This paper models a financially constrained entrepreneur and a deep-pocket incumbent developing an innovative product through a strategic alliance. We find that i) the financial constraints of the entrepreneur can be tightened by an increase in his endowment or a reduction in agency conflicts, which contrasts with traditional corporate finance theories; ii) the main agency conflict in alliances is the free-riding problem between the two collaborators, and a third party — an outside investor — can be introduced to address this problem; and iii) the incentive-compatible financial claims of alliances include debt, equity, warrants, convertible debt, and preferred equity, which are consistent with empirical observations.
{"title":"Strategic Alliances, Externalities, and Financial Constraints","authors":"Jieying Hong","doi":"10.2139/ssrn.2810896","DOIUrl":"https://doi.org/10.2139/ssrn.2810896","url":null,"abstract":"This paper models a financially constrained entrepreneur and a deep-pocket incumbent developing an innovative product through a strategic alliance. We find that i) the financial constraints of the entrepreneur can be tightened by an increase in his endowment or a reduction in agency conflicts, which contrasts with traditional corporate finance theories; ii) the main agency conflict in alliances is the free-riding problem between the two collaborators, and a third party — an outside investor — can be introduced to address this problem; and iii) the incentive-compatible financial claims of alliances include debt, equity, warrants, convertible debt, and preferred equity, which are consistent with empirical observations.","PeriodicalId":127641,"journal":{"name":"ERN: Conflict; Conflict Resolution; Alliances (Topic)","volume":"61 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-07-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125441657","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Klaus B. Beckmann, G. Susan, Lechner Anja, Lennart Reimer
We extend, and apply, one of the classic dynamic models in conflict economics due to Richardson (1919) and Boulding (1962). Restrictions on parameters are relaxed to account for alliances and for peace-keeping, and incrementalist as well as stochastic versions of the model are reviewed. These extensions allow for a rich variety of patterns of dynamic conflict. Using Monte Carlo techniques as well as time series analyses based on GDELT data (for the Ethiopian-Eritreian war, 1998-2000), we also assess the empirical usefulness of the model. It turns out that the Richardson model captures selected phases of the conflict quite well, a fact which can be used to distinguish between them.
{"title":"From the Ashes? Modelling Conflict Dynamics Using Richardson Equations","authors":"Klaus B. Beckmann, G. Susan, Lechner Anja, Lennart Reimer","doi":"10.2139/ssrn.2783876","DOIUrl":"https://doi.org/10.2139/ssrn.2783876","url":null,"abstract":"We extend, and apply, one of the classic dynamic models in conflict economics due to Richardson (1919) and Boulding (1962). Restrictions on parameters are relaxed to account for alliances and for peace-keeping, and incrementalist as well as stochastic versions of the model are reviewed. These extensions allow for a rich variety of patterns of dynamic conflict. Using Monte Carlo techniques as well as time series analyses based on GDELT data (for the Ethiopian-Eritreian war, 1998-2000), we also assess the empirical usefulness of the model. It turns out that the Richardson model captures selected phases of the conflict quite well, a fact which can be used to distinguish between them.","PeriodicalId":127641,"journal":{"name":"ERN: Conflict; Conflict Resolution; Alliances (Topic)","volume":"186 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-05-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116286756","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A major and frequent criticism of the current cross-border insolvency framework is that international cooperation is likely to break down whenever significant local interests are at risk. The Model Law on Cross-Border Insolvencies, adopted in Chapter 15 of the Bankruptcy Code, and the commentary thereon have largely focused on such instances when states might be unwilling to cede control over local property, i.e., sovereignty-related problems. This article is the first to explore a separate set of problems in cross-border insolvencies that have little or nothing to do with sovereignty-related concerns. Cross-border insolvency law also faces acculturation problems as states attempt to synthesize the Model Law into already existing legal structures. Cultural differences between the Model Law and domestic laws may impede the Model Law’s goals of promoting legal certainty in this field. These cultural differences may include terminology and interpretation issues, as well as case management and procedural issues.This article examines two recent opinions from the Second Circuit Court of Appeals to illustrate these acculturation problems. It then considers the degree to which the Model Law (and Chapter 15) are currently equipped to minimize such defections. UNCITRAL, when drafting the Model Law, created a Guide to Enactment and Interpretation in order to promote consistent interpretation. I conclude that this Guide may be effective at dealing with some issues, but that it is ill-suited to address differences in the manner of interpretation.
{"title":"The Problem of Local Methods in Cross-Border Insolvencies","authors":"Andrew B. Dawson","doi":"10.15779/Z38T877","DOIUrl":"https://doi.org/10.15779/Z38T877","url":null,"abstract":"A major and frequent criticism of the current cross-border insolvency framework is that international cooperation is likely to break down whenever significant local interests are at risk. The Model Law on Cross-Border Insolvencies, adopted in Chapter 15 of the Bankruptcy Code, and the commentary thereon have largely focused on such instances when states might be unwilling to cede control over local property, i.e., sovereignty-related problems. This article is the first to explore a separate set of problems in cross-border insolvencies that have little or nothing to do with sovereignty-related concerns. Cross-border insolvency law also faces acculturation problems as states attempt to synthesize the Model Law into already existing legal structures. Cultural differences between the Model Law and domestic laws may impede the Model Law’s goals of promoting legal certainty in this field. These cultural differences may include terminology and interpretation issues, as well as case management and procedural issues.This article examines two recent opinions from the Second Circuit Court of Appeals to illustrate these acculturation problems. It then considers the degree to which the Model Law (and Chapter 15) are currently equipped to minimize such defections. UNCITRAL, when drafting the Model Law, created a Guide to Enactment and Interpretation in order to promote consistent interpretation. I conclude that this Guide may be effective at dealing with some issues, but that it is ill-suited to address differences in the manner of interpretation.","PeriodicalId":127641,"journal":{"name":"ERN: Conflict; Conflict Resolution; Alliances (Topic)","volume":"27 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-08-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117026706","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
What is the effect of wars on industrialization, technology and commercial activity? In economic terms, such events as wars comprise a large exogenous shock to labor and capital markets, aggregate demand, the distribution of expenditures, and the rate and direction of technological innovation. In addition, if private individuals are extremely responsive to changes in incentives, wars can effect substantial changes in the allocation of resources, even within a decentralized structure with little federal control and a low rate of labor participation in the military. This paper examines war-time resource reallocation in terms of occupation, geographical mobility, and the commercialization of inventions during the American Civil War. The empirical evidence shows the war resulted in a significant temporary misallocation of resources, by reducing geographical mobility, and by creating incentives for individuals with high opportunity cost to switch into the market for military technologies, while decreasing financial returns to inventors. However, the end of armed conflict led to a rapid period of catching up, suggesting that the war did not lead to a permanent misallocation of inputs, and did not long inhibit the capacity for future technological progress.
{"title":"The Impact of War on Resource Allocation: &Apos;Creative Destruction&Apos; and the American Civil War","authors":"B. Khan","doi":"10.3386/W20944","DOIUrl":"https://doi.org/10.3386/W20944","url":null,"abstract":"What is the effect of wars on industrialization, technology and commercial activity? In economic terms, such events as wars comprise a large exogenous shock to labor and capital markets, aggregate demand, the distribution of expenditures, and the rate and direction of technological innovation. In addition, if private individuals are extremely responsive to changes in incentives, wars can effect substantial changes in the allocation of resources, even within a decentralized structure with little federal control and a low rate of labor participation in the military. This paper examines war-time resource reallocation in terms of occupation, geographical mobility, and the commercialization of inventions during the American Civil War. The empirical evidence shows the war resulted in a significant temporary misallocation of resources, by reducing geographical mobility, and by creating incentives for individuals with high opportunity cost to switch into the market for military technologies, while decreasing financial returns to inventors. However, the end of armed conflict led to a rapid period of catching up, suggesting that the war did not lead to a permanent misallocation of inputs, and did not long inhibit the capacity for future technological progress.","PeriodicalId":127641,"journal":{"name":"ERN: Conflict; Conflict Resolution; Alliances (Topic)","volume":"158 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133632551","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article investigates uses of accounting in labour-management negotiations during the automotive industry restructuring of 2008 and 2009 in Canada. Following a series of negotiations that occurred between a large North American automobile manufacturer, a major Canadian automotive union and the Canadian government, we document how different stakeholder groups framed the emerging crisis and drew upon accounting in order to further their interests. Drawing on research in industrial relations, we outline two key modes of accounting in labour-management negotiations: (1) fostering, where accounting is used in an integrative manner to secure mutual gains; and (2) forcing, where accounting is used primarily to secure concessions from third parties. The case study highlights the way that forcing modes of accounting displaced more fostering modes as the crisis intensified, ultimately resulting in worker acceptance of pay restraint, more flexible work practices and division into a core and peripheral labour force. The paper contributes to understanding the role of accounting in labour-management negotiations and how this role can be implicated in shaping the construction and contestation of organizational crises.
{"title":"Fostering and Forcing Uses of Accounting: Labour-Management Negotiations in the Automotive Crisis in Canada 2008-2009","authors":"Staci A. Kenno, Clinton Free","doi":"10.2139/ssrn.2537643","DOIUrl":"https://doi.org/10.2139/ssrn.2537643","url":null,"abstract":"This article investigates uses of accounting in labour-management negotiations during the automotive industry restructuring of 2008 and 2009 in Canada. Following a series of negotiations that occurred between a large North American automobile manufacturer, a major Canadian automotive union and the Canadian government, we document how different stakeholder groups framed the emerging crisis and drew upon accounting in order to further their interests. Drawing on research in industrial relations, we outline two key modes of accounting in labour-management negotiations: (1) fostering, where accounting is used in an integrative manner to secure mutual gains; and (2) forcing, where accounting is used primarily to secure concessions from third parties. The case study highlights the way that forcing modes of accounting displaced more fostering modes as the crisis intensified, ultimately resulting in worker acceptance of pay restraint, more flexible work practices and division into a core and peripheral labour force. The paper contributes to understanding the role of accounting in labour-management negotiations and how this role can be implicated in shaping the construction and contestation of organizational crises.","PeriodicalId":127641,"journal":{"name":"ERN: Conflict; Conflict Resolution; Alliances (Topic)","volume":"4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-12-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126103311","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
When ethnic conflict is likely people seek safety in homogenous neighborhoods, but does the resulting ethnic segregation decrease communal violence? This paper argues that local segregation causes violence by eroding interethnic trust. Although segregation reduces violent disputes between individuals, the possibility of positive interethnic contact is also lower in segregated areas. Where levels of interethnic trust are low, it is easier for political leaders and other extremists to build support for communal violence. I demonstrate that segregation increases the incidence of violence using a new data set measuring ethnic composition and violence across approximately 700 small localities in Kenya's Rift Valley Province during Kenya's 2007/2008 post-election crisis. Because segregation is likely endogenous to violence, I draw on Kenya's history of land settlement to instrument for segregation. I also demonstrate that it is unlikely local segregation increases violence by increasing groups' organizational capacity for violence.
{"title":"Does Local Ethnic Segregation Lead to Violence?: Evidence from Kenya","authors":"Kimuli Kasara","doi":"10.2139/ssrn.2401738","DOIUrl":"https://doi.org/10.2139/ssrn.2401738","url":null,"abstract":"When ethnic conflict is likely people seek safety in homogenous neighborhoods, but does the resulting ethnic segregation decrease communal violence? This paper argues that local segregation causes violence by eroding interethnic trust. Although segregation reduces violent disputes between individuals, the possibility of positive interethnic contact is also lower in segregated areas. Where levels of interethnic trust are low, it is easier for political leaders and other extremists to build support for communal violence. I demonstrate that segregation increases the incidence of violence using a new data set measuring ethnic composition and violence across approximately 700 small localities in Kenya's Rift Valley Province during Kenya's 2007/2008 post-election crisis. Because segregation is likely endogenous to violence, I draw on Kenya's history of land settlement to instrument for segregation. I also demonstrate that it is unlikely local segregation increases violence by increasing groups' organizational capacity for violence.","PeriodicalId":127641,"journal":{"name":"ERN: Conflict; Conflict Resolution; Alliances (Topic)","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-02-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116861699","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article introduces a static, within-country, game-theoretic model of litigated conflict over fundamental rights. The static model suggests that increased judicial interference in the determination of fundamental rights through democratic elections is never social welfare-increasing, even if judicial and political biases run in opposite directions (i.e., if the judicial process is biased in favor of one interest group and the political process is biased in favor of an ideologically-opposed interest group). In addition, the analysis identifies a set of parameters where social welfare increases if the extent to which the litigated conflict over fundamental rights in the society is constitutionalized is decreased (i.e., if litigation effort becomes more expensive and/or less effective). A few real-world examples of the implications of this static analysis are examined, including gun control and the possible future reconstitution of the judiciary in Syria.
