This project involves two separate empirical analyses of corporate and managerial liability. The first analyzes criminal sentencing of corporations under the new federal Sentencing Guidelines for Organizations. The research compares the new Guidelines to existing practice and to optimal corporate liability. The project also analyses the use of corporate probation (nonmonetary sanctions) as well as the fate of the individuals responsible for corporate wrongdoing. The second project focuses on wrongdoing by managers against shareholders. The research examines the nature of fiduciary duties imposed on managers to induce them to perform their jobs diligently (take `due care`) and not misappropriate the firm's assets for their own purposes (`duty of loyalty`). Economic theory suggests that these duties are the same, yet the law treats them differently. This second subproject will test the legal distinction using experimental methods. Experimental subjects serve as principals or agents, randomly determined, and play a two-stage game. In the first, the pairs of participants decide if they will combine their assets in a joint project. In the second, the agent has an opportunity to misappropriate assets. The central proposition will be tested by evaluating whether subjects establish different penalties when withholding their own assets than when misappropriating the assets of the other (care vs. Loyalty). The first subproject will use a database on corporate sentencing prior to the enactment of the Guidelines and create an analogous dataset on sentencing since. The results of this research will advance sociolegal theory about corporate criminal sentencing in federal courts and advance or knowledge of how people's behavior does or does not conform to legal notions of managerial duty. %%% This project involves two separate empirical analyses of corporate and managerial liability. The first analyzes criminal sentencing of corporations under the new federal Sentencing Guidelines for Organizations. The research compares the new Guidelines to existing practice and to optimal corporate liability. The project also analyses the use of corporate probation (nonmonetary sanctions) as well as the fate of the individuals responsible for corporate wrongdoing. The second project focuses on wrongdoing by managers against shareholders. The research examines the nature of fiduciary duties imposed on managers to induce them to perform their jobs diligently (take `due care`) and not misappropriate the firm's assets for their own purposes (`duty of loyalty`). Economic theory suggests that these duties are the same, yet the law treats them differently. This second subproject will test the legal distinction using experimental methods. Experimental subjects serve as principals or agents, randomly determined, and play a two-stage game. In the first, the pairs of participants decide if they will combine their assets in a joint project. In the second, the agent has an opportunity to misappropriate assets. The central proposition will be tested by evaluating whether subjects establish different penalties when withholding their own assets than when misappropriating the assets of the other (care vs. Loyalty). The first subproject will use a database on corporate sentencing prior to the enactment of the Guidelines and create an analogous dataset on sentencing since. The results of this research will advance sociolegal theory about corporate criminal sentencing in federal courts and advance or knowledge of how people's behavior does or does not conform to legal notions of managerial duty.
