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Abstract:
Behavioral Law and Economics has become an increasingly prominent field within legal scholarship, and most recently within the corporate area. A behavioral bias of particular relevance in corporate contexts is the differential between individuals' willingness to pay to obtain a legal entitlement and her willingness to accept to part with one, known as the "endowment effect." Should endowment effects pervade relationships within business organizations, it would significantly complicate much of the common wisdom within corporate law, such as the presumed optimality of ex ante voluntary agreements. Existing experimental research, however, does not adequately address whether and to what extent the endowment effect operates within corporate environments.

This Article presents an experimental test for endowment effects within a principal-agent relationship that typifies many firms. We find that subjects situated in an agency relationship do not exhibit a significant endowment effect. Using an additional experimental test, we argue that this dampening phenomenon is likely due to the fact that the agency context induces subjects to view property rights principally for their exchange value, thereby causing them to "disendow" their initial legal entitlements.

Abstract:
This paper presents a simple framework for analyzing a hierarchical system of judicial auditing. We concentrate on (what we perceive to be) the two principal reasons that courts and/or legislatures tend to scrutinize the decisions of lower-echelon actors: imprecision and ideological bias. In comparing these two reasons, we illustrate how each may yield systematically distinct auditing and reversal behaviors. While auditing for imprecision tends to bring about even-handed review/reversal, auditing for political bias tends to be significantly more one-sided. Examples of these tendencies can be found in a number of legal applications, including administrative law, constitutional law, and interpretive theories of jurisprudence. Moreover, our analysis suggests that political "diversity" among initial decision-makers (in addition to its other laudable goals) may be an important and generally underappreciated means for economizing on judicial administrative costs and easing the workload burdens on upper-echelon actors.

Abstract:
This article investigates whether television stations in small markets should be allowed to merge. The Federal Communications Commission prohibits such mergers. The FCC claims that such mergers will reduce the diversity of communications in small markets, and many commentators agree with the FCC. Consequently, the FCC and the commentators conclude that mergers should be prohibited. This article shows that the diversity rationale is wrong. For the most part, in small market settings diversity will be enhanced by mergers. Demonstrating this relationship (merger increases diversity of communication) occupies most of the article's analytics. Based on my analysis, I suggest that there should be a rebuttable presumption in favor of merger in hearings before the Federal Communications Commission.

Abstract:
Behavioral Law and Economics (BLE) has become an immensely popular field among legal scholars. This trend is hardly surprising, given the interdisciplinary nature of law and the fact that BLE's chief aim is to unify two well-established (but traditionally distinct) accounts of human behavior: psychology and economics. While the influence of BLE is certainly wide-spread, a particularly pertinent application is in corporate law, which must regulate a rich and intricate set of agency relationships. The extent to which cognitive biases cause deviations from the predictions of rational choice theory in such contexts has significant implications both for our understanding of existing rules and for normative legal reform proposals.

Two such biases seem especially relevant in the corporate context: endowment effects and (so-called) "other regarding preferences." This Article presents the first experimental test for these biases in the corporate-law context. We find, somewhat surprisingly, that the agency context appears substantially to dampen both of them. However, this dampening effect appears to be far from uniform, with some demographic groups (such as single men) exhibiting virtually no evidence of biases while others (such as women, married and/or cohabitating subjects, and subjects from small families) exhibiting the opposite. As such, our findings may serve as cautionary tale for both those who uncritically apply BLE to corporations as well as those who staunchly defend traditional rational choice theory.

Abstract:
This paper argues that the Solicitor General's strategic control of the federal government's litigation can increase the federal government's winning percentage, and alter the development of the law in the government's favor. First, this paper shows that the federal government has strategic incentives to appeal only cases that in which it has a very high chance of victory, and accept all other losses. By accepting a loss in any given circuit, the federal government preserves its option of following the government's preferred policies in all other circuits, and conforming its behavior only in the circuit where the court of appeal ruled against the government. By appealing the loss to the Supreme Court, the federal government runs the risk of losing and then being forced to follow unwanted (from the government's point of view) policies everywhere and possibly for a wider range of issues and agencies than was required by the court of appeals. As a consequence, only those cases that are almost sure victories for the federal government will be appealed to the Supreme Court. An extended empirical analysis of Supreme Court cases demonstrates the effect of strategic appeals by the Solicitor General and distinguishes the effect from other theories of why the Solicitor General tends to be unusually successful before the Supreme Court. The authors argue that this may alter the development of case law in favor of the government.

Abstract:
The United States government has several policies and programs designed to increase the number of broadcasting stations owned by racial minorities. Increasing the number of minority-owned broadcasting stations, the government claims, will diversify the content of broadcast programs by increasing the amount of minority-oriented programming. Minority owners will program their stations differently that white owners, the government claims. This paper presents the first econometric test of these propositions about minority ownership of broadcasting stations as well as a number of other related propositions. The paper concludes that increasing the number of minority-owned broadcasting stations increases the amount of minority-oriented programming. The paper also concludes that increasing the number of female-owned stations -- a policy that has been ruled unconstitutional -- would be just as effective at increasing minority-oriented programming.