The Deregulation of Private Capital and the Decline of the Public Company

From its inception, the federal securities law regime created and enforced a major divide between public and private capital raising. Firms that chose to “go public” took on substantial disclosure burdens, but in exchange were given the exclusive right to raise capital from the general public. Over time, however, the disclosure quid pro quo has been subverted: Public companies are still asked to disclose, yet capital is flooding into private companies with regulators’ blessing. This Article provides a critique of the new public-private divide centered on its information effects. While regulators may have hoped for both the private and public equity markets to thrive, they may instead be hastening the latter’s decline. Public companies benefit significantly less from mandatory disclosure than they did just three decades ago, because raising large amounts of capital no longer requires going and remaining public. Meanwhile, private companies are thriving in part by free-riding on the information contained in public company stock prices and disclosure. This pattern is unlikely to be sustainable. Public companies have little incentive to subsidize their private company competitors in the race for capital--and we are already witnessing a sharp decline in initial public offerings and stock exchange listings. With fewer and fewer public companies left to produce the information on which private companies depend, the outlook is uncertain for both sides of the securities-law divide

A Game-theoretic Model for Regulating Freeriding in Subsidy-Based Pervasive Spectrum Sharing Markets

Cellular spectrum is a limited natural resource becoming scarcer at a worrisome rate. To satisfy users\u27 expectation from wireless data services, researchers and practitioners recognized the necessity of more utilization and pervasive sharing of the spectrum. Though scarce, spectrum is underutilized in some areas or within certain operating hours due to the lack of appropriate regulatory policies, static allocation and emerging business challenges. Thus, finding ways to improve the utilization of this resource to make sharing more pervasive is of great importance. There already exists a number of solutions to increase spectrum utilization via increased sharing. Dynamic Spectrum Access (DSA) enables a cellular operator to participate in spectrum sharing in many ways, such as geological database and cognitive radios, but these systems perform spectrum sharing at the secondary level (i.e., the bands are shared if and only if the primary/licensed user is idle) and it is questionable if they will be sufficient to meet the future expectations of the spectral efficiency. Along with the secondary sharing, spectrum sharing among primary users is emerging as a new domain of future mode of pervasive sharing. We call this type of spectrum sharing among primary users as pervasive spectrum sharing (PSS) . However, such spectrum sharing among primary users requires strong incentives to share and ensuring a freeriding-free cellular market. Freeriding in pervasively shared spectrum markets (be it via government subsidies/regulations or self-motivated coalitions among cellular operators) is a real techno-economic challenge to be addressed. In a PSS market, operators will share their resources with primary users of other operators and may sometimes have to block their own primary users in order to attain sharing goals. Small operators with lower quality service may freeride on large operators\u27 infrastructure in such pervasively shared markets. Even worse, since small operators\u27 users may perceive higher-than-expected service quality for a lower fee, this can cause customer loss to the large operators and motivate small operators to continue freeriding with additional earnings from the stolen customers. Thus, freeriding can drive a shared spectrum market to an unhealthy and unstable equilibrium. In this work, we model the freeriding by small operators in shared spectrum markets via a game-theoretic framework. We focus on a performance-based government incentivize scheme and aim to minimize the freeriding issue emerging in such PSS markets. We present insights from the model and discuss policy and regulatory challenges

A Game-Theoretic Framework to Regulate Freeriding in Inter-Provider Spectrum Sharing

Primary-secondary spectrum sharing is limited in terms of design space, and may not be sufficient to meet the ever-increasing demand of connectivity and high signal quality. The next step to increase spectrum sharing efficiency is to design markets where sharing takes place among primary providers rather than leaving it to the limited case where the primary licensee is idle. Attaining contractual spectrum sharing among primary providers, a.k.a. co-primary or inter-provider sharing, involves additional costs for the users, e.g., roaming fee. Co-primary spectrum sharing without additional charge to the users poses two major challenges: a) regulatory approaches must be introduced to incentivize providers to share spectrum resources, and b) small providers in co-primary spectrum sharing markets may freeride on large providers’ networks as the customers of the small providers may be using the spectrum and infrastructure resources of large providers. Such freeriding opportunities must be minimized to realize the benefits of primary-level sharing. We consider a subsidy-based spectrum sharing (SBSS) market to facilitate co-primary spectrum sharing where providers are explicitly incentivized to share spectrum resources. We focus on minimizing freeriding in SBSS markets and introduce a game-theoretic model to regulate the freeriding. We use the model to explore operational regimes with minimal freeriding

You go First! Coordination Problems and the Standard of Proof in Inquisitorial Prosecution

The prosecution of criminals is costly, and subject to errors. In contrast to adversarial court procedures, the prosecutor is regarded as an impartial investigator and aide to the judge in inquisitorial justice systems. We show in a sequential prosecution game of a Bayesian court that a strategic interaction between these two benevolent enforcement agents exists where each player hopes to freeride on the other one´s investigative effort. This gives rise to inefficient equilibria with excessive operating and error costs. Moreover, we will demonstrate that our results are sensitive to the applied standard of proof and that, more disturbingly, the inefficient outcome becomes more probable when the conviction threshold is raised. Applying the concept of ‘beyond reasonable doubt’, we analyze the impact of the standard of proof and other legal policy instruments on type I and type II errors and operating costs

