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Bound print copies of George Mason School of Law’s working paper series on law and economics are available in the Law Library. The bound set often includes initial drafts of papers. Search Mason’s Classic Catalog to locate a working paper.

Recent Working Papers:


Optimal Imprisonment and Fines with Non-Discriminatory Sentences

By Nuno Garoupa, Murat Mungan

ABSTRACT:

When considering the optimal combination of monetary sanctions (costless) and imprisonment (costly) as deterrents, the traditional result is that imprisonment should not be imposed until monetary sanctions are completely exhausted. Therefore, imprisonment acts as a mere supplement to maximal fines. We show that, when wealth varies across individuals, it could be efficient to use imprisonment in combination with fines that do not exhaust the wealth of all individuals. The rationale is that, generally, it is impractical to tailor criminal sanctions as a continuous function of individuals' wealth.

Infocommunications Media Development Authority (IMDA) Convergence of Competition Code for the Media and Telecommunications Markets, Comment of the Global Antitrust Institute, Antonin Scalia Law School, George Mason University

By Tad Lipsky, Joshua Wright, Douglas Ginsburg, John Yun

ABSTRACT:

This Comment is submitted to the Infocommunications Media Development Authority (IMDA) for consideration in relation to its Convergence of Competition Code for the Media and Telecommunications Markets. Specifically, we address Part XII: Competition in a Digital Economy, where the IMDA engages in an important discussion regarding the role of competition policy in the digital economy. It is absolutely critical to get competition policy right in this key sector given that innovation drives most of the growth in a modern economy. We submit this Comment based upon our extensive experience and expertise in antitrust law and economics. As an organization committed to promoting sound economic analysis as the foundation of antitrust enforcement and competition policy, the Global Antitrust Institute (“GAI”) commends the IMDA for inviting discussion in regard to the important topics covered in the Report.

A Perfect Storm: Religion, Sex and Administrative Law

By Helen Alvaré

ABSTRACT:

Agency regulations on sexual and reproductive health easily provoke religious conflict while failing to demonstrate convincing medical excellence.

This is a consequence of two agency characteristics—political partisanship and agencies’ claims to superior expertise—intersecting with U.S. churches’ commitments respecting sexual morality. More and more, U.S. cultural and political norms respecting sex and reproduction diverge from those held by traditional religions. Furthermore, the two major national political parties are increasingly committed to starkly opposed views of sexual and reproductive health, and the place of religion in the nation’s life. Consequently, the Agency charged with rulemaking on sexual and reproductive health—the Department of Health and Human Services (“HHS”)—regularly issues poorly crafted policies that incite charges of religious establishment or violations of the free exercise of religion.

This Article will consider two of the most prominent policies. First, it will consider the Trump administration’s decision to fund primarily those youth sex education programs committed to avoidance or delay of sexual intercourse versus programs instructing teens about reducing the risks of sex by means of contraception. The sex education programs endorsed by the Trump Administration are called Sexual Risk Avoidance (“SRA”) by their creators, but were formerly known as “abstinence” education. These are distinguished from programs involving contraception, which the administration calls Sexual Risk Reduction programs (“SRR”), but proponents call Comprehensive Sex Education (“CSE”). This Article will use the terms for both programs preferred by their supporters, thus SRA for the first, and CSE for the latter.

This Article will also consider the Obama administration’s rule requiring religious institutions to offer health insurance guaranteeing free contraception. This is usually called the “contraception mandate,” although the HHS Secretary and the Food and Drug Administration (“FDA”) have acknowledged that some of the required drugs and devices can terminate already formed human embryos, and are thus more accurately understood to be abortifacients.

Optimal Enforcement with Heterogeneous Private Costs of Punishment

By Brian Galle, Murat Mungan

ABSTRACT:

We formalize the idea that regulatory devices may generate different incentive effects for different individuals. These unequal incentive effects can generate social costs by causing some individuals to be over-deterred and others to be under-deterred. This is an underappreciated dimension over which one ought to compare the efficiency of various regulatory tools. We then note various methods to reduce inefficiencies caused by unequal incentive effects. Among others, we show that combining tools which have negatively correlated effects can improve welfare; increasing the probability of detection can be preferable to imposing large transferable sanctions; and fines can be inferior to other regulatory instruments when the harm from offenses vary across offenders.

The General versus Specific Deterrence Effects of Expungements: Experimental Evidence

By Romain Espinosa, Gregory DeAngelo, Bruno Deffains, Murat Mungan, Rustam Romaniuc

ABSTRACT:

Expungement mechanisms allow first-time offenders to seal their criminal record. Theory predicts that the stigma of a criminal record can hinder the reintegration of criminals for whom legal activities are less lucrative. In theory, expungements priced at the reservation level can facilitate the reintegration of criminals without making first-time crime more attractive. This paper considers a behavioral perspective and offers experimental evidence about the impact of expungements priced either at the theoretically optimal level, above it or below it. To do this, we set up a laboratory experiment where subjects repeatedly face opportunities to commit crime (take money from another subject). In addition to stochastic formal sanctions – imposed by the experimenter – we introduce endogenously determined social sanctions. In our main treatments of interest, subjects who choose the wrongful action have the opportunity to expunge their record prior to the second stage, thus avoiding social sanctions as long as they do not recidivate. Overall, our experiment shows that, from a general deterrence perspective, it is better to implement expungements at very high prices. We offer an explanation for this result based on the idea that the price of expungements may signal the moral reprehensibility of the offense. There is no effect of expungements on specific deterrence.

Antidiscrimination Laws and the Administrative State: A Skeptic's Look at Administrative Constitutionalism

By David Bernstein

ABSTRACT:

This Article discusses why administrative agencies charged with enforcing antidiscrimination legislation while implicitly undertaking administrative constitutionalism tend to be inconsiderate of constitutional limitations on government authority in general, and especially of the limitations imposed by the First Amendment’s protection of freedom of expression.

To establish the existence and contours of the problem, Part I of this Article provides context by recounting several detailed examples of how federal, state, and local civil rights agencies have favored broad antidiscrimination enforcement over countervailing constitutional doctrines that impose limits on regulatory authority. These examples include the U.S. Department of Education’s Office of Civil Rights’ Obama-era attempts to use Title IX to strip university students accused of sexual assault of due process protection and to impose broad speech codes on universities, the U.S. Department of Housing and Urban Development’s (“HUD”) efforts in the 1990s to penalize neighborhood activists for lobbying against projects HUD deemed protected by the Fair Housing Act, local human rights commissions’ threats to punish individuals for otherwise protected speech deemed to cause a hostile environment, and state and local agencies’ willingness to prosecute individuals who discriminate in their choice of roommate.

Part II of this Article discusses the reasons why agencies that enforce antidiscrimination laws tend to be oblivious or hostile to constitutionally protected liberties in general and freedom of speech in particular. Part II begins with a discussion of institutional factors common to administrative agencies that tend to lead agencies to expand their power and neglect countervailing constitutional considerations. First, agencies increase their budget and authority by expanding, not contracting, the scope of the laws they enforce. Second, “purposivism,” or the notion that ambiguities in statutes should be resolved to further the laws’ underlying purposes, encourages agencies to resolve statutory interpretation disputes in favor of broad interpretations of agency authority. Third, antidiscrimination agencies attract employees ideologically committed to their agencies’ missions. Fourth, and concomitantly, agency staff (unlike generalist courts) generally do not see enforcing constitutional limitations on government power, or protecting freedom of speech specifically, as their job. Part II concludes with a discussion of political and ideological factors specific to agencies charged with enforcing antidiscrimination laws that make them especially prone to neglect constitutional restraints on their authority.

Part III of this Article suggests solutions that may at least mitigate administrative neglect of civil liberties in the context of antidiscrimination law. Most of these solutions involve broad reforms that would have ramifications well beyond mitigating the problem addressed in this Article. A more limited and therefore practical reform would be for agencies that enforce antidiscrimination legislation to establish an internal watchdog office charged with advocating within the agencies for compliance with the First Amendment and other constitutional constraints.

Exceptional, After All and After Oil States: Judicial Review and the Patent System

By Michael Greve

ABSTRACT:

The U.S. Supreme Court’s seminal 2018 decision in Oil States Energy Servs., LLC v. Greene’s Energy Group, LLC appears to mark the end of “patent exceptionalism”—that is, the notion that patent law and administration (should) remain at variance with the precepts of general administrative law. The petitioners contended that invention patents are “private rights” that, under the Constitution, can be canceled only by Article III courts, not administratively. The Court’s unequivocal rejection of that position removed any lingering constitutional cloud over the Patent and Trademark Office’s (PTO) administrative patent review and reexamination procedures under the 2011 America Invents Act.

However, the statutory judicial review regime of the Patent Act still departs from general administrative law. Parallel to an APA-conforming provision for appellate judicial review, the Patent Act permits disappointed patent applicants to contest adverse administrative decisions by way of an original, de novo action in U.S. district court. The relevant provision, Section 145 of the Patent Act, is wholly incompatible with administrative-law precepts of appellate (deferential, on-the-record) judicial review. Dating all the way back to the 1836 Patent Act, it is a statutory remnant of Marbury’s near-forgotten world of private rights and separated powers.

This Article chronicles the strange survival of Section 145 and explores its present-day, post-Oil States implications. As a practical matter, the rarely used Section 145 may offer a means of “gold-plating” patents: an administrative revocation of a “Section 145” patent would amount to a constitutionally prohibited executive revision of a final judicial decision. As a doctrinal matter, the Supreme Court has clearly recognized the “exceptional” nature of Section 145. The Oil States decision, read on its own but especially in the context of the Supreme Court’s broader administrative and patent law jurisprudence, affirms that position. Patent law will remain exceptional after all—just not for reasons grounded in property law and theory, but in a statutory and administrative-law sense.

Twelve Fallacies of the 'Neo-Antitrust' Movement

By Seth Sacher, John Yun

ABSTRACT:

Antitrust enforcement is back in the spotlight with advocates from both the political left and the populist political right demanding fundamental competition policy changes. While there are differences among those calling for such changes, several common beliefs generally unite them. This includes a contention that the writings and interpretations of Robert Bork and the Chicago School of economics have led antitrust astray in a manner fundamentally inconsistent with the original intent of the Sherman Act. Further, they are united by a belief that recent empirical, economic studies indicate the economy is becoming overly concentrated, that market power has been increasing dramatically, that performance in many, if not most, markets has been deficient, and that too much profit is going to too few firms. In this article, we identify and detail twelve fallacies of what we call the “neo-antitrust movement” and their associated claims. At the heart of these fallacies is a fundamental misunderstanding of economics and the consumer welfare standard that has been at the heart of competition policy since at least the 1960s. Additionally, there is a heavy reliance on studies that, upon closer scrutiny, do not support the positions of those who cite them. While competition law should be amenable to change, many of the proposals of the neo-antitrust movement would make antitrust less effective in its core mission without achieving the goal of ameliorating other possible injustices about which they are concerned.

Foot-Voting Nation

By Ilya Somin

ABSTRACT:

Democracy and ballot box voting have often been held up as central elements of the American political tradition. Less emphasis has been placed on the centrality of “voting with your feet.” Yet in many ways, it is an even more fundamental and distinctive feature of American politics than electoral democracy. Many nations have had democratic governments, and the idea of democracy long predates the founding of the United States. 

In modern times, a good many political systems have been more democratic than the US, in the sense of giving greater power to political majorities. By contrast, few if any other nations have been so heavily influenced by “foot voting,” through both internal and international migration. Both immigration and internal migration between states are, in most cases, forms of foot voting: the use of mobility to choose which government policies one wishes to live under.

