Empirical studies of corporate governance address potential endogeneity problems, but fail to place endogeneity in the context of a model and ignore the possibility of disparate treatment effects across companies. This paper tackles these defects. The model and analysis in the paper demonstrate...

While much has been made of "shareholder democracy" as a lever of corporate governance, there is little evidence about the efficacy of voting. This paper empirically examines votes on management-sponsored resolutions and finds widespread irregularities in the distribution of votes received by...

Two prominent theories of crime (Wilson and Herrnstein 1985; Gottfredson and Hirshi 1990) rely heavily on the notion that criminals are impatient or "present-oriented." In brief, the theories posit that present-oriented individuals will be predisposed to crime because the "costs" of crime (e.g.,...

This paper studies the "mechanical theory" of crime and incarceration--the notion that changes in imprisonment are partially determined by changes in crime rates. Previous studies found scant evidence supporting the mechanical theory. These studies, however, failed to properly control for...

Many firms have filed for bankruptcy to manage mass tort liabilities, most notably asbestos producers. We model a bankruptcy procedure that optimally balances the liquidity needs of present claimants and an uncertain number of future claimants. We find that future claimants should receive...

This paper proposes a novel normative economic explanation for statutes of limitations for criminal offenses. Because potential criminals tend to discount the future at higher rates than society, punishing crimes long after they are committed will be inefficient. Punishments after a long lag...

This paper examines the relation between two means of corporate information aggregation---corporate voting and stock market pricing. If the median voter and the price-setting shareholder share similar information, then close proxy contest outcomes should not have systematic effects on stock...

Many commentators assert that enhanced shareholder power is a promising cure for corporate governance ills. This paper empirically examines the impact of differential amounts of shareholder power on governance arrangements. When U.S. states enacted statutory antitakeover protections in the...

Courts seeking the most likely intent of contracting parties should interpret contracts according to Bayes’s rule. The best interpretation of a contract reflects both the prior likelihood (base rate) of a pair of contracting parties having a given intention and the probability that the...