2024-03-28T15:52:52Z
http://law.bepress.com/do/oai/
oai:law.bepress.com:gmulwps-1037
2005-08-24T18:19:08Z
publication:gmulwps
Life v. Death: Or Why the Death Penalty Should Marginally Deter
Keckler, Charles N. W.
Econometric measures of the effect of capital punishment have increasingly provided evidence that it deters homicides. However, most researchers on both sides of the death penalty debate continue to rely on rather simple assumptions about criminal behavior. I attempt to provide a more nuanced and predictive rational choice model of the incentives and disincentives to kill, with the aim of assessing to what extent the statistical findings of deterrence are in line with theoretical expectations. In particular, I examine whether it is plausible to suppose there is a marginal increase in deterrence created by increasing the penalty from life imprisonment without parole to capital punishment. The marginal deterrence effect is shown to be a direct negative function of prison conditions as they are anticipated by the potential offender – the more tolerable someone perceives imprisonment to be, the less deterrent effect prison will have, and the greater the amount of marginal deterrence the threat of capital punishment will add. I then examine the empirical basis for believing there to be a subset of killers who are relatively unafraid of the prison environment, and who therefore may be deterred effectively only by the death penalty. Criminals, empirically, appear to fear a capital sentence, and are willing to sacrifice important procedural rights during plea bargaining to avoid this risk. This has the additional effect of increasing the mean expected term of years attached to a murder conviction, and may generate a secondary deterrent effect of capital punishment. At least for some offenders, the death penalty should induce greater caution in their use of lethal violence, and the deterrent effect seen statistically is possibly derived from the change in the behavior of these individuals. This identification of a particular group on whom the death penalty has the greatest marginal effect naturally suggests reforms in sentencing (and plea bargaining) which focus expensive capital prosecutions on those most resistant to alternative criminal sanctions.
2005-08-24T07:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art38
https://law.bepress.com/context/gmulwps/article/1037/viewcontent/05_23_Life_v._Death.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Criminal Law and Procedure
Law and Economics
Criminal Law
Criminal Procedure
Law and Economics
oai:law.bepress.com:gmulwps-1005
2004-10-26T18:49:20Z
publication:gmulwps
Theory and Practice of Competition Advocacy at the FTC
Cooper, James C.
Pautler, Paul A.
Zywicki, Todd J.
This article was prepared as part of a recent symposium celebrating the Ninetieth Anniversary of the founding of the Federal Trade Commission. In addition, fall 2004 marks the Thirtieth Anniversary of a pivotal moment in the establishment of the modern advocacy program at the FTC, Chairman Lewis Engman’s speech on the economic burden that inefficient transportation regulation policies were imposing on the American economy. Although the FTC has been involved in advocacy activities since its founding, Engman’s speech symbolized a new aggressiveness on the part of the FTC in using its expertise to work with other governmental actors at all levels of the political system and in all branches of government to design policies that further competition and consumer choice.
Notwithstanding the beneficial impact that advocacy activities have had on the economy, the fortunes of the advocacy program have waxed and waned over time. In part, these mixed fortunes may reflect a lack of fundamental grounding of advocacy within the core mission of the FTC. The advocacy program, moreover, often has been politically controversial, exposing the Commission to criticism from special interests, Congress, and other governmental actors.
This article explores the theory and practice of competition advocacy, with the goal of explaining why the advocacy program should be recognized as a core element of the Commission’s mission. Advocacy can be used in conjunction with many of the FTC’s other tools, and in many situations the judicious use of advocacy can provide a low-cost and effective alternative to other enforcement options. The advocacy program is a unique and cost-effective tool for carrying out this mission. Because consumers are disadvantaged in the political arena vis-a-vis industry, they are likely to be unable to stop anticompetitive regulation on their own. Antitrust immunities, moreover, sometimes put anticompetitive regulation beyond the reach of traditional enforcement. By providing a means for the FTC to represent consumers’ interests directly in the policy-production mechanism, the advocacy program can overcome these two hurdles and provide protection for consumers at relatively low cost.
2004-10-26T07:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art6
https://law.bepress.com/context/gmulwps/article/1005/viewcontent/Theory_Practice_of_Advocacy_at_FTC_04_48.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Administrative Law
Economics
Law and Economics
Trade Regulation
Administrative Law
Antitrust and Trade Regulation
Economics
Law and Economics
oai:law.bepress.com:gmulwps-1014
2005-02-16T20:19:17Z
publication:gmulwps
Disappearing Defendants v. Judgment Proof Injurers: Upgrading the Theory of Tort Law Failures
Dari-Mattiacci, Giuseppe
Mangan, Barbara
Do injurers’ insolvency and victims’ reluctance to sue affect accident prevention in the same way? Are these circumstances less of a problem under the negligence rule than under strict liability? We argue, contrary to the literature, that the answer is, in most cases, negative and make three main points. First, the judgment proof problem and the disappearing defendant problem are shown to have different effects on injurers’ behavior and hence yield dissimilar levels of social welfare. Second, when these two problems occur simultaneously they may have offsetting effects. Third, the negligence rule is superior to strict liability only under some conditions, which are not always satisfied when cause in fact is considered. In this case, we find that social welfare under negligence may actually be less than, the same as, or greater than under strict liability. Our model encompasses different precaution technologies as well as monetary vs. non-monetary precautions.
2005-02-03T08:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art15
https://law.bepress.com/context/gmulwps/article/1014/viewcontent/05_01_Disappearing_Defendants.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Environmental Law
Health Law and Policy
Law and Economics
Torts
Environmental Law
Health Law and Policy
Law and Economics
Torts
oai:law.bepress.com:gmulwps-1036
2005-08-21T23:29:39Z
publication:gmulwps
Crops, Guns & Commerce: A Game Theoretical Critique of Gonzales v. Raich
Stearns, Maxwell L.
In Gonzales v. Raich, the Supreme Court sustained an application of the Controlled Substances Act (“CSA”), banning all private use of marijuana, as applied to two women who had cultivated or otherwise acquired marijuana for the treatment of severe pain pursuant to the California Compassionate Use Act. Writing for the majority, Justice Stevens placed Raich at the intersection of two landmark Commerce Clause precedents: Wickard v. Filburn, the notorious 1942 decision, which upheld a penalty under the Agriculture Adjustment Act of 1938 applied to a local farmer who violated his wheat quota but who had used the modest excess portion entirely on his own farm, and Lopez v. United States, the controversial 1995 decision, which stuck down the Gun-Free School Zones Act and for the first time in over sixty years imposed limits on the scope of Congress’s Commerce Clause power based upon the underlying subject matter of the regulated activity.
Writing for the Lopez majority, Chief Justice Rehnquist had claimed not to disturb the expansive post-New Deal Commerce Clause precedents, but rather to fit all of the cases neatly into three circumscribed categories: the use of channels of interstate commerce; instrumentalities or persons or things traveling in interstate commerce; and economic activities that have a substantial effect on interstate commerce. Significantly, the Lopez Court redefined the third and most important category from its original formulation set out in Wickard. While Wickard had allowed Congressional regulation of local activity, “whatever its nature . . . if it exerts a substantial economic effect on interstate commerce,” Rehnquist instead used “economic” to qualify the activity itself.
Following the revised Lopez formulation, the Raich Court inquired whether cultivating, acquiring, and using medical marijuana qualified as a regulable economic activity. Relying upon a dictionary for the proposition that economics refers to “the production, distribution, and consumption of commodities,” Stevens determined that just as the Wickard Court had sustained Congress’s regulation of wheat production, so too, the Raich Court was compelled to sustain Congress’s prohibition of marijuana acquisition, production, and use even if for medical purposes and on the advice of a physician as permitted under state law.
This Article traces the Lopez Court’s doctrinal modification, explores its implications, and offers an alternative economic analysis that considers the need for a central coordinating authority to effectuate the Congressional policy enacted pursuant to the Commerce Clause. The analysis reveals the shortcomings of Justice Stevens’s analysis in employing a dictionary definition of economics and of focusing strictly on the nature of the underlying activity to equate Wickard and Raich. Using an analysis that draws instead upon the prisoners’ dilemma and the multiple Nash equilibrium bargaining game, this Article demonstrates that the Court could have reconciled the expansive post-New Deal Commerce Clause cases with the more recent efforts, embodied in Lopez and in Morrison v. United States, to impose meaningful substantive restraints on the scope of Congress’s Commerce Clause powers. And it could have done so while applying Lopez to invalidate the CSA as applied to Respondents’ activities.