Part I of this chapter provides a brief overview of the role of immigration in the American political tradition, which has deep roots going back to the Founding. Part II focuses on internal foot voting. Unlike immigration, the importance of the latter was not well understood by the Founding Fathers. They nonetheless designed a political system that facilitated it in crucial ways, and it has had a profound impact since. 

Finally, Part III considers the continuing importance of foot voting in modern times, and emerging threats to its effectiveness, in the form of nationalist movements hostile to immigration and regulatory barriers that impede internal foot voting.

News Media Cartels are Bad News for Consumers

By John Yun

ABSTRACT:

Antitrust has two legal standards by which to assess firm conduct. The first is the rule of reason, which applies to the majority of antitrust matters that appear before competition agencies. The second standard is per se condemnation, which is reserved for conduct that is deemed so plainly harmful that the act itself is sufficient to find liability — the canonical example being cartel price fixing. The reason why cartels are condemned under a per se standard is because there is little to no redeeming social value from allowing competitors to jointly set the terms of trade in a market. Put simply, cartels are the antithesis of competition. They collectively negotiate on behalf of their members in order to extract a greater share of the market surplus while also damaging the market through higher prices, lower output, and/or lower quality.

This takes us to the Journalism Competition and Preservation Act. This bill was introduced with the professed objective of allowing small newspaper publishers to band together in negotiations with Facebook and Google in order to secure a more fair and equitable distribution of profits from online advertising. As virtuous as that may sound, the reality is quite different. The bill would allow all online newspaper publishers (including conglomerates such as the News Corporation, AT&T, and Viacom) to form a cartel to fix prices and other terms of trade. This is not a bill aimed at small publishers, nor is it a bill aimed at ensuring "quality” (which is often a red herring in antitrust as it invokes a desire for incumbents to create artificial barriers to entry). Rather, the bill would create antitrust immunity for colluding media conglomerates.

In this short article, we first describe precisely what is in the bill. Next, we describe the structure of the online news market, and the role that online platforms play in distributing news content. Finally, we detail the impact that such collusion would have on the market.

Misdemeanors by the Numbers

By Sandra Mayson, Megan Stevenson

ABSTRACT:

Recent scholarship has underlined the importance of criminal misdemeanor law enforcement, including the impact of public-order policing on communities of color, the collateral consequences of misdemeanor arrest or conviction, and the use of misdemeanor prosecution to raise municipal revenue. But despite the fact that misdemeanors represent more than three-quarters of all criminal cases filed annually in the United States, our knowledge of misdemeanor case processing is based mostly on anecdote and extremely localized research. This Article represents the most substantial empirical analysis of misdemeanor case processing to date. Using multiple court-record datasets, covering several million cases across eight diverse jurisdictions, we present a detailed documentation of misdemeanor case processing from the date of filing through adjudication and sentencing.

The resulting portrait reveals a system that disproportionately impacts poor people and people of color. Between 2011 and 2016, each jurisdiction studied relied on monetary bail, which resulted in high rates of pretrial detention even at relatively low amounts, and imposed court costs upon conviction. There were substantial racial disparities in case-filing rates across locales and offense categories. The data also, however, highlight profound jurisdictional heterogeneity in how misdemeanors are defined and prosecuted. The variation suggests that misdemeanor adjudication systems may have fundamentally different characters, and serve different functions, from place to place. It thus presents a major challenge to efforts to describe and theorize the contemporary landscape of misdemeanor justice. At the most fundamental level, the variation calls into question the coherence of the very concept of a misdemeanor, or of misdemeanor criminal justice. As appreciation for the significance of lowlevel law enforcement builds, we urge scholars and policymakers to attend carefully to the complexity of this sub-felony world.

Productive and Dynamic Inefficiencies of Moderate Regulatory Sanctions

By Tim Friehe, Murat Mungan

ABSTRACT:

This article shows that moderate regulatory sanctions can generate subtle problems not apparent in simple enforcement models. Assuming that firms may ultimately face different noncompliance detection probabilities, we highlight that moderate sanctions may conflict with aspects of both static and dynamic efficiency. 

