Showing papers in "Journal of Empirical Legal Studies in 2012"
TL;DR: For example, the authors found that corporate politics, governance, and value relate to each other in the S&P 500 before and after Citizens United, and that the politics-value relationship interacts with capital expenditures, and is stronger in regressions with firm and time fixed effects.
Abstract: How did corporate politics, governance, and value relate to each other in the S&P 500 before and after Citizens United? In regulated and government-dependent industries, politics is nearly universal, and uncorrelated with shareholder power, agency costs, or value. However, 11 percent of CEOs in 2000 who retired by 2011 obtained political positions after retiring and, in most industries, political activity correlates negatively with measures of shareholder power, positively with signs of agency costs, and negatively with shareholder value. The politics-value relationship interacts with capital expenditures, and is stronger in regressions with firm and time fixed effects, which absorb many omitted variables. After the shock of Citizens United, corporate lobbying and PAC activity jumped, in both frequency and amount, and firms politically active in 2008 had lower value in 2010 than other firms, consistent with politics at least partly causing and not merely correlating with lower value. Overall, the results are inconsistent with politics generally serving shareholder interests, and support proposals to require disclosure of political activity to shareholders.
81 citations
TL;DR: This paper found that judicial discretion does not contribute to, and may in fact mitigate, racial disparities in Guidelines sentencing, and that racial disparities are either reduced or little changed when the Guidelines are made less binding.
Abstract: The U.S. Sentencing Guidelines restrict judicial discretion in part to reduce unwarranted racial disparities. However, judicial discretion may also mitigate disparities if judges use discretion to offset disparities emanating from prosecutorial discretion or sentencing policies that have a disparate impact. To measure the impact of judicial discretion on racial disparities, we examine doctrinal changes that affected judges' discretion to depart from the Guidelines. We find that racial disparities are either reduced or little changed when the Guidelines are made less binding. Racial disparities increased after recent Supreme Court decisions declared the Guidelines to be advisory; however, we find that this increase is due primarily to the increased relevance of mandatory minimums, which have a disparate impact on minority offenders. Our findings suggest that judicial discretion does not contribute to, and may in fact mitigate, racial disparities in Guidelines sentencing.
64 citations
TL;DR: In this article, the economic consequences of disclosure and regulation within a context of significant information asymmetry and lenient regulation are analyzed, and the authors find that the choice of the listing method and regulation strictness significantly influence the value and long-run performance of newly listed firms.
Abstract: We analyze the economic consequences of disclosure and regulation within a context of significant information asymmetry and lenient regulation. In Canada, firms can enter the stock market at a prerevenue stage by fulfilling each of the requirements of an initial public offering or using reverse mergers. This backdoor listing method implies a smoother oversight by the securities commission and a shorter process based on private placements. Controlling for several dimensions, including self-selection, we find that the choice of the listing method and regulation strictness significantly influence the value and long-run performance of newly listed firms. These results are consistent with theories suggesting that a commitment by a firm to a stricter regulatory oversight lowers the information asymmetry component of the cost of capital, reducing the heterogeneity of expectations and mispricing.
55 citations
TL;DR: Contrary to the conventional wisdom, there is no evidence to support the claim that malpractice pressure induces physicians to perform a substantially greater number of cesarean sections, but some evidence is found consistent with positive defensive behavior among obstetricians.
Abstract: Using data on physician behavior from the 1979–2005 National Hospital Discharge Surveys (NHDS), I estimate the relationship between malpractice pressure, as identified by the adoption of noneconomic damage caps and related tort reforms, and certain decisions faced by obstetricians during the delivery of a child. The NHDS data, supplemented with restricted geographic identifiers, provides inpatient discharge records from a broad enough span of states and covering a long enough period of time to allow for a defensive medicine analysis that draws on an extensive set of variations in relevant tort laws. Contrary to the conventional wisdom, I find no evidence to support the claim that malpractice pressure induces physicians to perform a substantially greater number of cesarean sections. Extending this analysis to certain additional measures, however, I do find some evidence consistent with positive defensive behavior among obstetricians. For instance, I estimate that the adoption of a noneconomic damage cap is associated with a reduction in the utilization of episiotomies during vaginal deliveries, without a corresponding change in observed neonatal outcomes.