Most notably, the analysis reveals that Wickard does not represent an extreme example of Congressional Commerce Clause powers. Instead, Wickard relies upon the need for a central authority to curb national wheat outputs as a means of controlling price, and the need for a meaningful signal concerning the level at which the governmentally imposed quota regime will be enforced to avoid the consequence of cheating in undermining the overall pricing scheme. Neither of these concerns, nor any of the other identified concerns that justify the broad post-New Deal exercise of Congressional Commerce Clause powers, properly bear on the facts of Raich.
2005-08-21T07:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art37
https://law.bepress.com/context/gmulwps/article/1036/viewcontent/05_21_Crops__Guns___Commerce.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Constitutional Law
Jurisprudence
Law and Economics
Public Law and Legal Theory
Constitutional Law
Jurisprudence
Law and Economics
Public Law and Legal Theory
oai:law.bepress.com:gmulwps-1013
2004-12-16T19:35:47Z
publication:gmulwps
Defining Dicta
Abramowicz, Michael
Stearns, Maxwell
In recent decades, legal scholars have devoted substantially greater attention to studying the origin and nature of stare decisis than to defining the distinction between holding and dicta. This appears counter-intuitive when one considers, first, that stare decisis applies only to holdings of announced precedents, and second, that beyond problematic and rudimentary intuitions, the legal system has failed to develop meaningful definitions of these terms. While lawyers, legal scholars, and jurists likely assume that they can identify dicta when they see it, a careful analysis that categorizes the range of judicial assertions in need of proper characterization reveals that defining holding and dicta is more complex than the general trend of recent scholarship would suggest.
In this Article, Professors Abramowicz and Stearns provide a comprehensive yet accessible framework for identifying the categories of assertions requiring classification as holding or dicta; a normative and positive framework for setting up a holding-dicta classification scheme; and, most importantly, a definition that resolves most if not all of the difficulties revealed in the course of their analysis. The authors develop a theoretical model that explores the nature and limits of stare decisis as a mechanism for constraining judicial behavior, and they explain the importance of clarity in the understanding of holding and dicta within a precedent-driven system of law. After critiquing the most influential definitions of holding and dicta, the authors offer and defend their own: A holding consists of those propositions along the chosen decisional path or paths of reasoning that are actually decided, are based upon the facts of the case, and lead to the judgment. A proposition in a case that is not holding is dicta.
2004-12-16T08:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art14
https://law.bepress.com/context/gmulwps/article/1013/viewcontent/04_55_Defining_Dicta.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
General Law
Judges
Legal Analysis and Writing
Judges
Law
Legal Writing and Research
oai:law.bepress.com:gmulwps-1026
2005-06-21T00:35:23Z
publication:gmulwps
The Comparative Law and Economics of Pure Economic Loss
Parisi, Francesco
Palmer, Vernon Valentine
Bussani, Mauro
Law and economics shows that a key factor in determining the optimal economic loss rule is found in the relationship between pure economic loss and social loss. Economic loss should be compensable in torts only to the extent that it corresponds to a socially relevant loss. In this paper we undertake a comparative evaluation of the economic loss rule to verify whether modern legal systems, although not formally adopting the economic criterion, define the exclusionary rule in light of efficiency considerations. The comparative analysis reveals that the substantive applications of the economic loss rule in European jurisdictions are consistent with the predicates of economic analysis.
2005-06-12T07:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art28
https://law.bepress.com/context/gmulwps/article/1026/viewcontent/05_12_Comparative_Law___Economics.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Comparative and Foreign Law
Contracts
Law and Economics
Torts
Comparative and Foreign Law
Contracts
Law and Economics
Torts
oai:law.bepress.com:gmulwps-1041
2005-09-08T01:19:16Z
publication:gmulwps
A Law and Economics Perspective on Terrorism
Garoupa , Nuno M.
Klick, Jonathan
Parisi, Francesco
This paper reviews the existing law and economics literature on crime, noting where various models might apply to the terror context. Specifically, it focuses on two strands of the literature, deterrence and incapacitation. Challenging the conventional application of the basic rational agent model of crime in the context of terrorism, it considers anti-terror measures enacted by different countries, highlighting how the details of the laws correspond to the insights from economic models of crime. In conclusion, the paper proposes an efficient sorting mechanism in which individuals will be provided with adequate incentives to reveal their type to law enforcement authorities.
2005-09-07T07:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art42
https://law.bepress.com/context/gmulwps/article/1041/viewcontent/05_29_Law___Economics_Perspective.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Comparative and Foreign Law
Criminal Law and Procedure
Law and Economics
Torts
Comparative and Foreign Law
Criminal Law
Criminal Procedure
Law and Economics
Torts
oai:law.bepress.com:gmulwps-1030
2005-08-02T19:35:47Z
publication:gmulwps
Learning the Wrong Lessons from "An American Tragedy": A Critique of the Berger-Twerski Informed Choice Proposal
Bernstein, David E.
This paper is a critique of Margaret Berger and Aaron Twerski, “Uncertainty and Informed Choice: Unmasking Daubert”, forthcoming the Michigan Law Review. Berger and Twerski propose that courts recognize a cause of action that would allow plaintiffs who claim injury from pharmaceutical products, but who do not have sufficient evidence to prove causation, to recover damages for deprivation of informed choice. Berger and Twerski claim inspiration from the litigation over allegations that the morning sickness drug Bendectin caused birth defects. Considering the criteria Berger and Twerski suggest for their proposed cause of action in the context of Bendectin, it appears that a pharmaceutical manufacturer could be held liable for failure to provide informed choice: (a) even when there was never any sound scientific evidence suggesting that the product caused the harm at issue, and there was an unbroken consensus among leading experts in the field that the product did not cause such harm; (b) when the product prevented serious harm to a significant number of patients, and prevented substantial discomfort to a much greater number, even when there were no available alternative products; (c) when a plaintiff claims that she would not have taken the product had she been informed of an incredibly remote and completely unproven risk; and (d) when the defendant is unable to prove "a negative" - that the product in question definitely did not cause the claimed injury. No rational legal system would allow such a tort. Putting the Bendectin example aside, the informed choice proposal has the following additional weaknesses: (1) it invites reliance on unreliable "junk science" testimony; (2) it ignores the fact that juries are not competent to resolve subtle risk assessment issues; (3) it reflects an unwarranted belief in the ability of juries to both follow limiting instructions and ignore their emotions; (4) it ignores the problems inherent to multiple trials---even if defendants were to win most "informed choice" cases, safe products could still be driven off the market by a minority of contrary verdicts; (5) it ignores the inevitable costs to medical innovation as pharmaceutical companies scale back on researching product categories that would be particularly prone to litigation; (6) to preempt litigation, pharmaceutical companies would "overwarn," rendering more significant warnings less useful; and (7) FDA labeling requirements would arguably preempt the proposed cause of action.
2005-08-02T07:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art31
https://law.bepress.com/context/gmulwps/article/1030/viewcontent/05_15_Learning_the_Wrong_Lessons.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Evidence
Food and Drug Law
Health Law and Policy
Insurance Law
Products Liability
Torts
Evidence
Food and Drug Law
Health Law and Policy
Insurance Law
Torts
oai:law.bepress.com:gmulwps-1035
2005-08-25T22:36:20Z
publication:gmulwps
Reasonable Suspicion and Mere Hunches
Lerner, Craig S.
In Terry v. Ohio, Earl Warren held that police officers could temporarily detain a suspect, provided that they could articulate the “reasonable inferences” for their suspicion, and not merely allude to a “hunch.” Since Terry, the American legal system has discounted the “mere” hunches of police officers, requiring them to articulate “specific” and “objective” observations of fact to support their decision to conduct a stop and frisk. The officer’s intuitions, gut feelings and sixth sense about a situation are all disallowed.
This dichotomy between facts and intuitions is built on sand. Emotions and intuitions can be reasonable, and reasons are often predicated on emotions. Even as courts have, over the past two generations, grown more dismissive of hunches, there has been a counter-revolution in the cognitive sciences. Emotions and intuitions are not obstacles to reason, but indispensable heuristic devices that allow people to process diffuse, complex information about their environment and make sense of the world. If the legal rules governing police conduct are premised on a mistaken assumption about human cognition, can one craft a doctrine of policing that credits the wisdom of hunches? Can the legal system defer to police officers’ intuitions without undermining protections against law enforcement overreaching?
This article argues that, to some extent, judicial skepticism about police hunches can and should be abandoned. As a practical matter, the current legal regime substitutes palliative euphemisms for useful controls on police discretion. When an energetic police officer has a hunch that something is wrong and action is imperative, the officer will simply act. Months will pass before a suppression hearing, and by then it will be a simple matter to reverse-engineer the objective “reasons” for the stop — e.g., “I saw a bulge.” The legal system in practice simply rewards those officers who are able and willing to spin their behavior in a way that satisfies judges, while it penalizes those officers who are less verbally facile or who are transparent about their motivations. It would be preferable if politically accountable authorities joined the courts in monitoring police practices. The focus should be less on what police say after the fact and more on what they do — that is, how successful police officers are in catching criminals and how respectful they are of all citizens.