Deception, Materiality, and the Economics of Consumer Protection Comment of the Global Antitrust Institute, Antonin Scalia Law School, George Mason University

By Tad Lipsky, Joshua Wright, Douglas Ginsburg, John Yun

ABSTRACT:

This comment is submitted in response to the United States Federal Trade Commission (“FTC”) hearing on Consumer Privacy as part of the Hearings on Competition and Consumer Protection in the 21st Century. We submit this Comment based upon our extensive experience and expertise in consumer protection, antitrust law, and economics.

Making Federalism Great Again: How the Trump Administration's Attack on Sanctuary Cities Unintentionally Strengthened Judicial Protection for State Autonomy

By Ilya Somin

ABSTRACT:

“Sanctuary cities” - jurisdictions that refuse to assist federal government attempts to deport undocumented immigrants - have become a major focus of political conflict over immigration policy. The Trump administration’s efforts to punish sanctuary jurisdictions have led to multiple legal battles over constitutional federalism. 

The administration’s crackdown on sanctuary jurisdictions has helped make federalism great again. It achieved this unintended outcome by generating a series of court decisions protecting state and local governments against federal coercion, and by leading many on the political left to take a more favorable view of judicial enforcement of constitutional limits on federal power.

This is the first academic article to attempt a comprehensive evaluation of the federalism issues at stake in the Trump-era litigation on sanctuary cities. The article assesses the three main sets of sanctuary cases that have arisen during the Trump administration: legal challenges to Trump’s January 2017 executive order targeting sanctuary cities, challenges to the Justice Department’s July 2017 policy of conditioning federal law enforcement grants on state and local government cooperation with efforts to deport undocumented immigrants, and the administration’s lawsuit against California’s “sanctuary state” law. So far, at least, all three have led to notable victories for advocates of constitutional limits on federal power.

The sanctuary litigation has also produced a noteworthy reversal of the usual ideological valence of judicial enforcement of federalism, with progressive “blue” jurisdictions relying on legal doctrines traditionally associated with the political right. Whether this helps trigger a more lasting shift in attitudes towards federalism remains to be seen.

Evaluating the Impacts of Eliminating Prosecutorial Requests for Cash Bail

By Aurelie Ouss, Megan Stevenson

ABSTRACT:

Recent criminal justice reform efforts have focused on electing progressive prosecutors to implement change, such as the reduction of cash bail as a requirement for pretrial release. However, critics worry that removing cash bail will decrease accountability and increase failure-to-appear in court. We test this by looking at the effects of the No-Cash-Bail reform policy initiated by Philadelphia’s recently elected District Attorney, Larry Krasner. Under this policy, the DA’s office stopped requesting cash bail for defendants charged with a large variety of different offenses, both misdemeanor and felony. This policy led to an immediate 23% increase (12 percentage points) in the fraction of eligible defendants released with no monetary or other conditions (ROR), and a 22% (5 percentage points) decrease in the fraction of defendants who spent at least one night in jail, but no detectable difference for longer jail stays. The main effect of this policy was therefore to reduce the use of collateral to incentivize court appearance. In spite of this large decrease in the fraction of defendants having monetary incentives to show up to court, we detect no change in failure-to-appear in court or in recidivism, suggesting that reductions in the use of monetary bail can be made without significant adverse consequences. These results also demonstrate the role of prosecutors in determining outcomes over which they have no direct authority, such as setting bail.

The Federal Trade Commission Hearings on Competition and Consumer Protection in the 21st Century: Consumer Privacy, Comment of the Global Antitrust Institute, Antonin Scalia Law School, George Mason University

By Tad Lipsky, Joshua Wright, Douglas Ginsburg, John Yun

ABSTRACT:

This comment is submitted in response to the United States Federal Trade Commission (“FTC”) hearing on Consumer Privacy as part of the Hearings on Competition and Consumer Protection in the 21st Century. We submit this comment based upon our extensive experience and expertise in consumer protection, antitrust law, and economics. As an organization committed to promoting sound economic analysis as the foundation of antitrust enforcement and competition policy, the Global Antitrust Institute commends the FTC for holding these hearings and for inviting discussion concerning a range of important topics. 

