My six year old and I will be rooting hard for Duke tonight. We make no apologies. Do we feel any guilt given the prevalent underdog story? If you want a good Duke/Butler underdog story, go read Remains of the Day. (Or put it in your Netflix queue; it’s like The Blind Side! Same uplifting themes.)

Let’s clear a few things up about the underdog myth. First, I find it hard to think of Duke as ever being a true favorite given that the team is one of the most widely detested in American sports. Rooting for Duke builds character, I tell my son.

Second, “everyone loves an underdog” can be countered with “everyone loves a winner.” Americans love the scrappy, come-from-nowhere, David fighting Goliath. Except for when we don’t. For every Miracle on Ice, there is a Dream Team demolishing Angola.

Third, do we really need a treacly narrative for every sports story? I don’t need a Jim Nantz-narrated docu-melo-drama to get me interested in basketball any more than I need Ken Burns or George Will to over-intellectualize baseball. Newsflash – sports is not a metaphor for life – either yours or mine.

What’s truly great about basketball, Duke and otherwise, is that there is no arguing with the pure truth of a good jumpshot falling through the net.

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Kim Krawiec (Duke) has a new paper on SSRN, “A Woman’s Worth”, in which she disputes some of the traditional arguments for legal regulation of prostitution, oocyte donation, and surrogate pregnancy. Here is the abstract:

This Article examines three traditionally “taboo trades”: (1) the sale of sex, (2) compensated egg donation, and (3) commercial surrogacy. The article purposely invokes examples in which the compensated provision of goods or services (primarily or exclusively by women) is legal, but in which commodification is only partially achieved or is constrained in some way. I argue that incomplete commodification disadvantages female providers in these instances, by constraining their agency, earning power, and status. Moreover, anticommodification and coercion rhetoric is sometimes invoked in these settings by interest groups who, at best, have little interest in female empowerment and, at worst, have economic or political interests at odds with it.

Krawiec’s focus is on whether regulation of these markets reflect an inherent bias against women. For example, she questions why regulations of egg donation are so stringent (and appear to push women to “donate” for altruistic motives) while men face little comparable restrictions in sperm donation. This contributes to the shocking statistic cited by Krawiec that egg and sperm donors receive roughly the same hourly compensation for their services.

I see these regulations less as a means to regulate women differently and more as a way to protect the marriage contract as a social institution or tool of social control. There are some interesting connections between Krawiec’s work on these “taboo trades” and her research on financial derivatives. Whereas financial derivatives are often used as ways to unbundle the various economic rights associated with financial assets such as debt and equity, these taboo trades – prostitution, egg donation, and surrogacy – represent the unbundling (or decoupling) of the marriage contract. Religious and legal strictures traditionally bound sex, conception, and childbearing all within the confines of the marriage contract. As with derivatives, new technology and markets combined to allow these services to be unbundled. Regulation of trades of these unbundled services may be aimed at protecting the marriage contract (or at least minimizing its damage) and not just at regulating women per se.

In fact, these regulations also serve to control men – albeit indirectly. Regulating the availability of prostitution pushes men to seek sex in a relationship (like marriage). Raising the cost of surrogacy impacts men – including gay men -- who want fatherhood outside of heterosexual marriage. What explains then why women are the dominant targets of these regulations and not men? Perhaps it is gender bias. But law & economics may offer an alternative explanation. Women may be the cheapest cost avoiders. For example, it may be far cheaper to regulate the relatively fewer number of prostitutes compared to the larger number of johns. It may be easier to regulate egg donation and surrogacy – which often require more invasive technology than sperm donation.

Krawiec’s article opens up a number of interesting questions for future research – particularly how the unbundling of the marriage contract have different effects across class lines. This has long been an interesting area of inquiry in economics – see for example George Akerlof and Janet Yellen’s work on “reproductive technology shocks.” One hypothesis would be that both the markets and the restrictions Krawiec describes have widely differing impacts along two axis -- higher income and lower income women on the one hand and women seeking to be part of a long-term opposite sex relationship or not on the other. Disaggregating the analysis based on class might yield some very provocative conclusions. Might higher-income women favor price controls (including indirect price controls that operate through moral suasion) on surrogacy and oocyte donation because it keeps the cost of having a baby artificially low?

