Divesting University Endowments — Max Schanzenbach (Northwestern University)

In this episode of the CLE Vlog & Podcast Series, Prof. Roberto Galbiati (CNRS-Sciences Po & CEPR) talks about his paper "Science under Inquisition: The Allocation of Talent in Early Modern Europe" with Benjamin Kohler (ETH Zurich).In their study, Roberto Galbiati and his co-authors Edgard Dewitte, Francesco Drago, and Giulio Zanella explore how the Roman Inquisition shaped the development of science in Europe during the Scientific Revolution. Focusing on the 16th and 17th centuries, they combine historical evidence with an economic model of how talented individuals made decisions about their careers and where to live and work. The paper sheds light on the complex relationship between institutions, the threat of punishment, scientific production, and economic growth. Paper References:Edgard Dewitte (University of California, Berkeley)Francesco Drago (European University Institute & CEPR)Roberto Galbiati (CNRS-Sciences Po Paris & CEPR)Giulio Zanella (University of Bologna)Science under Inquisition: The Allocation of Talent in Early Modern Europehttps://sites.google.com/view/galbiatir1/researchAudio Credits for Trailer:AllttA by AllttA https://youtu.be/ZawLOcbQZ2w

In this episode of the CLE Vlog & Podcast Series, Max Schanzenbach (Northwestern University) and Karol Rutkowski (ETH Zurich) discuss the paper "Divesting University Endowments", which examines the legal and financial principles governing university endowment divestment and evaluates both historical and current divestment efforts. Professors Schanzenbach and Sitkoff (Harvard University), the authors of the study, argue that nonfinancial divestment is legally permissible only when it aligns with a university's charitable mission of research and education and has a reasonable impact on the endowment portfolio — a standard that is difficult to meet under modern investment practices. They also find that, contrary to common belief, universities have rarely undertaken broad divestment campaigns, including during apartheid in South Africa. The authors demonstrate that a divestment for moral abhorrence could pass fiduciary muster as consistent with the public benefit principle of charity law if supported by a clear public policy established by confirmatory governmental actions.Paper Reference:Max Schanzenbach (Northwestern University)Robert H. Sitkoff (Harvard University)Divesting University Endowmentshttps://papers.ssrn.com/sol3/papers.cfm?abstract_id=6332018Audio Credits for Trailer:AllttA by AllttA https://youtu.be/ZawLOcbQZ2w

Globalization creates new opportunities for cooperation across vast networks of individuals who may never meet. Social exclusion and monetary exchange are institutions that in theory can incentivize cooperation. But what encourages cooperation most effectively – money or social exclusion?In this episode of the CLE Vlog & Podcast Series, Prof. Maria Bigoni (University of Bologna) and Maurizia Di Buono (ETH Zurich) discuss Prof. Bigoni's paper "Money and Social Exclusion in Networks" (joint with Gabriele Camera and Eoardo Gallo). In an experiment, the authors evaluate the relative performance and interaction of monetary exchange and social exclusion in anonymous networks of different sizes. The results suggest that monetary exchange and temporary social exclusion perform similarly well in small networks. In large networks, however, monetary exchange is the only institution that promotes full cooperation by crowding out ostracism and keeping the network complete. The study offers an important insight: in an increasingly globalized world, well-functioning monetary systems are more effective than social exclusion in fostering cooperation across large and diverse communities.Paper Reference:Maria Bigoni (University of Bologna)Gabriele Camera (Chapman University)Edoardo Gallo (University of Cambridge)Money and Social Exclusion in Networkshttps://ideas.repec.org/p/chu/wpaper/25-06.htmlAudio Credits for Trailer:AllttA by AllttA https://youtu.be/ZawLOcbQZ2w

With the rapid rise of artificial intelligence, large language models (LLMs) are increasingly being considered for tasks once thought to be uniquely human—including legal interpretation. The idea of “AI judges” suggests appealing possibilities: consistent, fast, and ostensibly unbiased answers to legal questions. But how reliable are these models? Can their judgments truly be trusted? And do they withstand careful empirical scrutiny?In this episode of the CLE Vlog Series, Prof. Jonathan Choi (University of Southern California & Washington University, St. Louis) joins Alessandro Tacconelli (ETH Zurich) to discuss his paper, “Off-the-Shelf Large Language Models Are Unreliable Judges.” Prof. Choi presents findings from a series of empirical experiments designed to test how well LLMs perform as legal interpreters. His results reveal that model judgments are highly sensitive to prompt phrasing, output processing methods, and training choices. Moreover, post-training adjustments in today’s most widely used models can push LLMs’ assessments far from empirically grounded predictions of language use. These insights raise serious questions about the credibility of LLMs in legal interpretation and cast doubt on their ability to capture the “ordinary meaning” of legal texts.Paper Reference:Jonathan Choi – University of Southern California / Washington University (St. Louis)Large Language Models Are Unreliable Judgeshttps://papers.ssrn.com/sol3/papers.cfm?abstract_id=5188865Audio Credits for Trailer:AllttA by AllttA https://youtu.be/ZawLOcbQZ2w

In this episode of the CLE Vlog Series, Prof. Murat C. Mungan (Texas A&M University) discusses his paper "Symmetry, Presumptions, and the Judges Design" with Karol Rutkowski (ETH Zurich). In his work, Murat C. Mungan discusses an important assumption underlying a popular empirical method used in social sciences, namely average monotonicity, and shows the conditions under which this assumption can be violated.Paper Reference: Murat C. Mungan - Texas A&M UniversitySymmetry, Presumptions, and the Judges DesignPLOS One, Forthcominghttps://papers.ssrn.com/sol3/papers.cfm?abstract_id=4322684Audio Credits for Trailer:AllttA by AllttA https://youtu.be/ZawLOcbQZ2w

