schools. However, if it is below the threshold, the local government …

Chapter 8: Information Technology And The New Capitalism, James Bessen

Faculty Scholarship

Harnessing Digitalization for Sustainable Economic Development: Insights for Asia describes digitalization’s role in raising the productive capacities of economies. It examines how digital transformation can enhance trade, financial inclusion, and firm competitiveness, as well as how greater digital infrastructure investment, internet connectivity, and financial and digital education in the region can maximize digitalization’s economic benefits. It also explains the importance of striking the right balance between the regulation and supervision of financial technology to enable innovation and safeguarding financial stability and consumer protection.

Part I of the book seeks to build an understanding of digitalization’s effects on macroeconomic performance, including …

The Alarming Legality Of Security Manipulation Through Shareholder Proposals, Artem M. Joukov, Samantha M. Caspar

Seattle University Law Review

Shareholder proposals attract attention from scholars in finance and economics because they present an opportunity to study both quasidemocratic decision-making at the corporate level and the impact of this decision-making on firm outcomes. These studies capture the effect of various proposals but rarely address whether regulations should allow many of them in the first place due to the possibility of stock price manipulation. Recent changes to shareholder proposal rules, adopted in September 2020, sought to address the potential for exploitation that some proposals create (but ultimately failed to do so). This Article shows the potential for apparently legal stock price …

Why Do The Poor Not Have A Constitutional Right To File Civil Claims In Court Under Their First Amendment Right To Petition The Government For A Redress Of Grievances?, Henry Rose

Seattle University Law Review

Since 1963, the United States Supreme Court has recognized a constitutional right for American groups, organizations, and persons to pursue civil litigation under the First Amendment right to petition the government for redress of grievances. However, in three cases involving poor plaintiffs decided by the Supreme Court in the early 1970s—Boddie v. Connecticut,2 United States v. Kras,3 and Ortwein v. Schwab4—the Supreme Court rejected arguments that all persons have a constitutional right to access courts to pursue their civil legal claims.5 In the latter two cases, Kras and Ortwein, the Supreme Court concluded that poor persons were properly barred from …

How Can An Economic Analysis Affect The Understanding Of A Court’S Decision?, Yanni N. Kakouris

Honors Theses and Capstones

No abstract provided.

Religious Roots Of Corporate Organization, Amanda Porterfield

Seattle University Law Review

Religion and corporate organization have developed side-by-side in Western culture, from antiquity to the present day. This Essay begins with the realignment of religion and secularity in seventeenth-century America, then looks to the religious antecedents of corporate organization in ancient Rome and medieval Europe, and then looks forward to the modern history of corporate organization. This Essay describes the long history behind the entanglement of business and religion in the United States today. It also shows how an understanding of both religion and business can be expanded by looking at the economic aspects of religion and the religious aspects of …

Copyright And Parody: Touring The Certainties Of Intellectual Property And Restitution, Wendy J. Gordon

Faculty Scholarship

The essay that follows examines the boundary between two sets of rules. The first set arises under the law of Restitution, particularly the rule that volunteers ordinarily need not be rewarded. (Another way to state this same Restitution rule is to say that the retention of benefit voluntarily conferred is ordinarily not "unjust enrichment".) The second set of rules are those of Intellectual Property law, which creates property in a special kind of volunteer. My argument is simply that the law of Restitution leads almost directly to the law of Intellectual Property, though the two areas are premised on diametrically …

Selling Out: An Instrumentalist Theory Of Legal Ethics, Keith N. Hylton

Faculty Scholarship

Legal ethics has received attention mostly from scholars who view it as a field for the application of moral philosophy. However, economic analysis is also useful in the study of legal ethics, because it can illuminate the incentives that generate ethical dilemmas and controversies. This is especially true in the subfield this paper devotes its attention to, lawyer conflict of interest rules. The problem I focus on is the incentive of the lawyer to "sell out" his client-for example, by providing confidential information to a potential adversary or by providing legal misinformation to the client in order to aid the …

