Law and Economics Commons^™

Designing Contract Modification, Albert H. Choi, George G. Triantis

Articles

For long-term commercial contracts, modification tends to be the norm rather than the exception. While modification often takes place in response to an arrival of new information, contracting parties frequently modify the terms in response to a shift in bargaining power. In this Article, we explain how the flexibility to renegotiate in response to a shift in bargaining power can facilitate long-term contracting and thereby beneficial reliance investments and risk allocation. The prospect of modification can induce contracting parties who expect their bargaining power to improve, such as from the emergence of outside opportunities, to enter into contracts earlier and …

Merger Remedies Unbound, Dhruv Aggarwal, Albert H. Choi, Geeyoung Min

Articles

How should foundational contract law doctrines apply to corporate mergers? This Article argues that recent changes in Delaware law grant parties expansive contractual freedom to define their preferred remedies in merger agreements, untethered from the limits imposed by traditional contract law. A new provision in the Delaware corporate code, or the Delaware General Corporation Law (DGCL), permits penalty clauses in merger agreements, notwithstanding the traditional “anti-penalty doctrine” that forbids punitive liquidated damages in contracts. Delaware courts have also shown deference to specific performance provisions, treating them as presumptively enforceable commitments instead of retaining their traditional judicial discretion over the choice …

The Basis Of The Labor Exemption Reconsidered, Sanjukta Paul

Articles

Broadly speaking, this symposium queries the question of expanding some actors’ coordination rights under antitrust law as a way of effectuating legal goals relating to “power relations.” I commend the organizers of the symposium for opening this conversation, for asking about the use of “collective bargaining” beyond the traditional labor domain, and for taking on the question in a creative way. These broader questions are essential, and yet my own article will (paradoxically, perhaps) try to contribute to this effort by going back to the core domain of the labor exemption itself—where, it turns

The Impact Of The Filibuster On The Ideological Composition Of The Judiciary, James Cullers

CMC Senior Theses

This paper examines whether the 2013 Senate filibuster reform–the so-called "nuclear option"–changed the ideological composition of federal judicial nominees and whether that change translated into different confirmation outcomes. Using ideology scores from the Database on Ideology, Money in Politics, and Elections (DIME) matched to a dataset of all federal judicial nominees from 2000 to 2024, we separate the judicial selection process into two stages: presidential nomination and Senate confirmation. At the nomination stage, we find that post-2013 nominees were approximately 71% more likely to be ideologically extreme by pre-reform standards, a large and statistically significant shift consistent with presidents responding …

Expanding State Tax Authority: Public And Private Sector Impacts Of Wayfair, Maxwell Pastoria

Williams Honors College, Honors Research Projects

The 2018 Supreme Court decision in South Dakota v. Wayfair, Inc. (Wayfair) overturned the longstanding physical presence rule for state sales tax collection, enabling states to enforce tax obligations on remote sellers through marketplace facilitator and economic nexus laws (Oyez, 2018). This study investigates the effects of these two post-Wayfair tax laws on state sales tax revenues, entrepreneurship, and public expenditures across all 50 states. Using a two-way fixed effects difference-in-differences (TWFE DID) framework, this research analyzes how policy adoption influenced per-capita outcomes in tax revenue, firm formation, and government spending in social services, education, infrastructure, and …

The Law Of Quitting, Andrew K. Jennings

Faculty Articles

Throughout life, people enter countless positions of authority and trust in relation to one another and the public. These positions include, among many others, being a public official, being a corporate director, and being an employee. Law announces prerequisites for starting such positions, as well as incumbents’ rights and obligations once in them. But no office holds forever. Indeed, incumbents often choose to exit positions before they would otherwise end by expiration, removal, or death. Yet law governs such voluntary relinquishment—often called “resignation” or, more generically, “quitting”—largely as afterthought. That is, law expansively attends how positions of authority and trust …

Boundaries Of Rules: Social Reactions To Legal Intervention, Francesco Parisi

Articles

This chapter examines what happens at the boundaries of rules: when social practices acquire legal recognition, when legal rules seek to reshape social expectations, and when formal and informal enforcement operate together. The conventional economic model treats the expected formal sanction as the principal source of compliance. Although this model provides a fundamental benchmark, it captures only part of the effects of legal intervention. The taxonomy developed here identifies the different ways in which legal, moral, and social incentives may interact. The kinds of public and private enforcement through which individuals express norms shape the additive, nonadditive, and countervailing effects …

Nest Eggs And Lifelines: The Overlooked Strain Of Economic Volatility On 401(K) Participants, Samantha Prince

