A liquidity-constrained entrepreneur needs to raise capital to finance a business activity that may cause injuries to third parties - the tort victims. Taking the level of borrowing as fixed, the entrepreneur finances the activity with senior (secured) debt in order to shield assets from the...

We study jury trial waivers in a data set of 2,816 contracts contained as exhibits in Form 8-K filings by reporting corporations during 2002. Because these contracts are associated with events deemed material to the financial condition of SEC-reporting firms, they likely are carefully negotiated...

This paper examines a setting in which a firm is liable to pay environmental damages caused by its activity but may not have sufficient wealth for repair of damages. In order to induce the full internalization of the environmental cost, the firm is required to demonstrate a financial guarantee...

This paper describes the incentives for firms to seek voluntary product safety certifications. We consider a firm which makes the decision of whether or not to seek certification prior to selling the product. We show that, even when the firm and the consumers have same beliefs about the product...

This paper analyzes corporate responses to the liability risk arising from its workers' exposure to newly identified carcinogens. We find that firms, especially those with weak balance sheets, tend to respond to such risks by acquiring large, unrelated businesses with relatively high operating...

The best-performing and most popular algorithms are often the least explainable. In parallel, there is growing concern and evidence that sophisticated algorithms may engage, autonomously, in profit-maximizing but welfare-damaging strategies. Drawing on the literature on self-regulation and...

This Article examines the activities of various multinational enterprises (MNEs) involved in the Prestige oil spill of, 2002. The liability exposure of such enterprises is found to have been minimized by three legal phenomena which result from the current treatment of MNEs under national and...

The common-law doctrine of equivalents extends a patent's protection to cover certain similar devices that do not literally infringe on the patent's claims. Broad application of this doctrine can, however, create uncertainty as to how substantial an improvement a competitor must make to avoid...