2005-08-21T07:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art36
https://law.bepress.com/context/gmulwps/article/1035/viewcontent/05_20_Reasonable_Suspicion___Mere_Hunches.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Criminal Law and Procedure
Criminal Law
Criminal Procedure
oai:law.bepress.com:gmulwps-1011
2004-11-19T20:23:53Z
publication:gmulwps
The Law and Economics of Cybersecurity: An Introduction
Grady, Mark F.
Parisi, Francesco
One of the most controversial theoretical issues of our time is the governance of cybersecurity. Computer security experts, national security experts, and policy analysts have all struggled to bring meaningful analysis to cybersecurity; however, the discipline of law & economics has yet to be fully applied to the issue. This introduction presents work by leading national scholars who examine this complex national security challenge from a law and economics perspective. The focus spans from a discussion of pure market solutions to public-private issue analysis, providing a valuable basis for policy considerations concerning the appropriate governmental role on the issue of cybersecurity.
2004-11-19T08:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art12
https://law.bepress.com/context/gmulwps/article/1011/viewcontent/04_54_Law___Economics_of_Cybersecurity.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Administrative Law
Computer Law
Criminal Law and Procedure
Law and Economics
Administrative Law
Computer Law
Criminal Law
Criminal Procedure
Law and Economics
oai:law.bepress.com:gmulwps-1027
2005-06-22T18:24:00Z
publication:gmulwps
Neuronomics and Rationality
Chorvat, Terrence
McCabe, Kevin
The assumption of rationality is both one of the most important and most controversial assumptions of modern economics. This article discusses what current experimental economic as well as neuroscience research tells us about the relationship between rationality and the mechanisms of human decision-making. The article explores the meaning of rationality, with a discussion of the distinction between traditional constructivist rationality and more ecological concepts of rationality. The article argues that ecological notions of rationality more accurately describe both human neural mechanisms as well as a wider variety of human behavior than do constructivist notions of rationality.
2005-06-22T07:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art29
https://law.bepress.com/context/gmulwps/article/1027/viewcontent/05_13_Neuroeconomics___Rationality.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Law and Economics
Law and Economics
oai:law.bepress.com:gmulwps-1020
2005-03-08T01:16:58Z
publication:gmulwps
Institutions, Incentives, and Consumer Bankruptcy Reform
Zywicki, Todd
Consumer bankruptcy filing rates have soared during the past 25 years. From 225,000 filings in 1979, consumer bankruptcies topped 1.5 million during 2004. This relentless upward trend is striking in light of the generally high prosperity, low interest rates, and low unemployment during that period. This anomaly of ever-upward bankruptcy filing rates during a period of economic prosperity had spurred calls to reform the Bankruptcy Code to place new conditions on bankruptcy relief. Although bankruptcy reform has drawn broad bipartisan support on Capitol Hill, these proposals have proven controversial within the academy. Critics have argued that these reforms are unnecessary and punitive, and that private market adjustments such as higher interest rates and more restrictive credit rationing are suitable policy responses.
Scholars have previously identified two models of the consumer bankruptcy process, the traditional “distress” model and the economic “incentives” model. Neither, however, can explain the observed bankruptcy filing patterns of recent decades. This article offers a new model of consumer bankruptcy rooted in New Institutional Economics that explains the rise in consumer bankruptcy filings as reflecting changes in the institutions, incentives, and constraints surrounding the consumer bankruptcy filing decision. It is argued that this new model of consumer bankruptcy is both theoretically and empirically superior to the traditional model.
This article identifies three institutional factors that can explain the observed rise in bankruptcy filings over the past several decades: (1) A change in the relative economic costs and benefits associated with filing bankruptcy; (2) A change in social norms regarding bankruptcy; and (3) Changes in the nature of consumer credit, toward more national and impersonal forms of consumer credit. It is argued that all of these factors tend to increase the incentives for filing bankruptcy or reduce the constraints imposed on filing bankruptcy. The result has been to increase the equilibrium level of bankruptcy filings in America.
Finally, the article briefly discusses some policy implications of the model presented here, focusing most specifically on the proposals contained in the Bankruptcy Reform Act that Congress is again considering, but also addressing more far-reaching proposals, such efforts to reverse changes in social norms or proposals to allow contracting-around the mandatory discharge provision of current law.
2005-03-07T08:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art21
https://law.bepress.com/context/gmulwps/article/1020/viewcontent/05_07_Institutions__Incentives.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Bankruptcy Law
Commercial Law
Contracts
Law and Economics
Law and Society
Bankruptcy Law
Commercial Law
Contracts
Law and Economics
Law and Society
oai:law.bepress.com:gmulwps-1025
2005-04-28T23:38:57Z
publication:gmulwps
Worthless Patents
Moore, Kimberly A
This article presents the first empirical analysis of patent value by examining renewal rate data for nearly 100,000 patents. Finding that 53.7% of all patentees allow their patents to expire for failure to pay maintenance fees confirm common perceptions of patent issuance being a poor measure of innovation value. Even more interesting is the finding that patents which expire for failure to pay maintenance fees share some common identifiable characteristics. In particular, we found that renewed patents had more claims, cited more prior art, received more citations, had more related applications, had more inventors, and spent longer in prosecution. We also found that renewal rates varied both by assignee (individual versus corporation) and (foreign versus domestic) and by technology. By providing a means of systematically identifying worthless patents and their ex ante characteristics, this article complements the author's earlier work on identifying valuable patents by comparing litigated and issued patents. Renewal rate data, however, seems a better predictor of value than litigation data as renewal rate data captures the many ways a patent may be of private value to its owner such as revenue generation via licensing or litigation, defensively, or for signaling purposes. Hence, rather than analyzing a subset of really valuable patents (those that are litigated) which may or may not be representative of all valuable patents, analysis of renewal rate data captures the population of valuable patents.
2005-04-28T07:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art27
https://law.bepress.com/context/gmulwps/article/1025/viewcontent/04_29_Worthless_Patents__4_28_05_Update_.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Intellectual Property Law
Intellectual Property Law
oai:law.bepress.com:gmulwps-1018
2005-03-31T22:04:45Z
publication:gmulwps
Soft Regulators, Tough Judges
De Geest, Gerrit
Dari-Mattiacci, Giuseppe
Judges have a tendency to be more demanding than regulators. In the United States, a majority of the courts has adopted the rule that the unexcused violation of a statutory standard is negligence per se. However, the converse does not hold: compliance with regulation does not relieve the injurer of tort liability. In most European legal systems, the outcome is similar. We use a framework in which, on the one hand, the effects of tort law are undermined by insolvency and evidence problems and, on the other hand, regulation is expensive in terms of monitoring and information gathering. We show that a regulatory standard set below the socially optimal level of care can be sufficient to remove the shortcomings of tort law. In essence, this is because the injurer’s cost function may have two local minima that make only major deviations from the socially desirable level of precaution advantageous for the injurer, but not minor violations. This may occur when precaution also or only reduces the magnitude of the harm and under liability for negligence.
Thus, minimum regulation can completely restore optimal liability incentives. Conversely, liability reduces the cost of enforcing regulation in two ways: first, enforcing minimum regulation rather than a standard set at the socially optimal level is cheaper because it requires lower monitoring levels; second, tort liability already provides a part of the sanction for sub-optimal behavior, thus allowing for a further reduction in monitoring.
Moreover, we show that minimum regulation does not need to be set at a very precise level. On the contrary, any level within a certain range is socially optimal. This allows regulators to further curb their cost by saving on information gathering.
We show that an imperfectly working tort system can be fully corrected by minimum regulation in a variety of circumstances (for instance, even if the injurer is unable to compensate for the harm at the optimal level of precaution, and even if the rule in force is strict liability or a cause-in-fact variant of negligence).
2005-03-02T08:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art19
https://law.bepress.com/context/gmulwps/article/1018/viewcontent/05_06_Soft_Regulators.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Environmental Law
Health Law and Policy
Law and Economics
Products Liability
Torts
Environmental Law
Health Law and Policy
Law and Economics
Torts
oai:law.bepress.com:gmulwps-1028
2005-08-02T20:28:00Z
publication:gmulwps
Bolling, Equal Protection, Due Process, and Lochnerphobia
Bernstein, David E.
