Law and Economics.

• Position: Program and Working Group Meetings

The NBER's Program on Law and Economics met in Cambridge on March 2. Program Director Christine M. Jolls of Yale Law School organized the meeting. These papers were discussed:

Louis Kaplow, Harvard Law School and NBER, "Optimal Policy with Heterogeneous Preferences"

Discussant: Chris Sanchirico, University of Pennsylvania School of Law

Abraham Wickelgren, Northwestern University School of Law, "The Economics of Constitutional Rights and Voting Rules"

Discussant: Joshua Fischman, Tufts University

Benjamin E. Hermalin, University of California, Berkeley, and Michael S. Weisbach, University of Illinois and

NBER, "Transparency and Corporate Governance"(NBER Working Paper No. 12875)

Discussant: Nicola Persico, New York University and NBER

Steven Shavell, Harvard Law School and NBER, "On Optimal Legal Change, Past Behavior, and Grand fathering"

Discussant: Christopher Snyder, Dartmouth College

Edward Morrison, Columbia Law School, "Bargaining Around Bankruptcy: Small Business Distress and State Law"

Discussant: Albert Choi, University of Virginia School of Law

Christopher Avery and Alvin E. Roth, Harvard University and NBER; Christine M. Jolls; and Richard A. Posner, United States Court of Appeals, "The New Market for Federal Judicial Law Clerks"

Discussant: Betsey Stevenson, Wharton School, University of Pennsylvania

Jesse Rothstein, Princeton University and NBER, and Albert H. Yoon, Northwestern University School of Law "Affirmative Action in Law School Admissions: What Do Racial Preferences Do?" and "Mismatch in Law School"

Discussant: Justin Wolfers, Wharton School, University of Pennsylvania

Suzanne Scotchmer, University of California, Berkeley and NBER, "Risk Taking and Gender in Hierarchies"

Discussant: Ian Ayres, Yale Law School and NBER

Optimal policy rules--including those regarding income taxation, commodity taxation, public goods, and externalities--are typically derived in models with preferences that are homogeneous. Kaplow reconsiders many central results for the case in which preferences for commodities, public goods, and externalities are heterogeneous. When preference differences are observable, standard second-best results in basic settings are unaffected, except those for the optimal income tax. Optimal marginal income tax rates may be higher or lower on types who derive more utility from various goods, depending on the nature of preference differences and the concavity of the social welfare function. When preference differences are unobservable, all policy rules may change...