prior probability

Last week, the Colegio de Abogados de Puerto Rico–established in 1840 and one of the oldest bar associations in continuous existence in the Americas (for historical perspective, Boston’s bar association was founded in 1802; New York City’s not until in 1870)–awarded our work “Does the Prisoner’s Dilemma Refute the Coase Theorem?” an honorable mention for essay of the year. (The actual award itself is pictured below.) We co-wrote our paper last year with our friend and colleague Orlando Martinez-Garcia, and it was published in volume 47 of The John Marshall Law Review (Chicago). We are especially grateful to receive this award from the Colegio de Abogados and would be honored to present our paper in Puerto Rico in the future. In summary, after reviewing the history of the “Prisoner’s Dilemma Parable,” we modify this classic model by allowing the prisoners in the parable to bargain with each other in a low transaction cost setting, and we then define the various conditions under which the prisoners will be able to reach a mutually beneficial deal as postulated by the Coase Theorem, a very important idea from the world of economics. We think our paper is novel and useful because–along with the work of Wayne Eastman, a distinguished professor at Rutgers Business School–it is one of the few scholarly papers in the legal or economics literature to explore the intersection of the Prisoner’s Dilemma and the Coase Theorem.

Thus far, we have focused on Harvard sophomore Mark Zuckerberg and his creation of “Facemash” in the fall of 2003, a website which was arguably illegal and which we discussed at length in Lesson 1. It’s now time to introduce Harvard seniors Tyler and Cameron Winklevoss–identical twins played by the actor Armie Hammer in the movie “The Social Network”–as well as their fellow student and business partner Divya Narendra, an engineering student at Harvard. (We will refer to all three partners collectively as the Winklevoss team.) In brief, the Winklevoss team was in the process of developing an exclusive dating website, “The Harvard Connection.” Their innovative idea was this: only students with a Harvard email address could join their website. But this website was not yet ready to be released. The Winklevoss team needed someone to finish writing the computer code for their proposed website. Ironically, the fallout from the Facemash incident— including the “Ad Board” hearing which we studied in Lesson 2—increased Zuckerberg’s notoriety on campus and cemented his reputation as a talented, if immature, computer programmer. In need of just such a person, the Winklevoss team quickly set up a meeting with Zuckerberg and asked for his help with their “Harvard Connection” website. (In “The Social Network,” for example, this meeting takes place in the bicycle room of the exclusive Porcellian Club (the entrance of which is pictured below), and by the end of the meeting, Zuckerberg says “I’m in.”) Lesson 3 will thus focus on two legal questions: (1) Did Mark Zuckerberg and the Winklevoss team enter into a legally-binding contract when Mark agreed to help them out with their website? (2) Assuming there was a valid “work-for-hire” contract or a valid partnership agreement in this case, what is the legal remedy for its breach? (Hint for question #1: What are the elements of a contract and were all these legal elements met in this case.)

According to this chart prepared by Ian T. Sommers (via Dadaviz), the overall “fling to serious relationship” ratio on the TV show “Friends” is about 4 : 3. Do these data reveal any other intriguing patterns?

Credit: Leon Markovitz (via Dadaviz).

This semester, we are using the founding of Facebook as an in-depth case study to explore various aspects of business law and ethics. In Lesson 1, for example, we discussed the legal and moral dimensions of “Facemash,” a short-lived website Harvard sophomore Mark Zuckerberg had created in the fall of 2003—a few months before he created the first version of Facebook in early 2004. In this lesson, we will focus on the procedural side of law. Specifically, what type of process did Harvard College use to discover and corroborate the relevant facts regarding Facemash, i.e. the fact that Zuckerberg downloaded student I.D. photos without authorization? We will also consider if there are any legal limits on the form of punishment that the Ad Board could have imposed in this case. More broadly, what legal rights does a student (or a professor, for that matter) have when he is accused of wrongdoing or misconduct by a fellow student or faculty member. (Think about the Jameis Winston case at Florida State University, for example.) In addition, who has the burden of proof in these cases, and what burden of proof must the accusing party meet in order to prove his or her case?

We like this chart by our friend and colleague David Orozco. In this case, x = lawyers. But x could be anything: entrepreneurs, salesmen, politicians, writers, professors, etc. The key questions, though, are how does x signal her level of excellence and what makes her signal credible to third parties?

In a previous post, we asked whether Mark Zuckerberg breached any legal duties or violated any laws when he created Facemash? One theory of legal liability might be the tort of invasion of privacy, since Zuckerberg downloaded and then re-posted pictures of Harvard students without their consent. But Zuckerberg only downloaded student I.D. photos. Does one have a reasonable expectation of privacy to one’s I.D. photo? Another possible theory of liability (both civil and criminal) is copyright infringement. But who owns the legal rights to those I.D. photos, the students or the university? Yet another theory of liability might be based on the federal Computer Fraud and Abuse Act, which prohibits unauthorized uses of protected computers. (The arrest and prosecution of Internet activist Aaron Swartz, for example, were based in large part on this law.) But does it matter that Facemash was just a prank and not a commercial website? Do you think a jury would find a college sophomore guilty of violating federal law in this case?