For the past two decades, legal and economic scholarship has tended to assume that the central economic problem addressed by corporation law is getting managers and directors to act as faithful agents for shareholders. There are other important economic problems faced by business firms, however....

By the beginning of the twenty-first century, many observers had come to believe that U.S. corporate law should, and does, embrace a “shareholder primacy” rule that requires corporate directors to maximize shareholder wealth. This Essay argues that such a view is mistaken. As a positive...

Rational choice analysis generally assumes that most people are both rational and selfish. Although self-interest is sometimes defined in a broad and tautological fashion to include a taste for altruism or ethics, most rational choice analyses implicitly equate self-interest with maximizing...

Contemporary legal scholars have become keenly interested in behavioral approaches to law that recognize that real people do not always behave in a rationally selfish fashion. For example, numerous recent papers examine how human choice can be distorted by endowment effects, anchoring effects,...

At the close of the twentieth century, U.S. corporate scholarship was dominated by a principal-agent paradigm that assumed that shareholders were the principals or sole residual claimants in public corporations, and also assumed that corporate directors were the shareholders' agents. This...

This Symposium Article argues that the board-controlled corporation can be understood as a legal innovation that historically has functioned as a means of transferring wealth forward and sometimes backward through time, for the benefit of present and future generations. In this fashion the...

One of the most important questions in corporate governance is how directors of public corporations can be motivated to serve the interests of the firm. Directors frequently hold only small stakes in the companies they manage. Moreover, a variety of legal rules and contractual arrangements...