Resume

• 2006

  University of Illinois at Urbana-Champaign

  Full Professor & tenured since 2008 (Associate Professor between 2006-2008)\nLynn & Daniel Murray Faculty Scholar (2010-2012)\nVisiting Professor

  University of Haifa Faculty of Law (2014)\n\nCourses taught: Business Associations (3

  4 & 6 credits); Mergers & Acquisitions; Business Strategy for Lawyers; Evolution of Corporate Law & Policy; Unincorporated Business Entities; Antitrust Law; Antitrust Policy.\n•\tBest Instructor teaching awards: 2009; 2010; 2016; 2017.\n\nCommittees served: Admissions (Chair); Appointments (Chair); Career Services; Courtesy Appointments & VAPs; Curriculum; Discipline (Chair); Discipline (Investigator & Prosecutor); Graduate & International Studies (Chair); International Appointments; Lectures & Symposia; Legal Writing Appointments; Promotion & Tenure; Promotion & Tenure Appeal (advisory committee to Provost); Student scholarship.

  University of Illinois at Urbana-Champaign

• 2004

  Amitai

  Aviram

  Florida State University

  Florida State University

• 2002

  George Mason University

  George Mason University

• 2001

  Business Strategy

  Competition Law

  Mergers & Acquisitions

  Economic analysis of law

  Corporate Law

  University Teaching

  Legal Research

  Research

  Corporate Governance

  Counter-cyclical Enforcement of Corporate Law

  Corporate and securities laws are seen to mitigate corporate fraud by 'manipulating the incentives of agents'​: presenting corporate agents with a probability of being caught and punished if they commit fraud. This article suggests that the same laws also affect corporate fraud in a significant but unappreciated manner

  by 'manipulating the perceptions of the principals'​: affecting the principals'​ efforts in monitoring the agents by making them perceive the risk of fraud as more or less likely. \n\nDue to several cognitive biases discussed in this article

  principals misperceive the risk of fraud by their agents in a cyclical manner: they under-estimate the likelihood of fraud during booms and over-estimate it following busts. As a result

  they insufficiently police the agents during booms and excessively do so during busts. \n\nConspicuous law enforcement triggers cognitive biases that could be thoughtfully used to counter the public's cyclical bias. But political pressures that prosecutors face

  as well as their failure to consider law enforcement's effect on principals' perceptions

  result in enforcement that is itself cyclical and may exacerbate the biased perception of the risk of fraud. \n\nMonetary policy is analogous in requiring counter-cyclical government intervention

  and central banks have successfully stepped up to the task despite facing similar pressure not to intervene counter-cyclically. This article concludes by examining whether institutional safeguards that free central banks to operate counter-cyclically can be adapted to the context of corporate fraud.

  Counter-cyclical Enforcement of Corporate Law

  Topic: Law & Perceptions

  Topic: Corporate Organs

  The Placebo Effect of Law: Law's Role in Manipulating Perceptions

  Much of legal scholarship

  and in particular Law and Economics

  evaluates law and predicts its effects based on an analysis of law's manipulation of individuals'​ incentives. Although manipulating incentives certainly explains some of law's impact on behavior (e.g.

  increasing airport security may deter some airplane hijackers)

  law has an equally important impact on behavior by manipulating perceptions (e.g.

  causing the public to believe that the risk of airplane hijacking has diminished as a result of the law that increased airport security). \n\nThus

  like the placebo effect of medicine

  a law may impact social welfare beyond its objective effects by manipulating the public's subjective perception of the law's effectiveness. Failure to consider this largely ignored legal placebo effect may cause significant overstatement or understatement of a law's benefits. \n\nBy shedding light on laws'​ effects on perceptions

  this Article reveals forces that shape the creation of law. Legal placebo effects are a method by which politicians extract private benefits from the identification and mitigation of gaps between real and perceived risks. Some private entities compete with lawmakers through extra-legal methods. This competition affects laws' subject matter and the manner in which laws are presented to the public.

  The Placebo Effect of Law: Law's Role in Manipulating Perceptions

  Officers' Fiduciary Duties and the Nature of Corporate Organs

  The nature of officers’ fiduciary duties (and in particular whether the Business Judgment Rule applies to officers) is the subject of heated scholarly debate and conflicting case law. This Article analyzes the question using a neglected conceptual tool: the corporate organ.\n\nCorporate organs are bodies that act on behalf of the corporation but are not subject to its control and thus are not governed by agency law (the board of directors is the prototypical organ). This Article argues that corporate organs differ from

  and complement

  the other type of corporate actor (corporate agents) in the allocation of discretion whether to approve acts that are in the fiduciary duty penumbra. For agents

  this oversight function is given to the beneficiary (the principal); for organs

  it is given to judges.\n\nThe nature of an officer’s fiduciary duties depends on whether oversight by the beneficiary

  or by judges

  would maximize accountability. The answer differs between officers

  so in contrast to the arguments of both sides of the debate

  officers should not be uniformly classified as agents or organs. Such classification is best left to private ordering. Extant law allows for such private ordering but provides officers with an incentive to maintain an ambiguous status. This Article suggests tweaks to the law that would incentivize officers to self-select their status as organs or agents.