48 citations
TL;DR: This paper used case-control design to identify the effects of living in one of New York City's 330 public housing developments on the probability of stop, frisk, and arrest from 2004-2011, finding that the incidence rate ratio for trespass stops and arrests is more than two times greater in public housing than in the immediate surrounding neighborhoods.
Abstract: Drugs, crime, and public housing are closely linked in policy and politics, and their nexus has animated several intensive drug enforcement programs targeted at public housing residents. In New York City, police systematically conduct “vertical patrols” in public housing buildings, making tens of thousands of Terry stops each year. During these patrols, both uniformed and undercover officers systematically move through the buildings, temporarily detaining and questioning residents and visitors, often at a low threshold of suspicion, and usually alleging trespass to justify the stop. We use a case-control design to identify the effects of living in one of New York City's 330 public housing developments on the probability of stop, frisk, and arrest from 2004–2011. We find that the incidence rate ratio for trespass stops and arrests is more than two times greater in public housing than in the immediate surrounding neighborhoods. We decompose these effects using first differences models and find that the difference in percent black and Hispanic populations in public housing compared to the surrounding area predicts the disparity in trespass enforcement and enforcement of other criminal law violations. The pattern of racially selective enforcement suggests the potential for systemic violations of the Fourteenth Amendment's prohibition on racial discrimination.
44 citations
TL;DR: The authors study how Medicare spending changed after Texas adopted comprehensive tort reform in 2003, including a strict damages cap, and find no evidence that Texas's tort reforms bent the cost curve downward.
Abstract: Will tort reform “bend the cost curve?” Health-care providers and tort reform advocates insist the answer is “yes.” They claim that defensive medicine is responsible for hundreds of billions of dollars in health-care spending every year. If providers and reform advocates are right, once damages are capped and lawsuits are otherwise restricted, defensive medicine, and thus overall health-care spending, will fall substantially. We study how Medicare spending changed after Texas adopted comprehensive tort reform in 2003, including a strict damages cap. We compare Medicare spending in Texas counties with high claim rates (high risk) to spending in Texas counties with low claim rates (low risk), since tort reform should have a greater impact on physician incentives in high-risk counties. Pre-reform, Medicare spending levels and trends were similar in high- and low-risk counties. Post-reform, we find no evidence that spending levels or trends in high-risk counties declined relative to low-risk counties and some evidence of increased physician spending in high-risk counties. We also compare spending trends in Texas to national trends, and find no evidence of reduced spending in Texas post-reform, and some evidence that physician spending rose in Texas relative to control states. In sum, we find no evidence that Texas's tort reforms bent the cost curve downward.
39 citations
TL;DR: The article finds large and statistically significant relations between ex post validity and both textual features of the patents and ex ante aspects of the prosecution history (especially prior art submissions and the existence of internal patent office appeals before issuance).
Abstract: The article uses two hand-collected data sets to implement a novel research design for analyzing the precursors to patent quality. Operationalizing patent “quality” as legal validity, the article analyzes the relation between Federal Circuit decisions on patent validity and three sets of data about the patents: quantitative features of the patents themselves, textual analysis of the patent documents, and data collected from the prosecution histories of the patents. The article finds large and statistically significant relations between ex post validity and both textual features of the patents and ex ante aspects of the prosecution history (especially prior art submissions and the existence of internal patent office appeals before issuance). The results demonstrate the importance of refocusing analysis of patent quality on replicable indicators like validity, and the value that more comprehensive collection of prosecution history data can have for improving the output of the patent prosecution process.
39 citations
TL;DR: In this article, the authors identify instances in the Maryland circuit court in which the case facts are not consistent with the final sentence recommendation - inconsistencies that appear to be the result of human error and exogenous to the preferences of downstream actors.
Abstract: The extent to which rules set by the legislature bind or influence decisions regarding sentence length is central to institutional design and to determining the practical impact of any proposed reform regarding criminal punishment. However, it is generally difficult to identify empirically the impact of sentencing recommendations because court actors may have preferences that are correlated with those outlined in the guidelines. In this article, we take advantage of a new source of identification to study how government actors interact and make decisions in the criminal sentencing process. We identify instances in the Maryland circuit court in which the case facts are not consistent with the final sentence recommendation - inconsistencies that appear to be the result of human error and exogenous to the preferences of downstream actors. We find that even an advisory guidelines system like the one in Maryland has a direct impact on judicial decision making in cases involving drugs and violent crimes. Judges appear eager to go along with an erroneous lesser sentence for violent offenses. In contrast, judges appear to discount mistakes that are too high. This asymmetry does not occur for property and drug offenses that are simpler and more frequently encountered. More generally, experience matters. Error rates are lower for more frequently occurring offense types and lower for those court professionals who complete more of the sentencing worksheets. The net effect of sentencing guidelines on time served appears to be small because parole boards counteract the remaining influence of the guidelines.