In Brown v. Board of Education, the United States Supreme Court invalidated state and local school segregation laws as a violation of the Fourteenth Amendment's Equal Protection Clause. That same day, in Bolling v. Sharpe, the Court held unconstitutional de jure segregation in Washington, D.C.'s public schools under the Fifth Amendment's Due Process Clause. Fifty years after it was decided, Bolling remains one of the Warren Court's most controversial decisions.
The controversy reflects the widespread belief that the outcome in Bolling reflected the Justices' political preferences and was not a sound interpretation of the Due Process Clause. The Bolling Court stands accused of "inventing" the idea that due process includes a guarantee of equal protection equivalent to that of the Fourteenth Amendment's Equal Protection Clause.
A careful analysis of Bolling v. Sharpe, however, reveals some surprises. First, the almost universal portrayal of Bolling as an opinion relying on an "equal protection component" of the Fifth Amendment's Due Process Clause is incorrect. In fact, Bolling was a substantive due process opinion with roots in Lochner era cases such as Buchanan v. Warley, Meyer v. Nebraska, and Pierce v. Society of Sisters. The Court, however, chose to rely explicitly only on Buchanan because the other cases were too closely associated with Lochner.
Another surprise is that the proposition that Bolling has come to stand for, that the Fifth Amendment prohibits discrimination by the Federal Government, was not simply "made up" by the Supreme Court, but has a basis in longstanding precedent.
Finally, Bolling is an important example of the distorting effect of Lochnerphobia on Supreme Court jurisprudence. Bolling would have been a much stronger opinion had it been willing to explicitly rely on Lochner era precedents such as Meyer, and to employ a more explicitly Lochnerian view of the Due Process Clause.
2005-07-14T07:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art30
https://law.bepress.com/context/gmulwps/article/1028/viewcontent/05_14_Bolling__Equal_Protection__Due_Process__and_Lochnerphobia.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Civil Rights and Discrimination
Constitutional Law
Civil Rights and Discrimination
Constitutional Law
oai:law.bepress.com:gmulwps-1007
2004-11-04T22:39:12Z
publication:gmulwps
Does Soft Dollar Brokerage Benefit Portfolio Investors: Agency Problem or Solution?
Horan, Stephen M.
Johnsen, D. Bruce
With soft dollar brokerage, institutional portfolio managers pay brokers “premium” commission rates in exchange for rebates they use to buy third-party research. One hypothesis views this practice as a reflection of the agency problem in delegated portfolio management; another views it as a contractual solution to the agency problem that aligns the incentives of investors, managers, and brokers where direct monitoring mechanisms are inadequate. Using a database of institutional money managers, we find that premium commission payments are positively related to risk-adjusted performance, suggesting that soft dollar brokerage is a solution to agency problems. Moreover, premium commissions are positively related to management fees, suggesting that labor market competition does not punish managers for using soft dollars.
2004-11-04T08:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art7
https://law.bepress.com/context/gmulwps/article/1007/viewcontent/04_50_Does_Soft_Dollar_Brokerage.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Banking and Finance
Economics
Law and Economics
Banking and Finance Law
Economics
Law and Economics
oai:law.bepress.com:gmulwps-1021
2005-03-30T01:41:46Z
publication:gmulwps
The FTC and State Action: Evolving Views on the Proper Role of Government
Delacourt, John T
Zywicki, Todd
The state action doctrine was born in an era of exceptional confidence in government, with governmental entities widely regarded as unbiased and conscientious defenders of the public interest. Over time, however, more cautious and skeptical theories of government began to gain sway. In particular, the school of thought known as “public choice” – which holds that governmental entities, like private firms, will act in their economic self-interest – began to influence both legal theory and competition policy. Indeed, a close examination of recent state action case law suggests that public choice thinking has driven a slow, but consistent, evolution of the doctrine toward less deference to state regulators and more careful assessment of the actual incentives that drive their decision-making.
This evolution in thinking, however, has not been accompanied by the development of a systematic, analytical framework to guide the application of the state action doctrine in particular cases. Developing such a framework should therefore remain a top priority of leading antitrust policymakers, including those at the Federal Trade Commission.
2005-03-29T08:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art23
https://law.bepress.com/context/gmulwps/article/1021/viewcontent/05_08_FTC___State_Action.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Law and Economics
Legislation
Trade Regulation
Antitrust and Trade Regulation
Law and Economics
Legislation
oai:law.bepress.com:gmulwps-1022
2005-04-06T00:07:48Z
publication:gmulwps
Modernization of European Antitrust Enforcement: The Economics of Regulatory Competition
Depoorter, Ben
Parisi, Francesco
In this article we analyze the expected effects of regulatory overlap in European competition law resulting from Regulation 1/2003. Drawing upon recently developed economic theories of regulatory competition, our model foresees a number of qualitative adjustments resulting from this reform. On one hand, the direct applicability of the exemption provision should increase the overall amount of exemptions. On the other hand, a decentralized system permits private litigants' forum shopping, and parallel enforcement by multiple national competition authorities will drive up the number of infringement findings. Although the precise direction of substantive competition law is unclear, the overall effect is higher levels of regulatory activity. This entails not only greater administrative costs but also suggests increased transaction costs for doing business in the post-Regulation 1/2003 European Union.
2005-04-05T07:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art24
https://law.bepress.com/context/gmulwps/article/1022/viewcontent/05_09_Modernization_of_European_Antitrust_Enforcement__Non._.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Comparative and Foreign Law
International Law
Law and Economics
Comparative and Foreign Law
International Law
Law and Economics
oai:law.bepress.com:gmulwps-1015
2005-02-15T23:55:59Z
publication:gmulwps
Cross-examining the Brain: A Legal Analysis of Neural Imaging for Credibility Impeachment
Keckler, Charles N. W.
The last decade has seen remarkable process in understanding ongoing psychological processes at the neurobiological level, progress that has been driven technologically by the spread of functional neuroimaging devices, especially magnetic resonance imaging, that have become the research tools of a theoretically sophisticated cognitive neuroscience. As this research turns to specification of the mental processes involved in interpersonal deception, the potential evidentiary use of material produced by devices for detecting deception, long stymied by the conceptual and legal limitations of the polygraph, must be re-examined. Although studies in this area are preliminary, and I conclude they have not yet satisfied the foundational requirements for the admissibility of scientific evidence, the potential for use – particularly as a devastating impeachment threat to encourage factual veracity – is a real one that the legal profession should seek to foster through structuring the correct incentives and rules for admissibility. In particular, neuroscience has articulated basic memory processes to a sufficient degree that contemporaneously neuroimaged witnesses would be unable to feign ignorance of a familiar item (or to claim knowledge of something unfamiliar). The brain implementation of actual lies and deceit more generally, is of greater complexity and variability. Nevertheless, the research project to elucidate them is conceptually sound, and the law cannot afford to stand apart from what may ultimately constitute profound progress in a fundamental problem of adjudication.
2005-02-15T08:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art16
https://law.bepress.com/context/gmulwps/article/1015/viewcontent/05_02_Cross_examining_the_Brain.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Evidence
Law and Technology
Psychology and Psychiatry
Science and Technology
Evidence
Internet Law
Law and Psychology
Science and Technology Law
oai:law.bepress.com:gmulwps-1019
2005-03-30T01:29:53Z
publication:gmulwps
A Response to Professor Goldberg: An Anticompetitive Restraint by Any Other Name...
Muris, Timothy J
In ignoring the facts of the Three Tenors case and the transactions costs of legal rulemaking, Professor Goldberg would unnecessarily complicate antitrust law to the detriment of consumers. Contrary to his assertions, the FTC’s opinion does not favor ownership over contract. The parties could have chosen to coordinate Three Tenors products and promote a “brand,” but their contract explicitly provided otherwise. For a small class of cases – in which the parties restrain basic forms of competition such as price or advertising without a claim of consumer benefit – antitrust law avoids the costs of finding market power. In any event, the facts of the Three Tenors case provide a natural experiment revealing that the agreement the Commission proscribed in fact harmed consumers.
2005-03-07T08:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art20
https://law.bepress.com/context/gmulwps/article/1019/viewcontent/05_05_Response_to_Professor_Goldberg.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Law and Economics
Law and Economics
oai:law.bepress.com:gmulwps-1002
2004-10-19T17:28:04Z
publication:gmulwps
Obesity and Advertising Policy
Zywicki, Todd J.
Holt, Debra
Ohlhausen, Maureen
It is clear that Americans are getting fatter, both adults and children. This development has led some to call for a ban on food advertising directed at children. There are numerous practical and constitutional difficulties with such a policy. This article poses a more fundamental question - even if feasible, would restricting food advertising do anything to reduce obesity or even slow its trends? The article also considers whether the social costs of banning advertising could outweigh the social benefits of such an action.
