The Good-Faith Purchaser: Markets, Culture, and the Legal System

Abstract:
A key legal institution is the set of rules balancing theft with markets as alternative means to transfer property rights. Even if all legal systems forbid theft, different societies provide different ex post solutions to the conflict arising between the original owner and the good-faith buyer of a stolen good. These rules range from the full protection of the original owner's property right to the full protection of the buyer's reliance on contract. In situations in which only intermediaries can transfer goods by using either theft or markets, society should condone transfers occurred through theft when innocent buyers value the good more than original owners and reverse them otherwise. We show that, in the first case, provided that the difference between the owner's and the buyer's valuation is not too wide, there are separating equilibria in which moral intermediaries --- i.e., those for whom theft entails a sufficiently high moral cost --- signal their proper title by charging higher prices. In the second case, the market shrinks since moral intermediaries refrain from stealing. In the most likely case, in which buyers tend to value the good more than original owners, the extent of protection of the owner increases (decreases) with the share of moral intermediaries (the quality of the legal system) because of the lower probability of theft (lower impact of public enforcement). Instrumental variables estimates based on a cross section of 77 jurisdictions are consistent with this prediction.

Dari-Mattiacci, Giuseppe, Guerriero, Carmine and Huang, Zhenxing, The Good-Faith Purchaser: Markets, Culture, and the Legal System (June 20, 2012). Amsterdam Law School Research Paper No. 2012-70; Amsterdam Center for Law & Economics Working Paper No. 2012-01.

A Plural Account of the Transnational Law Merchant

Abstract:
The Law Merchant is depicted today as a transnational system based on merchant practice operating outside the fabric of national law. It is conceived as cosmopolitan in nature, universal in application, expertly delivered, and independent of other regulatory systems. This article critiques these qualities attributed to the historical as well as present-day Law Merchant. It disputes that it has evolved ‘spontaneously’ out of merchant practice; that it is uniform in nature; and that it transcends national law. It argues instead that the Law Merchant is often fragmentary in nature and subject to disparate national and transnational influences. It challenges, in particular, unitary conceptions of ‘autonomy’ ascribed to the Law Merchant, presenting a pluralistic conception of Law Merchant ‘autonomy’ instead. It illustrates these arguments in relation to the so-called Cyberspace Law Merchant and to transnational commercial arbitration.

Trakman, Leon, A Plural Account of the Transnational Law Merchant (May 14, 2012). (2011) 2(3) Transnational Legal Theory 309–345; UNSW Law Research Paper No. 2012-19.

Private Legal Transplants: Bright and dark nature of an unnoticed phenomenon

"Only a few months ago, the social image of prom­in­ent transna­tional enter­prises such as Apple and HP was threatened by media report­ing sev­eral viol­a­tions of labor rights by Fox­conn, the main con­tract man­u­fac­turer for elec­tron­ics com­pan­ies such as these, and which is loc­ated in the People’s Repub­lic of China ..." (more)

[Tomaso Ferando, Critical Legal Thinking, 28 May 2012]