36 citations
TL;DR: In this paper, the PSLRA's lead plaintiff provision enlisted institutional investors to monitor class counsel in order to curb the agency costs endemic in securities class actions, and the authors used a sample of 731 settlements to examine the efficacy of this provision and found that cases with public pension lead plaintiffs have larger recoveries and lower fee requests and fee awards than cases with other lead plaintiff types.
Abstract: The PSLRA's lead plaintiff provision enlisted institutional investors to monitor class counsel in order to curb the agency costs endemic in securities class actions. This article uses a sample of 731 settlements to examine the efficacy of this provision. It finds that, even when controlling for institutional self-selection of potentially easier or higher-quality cases, cases with public pension lead plaintiffs have larger recoveries and lower fee requests and fee awards than cases with other lead plaintiff types. The article also finds evidence consistent with the existence of a significant positive externality associated with public pension participation. Over time, fee requests and fee awards have on average declined significantly even in cases without such lead plaintiffs. These findings suggest that public pensions act as more effective monitors of class counsel than traditional plaintiffs and that the lead plaintiff provision has substantially reduced the transactions costs associated with securities class actions.
34 citations
TL;DR: In this article, a hierarchical Bayesian model was developed to predict the incidence and amount of settlements for federal class action securities fraud litigation in the post-PLSRA period, using data from Riskmetrics and identifying several important predictors of settlement incidence.
Abstract: This article develops models that predict the incidence and amount of settlements for federal class action securities fraud litigation in the post-PLSRA period. We build hierarchical Bayesian models using data that come principally from Riskmetrics and identify several important predictors of settlement incidence (e.g., the number of different types of securities associated with a case, the company return during the class period) and settlement amount (e.g., market capitalization, measures of newsworthiness). Our models also allow us to estimate how the circuit court a case is filed in as well as the industry of the plaintiff firm associate with settlement outcomes. Finally, they allow us to accurately assess the variance of individual case outcomes revealing substantial amounts of heterogeneity in variance across cases.
34 citations
TL;DR: In this article, a measure of deviations from expected ideological patterns in the justices' voting was used to assess whether ideological models provide an adequate explanation of consensus on the Court, and they found that case factors that predict voting disorder also predict consensus.
Abstract: Ideological models are widely accepted as the basis for many academic studies of the Supreme Court because of their power in predicting the justices' decision-making behavior. Not all votes are easily explained or well predicted by attitudes, however. Consensus in Supreme Court voting, particularly the extreme consensus of unanimity, has often puzzled Court observers who adhere to ideological accounts of judicial decision making. Are consensus and (ultimately) unanimity driven by extreme factual scenarios or extreme lower court rulings such that even the most liberal and most conservative justice can agree on the case disposition? Or are they driven by other, nonattitudinal influences on judicial decisions? In this article, we rely on a measure of deviations from expected ideological patterns in the justices' voting to assess whether ideological models provide an adequate explanation of consensus on the Court. We find that case factors that predict voting disorder also predict consensus. Based on that finding, we conclude that consensus on the Court cannot be explained by ideology alone; rather, it often results from ideology being outweighed by other influences on justices' decisions.
TL;DR: It is found that the odds of adverse birth outcomes are not associated with premium levels or tort reforms, and the adoption of liability‐limiting reforms is unlikely to have an adverse impact on outcomes.
Abstract: Previous research has identified an association between malpractice liability risk levels in a state and greater use of cesarean sections in obstetrical care. However, it is unclear whether such practice changes are associated with better birth outcomes. Using a mixed-effects model, we investigate the impact of malpractice risk, as measured by malpractice insurance premiums and various state tort reforms, on four adverse birth outcomes. We use a longitudinal research design to examine millions of individual births from 51 jurisdictions over 12 years (1991–2002). We find that the odds of adverse birth outcomes are not associated with premium levels or tort reforms. Our results suggest that rather than having a socially desirable deterrent effect on substandard care, liability pressure may produce a level of precaution taking in obstetrics that is higher than socially optimal. By the same token, the results also suggest that the adoption of liability-limiting reforms is unlikely to have an adverse impact on outcomes.
