We address one of the cardinal puzzles of European corporate law: the lack of derivate share-holder suits. We explain this phenomenon on the basis of percentage limits which require share-holders to hold a minimum amount of shares in order to bring a lawsuit. We show that, under this legal...

This study of initial public offerings (IPOs) carried out on the Berlin and London stock exchanges between 1900 and 1913 casts doubt on the received “law and finance” wisdom that legally mandated investor protection is pivotal to the development of capital markets. IPOs that resulted in...

The title of this chapter is deliberately provocative. Intuitively, many will be inclined to see conscious control of mental process as a good thing. Yet control comes at a high price. The consciously not directly controlled, automatic, parallel processing of information is not only much faster,...

We discuss survey evidence on individuals' willingness to sanction norm violations – such as evading taxes, drunk driving, fare dodging, or skiving off work – by expressing disapproval or social exclusion. Our data suggest that people condition their sanctioning behavior on their belief...

One possible solution to mitigate the negative influences of conflict which has been proposed in the literature is to subject the relevant parties to education. Education can take two forms: increasing an individual's human capital on the one hand, increasing her social capital on the other...

In recent debates, morality or social norms have been proposed as an instrument to reduce conflict behavior. As the argument goes, moral people will not engage in socially not-tolerated behavior or, less so than amoral people. Analyzing this question in the framework of contest theory, we find...

The deterrent effect of law enforcement rests on the link between the actual and the perceived detection risk. We study the role of word of mouth for this linkage. Our approach makes use of micro data on compliance with TV license fees allowing us to distinguish between households who have been...

Legal realists expect prosecutors to be selfish. If they get the defendant convicted, this helps them advance their careers. If the odds of winning on the main charge are low, prosecutors have a second option. They can exploit the ambiguity of legal doctrine and charge the defendant for vaguely...

Criminal procedure is organized as a tournament with predefined roles. We show that assuming the role of a defense counsel or prosecutor leads to role induced bias even if participants are asked to predict a court ruling after they have ceased to act in that role, and if they expect a...