This article provides a review of the literature on the fundamental causes of the American obesity problem as well as the purported contribution of children's advertising to the problem. The final conclusion is inescapable - the available evidence does not support the theory that children's exposure to food advertising has significantly contributed to increased children's obesity. Although children's obesity rates have skyrocketed during the past two decades, the available evidence indicates that children's exposure to food advertising has remained constant or has even declined during that same period.
This article first describes the existing theories and empirical evidence regarding the causal factors in the American obesity problem. Second, the article examines in detail the claim that the rise in children's obesity has been caused in whole or in part by food advertising directed at children. Available evidence and observations regarding the exposure of children to food advertising fail to support the hypothesis that increased food advertising directed at children has significantly contributed to the rise in childhood obesity. As a result, there is also little reason to believe that greater restrictions on advertising directed at children will do much at all to staunch the increase in children's obesity. Third, the article reviews the existing literature on the positive effects that advertising can have on increasing consumer knowledge and choice. Thus, even though there is little evidence that advertising is the cause of the obesity problem, it is likely that advertising can play a positive role in being part of the solution to obesity by providing more information to consumers and by providing incentives to create and market healthier food alternatives.
2004-10-18T07:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art3
https://law.bepress.com/context/gmulwps/article/1002/viewcontent/_3_Obesity_Zywicki_.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Economics
Health Law and Policy
Economics
Health Law and Policy
oai:law.bepress.com:gmulwps-1023
2005-04-06T21:41:02Z
publication:gmulwps
Fig Leaf Federalism and Tenth Amendment Exceptionalism
Lund, Nelson
The Supreme Court’s jurisprudence of federalism is at best undergoing an unfinished transformation, and is at worst just troubled and unsatisfying. In a little-noticed dissent in Tennessee v. Lane, Justice Scalia proposed an approach that could be generalized well beyond the specific position that he took in that case. Thus generalized, this approach may be understood as an elaboration of a proposal made by Justice O’Connor in her dissenting opinion twenty years ago in Garcia v. San Antonio Metro. Transit Auth. If adopted by the Court, this synthesis of the O’Connor and Scalia suggestions could work a real transformation in its federalism jurisprudence, and without some of the potentially radical side-effects that have thus far made the Court timorous and inconsistent. This very short paper explains how the synthesis would work, and why the Court should adopt it.
2005-04-06T07:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art25
https://law.bepress.com/context/gmulwps/article/1023/viewcontent/05_10_Fig_Leaf_Federalism.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Constitutional Law
Constitutional Law
oai:law.bepress.com:gmulwps-1033
2005-08-25T22:38:23Z
publication:gmulwps
The Reasonableness of Probable Cause
Lerner, Craig S.
Probable cause is generally cast in judicial opinions and the scholarly literature as a fixed probability of criminal activity. In the weeks before the September 11 attacks, FBI headquarters, applying such an unbending standard, rejected a warrant application to search Zacarias Moussaoui’s laptop computer. This article, which begins with an analysis of the Moussaoui episode, argues that the probable cause standard should be calibrated to the gravity of the investigated offense and the intrusiveness of a proposed search. Tracing the evolution of probable cause from the common law through its American development, the article argues that the Supreme Court’s current insistence on a “single standard” lacks historical support. Probable cause should be recast within a reasonableness framework, embracing the common sense view that not all searches equally trench on privacy concerns and not all crimes equally threaten the social order.
2005-08-16T07:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art34
https://law.bepress.com/context/gmulwps/article/1033/viewcontent/05_18_Reasonableness_of_Probable_Cause.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Constitutional Law
Criminal Law and Procedure
Constitutional Law
Criminal Law
Criminal Procedure
oai:law.bepress.com:gmulwps-1000
2004-10-04T18:33:51Z
publication:gmulwps
The Constitution in Two Dimensions: A Transaction Cost Analysis of Constitutional Remedies.
Kontorovich, Eugene
This Article reveals the underappreciated role of liability rules in constitutional law. Conventional constitutional theory insists that constitutional entitlements require, by their nature, property rule protection. That is, they can only be taken with the owner's consent; nonconsensual takings can be enjoined. This Article shows that many constitutional values are in fact protected by liability rules, which allow for forced transfers followed by payment of compensation. Substantive entitlements form one dimension of constitutional law. The various ways in which they are protected against transfers form the second dimension. The full picture of constitutional law only emerges from looking at both.
The Article locates liability rules in diverse areas such as the First Amendment prior restraint doctrine, the Third Amendment, Fourth Amendment search and seizure rules, the Due Process Clauses, the Takings Clause of the Fifth Amendment, the Self-Incrimination Clause of the Fifth Amendment, and the Excessive Bail Clause of the Eighth Amendment. Thus constitutional theory's insistence on property rule protection fails account for how some constitutional values are actually protected. This Article develops a richer understanding of the relationship between constitutional remedies and constitutional entitlements. The transaction cost perspective on constitutional law reveals previously unnoticed connections between various doctrines, and provides a new criterion for evaluating their strengths and weakness.
This Article also presents new evidence that the Constitution does not require property rule protection and can be satisfied with liability rules. It shows that the oft-overlooked Third Amendment explicitly mandates property rule protection for the entitlement it defines. This property rule, together with the Takings Clause's explicit liability rule, shows that for other entitlements the Constitution does not require any particular form of protection. The one explicit property rule and the one explicit liability rule define the second dimension in constitutional lawrengths and weakness.
2004-10-04T07:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art1
https://law.bepress.com/context/gmulwps/article/1000/viewcontent/A_Transactional_Analysis_of_Constitutional_Remedies_04_44.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Constitutional Law
Constitutional Law
oai:law.bepress.com:gmulwps-1003
2004-10-18T23:27:23Z
publication:gmulwps
Soft Negligence and Cause In Fact: A Comment on Ganuza and Gomez
Dari-Mattiacci, Giuseppe
Lowering the standard of negligence below the first-best socially optimal level has been shown by Ganuza and Gomez (2004) to increase the level of care taken by judgment proof injurers. In this paper, I consider a more complex model of negligence in which cause in fact is taken into account, and I show that this conclusion holds when the injurer’s care reduces the magnitude of the accidental harm but not when the injurer’s care reduces the probability of the accident. Thus, such soft negligence strategies aimed at tackling the adverse effects of judgment proofness need to be conditioned to the accident prevention technology available to injurers.
2004-10-18T07:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art4
https://law.bepress.com/context/gmulwps/article/1003/viewcontent/_4_Soft_Negligence__Dari_Mattiacci_.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Environmental Law
Health Law and Policy
Products Liability
Torts
Environmental Law
Health Law and Policy
Torts
oai:law.bepress.com:gmulwps-1031
2005-08-10T19:04:20Z
publication:gmulwps
Is Forum-Shopping Corrupting America's Bankruptcy Courts? Review of Lynn M. LoPucki, "Courting Failure: How Competition for big Cases is Corrupting the Bankruptcy Courts"
Zywicki, Todd J
In his new book, Courting Failure: How Competition for Big Cases is Corrupting the Bankruptcy Courts, Professor Lynn LoPucki’s book argues that that current bankruptcy venue rules have spawned an improper “competition for big cases” that has “corrupted” America’s bankruptcy courts. LoPucki argues that this competition has harmed the bankruptcy system and the economy, transferring wealth from creditors and employees to incumbent management and bankruptcy professionals. He also argues that the competition that has corrupted the American bankruptcy system is being replicated internationally, resulting in a similar competition and similar harm on the global stage.
This essay reviews LoPucki’s book and its central theoretical and empirical arguments. LoPucki offers powerful empirical evidence that something is amiss with much of current American bankruptcy practice. This essay will try to flesh out in more detail the model and theoretical foundations that implicit underlie LoPucki’s indictment of bankruptcy forum-shopping (and other forms of forum-shopping as well). Empirical evidence standing alone is insufficient to draw conclusions about whether forum-shopping is in general good or bad without a clearly-stated hypothesis to test. Instead, it is necessary to also have a theoretical model sufficient to generate testable hypotheses as a predicate both for determining whether forum-shopping is good or bad on net, as well as the likely effects of reform proposals. Although LoPucki identifies several problem areas in the current Chapter 11 reorganization process, it is not as clear that all of these problems can be clearly attributed to runaway forum-shopping. Instead, they may simply be good-faith errors or mistakes, for which continued competition may be beneficial, in that the competition may actually expedite the process of self-correction.