In this episode of the CLE Vlog & Podcast Series, Prof. Berk Ustun (University of California San Diego) discusses his paper "Prediction without Preclusion: Recourse Verification with Reachable Sets" with Benjamin Kohler (ETH Zurich). In their work, Berk Ustun and his co-authors investigate how machine learning models in high-stakes settings, such as lending and hiring, assign "fixed" predictions that individuals cannot change regardless of their actions. They introduce a formal procedure called "recourse verification" to certify whether a model allows for responsiveness or precludes access. In addition, they develop an auditing tool for practitioners to flag models that effectively block access to certain outcomes before they are deployed – a crucial step to promote fairness and transparency in machine-led decision making.Paper Reference: Berk Ustun – University of Southern California, San DiegoAvni Kothari – University of Southern California, San DiegoBogdan Kulynych – Lausanne University Hospital Tsui-Wei Weng – Halıcıoğlu Data Science InstitutePrediction without Preclusion: Recourse Verification with Reachable Setshttps://arxiv.org/abs/2308.12820Audio Credits for Trailer:AllttA by AllttA https://youtu.be/ZawLOcbQZ2w

In this episode of the CLE Vlog & Podcast Series, Mitu Gulati (University of Virginia) and Karol Rutkowski (ETH Zurich) discuss "Swiss Cheese Contracts", a topic drawn from Gulati's new book "Contract Hazards: Lawyers and Their Landmines", co-authored with Stephen J. Choi (NYU) and Robert E. Scott (Columbia University).In the study "Swiss Cheese Contracts: The Costs of Creative Lawyering", Prof. Gulati and his co-authors examine contracting practices in high-yield secured syndicated loans and Liability Management Transactions. They describe how new loopholes are continually discovered and exploited, creating a landscape that increasingly resembles a block of Swiss cheese.References: Stephen J. Choi – New York UniversityMitu Gulati – University of VirginiaRobert E. Scott – Columbia UniversitySwiss Cheese Contracts: The Costs of Creative Lawyeringhttps://papers.ssrn.com/sol3/papers.cfm?abstract_id=5391281Contract Hazards: Lawyers and Their Landmineshttps://academic.oup.com/book/61634Audio Credits for Trailer:AllttA by AllttA https://youtu.be/ZawLOcbQZ2w

In this episode of the CLE Vlog & Podcast Series, Raquel De Haro (ETH Zurich) interviews Anu Bradford (Columbia University) about her recent paper “The False Choice Between Digital Regulation and Innovation.” Prof. Bradford is the Henry L. Moses Professor of Law and International Organization, and a leading scholar on the EU’s regulatory power and digital regulation. She coined the term “Brussels Effect” and is the author of the influential books "The Brussels Effect: How the European Union Rules the World" and "Digital Empires: The Global Battle to Regulate Technology".This discussion addresses the widespread belief that digital regulation inevitably harms innovation, and why that assumption is often wrong. Prof. Bradford explains the real factors that have prevented EU technology companies from thriving. She also provides examples illustrating why digital regulation and innovation are not mutually exclusive and can even be mutually reinforcing under certain circumstances.A thought-provoking conversation for anyone interested in tech policy, digital markets, or the global race to govern big platforms.Paper Reference: Anu Bradford – Columbia UniversityThe False Choice Between Digital Regulation and Innovationhttps://scholarlycommons.law.northwestern.edu/nulr/vol119/iss2/3/Audio Credits for Trailer:AllttA by AllttA https://youtu.be/ZawLOcbQZ2w

In this episode of the CLE Vlog & Podcast Series, Prof. Francesco Parisi (University of Minnesota & University of Bologna) discusses his paper "Rewarding Failure" with Gianmarco Torchetti (ETH Zurich).In their work, Parisi and his co-authors Alice Guerra and Andres Sawicki challenge the one-sided incentive structure of intellectual property law, which rewards only successful innovations while overlooking the social value of failed research. The paper shows how negative results – information about what does not work – can generate significant learning externalities that benefit future research. Yet, under current legal frameworks, these valuable failures often go unshared. Paper Reference: Alice Guerra – University of Bologna Francesco Parisi – University of Minnesota & University of BolognaAndres Sawicki – University of MiamiRewarding FailureUniversity of Miami Legal Studies Research Paper No. 4726758 Minnesota Legal Studies Research Paper No. 24-12https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4726758Audio Credits for Trailer:AllttA by AllttA https://youtu.be/ZawLOcbQZ2w

In this episode of the CLE Vlog & Podcast Series, Prof. Manisha Padi (University of California, Berkeley) discusses her study "The Rise of Nonbanks in Servicing Household Debt" with Karol Rutkowski (ETH Zurich). In their work, Padi and co-authors study the effects of capital regulation focusing on the case of the market for mortgage servicing rights (MSRs) and the Basel III regulation. Using a theoretical model and U.S. credit registry data, the authors analyze the shift in servicing riskier mortgages from banks towards non-bank servicers triggered by Basel III. Their analysis shows the tension between reducing agency conflicts and enhancing investor welfare on one side, and the borrowers' welfare on the other. Paper Reference: The Rise of Nonbanks in Servicing Household DebtOlin Business School Center for Finance & Accounting Research Paper No. 2023/08 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4550175Naser Hamdi – Equifax, Inc. Erica Xuewei Jiang – University of Southern CaliforniaBrittany Almquist Lewis – Washington University in Saint Louis & Indiana University Manisha Padi – University of California, Berkeley Avantika Pal – Washington University in Saint LouisAudio Credits for Trailer: AllttA by AllttA https://youtu.be/ZawLOcbQZ2w