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24 J. Corp. L. 837 (1998-1999)
Measuring the Domain of Mediating Hierarchy: How Contestable Are U.S. Public Corporations

handle is hein.journals/jcorl24 and id is 847 raw text is: Measuring the Domain of Mediating Hierarchy: How Contestable Are U.S. Public Corporations? John C. Coates IV* I. IN TRO DUCTION ......................................................................................................... 837 II. THE TPMIMH DOES NOT EXPLAIN CORPORATE LAW ......................................... 839 A . C lose C orporations ............................................................................................. 840 B. Public Corporations with Control Shareholders ................................................ 841 C. The Role of the TPM/MH in Law ........................................................................ 842 III. THE POSSIBLE DOMAIN OF THE TPMIMH ................................................................ 843 A . D om inance by M anagers .................................................................................... 844 B. D om inance by Shareholders ............................................................................... 848 1. The Importance of Public Corporations Without Control Shareholders ....... 848 2. The Persistent Market for Corporate Control ............................................... 849 a. Tender Off ers ............................................................................................ 849 b. The Potential of Poison Pills .................................................................... 851 c. P roxy F ights .............................................................................................. 852 d. The Possibility of Extensive Delay in Takeover Bids ................................ 853 e. Evidence Regarding the Market for Corporate Control ........................... 855 3. Sotto Voce: Institutional Ownership and Shareholder Activism .................... 860 C. