Showing papers by "Georgetown University Law Center published in 1986"

Practices that (Credibly) Facilitate Oligopoly Co-ordination

Abstract: It is now well established in both the economic and legal literature that successful price co-ordination (either express or tacit) is not inevitable — even in highly concentrated industries protected by insurmountable barriers to entry. The key to this insight is the recognition that even though oligopolists’ fates are interdependent, individual self-interests are not perfectly consonant. As a result, oligopolists may find it difficult to agree on a mutually acceptable co-operative outcome, achieve that outcome smoothly, and maintain it over time in the face of exogenous shocks and private incentives to deviate. In the current language of industrial organisation, the joint profit-maximising point may not be a Nash equilibrium.

Authority, Autonomy, and Choice: The Role of Consent in the Moral and Political Visions of Franz Kafka and Richard Posner

Abstract: In "The Ethical and Political Basis of Wealth Maximization" and two related articles, Professor (now Judge) Richard Posner argues that widely shared pro-autonomy moral values are furthered by wealth-maximizing market transfers, judicial decisions, and legal institutions advocated by members of the "law and economics" school of legal theory. Such transactions, decisions, and institutions are morally attractive, Posner argues, because they support autonomy; wealth-maximizing transfers are those to which all affected parties have given their consent. This Article argues that Posner's attempt to defend wealth-maximization on principles of consent rests on a simplistic and false psychological theory of human motivation. Posner's argument depends on both an explicit assumption that the presence of consent, without more, satisfies the requirements of an ideal of autonomy and on an implicit assumption that people consent to changes in their world in order to improve their well-being. Through a series of contrasts, I will argue that Franz Kafka's fictional works on the nature of law dramatize a dark underside of Posner's argument that the fact of consent morally legitimates our legal, social, and personal worlds. In Kafka's fictional and horrific world, as in Posner's theoretical and ideal one, victim, aggressor, and community all regard this consent as validating an otherwise unappealing state of affairs. Consent insulates these situations from moral criticism and renders them, without more, morally attractive. Kafka's fictional world thus provides a dramatic enactment of Posner's moral claim: Posner argues that consent morally legitimates all; Kafka illustrates what a world so legitimated might look and feel like. In both worlds, good and evil, and right and wrong, lose all meaning when all that matters is whether and to what extent people get exactly what they think they want.