This review essay develops a model of the institutions and incentives governing the forum-shopping competition described by LoPucki in an effort to determine whether the empirical observations proffered by LoPucki can be best explained as the outcome of improper forum-shopping competition. The essay then closes with an analysis of provisions of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, noting that many of the provisions in the legislation offer substantive responses to many of the problems identified by LoPucki.
2005-08-10T07:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art32
https://law.bepress.com/context/gmulwps/article/1031/viewcontent/05_16_Is_Forum_Shopping_Corrupting.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Bankruptcy Law
Commercial Law
Contracts
Corporations
Law and Economics
Bankruptcy Law
Business Organizations Law
Commercial Law
Contracts
Law and Economics
oai:law.bepress.com:gmulwps-1006
2004-11-02T21:21:47Z
publication:gmulwps
A Culturally Correct Proposal to Privatize the British Columbia Salmon Fishery
Johnsen, D. Bruce
Canada now faces two looming policy crises that have come to a head in British Columbia. The first is long-term depletion of the Pacific salmon fishery by mobile commercial ocean fishermen racing to intercept salmon under the rule of capture. The second results from Canadian Supreme Court case law recognizing and affirming “the existing aboriginal and treaty rights of the aboriginal peoples of Canada” under Section 35(1) of the Constitution Act, 1982. This essay shows that the economics of property rights provides a joint solution to these crises that would promote the Canadian commonwealth by way of a privatization auction while respecting the tribes’ distinctive aboriginal culture.
2004-11-02T08:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art8
https://law.bepress.com/context/gmulwps/article/1006/viewcontent/04_49_Culturally_Correct_Proposal_to_Privatize_Salmon_Fishery.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Constitutional Law
Corporations
Economics
Environmental Law
Law and Economics
Legal History
Business Organizations Law
Constitutional Law
Economics
Environmental Law
Law and Economics
Legal History
oai:law.bepress.com:gmulwps-1009
2004-11-16T23:51:45Z
publication:gmulwps
The Unsolvable Dilemma of a Paretian Policymaker
Dari-Mattiacci, Giuseppe
Garoupa, Nuno
In this paper, we argue that social decisionmaking is subject to a fundamental conflict between consistency and completeness. We show that a consistent welfarist method of policy assessment, that is, one that never violates the Pareto principle, may be incomplete in the sense of being incapable of providing a solution to important social welfare problems.
2004-11-16T08:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art10
https://law.bepress.com/context/gmulwps/article/1009/viewcontent/04_52_Unsolvable_Dilemma.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Economics
Law and Economics
Economics
Law and Economics
oai:law.bepress.com:gmulwps-1038
2005-08-25T22:29:49Z
publication:gmulwps
Calling a Truce in the Culture Wars: From Enron to the CIA
Lerner, Craig S.
This Article compares and evaluates recent Congressional efforts to improve institutional “cultures” in the private and public sectors. The Sarbanes-Oxley Act of 2002 was designed to upgrade corporate culture by patching up the “walls” that separate corporate management from boards of directors, accountants, lawyers, and financial analysts. The Intelligence Reform Act of 2005 took a different tack, hammering away at walls that supposedly segmented the intelligence community. The logic was that the market failed because people did not observe sufficient formalities in their dealings with one another, while the intelligence community failed precisely because people kept their distance from one another and declined to share information. The way to improve their respective cultures, Congress determined, was to build up walls in the one case and to tear them down in the other. This Article expresses some skepticism, however, about these solutions. Building walls in the private sector increases transaction costs, which may outweigh any benefits in detecting fraud. With respect to the intelligence community, compartmentalization of information diminishes risks associated with double agents; redundancy of tasks may provide a safety margin; and segmentation of government agencies may guard against civil liberties violations as well as provide additional spurs to action. Furthermore, thriving firms in the private sector forge successful, though likely idiosyncratic, cultures designed to exploit business opportunities. Because the market is largely self-correcting, regulatory efforts to dictate a particular reorganization or cultural shift are probably unnecessary and possibly harmful. By contrast, the CIA, FBI, NSA, and all other government agencies operate without fear of bankruptcy, which is to say in the absence of penalties for deficient cultures (or rewards for successful ones). Nonetheless, efforts to re-structure government bureaucracies, nominally to re-make their cultures, should be regarded with caution. First, such efforts will almost inevitably be undertaken by political actors, whose motivations are at a minimum suspect. Second, even assuming the best of intentions and the utmost of human wisdom, central planners cannot forecast the untold costs and benefits to a major governmental reorganization. The Intelligence Reform Act’s overhaul of the intelligence community will have certain and substantial costs in the short-term, and very uncertain, if any, benefits in the long term.
2005-08-25T07:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art39
https://law.bepress.com/context/gmulwps/article/1038/viewcontent/05_24_Calling_a_Truce.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Criminal Law and Procedure
Law Enforcement and Corrections
Criminal Law
Criminal Procedure
Law Enforcement and Corrections
oai:law.bepress.com:gmulwps-1008
2004-11-15T21:43:30Z
publication:gmulwps
Judicial Power & Civil Rights Reconsidered
Bernstein, David E.
Somin, Ilya
Michael Klarman's "From Jim Crow to Civil Rights: The Supreme Court and the Struggle for Racial Equality" is an important contribution to the scholarly literature on both the history of the civil rights struggle and judicial power more generally. Klarman argues that for much of the twentieth century, the Supreme Court was very reluctant to rule in favor of African American civil rights claimants, and had little impact when it did.
Klarman is right to reject traditional accounts that greatly exaggerated the Supreme Court's willingness and ability to protect minorities. However, he overstates his case. The Court's views on the proper scope of African Americans' rights periodically diverged from that of the political branches of government. The Justices' relative insulation from political pressure; their membership in a different generational cohort than the median voter; the idiosyncrasies of presidential selection of Justices; and the Justices' nationalist inclinations all help explain this result.
Moreover, in at least three types of situations, judicial invalidation of Jim Crow legislation significantly aided African Americans: (1) when such legislation had solved collective action problems among racist whites; (2) when legislation had enabled white actors to externalize the costs of Jim Crow onto society as a whole; and (3) when laws lowered the overall costs of maintaining Jim Crow.
This Review supports these conclusions by closely examining relevant Supreme Court decisions, especially Progressive Era cases and Brown v. Board of Education.
2004-11-15T08:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art9
https://law.bepress.com/context/gmulwps/article/1008/viewcontent/04_51_Judicial_Power___Civil_Rights.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Civil Rights and Discrimination
Constitutional Law
Law and Economics
Legal History
Civil Rights and Discrimination
Constitutional Law
Law and Economics
Legal History
oai:law.bepress.com:gmulwps-1001
2004-10-18T21:22:37Z
publication:gmulwps
Wine Wars: The 21st Amendment and Discriminatory Bans to Direct Shipment of Wine
Zywicki, Todd J.
This essay is actually a series of posts from the Volokh Conspiracy weblog (www.volokh.com) that discusses the policy and constitutional issues surrounding a question that the Supreme Court will hear this term, whether discriminatory barriers to the interstate direct shipment of wine are constitutional. Because of the timeliness of the issue, the essay is presented in this unusual and informal format so as to be available to the public more rapidly than through the traditional law review format. This essay” reviews the historical evidence and ratification history of the 21st Amendment, and concludes that the answer is unambiguously no.
The purpose of the 21st Amendment was to reverse the 18th Amendment’s disastrous experiment with federal Prohibition, and thereby to restore the balance between state and federal power that had existed prior to the 18th Amendment. It did this in two ways. First, § 1 of the Amendment repealed Prohibition, restoring to the States their exclusive police power authority to regulate the local sale and distribution of alcohol. Second, § 2 of the Amendment constitutionalized certain federal laws that allowed the States to enforce their police power on equal terms against alcohol shipped in interstate commerce as against alcohol manufactured or sold within the State. Section 2’s purpose was to nullify a line of Supreme Court decisions that compelled some States to “reverse discriminate” in favor of out-of-state vendors. As a result, the 21st Amendment removed the federal government from meddling in local affairs, but did not cede a novel and unnecessary power to the States to meddle in the federal government’s traditional control over interstate commerce.
In other words, the 21st Amendment enabled dry States to remain dry if they so chose, but it did not empower wet states to engage in economic warfare against the products of other wet States.
2004-10-18T07:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art2
https://law.bepress.com/context/gmulwps/article/1001/viewcontent/_2__Wine_Wars___Zywicki_.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Constitutional Law
Constitutional Law
oai:law.bepress.com:gmulwps-1017
2005-03-09T19:48:33Z
publication:gmulwps
Overcoming Poletown: County of Wayne v. Hathcock, Economic Development Takings, and the Future of Public Use
Somin, Ilya
County of Wayne v. Hathcock is an important step forward in public use takings law. The Michigan Supreme Court was right to overturn its notorious 1981 Poletown decision and forbid condemnations that transfer property to private parties solely on the grounds that the new owners will contribute to “economic development.” Poletown was the best known and most widely criticized decision justifying a nearly unlimited condemnation power.