Faculty Scholarship

Many Americans rely on defined contribution plans like 401(k) plans for retirement savings. These plans do not guarantee a fixed retirement benefit; rather, the benefit is based on accumulated contributions and investment performance. When the stock market drops, so do retirement account balances. When inflation hikes living expenses, money does not go as far. President Donald Trump's policies, including those associated with tariffs, are causing economic and resource volatility leading to financial hardship. Americans worry as they watch living costs increase and their retirement savings diminish. It is well known that retirees rely on 401(k) plan balances to fund their …

Symmetry, Presumptions, And The Judges Design, Murat C. Mungan

Faculty Scholarship

An instrumental variables approach called ‘the judges design’ used frequently in social sciences relies on an assumption called ‘average monotonicity’. This assumption pertains to how different judges’ (or other classifiers’) decision making processes relate to each other. Violations of it are hard to detect, which raises the importance of it being supported by a plausible theory. Decisions of judges who solve Bayesian decision problems violate average monotonicity as long as the signals they process are symmetric and they do not possess strong presumptions. This result is extended to cases where judge presumptions are symmetrically distributed and may include strong presumptions. …

The Apathy Economy: Patents, Advertising, And Consumer Indifference, Gavin J. Milczarek-Desai, Derek E. Bambauer

Cardozo Arts & Entertainment Law Journal

Patents function as signals as well as rights to exclude. They inform competitors, investors, employees, and consumers about the invention and its owner. How this information affects consumers is not well understood. Existing studies disagree about how advertising a product or service as patented, or patent pending, affects the price consumers will pay. This Article offers the first major empirical study of that question andfinds that consumers behave with surprising rationality: they will not pay any price premium for a patented product. A product's patent status conveys little information about whether it is superior to competing offerings. The results hold …

Romanist-Bourgeois Property And The Development Of The Modern Capitalist World System, Anna Di Robilant

Faculty Scholarship

This article examines the role of Romanist-bourgeois property law in the development of the modern capitalist world system, focusing on how nineteenth-century jurists deliberately crafted and adapted Roman law-based property doctrines to address the evolving social relations of production in both Europe and its peripheries. Rather than viewing legal concepts as merely reflective of broader economic transformations, the author highlights the active role played by a professional class of jurists in shaping property law to legitimize and structure emergent capitalist class dynamics. The article critically engages with competing scholarly perspectives that either privilege market expansion or downplay class relations, arguing …

Universities, Capital, And Democratic Vulnerability, Steven Dean, Dana Brakman Reiser

Faculty Scholarship

For many, the university serves as a crucial guardian of democracy. Still, the capitulation of leading American private universities to authoritarian pressure from the Trump Administration should not be terribly surprising. This Essay offers one reason why. It does so by focusing on the law governing private nonprofit universities. It examines both the origins and the impact of a fundamental tension between their charitable missions and their need for capital. It shows how the legal framework designed to protect these nonprofit universities from market pressures can actually intensify their vulnerability.

The so-called “nondistribution constraint” stands at the core of U.S. …

Never Cool Enough: Legal And Policy Challenges To Keeping Data Centers And Communities Empowered In A Warming World, Cristina M. Banahan, Diana B. Wilkinson

Lewis & Clark Law Review

In a rapidly evolving world, artificial intelligence (AI) and cryptocurrency are two technologies at the forefront of the future. Although these developments promise many potential societal benefits and revenue, they come with a price. The data processing required to operate these new technologies demands a large amount of energy, using water to cool the systems and enable them to run without overheating. With such high water and energy demands, the benefits from these technological advancements come at a steep environmental cost. Despite the negative environmental impacts of these data centers, the Trump Administration continues to roll back environmental protections. The …

A Strategic Approach To “E”Sg Reporting, Taylor Nchako

Lewis & Clark Law Review

Environmental, Social, and Governance (ESG) factors have emerged as an important investment tool for the financial sector to address climate change. While the federal government has abandoned ESG disclosure, U.S. firms still face reporting obligations domestically and abroad. States across the country have proposed or passed two types of disclosure laws: greenhouse gas emissions disclosure and climate risk disclosure. These state-level efforts mirror actions in the European Union, Canada, and other jurisdictions in which U.S. firms operate.