  Officers' Fiduciary Duties and the Nature of Corporate Organs

  Path Dependence in the Development of Private Ordering

  Contrary to some idealized notions

  Private Legal Systems (“PLS”) are not typically locked in Darwinian competition over the efficiency of their norms

  and do not form autonomously (that is

  without reliance on preexisting institutions) upon the identification of an efficient norm. The evolution of PLSs is primarily driven by the PLSs’ relative enforcement costs

  not by the relative efficiency of the norm they attempt to enforce.\n\nBecause of enforcement costs’ role

  PLSs form in a path dependent manner

  beginning by enforcing a collaborative core norm – typically one that provides religious or social identity – then gradually expanding to enforce increasingly adversarial expansion norms. PLSs sometimes attempt to reduce path dependence by “inventing tradition” (creating rituals and symbols that suggest a shared identity) – an activity that has thus far not received much attention in the private ordering scholarship.

  Path Dependence in the Development of Private Ordering

  Bias Arbitrage

  The production of law - including the choice of a law's subject matter

  the timing of its enactment and the manner in which it is publicized and perceived by the public - is significantly driven by an extra-legal market in which politicians and private parties compete over the opportunity to engage in bias arbitrage. Bias arbitrage is the extraction of private benefits through actions that identify and mitigate discrepancies between objective risks and the public's perception of the same risks. \n\nPoliticians arbitrage these discrepancies by enacting laws that address the misperceived risk and contain a 'placebo effect' - a counter-bias that attempts to offset the pre-existing misperception. If successful

  politicians are able to take credit for the change in the perceived risk

  while social welfare is enhanced by the elimination of deadweight loss caused by the risk misperception. \n\nHowever

  politicians must compete with private parties such as insurers

  experts and the media

  who can engage in bias arbitrage using extra-legal means. This article analyses methods in which parties engage in bias arbitrage and the effect of interaction between potential bias arbitrageurs on the production of law.

  Bias Arbitrage

  Topic: Enforcement mechanisms of private legal systems

  Regulation by Networks

  The private ordering literature examines how nongovernment institutions mitigate opportunistic behavior in transactions. It emphasizes two elements that facilitate cooperation and reduce opportunism: repeated play and reputation. This paper explores the implications of a third element: network effects. Network effects create an incentive for a unique form of opportunism that exists only in network environments - degradation. On the other hand

  network effects facilitate mechanisms that may be very effective in mitigating opportunism. Therefore

  in certain industries

  networks mitigate opportunism

  largely displacing in that role the parties to the transaction and the government. This paper identifies mechanisms used by networks to reduce opportunism

  and market characteristics that are conducive to the effectiveness of these mechanisms (and therefore to the efficiency of networks as regulators). This helps explain the prevalence of networks in certain markets as compared to others

  and gives tools to assess networks' ability to self-regulate and anticipate the type of opportunism that is more likely to plague a given environment.

  Regulation by Networks

  Other topics

  A Paradox of Spontaneous Formation: The Evolution of Private Legal Systems

  Scholarship on private legal systems (PLS) explains the evolution of norms created and enforced by PLSs

  but rarely addresses the evolution of institutions that form PLSs. Such institutions are assumed to form spontaneously (unless suppressed by law) when law is either unresponsive or incapable of directing behavior in welfare-maximizing manners. \n\nBut

  as this paper demonstrates

  PLSs typically cannot form spontaneously. Newly formed PLSs cannot enforce cooperation since the effectiveness of mechanisms used to secure this cooperation (e.g.

  the threat of exclusion) depends on the PLS's ability to confer benefits to its members

  and newly formed PLSs do not yet confer such benefits. \n\nSuccessful PLSs bypass this barrier by building on extant foundations - preexisting institutions that already benefit members

  typically through functions requiring less costly enforcement. The threat of losing preexisting benefits disciplines members to abide by the PLSs' rules

  which in turn allows the PLSs to regulate behavior. This pattern indicates that rather than developing spontaneously

  PLSs develop in phases

  initially facilitating activities that are unrelated to regulating behavior and incur lower enforcement costs

  the provision of which enables the PLS to regulate behavior in the second stage. The paper suggests normative applications of this observation in the fields of antitrust

  critical infrastructure protection and corporate governance.

