Program on Law & Economics Faculty Fellows

Avishalom Tor

Director, Research Program on Law and Market Behavior, Professor of Law

Spotlight Research: Nudges that Should Fail?

Nudges that Should Fail evaluates more fully the case of failed nudges and examines the unaddressed problem of successful yet undesirable nudges. This analysis shows that the failure of nudging bears only limited diagnostic value while the success of a nudge is even less indicative of its normative status. The article concludes with recommendations for policy makers who wish to employ nudges that are not only efficacious but also likely to advance the subjective well-being of the individuals they target.

Sadie Blanchard

Associate Professor of Law

Spotlight Research: Nominal Damages as Vindication

A recent Supreme Court decision inspired a resurgence of interest in an old mystery: how can nominal damages vindicate a plaintiff for past harm? The Court relied on the longstanding common law practice of entitling a plaintiff to sue for violation of her rights, even without demonstrating harm in fact, and to recover nominal damages. Courts have long asserted that awarding nominal damages in such suits vindicates the plaintiff. But they have not explained just how awarding $1 provides vindication, and serious observers scoff at the idea that it does. This Article offers a theory of vindication through nominal damages litigation. It argues that permitting suits for nominal damages enables courts to function as producers of presumptively reliable reputation-relevant information. Plaintiffs pursue, and courts have long allowed, lawsuits for nominal damages when these suits might provide information that effectively remedies or deters harm.

Patrick Corrigan

Professor of Law

Spotlight research: Footloose with Green Shoes? Can Underwriters Profit from IPO Underpricing?,

In this article Corrigan sets forth a more satisfactory explanation for the use of green shoe options and overallotments in IPOs: they are used to maximize the principal trading payoffs of underwriters.

Martijn Cremers

Martin J. Gillen Dean, Mendoza College of Business and the Bernard J. Hank Professor of Finance Concurrent Professor of Law

Spotlight Research: "Is the Staggered Board Debate Really Settled?"

This article addresses a previous study in the University of Pennsylvania Law Review, Settling the Staggered Board Debate, and shows that the staggered board debate is very much alive rather than settled. It shows that our prior result that the adoption of a staggered board is associated with a positive increase in firm value is robust to the criticism in previous study. Second, it shows that previous study's conclusion that staggered boards have no significant association with firm value is based on statistical tests that have “poor power,” that is, tests that are unlikely to find a robust association even if such association is actually supported by the data. In contrast, the tests that indicate that our earlier results are robust have both much better statistical power and good “size,” making it unlikely that we can find a positive association between staggered boards and firm value if no such association exists in the data.

Nicole Stelle Garnett

John P. Murphy Foundation Professor of Law

Spotlight Research: Post-Accountability Accountability

As parental choice in the American educational landscape continues to expand, debates about accountability for chosen schools will only intensify. The questions of whether, when, and how the law ought to regulate the quality of the schools participating in parental-choice programs are important and vexing ones for the law of education. The article, Post-Accountability Accountability, examines these questions and proposes principles to guide regulatory design efforts.

Maria Maciá

Associate Professor of Law

Spotlight Research: Mandatory Disclosure for Ethical Supply Chains: A Conflict Mineral Case Study

Mandatory disclosure requirements for corporate supply chains have the potential to leverage consumer and investor sensibilities to incentivize corporations to source more ethically. Despite their growing prevalence, there are few empirical studies of their effects: whether they actually put pressure on companies remains untested. This Article supplies such evidence by examining the consumer and investor responses to corporate supply chain disclosures made pursuant to Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The act requires publicly traded companies to disclose to the Securities and Exchange Commission whether their supply chain contains “conflict minerals” (minerals important in global supply chains whose sourcing supports the conflict in the Democratic Republic of Congo and surrounding areas). The law aims to give customers and investors information about corporate supply chains, with the hope that they will support companies that source responsibly and punish those that do not. But whether this is actually accomplished is an open question.