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CALIFORNIA CORPORATE & SECURITIES LAW

Unilateral Disarmament, The Prisoners’ Dilemma And SEC Staff Comment Letters

In an arms race, each suffers the worst result if it disarms and the other side remains armed.  However, if both sides are armed, they are not as well off as when both sides are disarmed.  This is, of course, the classic “Prisoners’ Dilemma” game (see table below). Much the same logic applies to the SEC’s insistence…

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Confession Is Good For Soul And Equilibrium But Maybe Not Justice

Recently, I read this article about how the Department of Labor, the Internal Revenue Service and states are targeting pay practices of home builders.  This got me thinking about how industry enforcement sweeps can be a very effective enforcement tool. Suppose, for example, an enforcement sweep involves only two firms that do not communicate with…

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