  A Paradox of Spontaneous Formation: The Evolution of Private Legal Systems

  Bail-Ins: Cyclical Effects of a Common Response to Financial Crises

  In the wake of financial crises

  public authorities often respond by using law to modify private contracts to transfer value from those who fare better in the crisis to those who fare worse. From the perspective of the crisis victim

  this is a bailout. Because this article focuses on the perspective of the other party to the contract (specifically

  on the incentives this response creates to that party)

  this article will refer to such responses as “bail-ins”. Recent examples include staying foreclosures

  authorizing bankruptcy courts to modify mortgage terms

  or threatening criminal prosecution to induce banks to undo transactions made with their clients. \n\nBail-ins have greater political appeal than other forms of redistributive action but are expected to reduce future investment

  as investors fear similar actions in future crises. How harmful is that? Market-skeptics question that the market correctly determines the optimal amount of investment

  and are thus untroubled by government’s manipulation of it. And to appease those who do trust market allocation of investment

  government can offset the investment reduction by subsidizing investment.\n\nThis essay argues that bail-ins are significantly harmful from both market-trusting and market-skeptic perspectives. Rather than a permanent reduction in future investment

  bail-ins reduce investment cyclically – significantly when the bail-in is imposed

  but declining gradually as cognitive biases cause managers to underestimate the risk of future contract modifications and agency costs incentivize the managers to increase investment regardless of future bail-in risk. \n\nCyclical fluctuation in investment deterrence may seem less harmful than permanent deterrence

  but the opposite is true. As this essay explains

  cyclical fluctuation of investment makes bail-ins harmful from the perspectives of both market-skeptics and market-trusters

  and exacerbates the magnitude of future business cycles.

  Bail-Ins: Cyclical Effects of a Common Response to Financial Crises

  Allocating Regulatory Resources

  This article analyzes how law enforcers (with particular emphasis on securities regulators) should allocate their limited resources among multiple targets

  as well as how they are likely to allocate these resources. It modifies existing models in one significant way: it considers the effect of regulation not only on the behavior of those subject to it (potential wrongdoers)

  but also on the perceptions – and as a result

  on the behavior – of those whom regulation seeks to protect (potential victims).\n\nNormatively

  the article challenges the view of regulation as a two-way tradeoff between enforcement costs and deterrence of wrongdoing (i.e.

  the effect of regulation on potential wrongdoers’ risk perception)

  because it ignores the effect of regulation on potential victims’ risk perception. The article maps a more nuanced tradeoff between regulation’s effects on three key actors: regulators (administrative effects)

  potential wrongdoers (accountability effects)

  and potential victims (placebo effects).\n\nDescriptively

  the article demonstrates how regulators’ ability to bias arbitrage (create placebo effects for private gain) generates incentives for either under- or over-enforcement

  depending on the circumstances. Structural conditions that affect regulators’ incentive to use regulation for bias arbitrage are explored.

  Allocating Regulatory Resources

  Evolutionary Models of Corporate Law

  This chapter first considers resistance to the use of theoretical models

  examining tensions between the goals and methodologies of historians and economists who investigate differences in law over time (legal history) or between jurisdictions (comparative law). It then proceeds to define the characteristics of evolutionary models: a family of theoretical models that (in the author’s opinion) are particularly fruitful in exploring changes in law over time.\n\nThe rest of the chapter examines regulatory competition

  an area in which scholarly debate has focused on rival evolutionary models (though the models were not usually described and analyzed as such). Three models – horizontal (state vs. state)

  vertical (federal vs. state) and intrastate (interest group vs. interest group) – are explored and critiqued. \n\nKeywords: corporate law

  Delaware's dominance

  evolution

  evolutionary model

  horizontal competition

  interest groups

  network effects

  path dependence

  regulatory competition

  vertical competition

  Evolutionary Models of Corporate Law

  Select Publications below

  Select Publications below

  Aviram

  Israel Antitrust Authority

  Jerusalem

  Israel

  Supervised a merger investigation in the retail food industry. Advised regarding a merger in the cable television industry and regarding an industry-wide investigation of anticompetitive practices in the retail food industry. The Israel Antitrust Authority is the Israeli equivalent of the U.S. Federal Trade Commission.

  Consultant to the Legal Department

  Israel Antitrust Authority

  Drafted legal opinions

  Authority decisions and litigation briefs. Defended Authority decisions in judicial proceedings. Advised Authority economists regarding antitrust law.

  Israel Antitrust Authority

  Ingraham High School

  J.S.D. (Ph.D. equivalent in law)

  Doctoral dissertation titled: “Regulation by Networks”\nSupervisor: Judge Richard A. Posner

  Law

  John M. Olin Scholar of Law & Economics

  University of Chicago Law School

• 2000

  Wachtell

  Lipton

  Rosen & Katz

  Drafted memos regarding assessments of contemplated M&A transactions. Assisted in representing clients before antitrust authorities. Prepared Hart-Scott-Rodino pre-merger notification filings.

  Wachtell

  Lipton

  Rosen & Katz

• 1999

  Hebrew

  English

  Master of Laws (LLM)

  Law

  University of Chicago Law School

  181.03 (equivalent to graduating magna cum laude)

• 1995

  Judge Advocate General Corps

  IDF

  Israel Antitrust Authority

  International Law: Participated in Israeli-Palestinian civil affairs negotiations. Member of the Treasury Subcommittee of the Israeli-Palestinian Civil Affairs Committee.\n\nCommercial Law: Legal advisor to the Treasury Department of the Civil Administration. Drafted contracts for the Civil Administration and advised on contract disputes.

  Judge Advocate General Corps

  IDF

• 1991

  Bachelor of Laws (LL.B.)

  Law

  Editorial board

  Tel-Aviv University Law Review

  Tel Aviv University

  Magna cum laude