Akratic Corporations and Dysfunctional Markets
Virginia Journal of Criminal Law, Vol. 1 (2013)
14 Pages Posted: 26 Mar 2014 Last revised: 11 Apr 2014
Date Written: 2013
Manuel Utset examines the effect of criminal sanction on corporate actors with time inconsistent ("TI") preferences. He argues that traditional approaches to deterrence will under-deter these corporate actors and argues for higher levels of sanction. My contribution to Utset' s interesting and important research starts with three observations. First, the market economy places on TI corporate actors dynamic pressures that differ from those human actors face. Corporate actors with TI preferences face a competitive disadvantage relative to their competitors with TC preferences. Thus, unlike TI human actors, TI offenders' competitive disadvantages make "capital" punishment through acquisition or bankruptcy quite real — rendering unnecessary the additional sanctions that Utset suggests. Second, market failure or inefficient agency/institutional structure, on one hand, and TI preferring behavior, on the other, are difficult to disentangle. Firms may appear to have time-inconsistent preferences when they are, in fact, consistently responding to market failures. Third, akratic tendencies often excuse or partially excuse in the criminal law applicable to human subjects. Utset, on the other hand, argues for increasing punishment so as to deter the akratic corporate actor.
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