Category Archives: Law and Economics
Duncan Wallace, ‘The Reality of Shareholder Ownership: For-profit Corporations as Slaves’
ABSTRACT What is the relationship between shareholders and the corporation? The present scholarly consensus is that, whatever the relationship is, it is not one of owner and owned. This article contests that consensus. It argues that corporations are owned by their shareholders and, further, that corporations so-owned are slaves. In support of this contention, the […]
‘Buccafusco, Masur, and Varadarajan: Does Trade Secrecy Have an “Information Paradox”?’
One of the key purposes of trade secret law is to address the ‘Arrow information paradox’. The information paradox posits that there is a fundamental challenge in information exchange: It is difficult to assess the value of information without first sharing it, but once the information is shared, it becomes vulnerable to being copied, leaving […]
Parisi and Luppi, ‘The Multiplication Effect of Third-Party Liability’
ABSTRACT In real-world tort situations, accident probability is often influenced by external factors that are beyond the injurers and victims’ control. Standard economic analyses of tort law typically treat these factors as exogenous to the model, focusing on the primary incentives of injurers and victims. In this paper, we show that when accident risks are […]
Ethan Schwab, ‘How Safe Is Safe Enough? Analyzing the Incentive Structure of the Products Liability Scheme on Commercial Aviation Manufacturers’
ABSTRACT How do aviation manufacturers work to prevent tragedy? After tragedy strikes, how does the legal system’s imposition of a remedy change the operations and decision-making of these manufacturers, if at all? This Note explores whether the current products liability framework effectively achieves the goals of tort law – including whether it deters unsafe innovation […]
Silvie Rohr, ‘Corporate Purpose: A Management Concept and the Role of Contract Design’
ABSTRACT In light of systemic crises such as global warming and human rights violations in business operations, the call for reevaluating corporate conduct has become more pressing than ever. As these challenges intensify, a growing consensus advocates for a shift away from shareholder profit maximization towards a more holistic stakeholder governance model. Yet, the question […]
Christoph Engel, ‘The Negotiation Trap: An Experiment on a Large Language Model’
ABSTRACT In an experiment on the large language model GPT-4o, a supplier always makes a higher profit if it replaces uniform contract terms with a set of terms between which the customer may choose. The extra profit results from price discrimination. There is a first order and a second order effect. The first order effect […]
Susanna Kim Ripken, ‘Corporate Civil Disobedience’
ABSTRACT Classic theories of civil disobedience endorse the right of individuals to commit illegal acts to protest unjust laws and policies. Acts of civil disobedience have historically played a central role in exposing injustice and producing vital legal and social change. The literature on civil disobedience is vast; political and legal theorists have long recognized […]
Klerman and Bechtold, ‘Personal Property Servitudes Revisited’
ABSTRACT For nearly a century, scholars have debated whether personal property servitudes are valid. That is, can buyers and sellers of chattels write contracts that bind future purchasers? Buyers and sellers of real property can use covenants and equitable servitudes to bind future purchasers, but whether the same is true for personal property is controversial. […]
Thomas Cotter, ‘Wrongfulness as Disproportionality: Toward a Law-and-Economics Approach to Wrongful Patent Assertion’
ABSTRACT Nations throughout the world employ a variety of legal doctrines, including antitrust law, unfair competition law, and the abuse of rights doctrine, among others, to impose consequences for what can be characterized as the wrongful enforcement or assertion of patent rights. The present essay – to be published in an edited volume of papers […]
Paldor, Procaccia and Winter, ‘Preventing Class Action Sellouts’
ABSTRACT When class actions settle, the defendant and class counsel have a strong joint incentive to appropriate part of the class’s entitlement. The problem is long recognized, but neither existing mechanisms nor those suggested in the literature address it effectively. The current article proposes a market-based solution to the problem: Once a settlement is struck, […]