Although the pure economic loss rule has been remarkably durable in the common law, it suffers from a theoretical deficit. The rule has not been properly framed within the broader context of Anglo-American political economy. Any theory must recognize that the rule fundamentally deals with...

One of the most intensely debated issues in corporate law is the requirement of minimum share capital (or capital stock in the U.S.) for companies with limited liability. Some countries have recently reduced or eliminated this legal prescription. The paper discusses the effects of these...

This paper develops a positive model of informal contracting in which rewards and punishments are not determined by an ex ante optimal plan but instead express the ex post moral sentiments of the arbitrating party. We consider a subjective performance evaluation problem in which a principal can...

In this article we apply and extend the model elaborated by Acemoglu and Verdier in their seminal paper (2000), to examine how the economy represented in their theoretical framework responds to an exogenous change in the agent's incentive. In particular, we focus on the consequences of a famous...

This paper designs a mechanism that generalizes Judge Learned Hand's negligence liability tests from his classic opinions in T. J. HOOPER (1932) and CARROLL TOWING (1947). The “Benighted Hand” mechanism incentivizes truthful reporting of the agents' private costs of bilateral caretaking when...

This paper designs a mechanism that generalizes Ronald Coase's farmer-rancher example of nuisance law from his seminal article, “The Problem of Social Costs.” The mechanism incentivizes truthful reporting of the agents' private net benefits and costs of bilateral activity levels, thereby...

Mechanism design provides a general paradigm for deriving legal rules and institutions that implement social objectives as equilibrium outcomes of interactions among strategic individuals with private information and endogenous transaction costs. This paper designs mechanisms that generalize...

The spread of the novel coronavirus SARS-CoV-2 (COVID-19) among meatpacking employees forced closures and slowdowns at many plants across the United States. As the meatpacking giants JBS, Smithfield, and Tyson became hotbeds for COVID-19, national meat production plummeted. To forestall further...

In a hand-coded sample of M&A contracts from 2007-08, risk allocation provisions exhibit wide variation. Earn-outs are the least common means to allocate risk, indemnities are most common, followed by price adjustment clauses. Techniques for mitigating enforcement costs – escrows, holdbacks,...

Over 20 years, M&A contracts have more than doubled in size – from 35 to 88 single-spaced pages in this paper's font. They have also grown significantly in linguistic complexity – from post-graduate “grade 20” to post-doctoral “grade 30”. A substantial portion (lower bound ~20%) of...