ICLE Academic Affiliate Jeremy Kidd, a professor at Drake Law School, recently joined the Talking Legal Ed podcast to discuss law & economics and how it is useful in the law-school classroom. Kidd identifies “the three things about economics that every legal educator should know”:

1. Incentives matter;
2. The optimum level of risk is not zero; and
3. Competition is good.

He also discusses how these three ideas help professors teach and students understand the law. Kidd talks about his experience engaging students in a law & economics reading group, including how providing that kind of intellectual challenge can lift students out of the doldrums of memorizing the law and keep their minds engaged in true learning. Finally, he talks about bringing his own law & economics scholarship into the classroom, and the various ways to integrate current examples in lesson plans.

The full podcast is embedded below.

Abstract

Commentators have likened the recent surge in social-media-driven (SMD) retail trading in securities such as GameStop to a roller coaster: “You don’t go on a roller coaster because you end up in a different place, you go on it for the ride and it’s exciting because you’re part of it.” The price charts for GameStop over the past few months resemble a theme-park thrill ride. Retail traders, led by some members of the “WallStreetBets” subreddit “got on” the GameStop roller coaster at just under $20 a share in early January 2021 and rode it to almost $500 by the end of that month. Prices then dropped to around $30 dollars in February before shooting back to $200 in March. But, like most amusement park rides that end where they start, many analysts expect market forces will ultimately prevail, and GameStop’s share price will soon settle back to levels closer to what the company’s fundamentals suggest it should. Conventional wisdom counsels that bubbles driven by little more than noise and FOMO—fear of missing out—should eventually burst. There are, however, signs suggesting that something more than market noise and over-exuberance is sustaining the SMD retail trading in GameStop.

There is evidence that at least some of the recent SMD retail trading in GameStop and other securities is not only motivated by the desire to make a profit, but rather to make a point. This Essay identifies and addresses the emerging phenomenon of “expressive trading”—securities trading for the purpose of political, social, or aesthetic expression—and considers some of its implications for issuers, markets, and regulators.