TL;DR: In this paper, an empirical analysis of judicial behavior in the Spanish Supreme Court, a court of law dominated by career judges, is presented, which suggests that a career judiciary is not strongly politically aligned and favors consensus, formalism and dissent avoidance.
Abstract: This article develops an empirical analysis of judicial behavior in the Spanish Supreme Court, a court of law dominated by career judiciary. We focus on administrative review. The evidence seems to confirm that a career judiciary is not strongly politically aligned and favors consensus, formalism, and dissent avoidance. Notwithstanding, we detect a significant relationship between the decisions of the Court and the interest of the government. We suggest that our empirical analysis makes a significant contribution to undermine the myth of political insulation by career judges. Unlike previous literature, however, we argue and illustrate that judicial politicization can be consistent with consensus and dissent avoidance.
TL;DR: In this paper, the authors study 1,410 mandatory and 48 discretionary jurisdiction criminal law case outcomes in cases appealed to the Israel Supreme Court in 2006 and 2007 to assess influences on case outcomes.
Abstract: We study 1,410 mandatory jurisdiction and 48 discretionary jurisdiction criminal law case outcomes in cases appealed to the Israel Supreme Court in 2006 and 2007 to assess influences on case outcomes. A methodological innovation is accounting for factors—case specialization, seniority, and workload—that modify random case assignment. To the extent one accounts for nonrandom assignment, one can infer that case outcome differences are judge effects. In mandatory jurisdiction cases, individual justices cast 3,986 votes and differed by as much as 15 percent in the probability of casting a vote favoring defendants. Female justices were about 2 to 3 percent more likely than male justices to vote for defendants but this effect is sensitive to including one justice. Defendant gender was associated with outcome, with female defendants about 17 percent more likely than male defendants to receive a favorable vote on appeal. Our data’s samples of mandatory and discretionary jurisdiction cases allow us to show that studies limited to discretionary jurisdiction case outcomes can distort perceptions of judges’ preferences. Justices’ ordinal rank in rate of voting for defendants or the state was uncorrelated across mandatory and discretionary jurisdiction cases. For example, the justice who sat on the most criminal cases was the fourth (of 16 justices) most favorable to the state in mandatory jurisdiction cases but the 12th most favorable in discretionary jurisdiction cases. This result casts doubt on some inferences based on studies of judges on discretionary jurisdiction courts, such as the U.S. Supreme Court, in which only discretionary case outcomes are observed.
TL;DR: In this article, the authors identify instances in the Maryland circuit court in which the case facts are not consistent with the final sentence recommendation, which appear to be the result of human error and exogenous to the preferences of downstream actors.
Abstract: The extent to which rules set by the legislature bind or influence decisions regarding sentence length is central to institutional design and to determining the practical impact of any proposed reform regarding criminal punishment. However, it is generally difficult to identify empirically the impact of sentencing recommendations because court actors may have preferences that are correlated with those outlined in the guidelines. In this article, we take advantage of a new source of identification to study how government actors interact and make decisions in the criminal sentencing process. We identify instances in the Maryland circuit court in which the case facts are not consistent with the final sentence recommendation—inconsistencies that appear to be the result of human error and exogenous to the preferences of downstream actors. We find that even an advisory guidelines system like the one in Maryland has a direct impact on judicial decision making in cases involving drugs and violent crimes. Judges appear eager to go along with an erroneous lesser sentence for violent offenses. In contrast, judges appear to discount mistakes that are too high. This asymmetry does not occur for property and drug offenses that are simpler and more frequently encountered. More generally, experience matters. Error rates are lower for more frequently occurring offense types and lower for those court professionals who complete more of the sentencing worksheets. The net effect of sentencing guidelines on time served appears to be small because parole boards counteract the remaining influence of the guidelines.
TL;DR: For example, this paper found that although the threat of potential criminal sanctions had a large and statistically significant effect on subjects' stated willingness to engage in risky behavior, potential tort liability did not.
