Reputation Failure: The Limits of Market Discipline in Consumer Markets

Many believe that consumersourced reputational information about products would increasingly replace topdown regulation Instead of protecting consumers through coercive laws reputational information gleaned from the wisdom of the crowd would guide consumer decision making There is now a growing pressure to deregulate in diverse fields such as contracts products liability consumer protection and occupational licensingbrbrThis Article presents a common failure mode of systems of reputation Reputation Failure By spotlighting the publicgood nature of reviews rankings and even gossip this Article shows the mismatch between the private incentives consumers have to create reputational information and its social value As a result of this divergence reputational information is beset by participation selection and social desirability biases that systematically distort it The Article argues that these distortions are inherent to most systems of reputation and that they make reputation far less reliable than traditionally understoodbrbrThe limits of reputation highlight the centrality of the law to the future of the marketplace Proper legal institutions can deal not only with the symptoms of reputation failure ” consumer mistakes ” but improve the flow and quality of reputational information thus correcting reputation failures before they arise The Article offers a general framework and explores a number of strategies A more robust system of reputation can preserve consumer autonomy without sacrificing consumer welfar

Payday

Legislation lags behind technology all too often. While trillions of dollars are exchanged in online transactions—safely, cheaply, and instantaneously—workers still must wait two weeks to a month to receive payments from their employers. In the modern economy, workers are effectively lending money to their employers, as they wait for earned wages to be paid. The same worker who taps a credit card to pay for groceries in semiautomated checkout lines depends on dated payroll systems that only transfer payments on a “payday.” Workers, especially those living paycheck-to-paycheck, are hard-pressed to meet their daily needs and turn to expensive, short-term credit products—notably, payday lenders. While the need for credit is a real one, credit providers charge a steep price, often culminating in endless debt spirals. So, why does the payday still exist? This Article studies various explanations—economic, historical, behavioral, and legal. A primary conclusion is that the payday owes its existence to legacy legal architecture. That is, payday is a software problem, not a hardware problem. The hardware—i.e., money and payroll technology—is here. We can pay workers daily; in fact, gig economy workers in developing countries will often be paid more quickly than an American employee for the same work. What holds us back is our legal software: dated Eisenhower-era legislation that failed to anticipate technological change. Surprisingly, even pro-worker legislation, such as minimum wage laws, inadvertently encourages the practice. By revealing the overlooked and dated legal infrastructure that sustains the payday, this Article suggests a path for legal reform. Daily streams of payment to workers are feasible, practical, and far more efficient than most people realize. A focused reform could effectively bring an end to the puzzling and pernicious practice of having workers lend money to their employers while they wait for their payday

Contract Remedies in Action: Specific Performance

How is a right to specific performance of a contract used by parties Despite longstanding scholarly interest in the topic this question has been largely left unexplored This Article presents a qualitative study of parties and attorneys involved in specific performance litigation It investigates how parties choose between remedies whether they negotiate after judgment for specific performance if specific performance is implemented and the difficulties involved in its implementationbrbrThe findings reveal important theoretical oversights and challenges to prevailing law In practice many plaintiffs opt out of specific performance This is puzzling as expectation damages are notoriously under compensatory relative to performance A primary explanation is that it is harder to execute specific relief than a money judgment Focusing attention on execution provides a valuable lesson in exactly these circumstances where US law grants specific performance ” unique goods ” it is least valuable due to a lack of clear standards by which to evaluate performance Another explanation is lawyer\u27s bias attorneys will often advise clients to sue money damages to ensure easy collection of their own feesbrbrAnother set of findings reveal that parties think about specific performance in ways that are inconsistent with both economic and rightsbased theories Sometimes plaintiffs will not negotiate a judgment as they will be reluctant to commodify it in contrast to economic theories and other times they will treat specific performance instrumentally to achieve other ends but performance of the contractual promise which is in tension with rightsbased theories The Article concludes by discussing the theoretical and policy implications of these findings and highlights the ways in which qualitative research could enrich challenge and contextualize contract theor

Generative Interpretation

We introduce generative interpretation, a new approach to estimating contractual meaning using large language models. As AI triumphalism is the order of the day, we proceed by way of grounded case studies, each illustrating the capabilities of these novel tools in distinct ways. Taking well-known contracts opinions, and sourcing the actual agreements that they adjudicated, we show that AI models can help factfinders ascertain ordinary meaning in context, quantify ambiguity, and fill gaps in parties' agreements. We also illustrate how models can calculate the probative value of individual pieces of extrinsic evidence. After offering best practices for the use of these models given their limitations, we consider their implications for judicial practice and contract theory. Using LLMs permits courts to estimate what the parties intended cheaply and accurately, and as such generative interpretation unsettles the current interpretative stalemate. Their use responds to efficiency-minded textualists and justice-oriented contextualists, who argue about whether parties will prefer cost and certainty or accuracy and fairness. Parties--and courts--would prefer a middle path, in which adjudicators strive to predict what the contract really meant, admitting just enough context to approximate reality while avoiding unguided and biased assimilation of evidence. As generative interpretation offers this possibility, we argue it can become the new workhorse of contractual interpretation

The Case against Expanding Defamation Law

It is axiomatic that defamation law protects reputation This proposition ”common sensical pervasive and influential ”is wrong But it is wrong in a very instructive way and a careful examination of its mistaken assumptions carries deep lessons for First Amendment jurisprudence defamation law and the regulation of falsehoods across legal fields brbrThe key fallacy is the failure to recognize that laws not only affect how individuals behave but also how they think Whenever an allegation is made individuals decide whether and how much to trust it based on myriad factors One such factor is the strictness of defamation laws To the extent strict defamation laws deter purveyors of falsehoods they also make statements appear more trustworthy as individuals will reason that few would brave a falsity in the face of strong financial sanctions Thus strict defamation laws have the unintended consequence of making individuals more susceptible to believe those statements that are actually false brbrThis heretofore unrecognized complexity of defamation law has the potential of tipping the scales in First Amendment jurisprudence towards greater protection of free speech and free press Most urgently these findings give pause to the presidential calls to fight ˜fake news\u27 by expanding libel laws by showing that such laws may well backfire and exaggerate the effect of fake new