prior probability

We explore this novel legal question in our most recent work-in-progress titled “The Law & Economics of Research Fraud,” which is available on the Social Science Research Network (SSRN) here. Our paper sets the stage by reviewing three recent examples of alleged research fraud in the social sciences: James Hunton’s various research projects on accounting fraud, Michael LaCour’s fake gay-marriage survey published in the journal Science (and later retracted), and Alice Goffman’s dubious study of fugitive life in her best-selling book On the run. Next, we delve into the law and assess the potential civil liability of lead authors and co-authors in cases involving fabricated data under various common law theories of liability (tort and contract). We also assess the potential civil liability of research institutions and “predatory publishers” under various theories of vicarious liability. (By the way, we will write about the possibility of criminal liability in a future paper.) There is, however, a larger question that we leave to others for now: would the imposition of legal liability have a “chilling effect” on research? Maybe, maybe not, but here is another question to think about: why should academics be held to a lower legal standard than, say, businessmen are?

The “Nobel Prize” in economics–or the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2015–is perhaps the most prestigious award in all of the social sciences. Previous winners include our intellectual heroes Thomas Schelling, Ronald Coase, and John Nash. This year’s Nobel in economics was awarded to one Angus Deaton “for his analysis of consumption, poverty, and welfare.” Check out Professor Deaton’s beautiful autobiographical essay “Puzzles and paradoxes: a life in applied economics.” Here is an excerpt:

It has been a good time to spend a life in economics. Compared with many others, the profession is remarkably open to talent, and remarkably free of the nepotism and patronage that is common in professions in which jobs are scarce. It is also a profession that, deservedly on undeservedly, is very well- rewarded. The best gifts of a profession are the people it brings, to talk to, to work with, to be mentored by, and to make friends with. I have been truly fortunate in this respect. * * * Many of my oldest and best friends, many of them also mentors, have come to me through economics. Through economics too, I met my wife, Anne Case, and our personal and professional lives are almost entirely integrated; Anne is my critic, my colleague and coauthor, and my friend. * * *

Before Sean Parker discovered Facebook, he had co-founded a company called Napster, a peer-to-peer file-sharing website that allowed users to share MP3 music files with each other (see image below, courtesy of the website “How Stuff Works“). At the time, Napster was huge. According to Wikipedia, for example, “verified Napster use peaked with 26.4 million users worldwide in February 2001.” The Recording Industry Association of America wasted no time in filing a federal lawsuit against Napster–the file-sharing website was launched in June 1999; the lawsuit was brought in December 1999–and the record industry eventually persuaded a court to issue an injunction or court order shutting down the website … But did the court make the correct decision, and on what legal grounds did the court issue this draconian remedy (i.e. the injunction shutting down Napster)? Let’s say, by way of example, that you have paid for and downloaded onto your computer your favorite movie or your favorite record album. Is it illegal or unethical for you to then send that file to a friend … or to a member of your immediate family? What about your Netflix password? Is it illegal or unethical to share the password to your Netflix account with a friend or a family member?

In our previous two posts (part 1 and part 2), we summarized Professor Richard Epstein’s critique of the great F. A. Hayek. It is now time to assess Epstein’s criticisms of Hayek–to critique the critique, so to speak. It pains us to say this, but either Epstein is not a very good reader or he is not a good Bayesian. On page 136 of “The Constitution of Liberty,” Hayek specifically anticipates Epstein’s monopoly problem and concedes that “a monopolist could exercise true coercion … if he were, say, the owner of a spring in an oasis.” In addition, Hayek writes (ibid.):

It is worth pointing out … that whenever there is a danger of a monopolist’s acquiring coercive power, the most expedient and effective method of preventing this is probably to require him to treat all customers alike, i.e., to insist that his prices be the same for all and to prohibit all discrimination on his part.

In other words, Hayek’s solution to the monopoly problem anticipates the exact same argument that Professor Epstein makes in his critique of Hayek. We not only suspect, however, that Professor Epstein is a careless reader; we also suspect that his inability to give Hayek credit where credit is due might be the result of Epstein’s general skepticism about philosophy’s ability to contribute to our understanding of the law. Simply put, Professor Epstein has a particular view of the world. Fine, we all do. In Epstein’s case, his view is that modern philosophy has little to offer legal theory. (See, for example, his thoughtful 1999 Dunbar Lecture published in volume 68 the Mississippi Law Review under the title “Life Boats, Desert Islands, and the Poverty of Modern Jurisprudence.“) Given these priors about philosophy, Epstein must have reasoned thus: Since Hayek, at bottom, is really a philosopher, then Hayek must have little to offer legal theory. But had Epstein read Hayek more carefully, he would not have been so quick to dismiss Hayek’s contributions to law.