Abstract: For nearly four decades, economic analysis has dominated academic discussion of tort law. Courts also have paid increasing attention to the potential deterrent effects of their tort decisions. But at the center of each economic model and projection of cost and benefit lies a widely accepted but grossly undertested assumption that tort liability in fact deters tortious conduct. This article reports the results of a behavioral science study that tests this assumption as it applies to individual conduct. Surveying over 700 first-year law students, the study presented a series of vignettes, asking subjects to rate the likelihood that they would engage in a variety of potentially tortious behaviors under different legal conditions. Students were randomly assigned one of four surveys, which differed only in the legal rules applicable to the vignettes. In summary, the study found that although the threat of potential criminal sanctions had a large and statistically significant effect on subjects' stated willingness to engage in risky behavior, the threat of potential tort liability did not. These findings call into question widely accepted notions about the very foundations of tort law.
TL;DR: In this article, the authors focus on the pricing of cell phone service and evaluate the explanatory power of three accounts of the three-part tariff: a rational choice account, a behavioral account, and a second behavioral account that posits that some consumers overestimate their average future usage while others underestimate it.
Abstract: The cell phone service market is an economically significant market that has substantially increased consumer welfare. In this article, we focus on the pricing of cell phone service. The common pricing structure is a three-part tariff comprising: (1) a monthly charge; (2) a fixed number of minutes that the monthly charge pays for; and (3) a per-minute price for minutes beyond the plan limit. Using a unique data set of consumer-level monthly billing and usage information for 3,730 consumers at a single wireless provider, we evaluate the explanatory power of three accounts of the three-part tariff: a rational choice account; a behavioral account proposed by Grubb (2009) that supposes that consumers are overconfident in their estimates of their future usage; and a second behavioral account that posits that some consumers overestimate their average future usage while others underestimate it. We quantify the mistakes that consumers make in plan choice and, extrapolating from our data, estimate that these mistakes cost U.S. consumers over $13 billion annually. Our analysis suggests that regulation mandating the disclosure of product use information can be socially desirable in the cell phone service market.
TL;DR: In this article, the authors report an experiment that tests the hypothesis that, compared to traditional experts, such "blinded experts" will be more persuasive to jurors, and they found that blind experts, testifying on either side, were perceived as significantly more credible, and were more highly persuasive, in that they doubled or halved the odds of a favorable verdict, and increased or decreased simulated damages awards by over $100,000.
Abstract: “Blind expertise” has been proposed as an institutional solution to the problem of bias in expert witness testimony in litigation (Robertson 2010). At the request of a litigant, an intermediary selects a qualified expert and pays the expert to review a case without knowing which side requested the opinion. This article reports an experiment that tests the hypothesis that, compared to traditional experts, such “blinded experts” will be more persuasive to jurors. A national sample of mock jurors (N = 275) watched an online video of a staged medical malpractice trial, including testimony from two medical experts, one of whom (or neither, in the control condition) was randomly assigned to be a blind expert. We also manipulated whether the judge provided a special jury instruction explaining the blinding concept. Descriptively, the data suggest juror reluctance to impose liability. Despite an experimental design that included negligent medical care, only 46 percent of the jurors found negligence in the control condition, which represents the status quo. Blind experts, testifying on either side, were perceived as significantly more credible, and were more highly persuasive, in that they doubled (or halved) the odds of a favorable verdict, and increased (or decreased) simulated damages awards by over $100,000. The increased damages award appears to be due to jurors hedging their damages awards, which interacted with the blind expert as a driver of certainty. Use of a blind expert may be a rational strategy for litigants, even without judicial intervention in the form of special jury instructions or otherwise.
TL;DR: In this paper, the authors evaluate the selection of governing law and forum clauses in 1,020 merger agreements between public firms from 2004-2008 and conclude that during this sample period, Delaware was increasingly valued by the corporate actors who influence incorporation choices and competed strongly for legal products beyond its primary one, the public company charter.
Abstract: Despite its dominance of the market for public company corporate charters, Delaware has come under increasing fire for losing ground to other states in the competition to retain corporate litigation. To test this criticism, we evaluate the selection of governing law and forum clauses in 1,020 merger agreements between public firms from 2004–2008. This sample provides a clean test of the real-time attractiveness of states' judiciary during the sample period. In contrast to prior research, we find that Delaware's attractiveness to merging parties has increased in recent years. Parties appear to respond to exogenous events, evidenced by the fact that top-tier legal advisors, foreign acquirers, transactions surrounded by greater financial uncertainty, and larger transactions tend to select Delaware's forum over other venues. We conclude that during our sample period, Delaware was increasingly valued by the corporate actors who influence incorporation choices, and competed strongly for legal products beyond its primary one, the public company charter. This is important because a failure to retain corporate litigation can possibly lead to an erosion in Delaware's prominence in the public company chartering market.
