Zero Tolerance or Zero Sense?: A Guide to Challenging Zero Tolerance Disciplinary Policies in Public Schools

Article published in the Michigan State University School of Law Student Scholarship Collection

The McDonaldization of Academic Libraries?

George Ritzer, a sociologist at the University of Maryland, has proposed an influential thesis that suggests that many aspects of the fast food industry are making their way into other areas of society. This article explores whether his thesis, known as the McDonaldization thesis, is applicable to academic libraries. Specifically, it seeks to determine to what extent academic libraries may be considered McDonaldized, and if so, what effect McDonaldization may be having on them. It also investigates some possible alternatives to McDonaldization, and their implications for academic libraries

The Failure of Private Ordering and the Financial Crisis of 2008

This Article analyzes the Financial Crisis of 2008 in the context of failures by market participants to engage in private ordering thus leading to opportunistic behavior at the expense of market stability. The Financial Crisis of 2008 offers a decidedly negative verdict on a decades-long project to deregulate financial markets and rely on private ordering mechanisms, including securitization and default swaps, to mitigate opportunistic behavior and improve market efficiency. Although the regulatory approach of the past two decades, which relied in great measure on private parties fending for themselves, helped to generate a number of innovations and positive developments in finance, it ultimately failed to bring about more resilient financial markets. The market for mortgage securitizations found itself subject to adverse selection biases leading to a lemons market for asset-backed securities. At the same time, developments in derivative markets made it possible for central actors there to engage in more risk (moral hazard) than was optimal. Ultimately, parties that should have engaged in private ordering did not. As a consequence, we are left struggling for a new regulatory path forward that recognizes that market participants are human agents subject to the frailties of cognitive limitations, euphoria and perhaps even the occasional self-delusion. What is required is a close examination of the institutional and micro incentives (including incentives of agents) in order to strike a balance between market-based regulation and a more interventionist approach to regulating markets. A more pragmatic approach to market regulation recognizes that the earlier hands-off approach to regulation resulted in over-reliance on weak heuristics and little by way of robust private ordering. A new more pragmatic vision of market regulation will likely stop short of legislating against bubbles, but could, and should, result in less systemic risk and a more sustainable growth trajectory going forward

Response to The Cost of Guilty Breach: What Work Is “Willful Breach” Doing?

The authors of The Cost of Guilty Breach have pointed out an interesting issue—why is it that merger agreements import into their contracts language of moral culpability to establish liability in connection with a breach of the agreement? The authors propose some persuasive hypotheses to explain the presence of “willful breach” language. In this brief response, I mostly agree with the authors and offer a few of my own thoughts about the merger contract and breach

Asset Specificity and Transaction Structures: A Case Study of @Home Corporation

This is a case study of asset specific investments, a class of transactions that is well understood in the context of economic theory but that is under-analyzed empirically. Because specific investments are particular to a single location, use or customer, their next best use is of much lower value than the use for which they are initially intended. Consequently, asset specific investments face the threat of ex post opportunism and allocative inefficiency. This contracting problem is particularly difficult when firms that are otherwise rivals must coordinate individual investments to create a shared resource. In such cases, generating credible expectations of cooperation among rivals is critical to coordinating these investments. The case of @Home Corporation is an example of how rival cable companies were able to employ “hybrid” structures including contractual safeguards like joint ownership, specialized governance devices and economic lock-in to overcome the problem of asset specificity and then build out a nationwide cable-based online service network during the 1990s. As the market subsequently develope alternatives to @Home, the economic lock-in required to induce cooperation failed to materialize, and @Home collapsed. The ultimate failure of @Home points out that those strategies that provide the proper ex ante incentives many not always be durable, leaving contracting parties with less than perfect options

Mergers, MACs, and COVID-19

The conventional wisdom is that MAE/MACs in merger agreements provide an opportunity for buyers to renegotiate merger agreements in the event of intervening adverse events. However, the experience following the COVID-19 outbreak suggests that the conventional wisdom is incorrect or at least overstated. In fact, MAE/MACs shift the risk of exogenous adverse events (like COVID-19) to buyers while leaving only the risks of adverse endogenous and semi-endogenous events with the seller. The consequence of this risk-shifting is to strictly limit the circumstances under which a buyer can credibly lean on a MAE/MAC to threaten to terminate a merger agreement and initiate a renegotiation. Parties to merger agreements appear to have internalized that lesson, as demonstrated by the relative paucity of renegotiations in the immediate aftermath of the COVID-19 outbreak