The Theory of Taxation and Public Economics presents a unified conceptual framework for analyzing taxation--the first to be systematically developed in several decades. An original treatment of the ...subject rather than a textbook synthesis, the book contains new analysis that generates novel results, including some that overturn long-standing conventional wisdom. This fresh approach should change thinking, research, and teaching for decades to come.
WHY (EVER) DEFINE MARKETS? Kaplow, Louis
Harvard law review,
12/2010, Letnik:
124, Številka:
2
Journal Article
Recenzirano
Competition law is dominated by the market definition / market share paradigm, under which a relevant market is defined and pertinent market shares therein are examined in order to make inferences ...about market power. This Article advances the immodest claim that the market definition process is incoherent as a matter of basic economic principles and hence should be abandoned entirely. This conclusion rests on four arguments. First, meaningful inferences of market power in redefined markets cannot be made. Second, the paradigm relies on an unarticulated notion of a standard reference market whose necessity and prior omission signal a serious gap. Third and most important, determining what market definition is best is impossible without first formulating a best estimate of market power, rendering further analysis pointless and possibly leading to erroneous outcomes. Finally, the need to define markets engenders a mistaken focus on cross-elasticities of demand for particular substitutes rather than on the market elasticity of demand, which further reduces the quality of resulting market power inferences. Although the inquiry is conceptual, brief remarks on legal doctrine suggest that creating conformity may not be unduly difficult.
Market power is the most important determinant of liability in competition law cases throughout the world. Yet fundamental questions on the relevance of market power are underanalyzed, if examined at ...all: When and why should we inquire into market power? How much should we require? Should market power be viewed as one thing, regardless of the practice under scrutiny and independent of the pertinent anticompetitive and procompetitive explanations for its use? Does each component of market power have the same probative force? Or even influence optimal liability determinations in the same direction? This Article's ground-up investigation of market power finds that the answers often differ from what is generally believed and sometimes are surprising — notably, higher levels of certain market power measures or particular market power components sometimes disfavor liability. This gulf between conventional wisdom and correct understanding suggests the need to redirect research agendas, agency guidance, and competition law doctrine.
ON THE DESIGN OF LEGAL RULES Kaplow, Louis
Harvard law review,
01/2019, Letnik:
132, Številka:
3
Journal Article
Recenzirano
Important doctrines in diverse areas of law employ structured decision procedures requiring, in rough terms, that the plaintiff first make some demonstration of harm; if but only if that is done, the ...defendant must make some showing of benefit; and if but only if that occurs, balancing is performed. This Article compares such protocols to unconstrained balancing and finds them to be inferior with respect to the quality of final decisions: they sometimes fail to impose liability even though the harm is greater than the benefit, and they sometimes impose liability even though the benefit exceeds the harm. The Article also develops the principles of optimal information (evidence) collection and shows how structured decision procedures violate every core lesson and presuppose distinctions that often are incoherent or impractical to implement. The analysis addresses concerns about balancing that may motivate structured protocols, how less restrictive alternatives should be assessed, and the extent to which legal proceedings are conducted in conformity with either approach, as well as how they might be reformed.
Important doctrines in diverse areas of law employ structured decision procedures requiring, in rough terms, that the plaintiff first make some demonstration of harm; if but only if that is done, the ...defendant must make some showing of benefit; and if but only if that occurs, balancing is performed. In-depth analysis of such protocols reveals them to be inferior to unconstrained balancing with respect to the quality of final decisions and the guidance they provide for the collection of information and thus the conduct of adjudication. This Article applies this analysis to the rule of reason and merger regulation under antitrust law, Title VII disparate impact law, and the practices of strict scrutiny and proportionality analysis in constitutional law. Longstanding controversies are addressed and unappreciated deficiencies are discovered. In all three domains, existing law is cast in a substantially different light, both descriptively and normatively.
