Fred S. McChesney

Bureaucracy and Politics in FTC Merger Challenges

SINCE Stiglers article on the economic theory of regulation,1 public interest views of regulation increasingly have yielded to self-interest explanations. That is, well-organized private groups purchase regulatory favors in the political marketplace, benefiting both themselves and politician-sellers at the expense of less well-organized groups. However, one form of government regulation, antitrust, has largely escaped characteri-

An Ordinary Economic Rationale for Extraordinary Legal Sanctions

Legal scholars have typically viewed the set of extraordinary legal sanctions (that is, remedies that systematically overor undercompensate plaintiffs) as logically independent and often inefficient. In this Article, the authors offer a single, generally applicable model that predicts and explains the role extraordinary sanctions play in an efficient legal system. Starting with punitive damages, the authors show that extraordinary sanctions are necessary in those situations in which the expected imposition of liability rules, which seek to make the plaintiff whole, would encourage a defendant wrongly to take a plaintiffs property rather that negotiate for it. The authors distinguish their model from two others, the court-error model and the illicit-benefits model. They then extend their model to account for many other controversial and seemingly unrelated extraordinary legal remedies: injunctions, stipulated damages, collateral source recoveries, wrongful death awards, and criminal sanctions.

Tortious Interference with Contract versus "Efficient" Breach: Theory and Empirical Evidence

Tortious interference is bothersome, normatively and positively, to scholars espousing the economic model of “efficient breach” of contract because it penalizes third‐party inducements to breach. Scholars nonetheless find innovative second‐best arguments to justify the coexistence of tortious interference with “efficient” breach. This article shows normatively why tortious interference would be part of a first‐best legal system. Tortious interference provides property protection to contract rights in ways that apparently (absent data to the contrary) lower transaction costs when a third party values a promisors performance more than does the promisee. Positively, the law of tortious interference corresponds to the first‐best model posited here. Regression analysis of tortious interference cases shows more definitively that the second‐best factors proposed by efficient‐breach analysts explain little of the case outcomes. Factors identified in the first‐best model here do signifi cantly affect case results.