Law and Economics Commons^™

Re-Examining U.S. Bailouts In The Digital Era: Moral Hazard And Adverse Consequences, Joel Slawotsky

American University Business Law Review

Financial institutional bailouts have become the new normal in recent decades. From the savings and loan crisis, to the sub-prime, to SVB and Signature, the U.S. government and regulators have decided that the failure to protect depositors and investors could lead to bank runs, a destabilized banking sector, and ultimately economic turmoil inflicting tremendous monetary and social costs on citizens. However, the mainstreaming of bailouts has led to moral hazard, i.e., the expectation among all stakeholders including financial institutions, investors, creditors, and regulators, that a government rescue is inevitable. The problem of moral hazard is the creation of incentives to …

The Social Promise Of Hybrid Entities, Frederick M. Spight Jr.

American University Business Law Review

Many Historically Black Colleges and Universities (HBCUs) are struggling to stay afloat. These historic, and historically underfunded, institutions suffer from a chronic shortage of resources, leading to the notable closures of schools, like Concordia College. Some critics question the modern place of the HBCU as a relic of a bygone era. This article argues, however, that HBCUs are worth sustaining and provides the legal tool to do so: the hybrid entity. 

Hybrid entities arose from the social enterprise movement, which sought to harness the power of both nonprofit and for-profit organizations. Operating under the philosophy of “doing well, while doing …

Incentivized Delegation In Corporate Criminal Investigations: State Action, Unconstitutional Conditions, And Fifth Amendment Erosion., Ying Zhou

American University Business Law Review

This Article identifies and critiques “incentivized delegation,” an enforcement regime in which the Department of Justice (DOJ) conditions prosecutorial leniency on corporations’ completion of specified, prosecution-oriented, internal investigations of employee misconduct. While courts readily find state action when the government formally delegates investigative functions, they have not squarely addressed whether corporate investigations undertaken to secure prosecutorial leniency—without explicit governmental direction—should likewise trigger state-action scrutiny. United States v. Coburn illustrates the blind spot: by insisting that state action requires overt governmental direction and control, the decision exposes a fundamental failure to appreciate how the government can embed investigative mandates within the …

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 …

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 …

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.

Read But Not Understood? An Empirical Analysis Of Consumer Comprehension In Homeowners Insurance, Daniel Schwarcz, Brenda J. Cude, Kyle D. Logue, German Marquez Alcala

Articles

Modern contract law assumes that consumers meaningfully assent to the standard forms that govern their daily lives. However, this assumption is widely regarded as a legal fiction for two key reasons: first, most consumers do not read standard forms, and second, even those who do often struggle to fully comprehend their terms and implications. Although the lack of consumer reading has been well documented through empirical research, consumers’ ability to comprehend standard-form contracts has received surprisingly little attention.

This Article addresses the latter issue by empirically examining whether providing excerpts from the dominant standard-form homeowners insurance policy improves consumer understanding …

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 …

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 …

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 …

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 …

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 …

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 …

Liability For Non-Disclosure In Ipos, Albert H. Choi, Kathryn E. Spier

Articles

A privately-informed entrepreneur may withhold material information from prospective investors who may sue the firm ex post for (alleged) non-disclosure. Absent liability, the entrepreneur has an excessive incentive to withhold bad news and pursue socially-wasteful projects. Liability deters inefficient non- disclosure and prevents capital misallocation. Any damage award received by investors is partially offset by a reduction in equity value. Depending on the likelihood of court error and litigation cost, the socially-optimal damage award may be either zero or the minimum necessary for full deterrence. The private incentive to waive liability may be socially excessive or insufficient. Positive and normative …

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 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 …

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 …

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. …

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 …