1,720,971 research outputs found
Discriminating Shareholders through the Exclusion of Pre-emption Rights? – The European Infringement Proceeding against Spain (C-338/06) –
No full textOrder and Search Effects in Legal Decision Making
No full textLegal decisions are usually based on numerous pieces of information that may come in different orders. Most of the literature considers the order to be exogenous to the decision maker. This is a reasonable framework for (mock) jury studies, since jurors cannot influence the order of information presented to them. However, in many other legal contexts, decision makers have considerable discretion when it comes to the order in which the information is elicited (police, prosecutor, experts, probation officers etc.). In our experiments, we allow for the order of the information to be the chosen by the participants, except for the initial information which is experimentally manipulated (positive vs. negative). We analyze primacy vs. recency effects under an endogenous order of information as well as the influence of search effects. We put the experiments in a probation context where participants have to estimate the probability of recidivism and/or dangerousness. We thereby combine the literature on search effects with the literature on order effects (primacy vs. recency) in a context of legal decision making. We also compare the estimates to a standardized tool (OGRS-3), where we hypothesize that recidivism/dangerousness will be overestimated. Our research is intended to contribute to optimal decision making in a field that is widely neglected but has enormous practical consequences that are both monetary (if a non-dangerous prisoner is erroneously kept in prison) and non-monetary (if a dangerous prisoner is erroneously released and commits another violent crime)
No Derivative Shareholder Suits in Europe - A Model of Percentage Limits, Collusion and Residual Owners
Get PDFWe address one of the cardinal puzzles of European corporate law: the lack of derivate shareholder suits. In the vast majority of European jurisdictions, shareholders can bring a derivative action (for damages) against the management for breach of fiduciary duty. In all of these countries, a derivative lawsuit is the only remedy against managerial misconduct. In spite of corporate fraud by managers there are no such lawsuits. We explain this apparent paradox on the basis of percentage limits. The laws of percentage limits require shareholders to hold a minimum amount of typically 5% to 10% in order to bring an action against the management and they are extremely wide-spread in Europe. Since small shareholders are not entitled to sue, there is an incentive for managers to collude with large shareholders. In a four-stage-model, we show that, given the current percentage limits, managers will misappropriate corporate assets and split the proceeds with large shareholders. Contrary to current and past approaches to agency theory, we find that, in this equilibrium, (1) large shareholders do not monitor the management, (2) small shareholders do not free ride and (3) the residual ownership is not held by the shareholders on the whole but by the managers and the large shareholders. This interpretation of the current situation is consistent with empirical studies that find a more concentrated shareholder structure in Europe than in the United States. Also published as: Columbia Law and Economics Working Paper No. 312 (http://www.law.columbia.edu/center_program/law_economics/wp_listing_1/) German Working Papers in Law and Economics: Vol. 2007: Article 2. (http://www.bepress.com/gwp/default/vol2007/iss2/art2) SSRN (http://ssrn.com/abstract=933105)Agency Theorey, Derivative Suits, Shareholder Suits, Percentage Limits, Collusion, Residual Owners, Corporate Fraud, Managerial Misconduct, European Law, European Corporations, Europe, Large Shareholders, Free Rider, Collective Action, Settlements, Monitoring, Rent-Seeking
Law by human intent or evolution? Some remarks on the Austrian school of economics’ role in the development of law and economics
Get PDFAustrian school of economics, History of law and economics, Spontaneous order, Evolution, B15, B25, K00,
No Derivative Shareholder Suits in Europe – A Model of Percentage Limits and Collusion
Get PDFWe address one of the cardinal puzzles of European corporate law: the lack of derivate share-holder suits. We explain this phenomenon on the basis of percentage limits which require share-holders to hold a minimum amount of shares in order to bring a lawsuit. We show that, under this legal regime, managers will collude with large shareholders by means of settlements or bribes that impose a negative externality on small shareholders. Contrary to conventional agency models, we find that large shareholders do not monitor the management; as a consequence, there is no free riding opportunity for small shareholders.Collusion, Derivative Shareholder Suits, Percentage Limits, Monitoring, Free Riding
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