As the Poletown case dramatically demonstrates, the economic development rationale is a virtual blank check for eminent domain abuse for the benefit of private parties. Poletown upheld a condemnation as a result of which 4200 people were uprooted so that General Motors could build a new factory in Detroit. Although GM and the City of Detroit promised that the new plant would create over 6000 jobs for the community, in reality the new plant employed less than half that many workers. By destroying hundreds of homes and numerous businesses, churches, and other institutions, the Poletown condemnations very likely inflicted more economic harm than they created benefits.
Economic development takings are highly vulnerable to such abuse for three interrelated reasons: the economic development rationale can justify almost any condemnation that benefits a private business; economic development takings rarely receive adequate scrutiny through the political process because of their nontransparent nature; and the absence of binding legal obligations on the new owners to actually produce the promised economic benefits severely exacerbates the danger of interest group manipulation.
Although the Hathcock case will help curb eminent domain abuse, it is not a panacea. Hathcock still permits condemnations that transfer property to private parties in three sets of circumstances: “public necessity of the extreme sort,” situations where the public retains some “control” over the condemned property, and cases where condemnation is justified by “facts of independent public significance” rather than by the new owners’ planned use for the property. All three of these scenarios, particularly the last two, are vulnerable to manipulation and abuse. Hathcock’s third category is particularly problematic. It is intended to protect “blight” condemnations, which historically have often been used to benefit politically influential developers at the expense of the poor and ethnic minorities.
2005-03-02T08:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art18
https://law.bepress.com/context/gmulwps/article/1017/viewcontent/gmu.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Constitutional Law
Law and Economics
Property-Personal and Real
Constitutional Law
Law and Economics
Property Law and Real Estate
oai:law.bepress.com:gmulwps-1032
2005-08-12T17:05:38Z
publication:gmulwps
Expressive Association after Dale
Bernstein, David E.
The right to join with other people to promote a particular outlook, known as the right of expressive association, is a necessary adjunct to the right of freedom of speech, which is protected by the First Amendment of the United States Constitution. In Boy Scouts of America v. Dale, the United States Supreme Court found that the Boy Scouts of America had a First Amendment expressive association right to exclude a homosexual adult volunteer. Dale is likely to prove to be one of the most important First Amendment cases of recent years, because the Court enforced a broad right of expressive association against the competing claims of an antidiscrimination law.
The right to expressive association had languished in obscurity for more than two decades after the Supreme Court articulated it in the late 1950s and early 1960s in the course of protecting civil rights activists from racist Southern governments. Controversy over constitutional protection of expressive association arose in the 1980s, when private associations claimed that it protected their right to discriminate when necessary to pursue the associations' goals. The Supreme Court seemed aghast that the expressive association right was being used as a tool of those who would seek to use its protection of their associative status in order to discriminate. In a series of opinions in the mid to late 1980s, the Court both narrowly defined the circumstances in which expressive association rights are impinged, and suggested that antidiscrimination laws are always "compelling government interests" sufficient to override these rights. The right of expressive association had been significantly weakened.
Dale, however, dramatically revived the right of expressive association. The Court found that the Boy Scouts had an expressive association right to exclude gay scoutmasters even though the Scouts' anti-homosexual activity policy was neither well-publicized nor especially central to its mission. Moreover, the Court rejected New Jersey's claim that the law was justified by the state's compelling interest in eradicating discrimination against homosexuals.
The essay examines the right of expressive association and the consequences of its reinvigoration by the Supreme Court in Dale. Part I recounts the ups and downs of the right from its inception in civil rights cases, to its low ebb in the 1980s, to its reinvigoration in Dale. Part II discusses some of the scholarly commentary on Dale and concludes that the right to expressive association after Dale will continue to be a broad one, with some limitations. Part III discusses some of the post-Dale decisions that support the interpretation of Dale as expounding a broad-based expressive association right fully applicable to a variety of situations. Finally, Part IV looks at some of the untapped potential uses of the right. In particular, Dale will often shield religious associations from intrusive antidiscrimination laws.
2005-08-12T07:00:00Z
text
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https://law.bepress.com/gmulwps/art33
https://law.bepress.com/context/gmulwps/article/1032/viewcontent/05_17_Expressive_Association.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Constitutional Law
Constitutional Law
oai:law.bepress.com:gmulwps-1034
2005-08-21T23:05:57Z
publication:gmulwps
Private Property, Development and Freedom
Eagle, Steven J.
The author asserts that adherence to the rule of law, including property law, is a necessary condition to economic development and human freedom. United States governmental agencies and private institutes have attempted to convey this message to Russia, other states of the former Soviet Union, and former Soviet satellite states, with some success. Finally, and unfortunately, the United States has veered away from the very adherence to the rule of law respecting property which it espouses abroad.
2005-08-21T07:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art35
https://law.bepress.com/context/gmulwps/article/1034/viewcontent/05_19_Private_Property__Development___Freedom.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Constitutional Law
International Law
Land Use Planning
Property-Personal and Real
Public Law and Legal Theory
Constitutional Law
International Law
Land Use Law
Property Law and Real Estate
Public Law and Legal Theory
oai:law.bepress.com:gmulwps-1039
2005-08-31T00:02:43Z
publication:gmulwps
The Economics of Loyalty Discounts and Antitrust Law in the United States
Kobayashi, Bruce H.
This paper examines the law and economics of loyalty discounts. While there have been recent advances in the economic analysis of loyalty discounts, this literature is still relatively recent and sparse. Though some of these papers provide tests that would serve to identify either deviations from short run profit maximization or, in the case of bundled discounts, a reduction in consumer welfare or the exclusion of a hypothetically equally efficient competitor, these tests have several shortcomings. As a result, the economic literature currently does not provide a reliable way to gauge whether the potential harm from the use of loyalty discounts would outweigh any demonstrable benefits from their use.
A review of the major cases involving loyalty and other volume discounts suggests the following general observations. In the single product case, courts have consistently applied the “not easy to establish” two part test for predatory pricing set out by the Supreme Court in its Brooke Group decision. As a result, the courts have generally ruled that above-cost volume discounts, including those that use market share discounts and near exclusive thresholds, are lawful and do not violate the antitrust laws. In cases involving multimarket or bundled rebates, however, courts have not generally followed the Brooke Group Court’s presumption that above cost bundled discounts are presumptively legal. However, they have generally followed the Brooke Group Court’s focus on the actual facts or realities of the marketplace rather than on hypotheticals. Thus, while the lower courts have considered the theories and tests contained in the recent theoretical literature on loyalty discounts, they have generally refused to find liability absent sufficient proof that the conditions required by these tests apply, and that the underlying tests reflect market realities. This approach is consistent with the federal courts’ generally cautious approach to expanding Section 2 liability, and the recognition of the underdeveloped and untested state of the academic literature.
Moreover, there are significant flaws in the two cases where courts have found use of bundled loyalty rebates to be unlawful. In SmithKline, the court did focus on data and concluded that an equally efficient competitor would have been excluded by the bundled discounts evaluated in the case. However, economic theory suggests that the court may have used a flawed standard, and should have instead focused on the fact that changes to the bundled rebate programs served to increase rather than decrease prices. And the court’s decision in LePage’s not only suggested use of the same flawed standard, it found liability without requiring sufficient proof that the standard even applied to the facts of the case.
2005-08-30T07:00:00Z
text
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https://law.bepress.com/gmulwps/art40
https://law.bepress.com/context/gmulwps/article/1039/viewcontent/05_26_Economics_of_Loyalty_Discounts.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Law and Economics
Law and Economics
oai:law.bepress.com:gmulwps-1016
2005-03-08T22:13:59Z
publication:gmulwps
Taxing Utility
Chorvat, Terrence
In order to assess the efficiency of a tax, we should examine its effect on the behavior of individuals. In general, the less a tax affects behavior, the more efficient it is thought to be. The standard example of a non-distorting tax is a lump-sum tax, which does not change with the behavior of the taxpayer. However, this article demonstrates that behavioral distortions can and do arise from a change in even a lump-sum tax. The only truly non-distortionary tax would be one based on utility itself. Utility, which has been used as a norm for distributional analysis, is also the ideal base for efficiency analysis. In fact, any reasonable attempt to describe a minimally distortive basis of taxation will significantly resemble the notion of a tax on utility. Therefore, utility itself is the best basis for evaluation of the efficiency of a tax. Such a tax has many additional features which make it more useful for analytical purposes than lump sum taxes.
