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TOTM There is a very interesting development in the ongoing saga of the FTC v. Schering-Plough Corporation, a very important antitrust case involving a payment from . . .
There is a very interesting development in the ongoing saga of the FTC v. Schering-Plough Corporation, a very important antitrust case involving a payment from a branded pharmaceutical manufacturer to a generic to delay entry (a “reverse payment”).
Read the full piece here.
TOTM The folks over at Lawyers, Gun$, and Money are chiding me for ignoring (or, as they say, never having heard of) positive externalities. A couple . . .
The folks over at Lawyers, Gun$, and Money are chiding me for ignoring (or, as they say, never having heard of) positive externalities. A couple of days ago, I criticized a NYT editorial calling for the federal government to “throw its weight behind” private efforts to develop alternative fuels. My main point was that the best thing the government could do would be to let energy prices rise in response to forces of supply and demand. High prices, I argued, have spurred — and will continue to spur — private investment in alternative technologies.
TOTM When Henry Manne writes about insider trading, as he does this week in the WSJ op-ed, one can be sure that it is worth reading. . . .
When Henry Manne writes about insider trading, as he does this week in the WSJ op-ed, one can be sure that it is worth reading. The op-ed, which is the first installment of a two part series, offers two central points: (1) the behavioral finance literature does not support the regulation of insider trading, but has pushed usefully pushed economists to think beyond the realm of the “marginal trader” and into a Hayekian theory of price formation, and (2) this “wisdom of crowds” approach to price formation provides a new rationale insider trading regulations.
TOTM It’s a strange day when the New York Times advocates corporate tax breaks. It’s an even stranger day when I dissent from that recommendation. Well, . . .
It’s a strange day when the New York Times advocates corporate tax breaks. It’s an even stranger day when I dissent from that recommendation. Well, today must be a strange day indeed, for they did, and I must.
TOTM An article from yesterday’s W$J sheds some light on the organic community’s anger over Wal-Mart’s decision to begin selling organic products. A few weeks ago, . . .
An article from yesterday’s W$J sheds some light on the organic community’s anger over Wal-Mart’s decision to begin selling organic products. A few weeks ago, I accused Wal-Mart’s critics of wanting to keep price-sensitive consumers out of the organic “club.” The article in yesterday’s Journal suggests that that’s part of the story, but that the critics might also have a legitimate gripe. Examined closely, though, even that concern is unfounded.
TOTM An exchange between Ethan Leib at Prawfsblawg and Kate Litvak in the comments to Ethan’s very interesting post on political science in the academy raises . . .
An exchange between Ethan Leib at Prawfsblawg and Kate Litvak in the comments to Ethan’s very interesting post on political science in the academy raises some interesting questions about the status of law and economics in the legal academy.
TOTM Marty Feldstein has an interesting idea about how to reduce America’s oil consumption, but I’m not quite ready to sign on. In an op-ed in . . .
Marty Feldstein has an interesting idea about how to reduce America’s oil consumption, but I’m not quite ready to sign on.
In an op-ed in yesterday’s WSJ, Feldstein proposed a “cap and trade” system for gasoline. Under the proposed system, the government would set a limit on the amount of gasoline Americans could purchase annually and would then allocate rights to purchase that amount of gasoline.
Scholarship Abstract Economic theorists argue that broad termination rights allow franchisors to police opportunism on the part of franchisees which have an incentive to free ride . . .
Economic theorists argue that broad termination rights allow franchisors to police opportunism on the part of franchisees which have an incentive to free ride on the franchised trademark. However, in principle, these termination rights could generate another form of opportunism as franchisors then have an incentive to skim establishments that prove to be particularly profitable. We use the adoption of state franchise termination laws to determine which form of opportunism is more important on the margin. Using panel data on fast food establishments, we find that laws restricting franchisor termination rights lead to a reduction in franchising, and this reduction is not offset by the concomitant increase in franchisor-operated establishments. We also examine state employment rates in industries characterized by high rates of franchising relative to other industries where franchising is rare, finding that employment in franchise industries drops, as a proportion of total employment, by about 7 percent when states enact restrictions on franchisor termination rights. Both sets of results imply that the potential for franchisee opportunism is stronger, and restrictions on termination rights are likely to reduce joint surplus among franchisors and franchisees.
TOTM Via Marginal Revolution, I came across this letter from the National Kidney Foundation to the AEI in anticipation of AEI’s upcoming event (June 12th) addressing . . .
Via Marginal Revolution, I came across this letter from the National Kidney Foundation to the AEI in anticipation of AEI’s upcoming event (June 12th) addressing the national organ shortage (previous post here).