TL;DR: The authors found that African Americans are much more likely to file Chapter 13 bankruptcy than debtors of other races, even after controlling for financial, demographic, and legal factors that might favor a Chapter 13 filing.
Abstract: We report on racially disparate uses of Chapter 13 bankruptcy. Currently, approximately 1,500,000 bankruptcy petitions are filed each year, with about 30 percent of those petitions being Chapter 13 cases. Although Chapter 13 can offer some legal advantages for persons seeking to protect valuable assets such as a house or automobile, it generally offers less relief and costs more than the primary alternative available to consumers, Chapter 7. The chief feature of a Chapter 13 bankruptcy case is a plan under which the debtor must devote all his or her disposable income to creditor repayment over a three- to five-year period. Chapter 7, in contrast, requires only that the debtor turn over all nonexempt assets, with over 90 percent of Chapter 7 debtors having no assets to turn over. This article reports on two studies, one using data from actual bankruptcy cases and the other involving an experiment with a national random sample of bankruptcy attorneys. Because the court system does not collect racial data on bankruptcy filers, the first study uses data from the Consumer Bankruptcy Project. Even after controlling for financial, demographic, and legal factors that might favor a Chapter 13 filing, African Americans are much more likely to file Chapter 13, as compared to debtors of other races. The second study reports on an experimental vignette sent to a random sample of consumer bankruptcy attorneys who represented debtors. The attorneys were more likely to recommend Chapter 13 when the hypothetical debtors were a couple named “Reggie & Latisha,” who attended an African Methodist Episcopal Church, as compared to a couple named “Todd & Allison,” who attended a United Methodist Church. Also, attorneys viewed “Reggie & Latisha” as having better values and being more competent when they expressed a preference for Chapter 13 as compared to “Todd & Allison,” who were seen as having better values and being more competent when they wanted to file Chapter 7, giving them a “fresh start.” Previous research and the results from the present experimental vignette study suggest that consumer bankruptcy attorneys may be playing a very important, although likely unintentional, role in creating the racial disparity in chapter choice. Together, the two studies raise questions about the fairness of the bankruptcy system.
TL;DR: In this article, the authors investigate changes in where suits are brought using four hand-collected data sets capturing different types of suits: class action lawsuits filed in large MA, derivative suits alleging option backdating, and cases against public company directors that generate one or more publicly available opinions between 1995 and 2009.
Abstract: Delaware's expert courts are seen as an integral part of the state's success in attracting incorporation by public companies. However, the benefit that Delaware companies derive from this expertise depends on whether corporate lawsuits against Delaware companies are brought before the Delaware courts. We report evidence that these suits are increasingly brought outside Delaware. We investigate changes in where suits are brought using four hand-collected data sets capturing different types of suits: class action lawsuits filed in (1) large MA (3) derivative suits alleging option backdating; and (4) cases against public company directors that generate one or more publicly available opinions between 1995 and 2009. We find a secular increase in litigation rates for all companies in large MA and (2) suits being filed both in Delaware and elsewhere in large M&A transactions. Overall, Delaware courts are losing market share in lawsuits, and Delaware companies are gaining lawsuits, often filed elsewhere. We find some evidence that the timing of specific Delaware court decisions that affect plaintiffs' firms coincides with the movement of cases out of Delaware. Our evidence suggests that serious as well as nuisance cases are leaving Delaware. The trends we report potentially present a challenge to Delaware's competitiveness in the market for incorporations.
TL;DR: This paper examined the role of class, school prestige, and law school grades on the career earnings of lawyers and the success of big firm associates in becoming partners, finding that social class strongly conditions who goes to law school, but no longer predicts much about postgraduate outcomes.
