Copyright (c) 2009 George Mason University School of Law All rights reserved. http://law.bepress.com/gmulwps Recent documents in George Mason University School of Law Working Papers Series en-us Tue, 03 Nov 2009 09:35:38 PST 3600 http://law.bepress.com/gmulwps/gmule/art42 http://law.bepress.com/gmulwps/gmule/art42 Wed, 07 Sep 2005 18:20:08 PDT 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. Nuno M. Garoupa Comparative Law Criminal Law and Procedure Law and Economics Torts http://law.bepress.com/gmulwps/gmule/art41 http://law.bepress.com/gmulwps/gmule/art41 Thu, 01 Sep 2005 16:47:09 PDT 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. Bruce H. Kobayashi Law and Economics http://law.bepress.com/gmulwps/gmule/art40 http://law.bepress.com/gmulwps/gmule/art40 Tue, 30 Aug 2005 17:04:18 PDT 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. Bruce H. Kobayashi Law and Economics http://law.bepress.com/gmulwps/gmule/art39 http://law.bepress.com/gmulwps/gmule/art39 Thu, 25 Aug 2005 11:24:51 PDT 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. Craig S. Lerner Criminal Law and Procedure Law Enforcement and Corrections http://law.bepress.com/gmulwps/gmule/art38 http://law.bepress.com/gmulwps/gmule/art38 Wed, 24 Aug 2005 11:20:00 PDT 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. Charles N. W. Keckler Criminal Law and Procedure Law and Economics http://law.bepress.com/gmulwps/gmule/art37 http://law.bepress.com/gmulwps/gmule/art37 Sun, 21 Aug 2005 16:30:18 PDT 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. Maxwell L. Stearns Constitutional Law Jurisprudence Law and Economics Public Law and Legal Theory http://law.bepress.com/gmulwps/gmule/art36 http://law.bepress.com/gmulwps/gmule/art36 Sun, 21 Aug 2005 16:18:45 PDT 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. Craig S. Lerner Criminal Law and Procedure http://law.bepress.com/gmulwps/gmule/art35 http://law.bepress.com/gmulwps/gmule/art35 Sun, 21 Aug 2005 16:07:21 PDT 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. Steven J. Eagle Constitutional Law International Law Land Use Planning Property-Personal and Real Public Law and Legal Theory http://law.bepress.com/gmulwps/gmule/art34 http://law.bepress.com/gmulwps/gmule/art34 Tue, 16 Aug 2005 08:54:30 PDT 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. Craig S. Lerner Constitutional Law Criminal Law and Procedure http://law.bepress.com/gmulwps/gmule/art33 http://law.bepress.com/gmulwps/gmule/art33 Fri, 12 Aug 2005 10:06:36 PDT 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. David E. Bernstein Constitutional Law