Research Papers and Abstracts

Profit Sharing Contracts in Hollywood : Evolution and Analysis
(Journal of Legal Studies, Vol XXVII (1), January, 1998, pp. 67-112).

This article examines the development of profit- or revenue-sharing contracts in the motion picture industry. Contrary to much popular belief, such contracts have been in use since the start of the studio era. However, early contracts differed from theose seen today. The evoloution of the current contract is traces, and evidence regarding the increased use of sharing contracts after 1948 is examined. I examine competing theories of the economic fucntin served by these contracts. I suggest that it its unlikely that these contracts are the result of a standard principal-agent problem.

This is an Adobe Acrobat PDF file of the paper as it appeared in the Journal of Legal Studies. This file is posted with permission of the Journal of Legal Studies.

The Appraisal Remedy and Merger Premiums
The appraisal remedy affords a shareholder the option to redeem her shares for cash in the event of certain corporate actions, such as mergers. While appraisal appears to have been developed to protect shareholders who might oppose a corporate action yet be unable to sell their shares for fair value in a liquid market, the value of appraisal to shareholders of publicly traded firms is questionable. This is especially true when we realize that shareholder class actions for breach of fiduciary duty provide an alternative avenue of recovery and are easier to initiate. In this paper we present the first large-sample empirical study of the effect of access to appraisal on target shareholder gains from acquisitions. We examine 1350 mergers involving publicly held firms. In some of these mergers dissenting shareholders could seek an appraisal and in others appraisal was not available. We find some evidence that appraisal offers dissenting shareholders hold-up power that reduces average shareholder gains in certain transactions. However, for the entire sample, we find no evidence that appraisal has any effect, positive or negative, on target shareholder gains from takeovers.

Limited Liability in California: 1928-1931
Limited liability for corporations is a fairly recent innovation, going back only to the mid-19th century in England and the United States. In California, limited liability did not become available to corporate shareholders until 1931. This paper examines the effect of adopting limited liability for firms incorporated in California. Our results may help to inform the debate over corporate liability.

Working Paper, September, 2000