Abstract: If we study the 40,000 law graduates who join the legal profession each year, how well can we predict their future careers? How much of their future is predicted by their social class? The law school they attend? Their law school grades? This article undertakes the first in-depth examination of these questions. Drawing on several large and recently released data sets, we examine the role of class, school prestige, and law school grades on the career earnings of lawyers and the success of big firm associates in becoming partners. We find that social class strongly conditions who goes to law school, but no longer predicts much about postgraduate outcomes. Law school prestige is important, but it is generally trumped by law school performance (as measured by law school grades). Law school grades reflect both personal characteristics not well captured by prelaw credentials, and one's relative position in a law school class as measured by prelaw credentials. Our findings suggest that there is little empirical basis for the overwhelming importance students assign to “eliteness” in choosing a law school.
TL;DR: For example, the authors found that when deciding whether to exclude evidence found during a search conducted without probable cause, participants are sensitive to a police officer's motive (clean vs. dirty), but not to alternative means of punishing those officers (civil suit, citizen-police review board).
Abstract: Historically, the Supreme Court has offered two justifications for the exclusionary rule: (1) it protects the integrity of the judicial system from “dirty” evidence and (2) it deters illegal searches by the police. The former justification has mostly fallen out of favor. Today, decisions turn on whether the rule would, in fact, deter illegal searches in a given class of cases. As such, most empirical studies about the rule have focused on whether or not the rule leads to fewer police searches (illegal or otherwise), or to fewer criminal convictions. This study takes a completely different approach, assessing support for the two competing justifications for the rule. Two experiments show support for the integrity justification for the rule, but not for the deterrence justification. Specifically, when deciding whether to exclude evidence found during a search conducted without probable cause, participants are sensitive to a police officer's motive (clean vs. dirty), but not to alternative means of punishing those officers (civil suit, citizen-police review board). A third experiment examines the integrity rationale in more detail. Participants who were obligated to use dirty evidence at trial disproportionately selected a bottle of Purell over a pen as a thank-you gift versus participants who were able to exclude that evidence. In other words, the exclusionary rule seems to protect the courts from being metaphorically tainted. These findings are important given that the rule is not constitutionally mandated. The Supreme Court has held that the rule can be ignored to the extent that it (1) does not achieve its goals and (2) undermines the perceived legitimacy of the courts by the public. Given this, the Court needs to be right about what those goals are, and whether or not its current deterrence-based jurisprudence enhances legitimacy. These experiments suggest the possibility that reinvigorating the integrity justification would serve the ends of the rule better than current doctrine does.
TL;DR: The authors used a data set of 13th-century English cases to test the Priest-Klein selection model and found that the results were consistent with the predictions of the 1984 article, as well as with the asymmetric-information selection models developed by Hylton and Shavell.
Abstract: Priest and Klein's seminal 1984 article argued that litigated cases differ systematically and predictably from settled cases. This article tests the Priest-Klein selection model using a data set of 13th-century English cases. These cases are especially informative because juries rendered verdicts even in settled cases, so one can directly compare verdicts in settled and litigated cases. The results are consistent with the predictions of the Priest-Klein article, as well as with the asymmetric-information selection models developed by Hylton and Shavell.
TL;DR: For example, this article found that residential stability and willingness to serve distinguished former jurors from those who never been summoned or had never been questioned for a case, and that neither race nor ethnicity accounted for participation, a finding replicated in data from another state.
Abstract: Using a survey of a random sample of 1,380 Texas adults, we consider what factors distinguish those who have ever had an opportunity to serve on a jury from those who have not (“lifetime participation”). Residential stability and willingness to serve distinguished former jurors from those who had never been summoned or had never been questioned for a case. After controlling for age, neither race nor ethnicity accounted for participation, a finding replicated in data from another state. No factors differentiated former jurors from people who have been questioned but never selected. Our results strongly indicate that improvements to participation should focus on attrition that occurs before potential jurors reach the courtroom.
TL;DR: In this paper, the authors present four experiments testing the prediction that assignment of contract rights erodes the moral obligation to perform, and the results of these four experiments provide support for the proposition that a permissible and apparently neutral transfer of a contractual right may nonetheless reduce the likelihood or quality of performance by weakening the norm of reciprocity.
Abstract: This article presents four experiments testing the prediction that assignment of contract rights erodes the moral obligation to perform. The first three studies used an experimental laboratory game designed to model contractual exchange. Players in the games were less selfish with a previously generous partner than with a third-party player who had purchased the right to the original partner's expected return. The fourth study used a web-based questionnaire, and found that subjects reported that they would require less financial incentive to breach an assigned contract than a contract held by the original promisee. The results of these four experiments provide support for the proposition that a permissible and apparently neutral transfer of a contractual right may nonetheless reduce the likelihood or quality of performance by weakening the norm of reciprocity.
