Arbitration Case Law Update 2015

This chapter identifies decisions by the U.S. Supreme Court and selected federal circuit and high state courts in the past year that interpret and apply the Federal Arbitration Act (FAA) and could have an impact on securities arbitration practice

The Interdependence Between Political and Economic Entrepreneurship

The Chinese economy has developed rapidly despite two major constraints: ill-functioning markets and a socialist past, both of which caused an environment of unenforceable contracts. In this situation the need to pool resources and to govern relational risk was paramount to the development of a private sector. While modern organisation (transaction cost-) theory can explain why and to which extent entrepreneurship in China is based on collective agents, an analysis of the (local) political market is needed to explain why China's villages provide the much needed (and valuable) public goods in form of property rights protection and contractual security. Decentralisation and jurisdictional competition facilitate the writing of a new "common law" as well as the "discovery" of new forms of collective action.economic development;entrepreneurial economy;jurisdictional competition;organisational change

Commitment Problems in Conflict Resolution

Commitment problems are inherent to non-binding conflict resolution mechanisms, since an unsatisfied party can ignore the resolution and initiate conflict. We provide experimental evidence suggesting that even in the absence of binding contractual agreements individuals often avoid conflict by committing to the outcome of a conflict resolution mechanism. Commitment problems are mitigated to a greater extent for groups who opt-in to the conflict resolution mechanism, but only when opting-in is costly. Although conflict rates are higher when opting-in is costly than when it is free or exogenously imposed, commitment problems are greatly reduced amongst those groups who choose to opt-in

Norm Commandeering and the Tobacco Trust

In the early 1870s, Durham became a major center of tobacco marketing. Farmers brought their crops to auction warehouses, which then sold them to the town’s manufacturers. This was a process facilitated by a well-developed system of social norms. But the formation of the American Tobacco Company’s “tobacco trust” in the 1890s threatened that arrangement—buyers conspired to pay less per pound of tobacco, and warehousemen lost the ability to police buyers’ conduct. When farmers attempted to organize in response, geographic and social distance caused their efforts to fail. By the time federal courts dissolved the trust in 1911, the damage had already been done. This Note’s historical analysis will be relevant for scholars of both informal ordering and competition law. For the former, it shows that some norm systems depend on the presence of competition. Informal ordering can, of course, also be a response to a lack of competition. But the possibility of collective action problems means that attempts to organize in reaction will often fail. For scholars of competition law, the possibility of norm commandeering provides a concrete example of how concentrated market power can affect economic and social dynamics

Wakelam v. Hagood Clerk\u27s Record v. 2 Dckt. 36940

https://digitalcommons.law.uidaho.edu/idaho_supreme_court_record_briefs/2222/thumbnail.jp

Using Auction Theory to Inform Takeover Regulation

This paper focuses on certain mechanisms that govern the sale of corporate assets. Under Delaware law, when a potential acquirer makes a serious bid for a target, the target's Board of Directors is required to act as would "auctioneers charged with getting the best price for the stock- holders at a sale of the company." The Delaware courts' preference for auctions follows from two premises. First, a firm's managers should maximize the value of their shareholders' investment in the company. Second, auctions maximize shareholder returns. The two premises together imply that a target's board should conduct an auction when at least two firms would bid sums that are nontrivially above the target's prebid market price.Auctions; Takeovers

Eliminating Securities Fraud Class Actions Under the Radar

At least since Basic, Inc. v. Levinson, the business community and many influential scholars have challenged the existence of the securities fraud class action on a variety of grounds. Recently, two proposals have been advanced to fix the problem of abusive securities fraud class actions. One proposal requires arbitration of all securities fraud class actions; the other eliminates the corporate defendant in most actions. Proponents assert that shareholders should have the right to adopt these proposals through amendment of the company\u27s certificate of incorporation. In reality, adoption of either proposal would substantially curtail, if not eliminate, the securities fraud class action. Part I of this paper first reviews the rationales - compensation and deterrence - for the federal securities class action, sets forth the critics\u27 principal arguments as to why these goals are not achieved, and argues that the post-PSLRA securities fraud class action is reasonably effective in achieving both compensatory and deterrence goals. Part II then describes the two proposals. Part III explains why these proposals are impermissible under the anti-waiver clause, Section 29(a) of the Securities Exchange Act. Part IV explains why these proposals are also, under state law, illegal, unfair to current shareholders that do not vote in favor of them, and unenforceable as to future stock purchasers. Part V concludes by calling for a national debate on the future of the securities fraud class action. The arguments for and against the securities fraud class action involve complexities and uncertainties that make quick and dirty solutions like these two proposals inappropriate

Individual and Collective Reputation: Lessons from the Wine Market

The concept of reputation has been used in every field of economic research, given its capacity to affect the outcome of all economic and financial transactions. The theoretical debate on reputation is very rich, but the mechanisms of reputation building have not been explored enough from the empirical viewpoint. In this paper we investigate the determinants of firm reputation taking into consideration the interactions between individual and collective reputation. This paper is one of the first attempts to provide robust evidence on the determinants of firm reputation using a large set of controls applied to a database not affected by self-selection bias. In fact, we constructed a new database containing the universe of wineries located in four regions of the North-West of Italy with an established national reputation and focus on the determinants of the “jump” from national to international reputation. Our research confirms the prediction of the theoretical literature and shows the positive effect of firm age, size, investments and producer’s intrinsic motivations, and of collective reputation on individual firm reputation. Cooperatives seem to decrease their reputation when the number of associated members rises, due to free-riding and traceability problems. In contrast with previous research, relying on well-known external consultants does not acquire any outside reputation. Finally, by comparing the regression results on the determinants of national and international reputation it emerges the relevance of the mechanisms of the evaluation process: the higher proximity to the wineries of a national observer permits a better and more technical knowledge of the quality provided, allowing small niche producers with very low productivity to emerge and be known. For the same reason, the national classification system (i.e. the DOCG system) exerts a significant effect only on the international reputation of wineries, but not on the national one where the effect of collective reputation (i.e. the reputation of single denominations like Barolo) seems to prevail.reputation, credibility, asymmetric information, quality standards, Industrial Organization, L14, L15,

Antitrust and Trade Regulation Law

The antitrust laws are a minefield for the uninitiated. Indicative of this reality is the fact that there were no successful civil lawsuits alleging a violation of the antitrust laws brought in Virginia over the past year. A number of conspiracy, monopolization and price discrimination cases were attempted, but they all failed for a variety of reasons outlined in greater detail below. In contrast to the national trend, no antitrust cases with regard to health care were decided in Virginia during the past year. The absence of such cases represents a dramatic change from previous experience, which perhaps reflects the reality that-staff privilege and exclusive dealing cases involving hospitals or physicians are rarely successful under the antitrust laws