Throughout the world, the rule against price fixing is competition law's most important and least controversial prohibition. Yet there is far less consensus than meets the eye on what constitutes ...price fixing, and prevalent understandings conflict with the teachings of oligopoly theory that supposedly underlie modern competition policy.
Competition Policy and Price Fixingprovides the needed analytical foundation. It offers a fresh, in-depth exploration of competition law's horizontal agreement requirement, presents a systematic analysis of how best to address the problem of coordinated oligopolistic price elevation, and compares the resulting direct approach to the orthodox prohibition.
In doing so, Louis Kaplow elaborates the relevant benefits and costs of potential solutions, investigates how coordinated price elevation is best detected in light of the error costs associated with different types of proof, and examines appropriate sanctions. Existing literature devotes remarkably little attention to these key subjects and instead concerns itself with limiting penalties to certain sorts of interfirm communications. Challenging conventional wisdom, Kaplow shows how this circumscribed view is less well grounded in the statutes, principles, and precedents of competition law than is a more direct, functional proscription. More important, by comparison to the communications-based prohibition, he explains how the direct approach targets situations that involve both greater social harm and less risk of chilling desirable behavior--and is also easier to apply.
MULTISTAGE ADJUDICATION Kaplow, Louis
Harvard law review,
03/2013, Letnik:
126, Številka:
5
Journal Article
Recenzirano
Legal proceedings often involve multiple stages: U.S. civil litigation allows motions to dismiss and for summary judgment prior to trial; government agencies as well as prosecutors employ ...investigative and screening processes before initiating formal adjudication; and many Continental tribunals move forward sequentially. Decisionmaking criteria have proved controversial, as indicated by reactions to the Supreme Court's recent decisions in Twombly and Iqbal and its 1986 summary judgment trilogy, which together implicate the Supreme Court cases most cited by federal courts. Neither jurists nor commentators have articulated coherent, noncircular legal standards, and no attempt has been made to examine systematically how decisions at different procedural stages should ideally be made in light of the legal system's objectives. This Article presents a foundational analysis of the subject. The investigation illuminates central elements of legal system design, recasts existing debates about decision standards, identifies pathways for reform, and provides new perspectives on the nature of facts and evidence and on the relationship between substantive and procedural law.
Adjudication is fundamentally about information, usually concerning individuals' previous or proposed behavior. Legal system design is challenging because information ordinarily is costly and ...imperfect. This Article analyzes a broad array of system features, asking throughout whether design should aim at the truth or at consequences, how these approaches may differ, and what general lessons may be drawn from the comparison. It will emerge that the differences in approach are often large and their character is sometimes counterintuitive. Accordingly, system engineers concerned with social welfare need to aim explicitly at consequences. This message is not one opposed to truth per se but rather a strong admonition: it is dangerous to be attached to the alluring view that adjudication is primarily about generating results most in accord with the truth of the matter at hand.
Competition law's prohibition on price fixing and related horizontal agreements is one of its few uncontroversial provisions and is understood to be well grounded in economic principles that are ...taken to provide the foundation for competition policy. Upon examination, however, commonly offered views of the law's conception of agreement prove to be difficult to articulate in an operational manner, at odds with key aspects of legal doctrine and practice, and unrelated to core elements of modern oligopoly theory. This Article explores these and other features of the agreement requirement and suggests the need for a wholesale rethinking of how competition law should approach the oligopoly problem.
A substantial literature examines how the Pigouvian directive that marginal taxes should equal marginal external harms needs to be modified in light of the preexisting distortion due to labor income ...taxation. Additional literature considers distributive concerns. It is demonstrated, however, that simple first-best rules—unmodified for labor supply distortion or distribution—are correct in the model examined. Specifically, setting all commodity taxes equal to marginal harms (and subsidies equal to marginal benefits) can generate a Pareto improvement, as can a marginal reform toward the first-best. Qualifications and explanations for differences from previous work are also presented.
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