Investigating The Contract Production Process, Stephen J. Choi, Robert E. Scott, G. Mitu Gulati

Faculty Scholarship

Contract law and theory have traditionally paid little attention to the processes by which contracts are made. Instead, contracts among sophisticated parties are assumed to be full articulations of the desires of the parties; whatever the process, the outcome is the same. This article compares sovereign debt contracts from US and UK firms, with different production processes, that are trying to do the same thing under very similar legal regimes. We find that that the production process likely matters quite a bit to the final form that contracts take.

"Do Lawyers Need Economists?" Review Of Economic Transplants: On Lawmaking For Corporations And Capital Markets, Reuven S. Avi-Yonah

Reviews

Katja Langenbucher’s outstanding book seeks to address the question of why and in what ways have lawyers been importing economic theories into a legal environment, and how has this shaped scholarly research, judicial and legislative work? Since the financial crisis, corporate or capital markets law has been the focus of attention by academia and media. Formal modelling has been used to describe how capital markets work and, later, has been criticized for its abstract assumptions. Empirical legal studies and regulatory impact assessments offered different ways forward. This excellent book presents a new approach to the risks and benefits of interdisciplinary …

Consumer Welfare & The Rule Of Law: The Case Against The New Populist Antitrust Movement, Elyse Dorsey, Geoffrey A. Manne, Jan M. Rybnicek, Kristian Stout, Joshua D. Wright

Pepperdine Law Review

Populist antitrust notions suddenly are fashionable again. At their core is the view that antitrust law is responsible for a myriad of purported socio-political problems plaguing society today, including but not limited to rising income inequality, declining wages, and increasing economic and political concentration. Seizing on Americans’ fears about changes to the modern US economy, proponents of populist antitrust policies assert the need to fundamentally reshape how we apply our nation’s competition laws in order to implement a variety of prescriptions necessary to remedy these perceived social ills. The proposals are varied and expansive but have the unifying theme of …

The Economics And Antitrust Of Bundling, Rajeev R. Bhattacharya

The Journal of Business, Entrepreneurship & the Law

This article explains the economics and antitrust of bundling. I first show that popular arguments such as demand complementarities, economies of scope, and price discrimination are not sufficient. I then detail potentially anticompetitive factors such as leverage and opacity. I then use simple examples to show how variation in consumer valuations explains bundling and is not anticompetitive. Finally, I explore other business judgment rule explanations for bundling.

The Data Market: A Proposal To Control Data About You, David Shaw, Daniel W. Engels

SMU Data Science Review

The current legal and economic infrastructure facilitating data collection practices and data analysis has led to extreme over-collection of data and the overall loss of personal privacy. Data over-collection has led to a secondary market for consumer data that is invisible to the consumer and results in a person's data being distributed far beyond their knowledge or control. In this paper, we propose a Data Market framework and design for personal data management and privacy protection in which the individual controls and profits from the dissemination of their data. Our proposed Data Market uses a market-based approach utilizing blockchain distributed …

A Taxing Feminism, Anthony C. Infanti, Bridget J. Crawford

Book Chapters

Feminist perspectives are not new to tax law. The first academic piece bringing a feminist perspective to bear on tax law dates to the early 1970s, when Grace Blumberg published “Sexism in the Code: A Comparative Study of Income Taxation of Working Wives and Mothers.” Contemporaneously, none other than Ruth Bader Ginsburg (along with her tax lawyer husband Marty Ginsburg) brought a feminist perspective to bear on tax law when she argued Moritz v. Commissioner before the Tenth Circuit Court of Appeals, as depicted in the movie On the Basis of Sex. Since then, numerous other contributions have been …

The Emergence Of Law And Macroeconomics: From Stability To Growth To Human Development, Steven A. Ramirez

Faculty Publications & Other Works

No abstract provided.