{"title":"Litigated Conflict Over Fundamental Rights: A Static Model","authors":"W. Bunting","doi":"10.15355/EPSJ.8.2.5","DOIUrl":"https://doi.org/10.15355/EPSJ.8.2.5","url":null,"abstract":"This article introduces a static, within-country, game-theoretic model of litigated conflict over fundamental rights. The static model suggests that increased judicial interference in the determination of fundamental rights through democratic elections is never social welfare-increasing, even if judicial and political biases run in opposite directions (i.e., if the judicial process is biased in favor of one interest group and the political process is biased in favor of an ideologically-opposed interest group). In addition, the analysis identifies a set of parameters where social welfare increases if the extent to which the litigated conflict over fundamental rights in the society is constitutionalized is decreased (i.e., if litigation effort becomes more expensive and/or less effective). A few real-world examples of the implications of this static analysis are examined, including gun control and the possible future reconstitution of the judiciary in Syria.","PeriodicalId":127641,"journal":{"name":"ERN: Conflict; Conflict Resolution; Alliances (Topic)","volume":"121 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-10-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114521846","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
What leads the United Nations Security Council to intervene in one conflict, but remain inactive in others of similar magnitude and cruelty? This paper analyzes all registered 178 internal and internationalized internal conflicts since 1945, with the goal to unveil what determines the probability of a UN intervention. Our main focus lies on the question whether the geographical proximity to the ve permanent members of the UN Security Council (China,France, Russia, the United Kingdom, and the United States) has an e ect on the probability of intervention. Our results suggest that the UN is substantially more likely to intervene in conflicts located in Europe. A more detailed look at distances revels that for every 1,000 kilometers of distance from France or the United Kingdom the probability of intervention decreases by about one third. Further, we nd that UN intervention is signi cantly more likely to happen in smaller (less population), poorer (smaller GDP per capita), and less open economies (openness to international trade).
{"title":"The Determinants of UN Interventions - Are There Regional Preferences?","authors":"J. Duque, Michael Jetter, Santiago Sosa","doi":"10.2139/ssrn.2255273","DOIUrl":"https://doi.org/10.2139/ssrn.2255273","url":null,"abstract":"What leads the United Nations Security Council to intervene in one conflict, but remain inactive in others of similar magnitude and cruelty? This paper analyzes all registered 178 internal and internationalized internal conflicts since 1945, with the goal to unveil what determines the probability of a UN intervention. Our main focus lies on the question whether the geographical proximity to the ve permanent members of the UN Security Council (China,France, Russia, the United Kingdom, and the United States) has an e ect on the probability of intervention. Our results suggest that the UN is substantially more likely to intervene in conflicts located in Europe. A more detailed look at distances revels that for every 1,000 kilometers of distance from France or the United Kingdom the probability of intervention decreases by about one third. Further, we nd that UN intervention is signi cantly more likely to happen in smaller (less population), poorer (smaller GDP per capita), and less open economies (openness to international trade).","PeriodicalId":127641,"journal":{"name":"ERN: Conflict; Conflict Resolution; Alliances (Topic)","volume":"51 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-04-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115309408","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Alliances often face both free-riding and hold-up problems, which under- mine the effectiveness of alliances in mobilizing joint fighting effort. Despite of these disadvantages, alliances are still ubiquitous in all types of contests. This paper asks if there are non-monetary incentives to form alliances, e.g., intimidating/discouraging the single player(s) who is/are left alone. For this purpose, I compare symmetric (2 vs. 2) and asymmetric (2 vs. 1) contests to their equivalent 4-player and 3-player individual contests, respectively. We find that alliance players in symmetric (2 vs. 2) contests behave the same as those in equivalent 4-player individual contests. However, in asymmetric (2 vs. 1) contests, stand-alone players were strongly discouraged to exert effort (especially the females), compared to the 3-player individual contests. Alliance players may have anticipated this effect and also reduced their effort, if alliances share the prize according to the merit rule. Behavioural factors such as the need to belong can help reconcile the "paradox of alliance formation".