As ESG disclosure standards are adopted in jurisdictions around the world, these standards are undergoing various advancements, reductions, and contestations. These shifts in …

1981, Carliss N. Chatman

Faculty Journal Articles and Book Chapters

42 U.S.C. § 1981 should have solved a pervasive problem in American capitalism—when white economic interests do not converge with the contract rights of Black people, they are excluded from the market in a way that causes systemic harm. This Article proposes that the failure to enforce 1981 in the past may render it more harmful than beneficial in the present climate of retrenchment. The realities of racism combine with the lack of economic interest convergence to make combatting contract inequality on a contract-by-contract basis legally precarious, nearly impossible to properly evaluate, and difficult to economically incentivize. This is in …

Values Primacy & Total Governance Through Activism, Carliss N. Chatman, Sergio Alberto Gramitto Ricci

Faculty Journal Articles and Book Chapters

In the aftermath of George Floyd’s murder, public companies swift-ly pledged sweeping equity commitments—only to abandon them under political and market pressure. These reversals were not aberrations. They were opportunistic, performative, and reactionary marketing responses. They expose a governance regime in which stakeholder interests are structurally reversible because they remain doctrinally optional, lacking the institutional interlock needed to create binding accountability across stakeholder roles.

This Article explores how stakeholder power is already embedded in corporate governance through interlocking initiatives grounded in shared values. Stakeholder activism—boycotts, proxy votes, viral campaigns—is not merely expressive; it is an overlooked form of governance. Drawing …

A New View Of Taxation, Christopher H. Hanna

Faculty Journal Articles and Book Chapters

Tax scholars have made a number of breakthrough discoveries in tax law going back to at least Thomas Hobbes and his observations on a consumption tax almost 400 years ago. In more recent times, in the 1970 and 1980s, a number of tax law scholars made very important contributions in understanding the similarities and differences between an income tax, a consumption tax and a wage tax, as well as developing a greater understanding in a related area—the time value of money. It seems, however, that in the last 30 years or so, the only breakthrough or significant discovery in tax …

The Future Of Monetary Federalism: Rethinking Supremacy In The Stablecoin Era, Richard H. Fair

American University Business Law Review

[INTRODUCTION] In the summer of 2023, the State of Wyoming enacted a law authorizing its state treasurer to issue a blockchain-based, state-backed digital stablecoin known as the Wyoming Stable Token (“WYST”). Two years later, Congress passed the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act, GENIUS, or the Act), moving to establish a comprehensive federal regulatory regime for stablecoins. These dueling initiatives have sparked more than regulatory confusion; they have set the stage for a structural clash between state financial innovation and federal monetary supremacy. At the heart of this confrontation lies a question that the Constitution …

Trophy Assets, Aneil Kovvali

Articles

Rich people like to own things that make them look cool. When the thing in question is a car, house, or boat, the implications are limited. But sometimes very rich people own assets that are more important. Within media, Elon Musk acquired Twitter, Jeff Bezos ac-quired the Washington Post, and Patrick Soon-Shiong acquired the Los Angeles Times. There has also been a craze for aerospace: Musk with Space X, Bezos with Blue Origin, Richard Branson with Virgin Galactic, and going back further, Howard Hughes with Hughes Aircraft Company. It is often difficult to understand the behavior in purely finan-cial terms, …

Regulating Robotaxis, Bryant Walker Smith, Matthew T. Wansley

Articles

In several sunbelt cities, commercial robotaxi service has arrived. The leading robotaxi company is providing over 400,000 trips per week. The industry claims that robotaxis will save lives and provide convenient and affordable mobility. Critics counter that they will increase congestion, undermine transit, and subject the public to ubiquitous surveillance. We argue that the social impact of robotaxis depends on how they are regulated. We emphasize two points missing from the debate. First, some of the benefits of robotaxis may be political rather than technological—some longstanding public policy goals may become viable in a robotaxi world. Second, letting one private …

Ticking Toward Reform: Rethinking The Material Difference Exception In The Luxury Watch Resale Market And Beyond, Mallory K. Hogan

American University Law Review

The rapid growth of the luxury resale market has heightened tension between trademark holders and secondary-market sellers. Courts are increasingly left to apply the material difference exception to first sale doctrine defenses, to find trademark infringement when resold goods differ from the original product, even in de minimis ways. Originally designed to protect consumers from confusion where post-sale modifications affected product quality or safety, the exception has evolved into a broad enforcement tool that luxury brands leverage to challenge resellers over minor or cosmetic alterations. In the luxury watch and accessories markets in particular, courts have deemed even minimal differences …

Antidiscrimination Law Against Labor, Jordan Laris Cohen

American University Law Review

In recent years, employer compliance with antidiscrimination law has emerged as a major justification for limiting the rights of employees to organize and engage in collective action in the workplace. In IBM Corp., a Republican majority of the National Labor Relations Board cited “laws addressing workplace discrimination and sexual harassment” as a primary reason to deny nonunionized employees the right to a coworker representative during investigatory interviews. In General Motors, a Republican Board majority invoked antidiscrimination law in upending four decades of precedent regarding employer discipline of employees engaged in “opprobrious conduct” in the course of protected organizing …

Lawbreaking As A Method Of Competition, Sandeep Vaheesan

American University Law Review

Business competition is not a free-for-all in which firms can compete and triumph by hook or crook. Instead, market rivalry is a process structured by laws of general application and sector-specific rules. Certain competitive strategies and tactics are proscribed by statutes, regulations, and common law. Firms may not compete by bombing their rivals’ facilities, bribing the employees of wholesale customers, or making false claims about their own goods.

