In the last fifteen years, a number of empirical studies of multi-member judicial panels have documented a phenomenon popularly known as "panel effects." Two principal findings of this literature are: (1) the inclusion of even a single (non-pivotal) member from outside the dominant ideological on the panel can induce induces the panel to reverse "like minded" administrative agencies more frequently than would a panel dominated wholly by the majority ideology; and (2) when mixed panels do not reverse, they frequently issue unanimous decisions. These apparently moderating effects of mixed panel composition pose a challenge to conventional median voter theory. In the face of this challenge, many scholars have offered their own explanation for panel effects (including collegiality; deliberation, whistle-blowing, and others). In this paper, we propose a general model that (among other things) predicts panel effects as a byproduct of strategic information acquisition. The kernel of our argument is that (non-pivotal) minority members of mixed panels have incentives to engage in costly searches for information in cases where the majority members would rationally choose not to do so. As a result, the inclusion of minority members may induce greater information production in a way that increases the likelihood that a mixed panel will overturn ideologically allied agency actors. Our informational account -- if true -- has normative implications for the composition of judicial panels in particular, and for deliberative groups more generally.

We analyze incentive-efficient government bailouts within a canonical model of intra-firm moral hazard. Bailouts exacerbate the moral hazard of firms and managers in two ways. First, they make them less averse to failing. Second, the taxes to fund bailouts dampen their incentives. Nevertheless, if third-party externalities from keeping the firm alive are strong, bailouts can improve welfare. Our model suggests that governments should use bailouts sparingly, where social externalities are large and subsidies small; eliminate incumbent owners and managers to improve a priori incentives; and finance bailouts through redistributive taxes on productive firms instead of forcing recipients to repay in the future.

This paper considers the efficiency implications of managerial "favoritism" towards block shareholders of public corporations. While favoritism can take any number of forms (including the payment of greenmail, diversion of opportunities, selective information disclosure, and the like), each may have the effect (if not the intent) of securing a block shareholder's loyalty in order to entrench management. Accordingly, the practice of making side payments is commonly perceived to be contrary to other shareholders' interests and, more generally, inefficient. In contrast to this received wisdom, we argue that when viewed ex ante, permissible acts of patronage toward block shareholders may play an important efficiency role that benefits all shareholders alike. We demonstrate that the prospect of having to share rents with a third party may itself have a deterrent effect on managerial self-dealing - an off-equilibrium benefit that would not be readily apparent if one looked only at instances where favoritism actually occurs in practice.

This article investigates whether the regulatory regime created by the Sarbanes-Oxley Act of 2002 (SOX) has driven firms in general, and small firms in particular, out of the public capital market. Previous attempts to address this question have had difficulty controlling for other factors that could have affected exit decisions around the enactment of SOX. To address this difficulty, we examine the post-SOX change in the propensity of public American target firms to favor private acquirers over public ones with the corresponding change for foreign target firms, which were outside the purview of SOX. Our findings are consistent with the hypothesis that SOX induced small firms to exit the public capital market during the first year of its enactment. Large firms, by contrast, do not appear to have been affected.