TL;DR: In this paper, the authors used a newly available database of consumer credit card agreements to take the first, in-depth empirical look at why credit card issuers use arbitration clauses.
Abstract: This article uses a newly available database of consumer credit card agreements to take the first, in-depth empirical look at why credit card issuers use arbitration clauses. Based on a sample of credit card agreements made available by 298 issuers under the Credit Card Accountability Responsibility and Disclosure Act of 2009, it finds that while most credit card agreements include arbitration clauses, the substantial majority of credit card issuers (247 of 298, or 82.9 percent) do not use arbitration clauses in their credit card agreements. The article also finds that credit card issuers are more likely to use arbitration clauses when they (1) specialize in making credit card loans; (2) make riskier credit card loans; and (3) have a larger credit card portfolio. Conversely, issuers are less likely to use arbitration clauses when they are (1) mutually owned (i.e., credit unions) rather than shareholder owned (i.e., banks); and (2) are located in states in which class arbitration waivers are unenforceable. These empirical findings have potentially important implications for a number of timely policy questions, such as: What sorts of options are available to consumers who wish to obtain a credit card that is not subject to an arbitration clause? How might increased regulation of arbitration (whether by Congress or by the Consumer Financial Protection Bureau) affect the market for credit card loans? and How are businesses likely to respond to the Supreme Court's recent decision in AT&T Mobility LLC v. Concepcion?
TL;DR: This article found that people are able to make explicit distinctions about the states of mind of others that more or less correspond to legally relevant categories, and when asked to assign consequences, their hot moral judgments play a larger role than do their cold cognitive categorizations.
Abstract: In a series of experimental studies, we asked people to assign appropriate civil and/or criminal liability to individuals who cause harm with various culpable states of mind and kinds of knowledge. The studies are principally aimed at two related issues. First, do people actually separate the various states of mind conceptually? How much knowledge, and what kind of knowledge, regarding something that may go wrong (understanding risk) is sufficient to count as knowing that something will go wrong (having knowledge legally equivalent to intent)? Second, to the extent that people distinguish among the states of mind that help define normative behavior, how much do those distinctions contribute to people's judgments of civil liability? Our studies show that people are able to make explicit distinctions about the states of mind of others that more or less correspond to legally relevant categories. Yet, when asked to assign consequences, their “hot” moral judgments play a larger role than do their “cold” cognitive categorizations.
TL;DR: In this paper, the effects of competition on risk-taking behavior and firm performance within the financial services industry are explored by exploiting a regulatory change that allowed new players to enter the British mutual fund industry.
Abstract: This article explores the effects of competition on risk-taking behavior and firm performance within the financial services industry. It does so by exploiting a regulatory change that allowed new players to enter the British mutual fund industry. Exploiting this regulatory shock, we trace nontrivial linkages among industry competition, risk taking, and performance. Greater competition followed the regulatory liberalization, leading to a significant increase in risk-taking behavior of funds. Competition generated performance efficiencies, forcing underperforming funds to exit and halting earlier value destruction. Competition, however, did not produce tangible cost savings for consumers of investment services.
TL;DR: This paper used factors independent from neighborhood indicators, specifically school and parish leadership characteristics, to predict which Catholic elementary schools might close in urban Chicago, and used that factor, with sociodemographic variables to predict police-beat-level crime rates.
Abstract: Our previous work has suggested that the closure of Catholic elementary schools generates disorder and suppresses social cohesion in urban neighborhoods—findings that support the conclusion that Catholic elementary schools create neighborhood social capital. We extend our inquiry here by asking if Catholic school closures might also affect crime rates. Using factors independent from neighborhood indicators, specifically school and parish leadership characteristics, we created an exogenous factor that predicted which Catholic schools might close in urban Chicago, and used that factor, with sociodemographic variables, to predict police-beat-level crime rates. We find that Catholic school closures slow the rate of decline of crime in a police beat compared to beats with no Catholic school closure. We also find that higher perceived disorder predicted higher initial levels of crime. Our findings provide insight into which policing policies are effective and the benefits of involving religious institutions in crime-prevention efforts. They also lend support to “school-choice” mechanisms, such as vouchers or tax credits, that would provide financial resources to students attending urban Catholic schools.