联盟经常面临搭便车和拖延的问题，这削弱了联盟动员联合作战力量的有效性。尽管存在这些缺点，联盟在所有类型的比赛中仍然无处不在。这篇论文询问了是否存在非金钱激励机制去形成联盟，例如，恐吓/阻止那些被孤立的单人玩家。为此，我将对称(2 vs. 2)和非对称(2 vs. 1)竞赛分别与4人竞赛和3人竞赛进行比较。我们发现，在对称(2 vs 2)竞争中，联盟玩家的行为与4人个人竞争中的行为相同。然而，在非对称(2 vs. 1)比赛中，与3人单人比赛相比，独立玩家(尤其是女性)不愿付出努力。联盟玩家可能已经预料到这种影响，并且也减少了他们的努力，如果联盟根据功绩规则分享奖励。归属需求等行为因素有助于调和“联盟形成悖论”。
{"title":"Fight Alone or Together? The Need to Belong","authors":"Changxia Ke","doi":"10.2139/ssrn.1971641","DOIUrl":"https://doi.org/10.2139/ssrn.1971641","url":null,"abstract":"Alliances often face both free-riding and hold-up problems, which under- mine the effectiveness of alliances in mobilizing joint fighting effort. Despite of these disadvantages, alliances are still ubiquitous in all types of contests. This paper asks if there are non-monetary incentives to form alliances, e.g., intimidating/discouraging the single player(s) who is/are left alone. For this purpose, I compare symmetric (2 vs. 2) and asymmetric (2 vs. 1) contests to their equivalent 4-player and 3-player individual contests, respectively. We find that alliance players in symmetric (2 vs. 2) contests behave the same as those in equivalent 4-player individual contests. However, in asymmetric (2 vs. 1) contests, stand-alone players were strongly discouraged to exert effort (especially the females), compared to the 3-player individual contests. Alliance players may have anticipated this effect and also reduced their effort, if alliances share the prize according to the merit rule. Behavioural factors such as the need to belong can help reconcile the \"paradox of alliance formation\".","PeriodicalId":127641,"journal":{"name":"ERN: Conflict; Conflict Resolution; Alliances (Topic)","volume":"8 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115396436","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In bringing economic analysis to bear on the settlement of legal disputes, it is commonly presumed that the parties to the dispute are governed by the principles of private property and so are residual claimants to their legal expenses. This institutional framework promotes a substantive rationality that is often conducive to the settlement of disputes without trial. In contemporary mixed economies, however, a political agency is often party to a dispute. These agencies operate under a different substantive rationality because the framework of collective property under which they operate means they do not have residual claims on their legal expenses. They can, however, convert those expenses into investments in politically preferred activity. What results is a conflict between rationalities that generates societal tectonics that often are misidentified as market failures when they are really systemic properties of the conflicting rationalities.
{"title":"Dispute Resolution When Rationalities Conflict: Cost and Choice in a Mixed Economy","authors":"R. Wagner","doi":"10.2139/ssrn.1921929","DOIUrl":"https://doi.org/10.2139/ssrn.1921929","url":null,"abstract":"In bringing economic analysis to bear on the settlement of legal disputes, it is commonly presumed that the parties to the dispute are governed by the principles of private property and so are residual claimants to their legal expenses. This institutional framework promotes a substantive rationality that is often conducive to the settlement of disputes without trial. In contemporary mixed economies, however, a political agency is often party to a dispute. These agencies operate under a different substantive rationality because the framework of collective property under which they operate means they do not have residual claims on their legal expenses. They can, however, convert those expenses into investments in politically preferred activity. What results is a conflict between rationalities that generates societal tectonics that often are misidentified as market failures when they are really systemic properties of the conflicting rationalities.","PeriodicalId":127641,"journal":{"name":"ERN: Conflict; Conflict Resolution; Alliances (Topic)","volume":"25 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-09-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127631373","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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