Previous work on the regulation of termination clauses in franchise contracts has ignored the ability of parties to contract around state law. Using data on two national fast-food restaurants, we find that Washington, D.C.'s termination restriction which did not restrict choice-of-law provisions...

Do specialized judges make better decisions than judges who are generalists? Specialized judges surely come to know their area of law well, but specialization might also allow judges to develop better, more reliable ways of assessing cases. We assessed this question by presenting a group of...

Conventional arguments suggest that republics ought to grow faster than monarchies and experience lower transitional costs following reforms. We employ a panel of 27 countries observed from 1820 to 2000 to estimate these differences. Results show no significant growth differences between the two...

This paper argues that the human species has two natural coordination mechanisms: leadership and fairness. A leader who ignores fairness when coordinating the behavior of a large organization risks creating the conditions for the emergence of a destabilizing subgroup that is able to coalesce...

I examine the work of POLANYI [1957] to extract from it hypotheses related to the emergence and operation of the capitalist system. I adapt models from the literature on complex adaptive systems and evolutionary game theory to build a fictitious society in which I "test" those hypotheses. The...

The paper is intended to provide a broad overview of the field of corporate governance, and to integrate recent research. Corporate governance is viewed from the perspective of the agency costs involved in obtaining equity investment from minority outside stockholders in a firm controlled by...

This paper empirically compares civil procedure in common-law and civil-law countries. Using World-Bank and hand-collected data, and unlike earlier studies that used predecessor data sets, this paper finds no systematic differences between common- and civil-law countries in the complexity,...

We clarify the conventional claims concerning the most popular damage measures: expectation damages (ED), constant damages (CD), and reliance damages (RD). We strictly examine strategies versus outcomes in equilibrium and make several new investigations. In terms of equilibrium outcomes, we...

This paper investigates what legal rules for breach of contracts can support the efficiency in a principal-agent relationship when complete contracts cannot be written ex ante and the agent chooses unobservable effort in advance of trade. We examine both specific performance and expectation...

Many economic writers on contract theory have assumed that legal institutions are simply unable to do the job of enforcement, and have thus attempted to devise arrangements that motivate the parties to keep their commitments even though a government tribunal would be unable to tell whether they...