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The analysis presented in this article addresses the narrow issue of the effects of potential treble damage actions on the behavior of contractually-related manufacturers and distributors. Part II of this article presents the notion of opportunistic behavior, which has influenced much of the economic analysis and the Supreme Court's recent treatment of vertical nonprice restraints. The transformation of the threat of opportunism into socially-wasteful expenditures of resources is also discussed. Part III examines the problematic role of opportunism in the distribution of goods, restricted distribution practices that aim to solve the problem, and the antitrust treatment of such restricted distribution practices. This part argues that, in terms of controlling opportunism, which is the substantive purpose of the practice, the Supreme Court's formalistic distinction between price and nonprice restraints is not useful. Part IV examines the perverse incentives created by the current antitrust treatment of restricted distribution practices. Part IV begins with an analysis of contract law damages and the incentives to engage in opportunistic behavior through inducing breach and collecting damages when stipulated damage clauses provide for damages greater than actual damages. The analysis is then extended to the antitrust treatment of restricted distribution contracts where the threat of a treble damage action is viewed as an implicit government-mandated clause stipulating damages greater than actual damages. Thus, the incentives to engage in opportunistic behavior through the manipulation of restricted distribution contract terms are the same as under other contracts when stipulated damages are greater than actual damages. This part argues that the pursuit of treble damages in restricted distribution cases is another form of opportunistic behavior, and that the threat of such opportunistic behavior increases the costs of procompetitive distribution practices and thus decreases consumer welfare. The opportunistic pursuit ...

This dissertation presents a legal and economic history of the change in method of incorporation from special corporate charters via legislative act to general incorporation laws which make corporate privileges available to all who meet certain, minimal procedural requirements. Prior to the mid-1800's, corporate privileges were allocated by special legislative act in a market for corporate privileges. In this market, legislators had monopoly control over the use of corporate privileges within their respective jurisdictions. Thus, the issue examined is why the legislators relinquished their monopoly control. The thesis of this dissertation, stated briefly, is that legislators in both the United States and Great Britain abandoned the market for special corporate charters because events beyond their control made it difficult or impossible for them to continue to create and capture rents through the passage of special acts of incorporation. Exogenous legal and economic changes are identified and shown to be reliable predictors of the demise of special corporate chartering. In England, changes through the common law courts produced an inexpensive alternative to the corporate form and lowered the rates of return to legislators from passing special acts. In the United States, the growth of interstate commerce and an important Supreme Court decision, Paul v. Virginia, changed the legislative market for corporate privileges from one of localized monopolies into a competitive, national free market in corporate privileges. The historical experience suggests that the passage of a national incorporation law could lead to the same type of abuses that occurred prior to the development of the national free market in incorporation laws and the passage of liberal state general incorporation laws. ; Ph. D.

State regulation of insurance companies has been criticized for many years because of the burden imposed on insurers by having to comply with the laws of many jurisdictions. These higher costs are passed on to consumers. The problems with the current regulatory structure are prompting calls for increased federal regulation of insurance. However, all proposals to federalize insurance regulation create opportunities for abuse at the hands of the federal government and fail to utilize the benefits of a federal system. This article shows how many of the problems of the current system can be addressed without resorting to a large scale intrusion of federal regulators into insurance markets. The proposed solution calls for minimal federal intervention to provide for jurisdictional competition between states that would be allowed to charter insurers that could operate nationally with only the single license granted by the charter. This single-license approach addresses the most salient concerns of proponents of federal optional chartering. It also has the potential for triggering competition and innovation in insurance products and rates while preserving a meaningful role for state regulation.

Seeing the potential for jurisdictional competition to generate a more efficient insurance regulatory structure, proposed is for insurers to act nationally with a single license granted by one state as a means of spurring insurance product & rate competition & innovation while keeping state regulation relevant. References. Adapted from the source document.