You go First! Coordination Problems and the Standard of Proof in Inquisitorial Prosecution

The prosecution of criminals is costly, and subject to errors. In contrast to adversarial court procedures, the prosecutor is regarded as an impartial investigator and aide to the judge in inquisitorial justice systems. We show in a sequential prosecution game of a Bayesian court that a strategic interaction between these two benevolent enforcement agents exists where each player hopes to freeride on the other one´s investigative effort. This gives rise to inefficient equilibria with excessive operating and error costs. Moreover, we will demonstrate that our results are sensitive to the applied standard of proof and that, more disturbingly, the inefficient outcome becomes more probable when the conviction threshold is raised. Applying the concept of ‘beyond reasonable doubt’, we analyze the impact of the standard of proof and other legal policy instruments on type I and type II errors and operating costs

Regulation and Innovation: Approaching Market Failure from Both Sides

Regulation is often claimed to be the enemy of socially desirable in-novation because of factors including innovation’s unpredictability and regulation’s compliance costs. In this essay, we bring two intellectual property scholars’ perspectives to bear on the question of regulation’s impact on innovation. We offer a novel, yet intuitive, analytical frame-work that takes both market demand failures, and failures of supplier appropriability into account. Traditionally, regulation seeks to mitigate market failures that create deviations between the demand portfolio perceived by suppliers and the socially optimal demand portfolio. Studies of the interplay between regulation and innovation have mostly taken this perspective, considering the impact of various regulatory transaction and compliance costs on innovation. Intellectual property law and competition law target a different sort of problem, where markets fail to supply products and services at competitive prices or to undertake innovative activities because of supplier appropriability issues

Limiting the Collective Right to Exclude

For decades, society’s disparate interests and priorities have stymied attempts to resolve issues of housing affordability and equity. Zoning law and servitude law, both of which have been robustly empowered by decades of jurisprudence, effectively grant communities the legal right and ability to exclude various sorts of residences from their wealthiest neighborhoods. Exclusion by housing type results in exclusion of categories of people, namely, renters, the relatively poor, and racial minorities. Although our society’s housing woes may indeed be intractable if we continue to treat a group’s right to exclude with the level of deference that such exclusionary efforts currently enjoy, this treatment is unjustifiable. Courts should acknowledge and consider the broad public and private costs that are created by a group’s unfettered right to exclude. A more balanced approach would weigh individual autonomy to control property and various public harms resulting from community exclusions against legitimate community needs to exclude certain residents and uses. Judicial limits of the collective right to exclude may enable real progress toward fair and affordable housing to be achieved at last

Gone in Sixty Milliseconds: Trademark Law and Cognitive Science

Trademark dilution is a cause of action for interfering with the uniqueness of a trademark. For example, consumers would probably not think that Kodak soap was produced by the makers of Kodak cameras, but its presence in the market would diminish the uniqueness of the original Kodak mark. Trademark owners think dilution is harmful but have had difficulty explaining why. Many courts have therefore been reluctant to enforce dilution laws, even while legislatures have enacted more of them over the past half century. Courts and commentators have now begun to use psychological theories, drawing on associationist models of cognition, to explain how a trademark can be harmed by the existence of similar marks even when consumers can readily distinguish the marks from one another and thus are not confused. Though the cognitive theory of dilution is internally consistent and appeals to the authority of science, it does not rest on sufficient empirical evidence to justify its adoption. Moreover, the harms it identifies do not generally come from commercial competitors but from free speech about trademarked products. As a result, even a limited dilution law should be held unconstitutional under current First Amendment commercial-speech doctrine. In the absence of constitutional invalidation, the cognitive explanation of dilution is likely to change the law for the worse. Rather than working like fingerprint evidence--which ideally produces more evidence about already-defined crimes--psychological explanations of dilution are more like economic theories in antitrust, which changed the definition of actionable restraints of trade. Given the empirical and normative flaws in the cognitive theory, using it to fill dilution\u27s theoretical vacuum would be a mistake

Sustainability Potentials of the Sharing Economy: The case of accommodation sharing platforms

The sharing economy, which facilitates technology-enabled sharing of underused assets, is an umbrella for a variety of segments and platforms. The concept includes peer-to-peer, business-to-business and business-to-consumer platforms which are celebrated for their potential to facilitate a transformative change towards a sustainable society grounded in access over ownership, empowerment, inclusiveness, democracy and an economically, environmentally and socially sound way of doing business. While claims emphasising the sustainability potentials of the sharing economy are ubiquitous in the literature, research on the sustainability implications of the sharing economy is scarce and the potentials have not been contested in scientific studies. Critics of the sharing economy have brought to light some of the negative repercussions sharing platforms might create: exacerbation of wealth inequality, increase of environmental degradation and a race to the bottom. This thesis takes an explorative approach and synthesises the overarching sustainability claims inherent to the sharing economy which are then tested on the accommodation segment. The analytical framework utilised for the discussion of sustainability claims emerged from the literature and primary data was collected via ten in-depth interviews with providers of accommodation sharing platforms and a quantitative survey with their users. The research found a wide spectrum of business models and identified different sustainability implications for each of type of accommodation sharing platforms