Are Corporations People? Book Review of We the Corporations: How American Businesses Won Their Civil Rights

By David Bernstein

ABSTRACT:

This is a review of UCLA Law Professor Adam Winkler’s We the Corporations: How American Businesses Won Their Civil Rights. Among its virtues, the book explains the influence of colonial charters on American constitutional development, turns on its head the conventional wisdom about how “corporate personhood” relates to the granting of constitutional rights to corporations, and explains why the most important expansion of corporate rights was a product of liberal, not conservative, supreme court justices.

The review criticizes the book, on the other hand, for neglecting early religious freedom cases involving corporations, conflating free market arguments with pro-corporation ones, neglecting the importance of the incorporation doctrine in establishing corporate rights, wildly overstating the importance of the Powell memo, failing to reckon with the partisan reasons Democrats and liberals support campaign finance reform, and more generally accepting dubious progressive shibboleths such as the “race to the bottom” as valid.

 

Justice Scalia's Eighth Amendment Jurisprudence: The Failure of Sake-of-Argument Originalism

By Craig Lerner

ABSTRACT:

How is an originalist judge in the common law tradition to reconcile the competing demands of the Constitution’s original meaning and an accumulating body of nonoriginalist precedents?  This Article explores the dilemma of constitutional originalism through a comprehensive review of Justice Scalia’s Eighth Amendment jurisprudence.  In this legal context the dilemma is infused with a moral dimension.  Many punishment practices common in 1791 are widely considered barbaric today.  When confronted with the choice between the Eighth Amendment’s original meaning and a clearly erroneous precedent that better aligns the Constitution with the moral tenor of the times, which is an originalist judge to choose?

 

In an essay published soon after joining the Supreme Court, Justice Scalia outlined an answer to this question.  He anticipated that his Eighth Amendment opinions would be framed as arguments in the alternative—first, the Constitution, properly understood, did not foreclose a punishment; and, in the alternative, even if nonorginalist precedents were followed for the sake of argument, the result would be the same, because there was “inadequate indication that any evolution in social attitudes has occurred.”  Almost all of his Eighth Amendment opinions proved to be of this character.  As demonstrated in this Article, Justice Scalia’s hopeful expectation that he could achieve orginalist results through such a strategy was disappointed.  One problem is that the strategy presumes that there has been no meaningful “evolution in social attitudes” with respect to punishment since 1791.  The deeper problem is that it is not enough for the community’s “social attitudes” to remain durable.  The relevant question is whether the moral sentiments of the legal elites who ascertain these “social attitudes” remain durable. In one of his final Eighth Amendment opinions, Justice Scalia conceded the defeat of sake-of-argument originalism.  He intimated a willingness to pursue a more heroic originalist agenda, potentially displacing mountains of nonoriginalist precedent.  This Article highlights the tension an originalist judge faces, more than two centuries after the Constitution’s ratification, between a principled adherence to original meaning, which can appear revolutionary, and a humbler originalism, which can appear opportunistic.

 

The Bimetallic Question in the Valley of Fear

By Ross Davies

ABSTRACT:

The vicissitudes of post-Civil War currency policy are reflected in variations in the text of Arthur Conan Doyle's novel, "The Valley of Fear."

Comment of the Global Antitrust Institute, George Mason University School of Law, on the Australian Competition & Consumer Commission's Digital Platforms Inquiry, Preliminary Report

By John Yun, Douglas Ginsburg, Joshua Wright, Tad Lipsky

ABSTRACT:

This Comment is submitted to the Australian Competition & Consumer Commission (ACCC) for consideration in relation to its Digital Platforms Inquiry, Preliminary Report (2018). We detail several fundamental methodological shortcomings and analytical gaps in the Preliminary Report, which ultimately do not support the recommendations considered for implementation. The GAI Competition Advocacy Program provides a wide range of recommendations to facilitate adoption of economically sound competition policy.