In a range of industries, however, firms choose to compete by violating laws protecting consumers, workers, businesses, and the public and obtaining an unfair cost or other advantage over their rivals. Examples …

The Law And Ai As An “Apex Collaborator”: Legal Frameworks For Optimized Cooperation, David S. Filippi, Bill Tomlinson, Andrew W. Torrance

FIU Law Review

Law fundamentally exists to enable human cooperation, providing frameworks for everything from basic contracts to complex international agreements. As artificial intelligence systems grow more sophisticated, they may enable new ways that collaborative activity can occur. We posit the possibility of a new kind of AI entity: the “Apex Collaborator,” a computational system with capabilities for cooperation and partnership that are superior, in at least some ways, to those of humans. Just as apex predators shape the ecosystems in which they live through predation, Apex Collaborators would shape human-AI networks through their ability to enhance peaceful coexistence, collective problem-solving, and shared …

Constructive Taxation: How Filing Requirements Turn Tax Benefits Into De Facto Taxes, Orli Oren-Kolbinger

FIU Law Review

Constructive taxation reveals a mismatch between the redistributive objectives Congress claims to pursue and how tax administration is carried out. Procedural barriers allocate benefits through bureaucratic processes rather than on the basis of need or eligibility, reflecting implicit judgments about who deserves them. Low-income households must still file, even when the government already has the necessary information to determine eligibility. Examining this through Congress’s taxing and spending powers, the Article shows that refundable credits function as tax expenditures, using the tax code to deliver benefits while creating administrative burdens that resemble economic penalties. When procedural barriers prevent eligible taxpayers from …

Owning Trading Opportunities, Kevin Douglas

FIU Law Review

Owning Trading Opportunities identifies the doctrines and policy rationales used to protect property rights in corporate opportunities. It then explores adopting these doctrines and rationales to reform the notions of "fairness," "public interest," "investor protection," "market confidence," and "economic efficiency" driving the regulation of insider trading.

This approach yields several benefits. First, it shows that a policy commitment to equal trading opportunities for all investors is the functional equivalent of a commitment to fostering equal access to information for all investors. The U.S. Supreme Court attempted to reject the latter but failed by embracing the former.

Second, corporate opportunity cases …

The American Dream And The Politics Of Promise: Presidential Rhetoric Against Reality On Inequality, Education, And Assistance Since 2000, Abigail Demonte

Touro Law Review

No abstract provided.

Rethinking Legal Models For Aligning U.S.-African Trade And The Afcfta, Katrin Kuhlmann

Georgetown Law Faculty Publications and Other Works

The U.S.-African trade relationship has become increasingly volatile and conditional, with significant implications for supply chains, trade corridors, and regional and global markets. This relationship has historically been based on a unilateral, preferential legal approach through a trade preference programme – the African Growth and Opportunity Act (AGOA) – under which individual countries petition for eligibility to receive duty-free treatment. AGOA expired in September 2025 in the midst of U.S. tariffs, but in early 2026 the programme was retroactively reauthorised through December 2026, with further application subject to “modernisation” and alignment with the “America First” policy. While many see reauthorisation …

Distillation Laundering: Regulatory Arbitrage And A Potential Beijing Effect In Ai, Laura Edelson, Filippo Lancieri

Georgetown Law Faculty Publications and Other Works

This essay introduces distillation laundering, a new form of regulatory arbitrage. Distillation, a technique for training large language models based on the outputs of other models instead of from scratch, is generally prohibited by the terms of service of closed-weight frontier models. However, it is economically efficient and has been key to the success of the cheap, distilled (largely Chinese) open-weight models, which have reshaped the global political economy of AI regulation. US companies have now begun to re-import the effects of distillation through various means—a process we call distillation laundering. We also discuss how attempts to lobby these models …

Insider Trading & Unconstitutionally Compelled Speech, Steven J. Cleveland

Villanova Law Review (1956 - )

No abstract provided.