2024-03-29T07:20:45Zhttp://open-archive.highwire.org/handler
oai:open-archive.highwire.org:aler:8/3/4392015-05-20HighWireOUPaler:8:3
The Economic Consequences of Accounting Fraud in Product Markets: Theory and a Case from the U.S. Telecommunications Industry (WorldCom)
Sadka, Gil
Articles
This article studies the effects of accounting fraud on the product market. The model presented in this article relies on the idea that a firm’s financial statements and actions must be consistent with each other. If the firm is behaving fraudulently, insofar as its financial statements portray it as relatively efficient, the firm must act accordingly, that is, increase its market share and/or reduce its prices. If the firm does not behave in keeping with its fraudulent financials, the market would be able to identify the fraud. As such, the manager will take actions and make pricing decisions that are not optimal. These actions can have a significant adverse effect on social welfare. This article utilizes the WorldCom case to illustrate the implications of such fraudulent behavior and its economic significance in product markets.
Oxford University Press
2006-09-01 00:00:00.0
TEXT
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http://aler.oxfordjournals.org/cgi/content/short/8/3/439
http://dx.doi.org/10.1093/aler/ahl012
en
Copyright (C) 2006, American Law and Economics Association
oai:open-archive.highwire.org:aler:8/3/4762015-05-20HighWireOUPaler:8:3
Profit Neutrality in Licensing: The Boundary Between Antitrust Law and Patent Law
Maurer, Stephen M.
Scotchmer, Suzanne
Articles
We address the patent/antitrust conflict in licensing and develop three guiding principles for deciding acceptable terms of license. <it>Profit neutrality</it> holds that patent rewards should not depend on the rightholder’s ability to work the patent himself. <it>Derived reward</it> holds that the patentholder’s profits should be earned, if at all, from the social value created by the invention. <it>Minimalism</it> holds that licenses should not be more restrictive than necessary to achieve neutrality. We argue that these principles are economically sound and rationalize some key decisions of the twentieth century such as <it>General Electric</it> and <it>Line Material</it>.
Oxford University Press
2006-09-01 00:00:00.0
TEXT
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http://aler.oxfordjournals.org/cgi/content/short/8/3/476
http://dx.doi.org/10.1093/aler/ahl013
en
Copyright (C) 2006, American Law and Economics Association
oai:open-archive.highwire.org:aler:8/3/5232015-05-20HighWireOUPaler:8:3
Incomplete Contracts with Asymmetric Information: Exclusive Versus Optional Remedies
Avraham, Ronen
Liu, Zhiyong
Articles
Scholars have been debating for years the comparative advantage of damages and specific performance. Yet, most work has compared a single remedy contract to another single remedy contract. But contract law provides the non-breaching party with a variety of <it>optional</it> remedies to choose from in case of a breach, and parties themselves regularly write contracts which provide such options. In this article, we start filling this gap by studying multi-remedy contracts. Specifically, we compare a contract that grants the non-breaching party an option to choose between liquidated damages and specific performance with an exclusive remedy contract, which restricts the non-breaching party’s remedy to liquidated damages only.
Oxford University Press
2006-09-01 00:00:00.0
TEXT
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http://aler.oxfordjournals.org/cgi/content/short/8/3/523
http://dx.doi.org/10.1093/aler/ahl011
en
Copyright (C) 2006, American Law and Economics Association
oai:open-archive.highwire.org:aler:8/3/5622015-05-20HighWireOUPaler:8:3
Uncovering Discrimination: A Comparison of the Methods Used by Scholars and Civil Rights Enforcement Officials
Ross, Stephen L.
Yinger, John
Articles
The responsibility for uncovering discrimination falls on both scholars and civil rights enforcement officials. Scholars ask whether discrimination exists and why it arises; enforcement officials ask whether particular firms are discriminating. This article investigates the points of commonality and divergence in these two lines of inquiry. We demonstrate a need for more research focusing on discrimination as defined by the law and for more enforcement building on the methodological lessons in the research literature. We also show that disparate-impact discrimination cannot be identified with current enforcement tools but could be identified with methods in the scholarly literature.
Oxford University Press
2006-09-01 00:00:00.0
TEXT
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http://aler.oxfordjournals.org/cgi/content/short/8/3/562
http://dx.doi.org/10.1093/aler/ahl015
en
Copyright (C) 2006, American Law and Economics Association
oai:open-archive.highwire.org:aler:8/3/6152015-05-20HighWireOUPaler:8:3
Freakonomics: Scholarship in the Service of Storytelling
DiNardo, John
Book Reviews
<it>Freakonomics: A Rogue Economist Explores the Hidden Side of Everything</it> by Steven D. Levitt and Stephen J. Dubner is certainly popular. Indeed, my search for something comparable took me back more than 120 years.<cross-ref type="fn" refid="fn1">1</cross-ref> Even with the uncertainty about what constitutes a best seller, it is clear that the book has reached a huge audience, especially for a book about “economics.” As I write this, it has been on the <it>New York Times</it> best-seller list for 46 weeks, and having started on the <it>Publisher’s Weekly</it> Hardcover Nonfiction best-seller list in the 12th position on April 25, 2005, it has hovered in the top ten thereafter. Moreover, as reported on the Freakonomics web site, the book has garnered a large international audience, and the book is on various “best of” lists. Levitt and Dubner have sought a broad and diverse audience for their collection of stories: Levitt has been on “The 700 Club” (a talk show by conservative businessman and religious broadcaster Pat Robertson) and “The Daily Show with Jon Stewart” (a center–left parody of the news and news reporting) among other places. Both the authors write a column for the <it>New York Times Magazine</it> as well as participate in an active blog (just navigate from the book’s web site to the URL <inter-ref locator="http://www.freakonomics.com," locator-type="url">http://www.freakonomics.com,</inter-ref> where, among other things, they respond to a large number of readers’ inquiries<cross-ref type="fn" refid="fn2">2</cross-ref>). The book comes complete with more than 20(!) pages of references and citations as diverse as a radio talk show caller’s unverified claim that her niece was named “Shithead” (pronounced SHUH-teed) as well as Kenneth Arrow’s “A Theory of Discrimination” and includes a two-and-a-half page tabulation of average years of mother’s education by child’s first name. The extensive footnotes should not mislead: <it>Freakonomics</it> does not take its subjects very seriously. In <it>Freakonomics</it>, Levitt’s scholarship and the scholarship of others are put in the service of telling a “good story” rather than the other way around. Indeed, if the many reviews of the book are any guide, many find the book “entertaining” even if they felt that “Levitt’s only real message is to encourage confrontational questions” (<cross-ref type="bib" refid="Berg-2005">Berg, 2005</cross-ref>). One reviewer found the stories so compelling that he went so far as to suggest that “criticizing <it>Freakonomics</it> would be like criticizing a hot fudge sundae” (<cross-ref type="bib" refid="Landsburg-2005">Landsburg, 2005</cross-ref>).
Oxford University Press
2006-09-01 00:00:00.0
TEXT
text/html
http://aler.oxfordjournals.org/cgi/content/short/8/3/615
http://dx.doi.org/10.1093/aler/ahl014
en
Copyright (C) 2006, American Law and Economics Association
oai:open-archive.highwire.org:aler:8/3/6272015-05-20HighWireOUPaler:8:3
Erratum
Erratum
Oxford University Press
2006-09-01 00:00:00.0
TEXT
text/html
http://aler.oxfordjournals.org/cgi/content/short/8/3/627
http://dx.doi.org/10.1093/aler/ahl016
en
Copyright (C) 2006, American Law and Economics Association