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The collection of all scholarly commentary on law, economics, and more

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Why Study Economics?

There are a lot of good reasons. Perhaps these will be the subject of another post. But earning potential has never been a big one. I recall an economics professor of mine during my undergraduate years at UCSD frequently describing the job of an economist as “talking money without ever earning any.” A recent study ... Why Study Economics?

IPO Allocation Abuse Rules

A recent W$J article entitled “Can Bankers Resist the Temptation?� notes that the IPO market is heating up and wonders whether underwriters can resist the temptation of allocating hot IPOs to hedge funds for flipping. Hedge funds now account for as much as a third of IPO allocations and “an increasing chunk of Wall Street’s ... IPO Allocation Abuse Rules

Grimes on the KFTC's Microsoft Decision

Warren Grimes of the American Antitrust Institute (and Southwestern Law School) defends the Korea Fair Trade Commission’s recent Microsoft decision holding that Microsoft abused its dominant position by bundling Instant Messenger and Windows Media Player technologies to its operating system, and its order that Microsoft must sell unbundled versions. Grimes central point is that not ... Grimes on the KFTC's Microsoft Decision

More on JD/PhD's in Law and Economics

My colleage Francesco Parisi has chimed in on Vandy’s new law and economics program in the Chronicle of Higher Education. Though I cannot click through to the actual article in the Chronicle, Francesco notes that GMU has long had a “Law and Economics” Ph.D. program, offering six different degrees in law and economics (as opposed ... More on JD/PhD's in Law and Economics

Mutual Fund Name Changes

Today’s W$J has an article about mutual fund name changes entitled “The Bull Market in Mutual-Fund Name Changes.” Last year 719 funds changed their names, up from 505 the year before. Some name changes are the result of acquisitions. For example, following the acquisition of various Strong mutual funds, Wells Fargo changed their names to ... Mutual Fund Name Changes

Making markets seem thicker

The Internet (read: inexpensive information dissemination) comes to the notoriously informationally-challenged housing market. The WSJ reports on a new website, zillow.com, which, as the WSJ says, uses data such as tax records, sales history and the actual prices of “comparables” — homes in your area that are similar to yours — to come up with ... Making markets seem thicker

Oakland’s Fast-Food Tax — Madness or Genius?

From the good folks who brought us Ebonics as a second language (wait, make that first language) comes another creative policy proposal. On Tuesday night, the Oakland City Council decided to deal with its local trash problem by taxing fast-food restaurants up to $3,815 per year to pay for street clean-up. (Reports here and here.) ... Oakland’s Fast-Food Tax — Madness or Genius?

Vonage IPO and VoIP

Vonage, a provider of broadband telephone services, filed an IPO registration statement with the SEC today for the sale of $250 million of common stock. Basically, Vonage offers a cheap alternative to traditional phone service. For about $25 per month, you get unlimited calls to anywhere in the U.S. and Canada with all the bells ... Vonage IPO and VoIP

IPO Marketing Practices During the Waiting Period

The make or break time for an IPO from the underwriter’s perspective is the waiting period (the period of time beginning when the IPO registration statement is filed with the SEC and ending when the SEC declares the registration statement effective). This is when the underwriting syndicate is bookbuilding, i.e. actively marketing the deal and ... IPO Marketing Practices During the Waiting Period

Accurately Disclosing Oil Reserves

Yesterday’s W$J reported on an effort by oil companies to change the way reserves are reported in securities filings. SEC rules, it seems, mandate that reserves be measured in a manner that understates the actual amount of available oil. For example, the rules (available here) require that only proven reserves (those for which there is ... Accurately Disclosing Oil Reserves

Directors' Duties Even in Solvent Firms

In the Ribstein & Alces paper mentioned below by Keith, Ribstein & Alces write: The problem with holding that directors have duties to the “corporation” is that the corporation is composed of contracts among claimants with varying and possibly conflicting interests in the firm’s wealth. In solvent firms this is not troubling. Serving the firm’s ... Directors' Duties Even in Solvent Firms

Paternalism and the iPod, Part II: The Behavioral Economics of Apple?

Dave Hoffman over at Concurring Opinions asks: “Is Apple Exploiting Consumer Irrationality?” Dave is worried that consumers’ continuing iPod purchases may be irrational in the face of evidence that many iPod’s fail within their one year warranty period or shortly after, and that this strategy might explain Apple’s “growing market strength.” How likely are consumer ... Paternalism and the iPod, Part II: The Behavioral Economics of Apple?