Document Type


Publication Date



The purpose of this Article is to interrogate the relationship between judicial error and extralegal norms more formally, focusing particularly on typical corporate disclosure contexts. In so doing, I shall argue that this relationship is far less clear-cut than much of the literature suggests. Using a formal, game-theoretic model of information disclosure, I demonstrate that in the presence of judicial error, a society that benefits from extralegal norms of honest disclosure might ironically favor more expansive legal regulation than would a similarly situated society in which norms are weak or nonexistent. Thus, in contrast to the common argument that norms can (or should) substitute for error-prone law, I argue that the two phenomena may frequently complement each other.


Law | Law and Economics | Securities Law


Copyright © 2001 Penn Law: Legal Scholarship Repository.