2005-02-22T08:00:00Z
text
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https://law.bepress.com/gmulwps/art17
https://law.bepress.com/context/gmulwps/article/1016/viewcontent/05_03_Taxing_Utility.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Economics
Law and Economics
Taxation
Taxation-Federal Income
Economics
Law and Economics
Taxation-Federal
Tax Law
oai:law.bepress.com:gmulwps-1010
2004-11-17T20:54:16Z
publication:gmulwps
Putting Humpty Dumpty Back Together: Pricing in Anticommons Property Arrangements
Depoorter, Ben
Vanneste, Sven
Recently, a new theory has drawn considerable attention in the literature on common property. A number of scholars have pointed to the danger of excessive propertization in the context of what are termed "anticommons" property regimes. Although this theory has found its way into numerous legal and economic applications, the empirical and cognitive foundations of the theory of fragmentation remain unexplored. Based on experimental data, this Article conducts an investigation into the social and personal processes involved in the anticommons.
The results confirm the theoretical proposition that anticommons deadweight losses increase with the degree of complementarity between individual parts and with the degree of fragmentation.
Our study also provides three novel insights into the problem of fragmentation. First, the data illustrate that individual right holders base their reservation price on a proportion of the expected surplus of the bundler-purchaser, disregarding the objective value of the resource. Second, the experiments suggest that uncertainty amplifies the anticommons pricing effect. Individual right holders ignore the expected value of the purchaser’s project, and instead focus on the upper range of profitability and surplus. Willingness to accept is anchored onto a proportion of the maximum profitability, rather than a proportion of the expected benefits of the project. Finally, throughout the experiment reservation prices seem to be consistently lower in cases where there exists large uncertainty within the range of positive outcomes, relative to scenarios where there is relative certainty regarding a positive outcome but which includes the possibility of a (modest) negative outcome. Subjects seem to emphasize the relative low probability of success over the possibility of a negative outcome.
The experiment provides clear indications of the pricing effect in settings where complementary units are fragmented over individual right holders. Given the stickiness of initial selling prices, and the prospective costs of the required negotiations to drive prices down to the expected value of the project, value maximizing projects might be abandoned, leading to the tragic outcome of under use or idleness. The results thus reinforce the normative hypothesis of the anticommons: property right systems should be careful in allowing the liberal creation and fragmentation of property rights.
2004-11-17T08:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art11
https://law.bepress.com/context/gmulwps/article/1010/viewcontent/04_53_Putting_Humpty_Dumpty_Back_Together.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Economics
Law and Economics
Property-Personal and Real
Economics
Law and Economics
Property Law and Real Estate
oai:law.bepress.com:gmulwps-1004
2004-10-22T19:26:54Z
publication:gmulwps
Rents, Dissipation, and Lost Treasures with N Parties
Dari-Mattiacci, Giuseppe
Langlais, Eric
Parisi, Francesco
The rent-seeking literature is unanimous on the fact that, in a rent-seeking context, the rent dissipation increases with the number of potential participants. In this paper we analyze the participants' choice to enter the game and their levels of efforts. We show that the usual claim - that the total dissipation approaches the entire value of the rent - applies only when participants are relatively weak. In the presence of strong competitors, the total dissipation actually decreases, since participation in the game is less frequent. We also consider the impact of competitors' exit option, distinguishing between redistributive rent-seeking and productive rent-seeking situations. In redistributive rent-seeking, no social loss results when all competitors exit the race. In productive rent-seeking, instead, lack of participation creates a social loss (the lost treasure effect), since valuable rents are left unexploited. We further show that in N-party rent-seeking contests, the lost-treasure effect perfectly counterbalances the reduction in rent dissipation due to competitors' exit. Hence, unlike redistributive rent-seeking, in productive rent-seeking the total social loss remains equal to the entire rent even when parties grow stronger, irrespective of their number.
2004-10-22T07:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art5
https://law.bepress.com/context/gmulwps/article/1004/viewcontent/_5_Rents_Dissipation___LostTreasures__Dari_Mattiaci_.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Economics
Law and Economics
Economics
Law and Economics
oai:law.bepress.com:gmulwps-1040
2005-09-01T23:45:18Z
publication:gmulwps
Two Tales of Bundling
Kobayashi, Bruce H.
The economic literature on bundling has made many theoretical advances. However, several omissions reveal themselves. The advances have largely been on the theoretical side. These models contain restrictive assumptions regarding the existence of monopoly in some markets, and the nature of rivalry in others. The models generally ignore obvious and ubiquitous reasons firms may use bundled discounts. These models have not been subject to robustness checks, nor have their assumptions been tested empirically. As a result, the literature that shows the possibility of anticompetitive harm does not provide a reliable way to gauge whether the potential for harm would outweigh any demonstrable benefits from the practice.
As a result of the underdeveloped nature of the literature, simple rules that result in extreme tradeoffs between type I and type II errors may dominate more complex tests that attempt to differentiate procompetitive from anticompetitive behavior. Such complex tests may work well within the confines of a theoretical model, but not when applied to firms in actual antitrust cases. Improving the reliability of more complex tests for anticompetitive behavior will require economists to expand their understanding of both the anticompetitive and procompetitive reasons firms engage in bundling. This will entail studying the reasons bundling is adopted by firms without market power, relaxing the assumption of monopoly in theoretical models, and generating testable hypothesis and the data to test them.
2005-09-01T07:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art41
https://law.bepress.com/context/gmulwps/article/1040/viewcontent/05_27_Two_Tales_of_Bundling.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Law and Economics
Law and Economics
oai:law.bepress.com:gmulwps-1012
2004-11-23T00:54:54Z
publication:gmulwps
Whistle Blowing
Depoorter, Ben
De Mot, Jef
For law enforcement purposes corruption and fraud are hard battles. Because of the highly secretive and premeditated nature of these crimes, prime witnesses are themselves often implicated in the fraudulent transaction. Promises of immunity and whistle blowing rewards are often required to resolve these information asymmetries. These insights have set a trend, both in scholarship and law enforcement practice, towards reward-based approaches (carrots), as an alternative or complement to punishment based deterrence (sticks). Applying the U.S. False Claims Act (FCA) as an analytical framework, we provide a critical review of the efficiency limitations of whistle blowing. More specifically, the formal model developed in this contribution, reveals a gap between social and private incentives in whistle blowing, both with regard to the decision to pursue litigation and the timing of whistle blowing. First, while an insider will blow the whistle whenever his expected recovery exceeds the expected costs of litigation, enforcement agencies seek to optimise enforcement in the long run. The autonomy of whistle blowers to pursue claims without government involvement, weakens the government’s bargaining position and obstructs the government’s ability to weigh in wider factors of enforcement (the effect of an individual case on a multiple claim suit, etc.). Second, whenever rewards are tied to recovery, bounty awards create a perverse incentive whereby fraudulent practices are not terminated at a socially optimal point in time. The potential race among whistle blowers cannot mitigate this effect fully because the stigma and loss of opportunities on the job market act as internal constraints on whistle blowing.
2004-11-22T08:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art13
https://law.bepress.com/context/gmulwps/article/1012/viewcontent/04_56_Whistle_Blowing.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Criminal Law and Procedure
Law and Economics
Law Enforcement and Corrections
Criminal Law
Criminal Procedure
Law and Economics
Law Enforcement and Corrections
oai:law.bepress.com:gmulwps-1024
2005-04-21T21:15:23Z
publication:gmulwps
An Economic Analysis of the Private and Social Costs of the Provision of Cybersecurity and other Public Security Goods
Kobayashi, Bruce H.
This paper examines the incentives of private actors to invest in cybersecurity. Prior analyses have examined investments in security goods, such as locks or safes that have the characteristics of private goods. The analysis in this paper extends this analysis to examine expenditures on security goods, such as information, that have the characteristics of public goods. In contrast to the private goods case, where individual uncoordinated security expenditures can lead to an overproduction of security, the public goods case can result in the underproduction of security expenditures, and incentives to free ride. Thus, the formation of collective organizations may be necessary to facilitate the production of public security goods, and the protection of information produced by the collective organization should be a central feature of such organizations.
2005-04-21T07:00:00Z
text
application/pdf
https://law.bepress.com/gmulwps/art26
https://law.bepress.com/context/gmulwps/article/1024/viewcontent/05_11_Economic_Analysis_of_Private___Social.pdf
George Mason University School of Law Working Papers Series
bepress Legal Repository
Criminal Law and Procedure
Intellectual Property Law
Law and Economics
Criminal Law
Criminal Procedure
Intellectual Property Law
Law and Economics