The journal of law and economics

The J ournal of LAW & ECONOMICS VOLUME 56, NUMBER 4

NOVEMBER

The Problem of Social Cost R. H. Coase The Federal Communications Commission R. H. Coase On the Design of Leniency Programs Zhijun Chen and Patrick Rey Education, ComplaĂ­nts, and Accountability [uan Botero, Alejandro Ponce, and Andrei Shleifer Labor Laws and Innovation Viral V. Acharya, Ramin P. Baghai, and Krishnamurthy V. Subramanian Racial Segregation Patlerns in Selective Universities Peter Arcidiacono; Esteban Aucejo, Andrew Hussey, and Kenneth Spenner Self-Reporting, lnvestigation, and Evidentiary Standards Heiko Gerlach International Politics and Import Diversification Sergey Mitya:kov, Heiwai Tang, and Kevin K. .Tsui

Published for The Booth School of Business of the University of Chicago and The University of Chicago Law School

THE

UNIVERSITY

OF

CHICAGO

PRESS

2013

The J ournal of LAW&ECONOMICS VOLUME 56, NUMBER 4

NOVEMBER 2013

837

The Problem of Social Cost R. H. Coase

879

The Federal Communications Commission R. H. Coase

917

On the Design of Leniency Programs Zhijun Chen and Patrick Rey

959

Education, Complaints, and Accountability [uan Botero, Alejandro Ponce, and Andrei Shleifer

997

Labor Laws and Innovation Viral V. Acharya, Ramin P. Baghai, and Krishnamurthy V. Subramanian

1039

Racial Segregation Patterns in Selective Universities Peter Arcidiacono, Esteban Aucejo, Andrew Hussey, and Kenneth Spenner

1061

Self-Reporting, Investigation, and Evidentiary Standards Heiko Gerlach

1091

International Politics and Import Diversification Sergey Mityakov, Heiwai Tang, and Kevin K. Tsui

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In Memoriam

We dedicate this issue to the memory of Ronald Coase, one of the greatest economic thinkers. Ronald served as the second editor of the fLE from 1964 until 1982. Ronald died at the age of 102 on September 2, 2013. We reprint in this volume Ronald's famous paper "The Problem of Social Cost," one of the most cited papers in economics. We also reprint the precursor to that article, "The Federal Communications Commission," since Ronald felt that most economists did not understand what he was saying in his article on the FCC. Both articles originally appeared in the fLE. Coase was a strong advocate of studying concrete practices and behavior as a means of furthering our understanding of how economic forces shape industry and regulatory activity. These two papers illustrate how this process, for Coase, often led to deep insights.

The JLE was very important to Ronald. On his retirement from the fLE editorship, Ronald wrote, "Editorship of the [ournal of Law and Economics has always been dear to my heart. I would not have come to Chicago were it not for the [ournal. I saw it playing an important role in changing the views of economists and in establishing and developing certain types of study. But, of course, my interest has always been in the economics profession and it was the view of economists not lawyers that I wanted to change.. . . What I wanted to do in the [ournal was to make economists see that the legal system had a great influence on the working of the economic system. And in this I feel I succeeded."

We, the editors, thank Ronald for his efforts on behalf of the [ournal and dedicate this volume to his memory. We also note that the [ournal issued a volume in honor of Ronald on the occasion of his 100th birthday.

The Editors