Happy Commercialized Romance Day!

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If Saab does meet its demise (I hope it doesn't) and now that Volvo seems to be thinking outside the box (wink) and marketing itself to Republicans, what will academics drive?  Here are some of the candidates with a thumbnail analysis of implications for parking one in the faculty lot:

1.  Volkswagen: verboten.

2.  Prius: Check plus on assauging social guilt, check minus on panache. 

3.  Subaru: A strong candidate except doesn't exactly scream "I'm a European Social Democrat stuck in the U.S."

4.  Jaguar: Screams "I'm a Tory, and you don't even know what that means."

5.  Land Rover: The toxic connotation combination of yuppiedom and colonialism.

6.  Mercedes/BMW: makes it hard for the driver to make social justice arguments in faculty meetings on the parking situation.

7.  Mazda/Honda and everything else: a little too lower case "d" democratic.

I guess that leaves us with ... Audi. Just don't check its corporate structure or you'll be back at square 1.

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My guest-blogging stint has come to an end.  And the semester is winding down.  So it is time to tie things together.  I've tried to cover a lot of ground in two weeks -- starting with the Berlin Wall, moving on to predictions of trouble ahead for the law school business model, analyzing the financial crisis, and talking about how technology, including ideas from Open Source can improve financial regulation.  There are some common threads to all of this:

1.  Change can come suddenly and bring even big and old institutions to their knees.

2.  It is hard to outrun underlying economics.

3. Even if predictive models are not "wrong", we need to pay close attention to their assumptions and the incentives of people who use them.

4. Similarly, lawyers can't afford to shy away from technical subjects or bad things start to happen.

5.  Open systems -- whether economies or regulations or institutions -- tend to be more robust.  Karl Popper still has much to say.

I would like to thank Gordon and the rest of the Glom for letting me guest blog these past two weeks.  Thank you to those of who have read my posts and particularly to those who have responded either on the blog or off-line.

If you are a law professor and going to AALS in New Orleans, look me up.  I'll definitely be at the Financial Institutions Section on Friday at 10:30 AM, where I'll be commentng on an intriguing paper by Daniel Schwarcz (Minnesota) on regulatory competition in insurance (David mentioned the paper in a post a few days ago).  I'll also be presenting some of the ideas on technology and securities disclosure that you have gotten a taste of over the last several days at the Securities Regulation Section on Saturday morning.  The other papers in this section are real dynamite and include William Birdthistle on Jones v. Harris (following his posts in the Glom forum on the subject two weeks ago), Michael Guttentag (Loyola - LA) on Financial Crashes, and Charles Whitehead (Cornell) on "Reframing Financial Regulation."

Have a good Thanksgiving. 

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My time at the Glom is drawing to a close. So to mark the coming week and to mix the sublime and the ridiculous (as in my wont), I'd thought I'd give a list of some of the things I am thankful for this year (at least those not-too-personal things that seem to fit in the 4 themes of this blog listed on the masthead):

1. Business (to the extent the private sector still exists): The Frontier (where to have breakfast in Albuquerque).

2. Law (to the extent it isn't just what we ate for breakfast): the lawyers who work hard to make sure we respond to crises (political and economic) without devouring law; senior scholars who take an interest in developing junior scholars; Todd Rakoff; those of my students who are still interested in Business Associations and Contracts this late in the semester; Debbie Anker.

3. Economics (to the extent it still works): an explanation of the leverage cycle (hat tip to Margaret Blair); really good articles on the economics of structured finance; research on decision-making under uncertainty not just risk.

4. Society (to the extent Maggie Thatcher is wrong and it is real): the best part of the birds; stuffing; sauce; and cake; washed down with either a martini or Canada dry.

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Job said, "the fear of the Lord, that is wisdom." A group of scholars at the University of Chicago is not satisfied to leave it at that and has launched a research program on the nature and benefits of wisdom.

Cool.

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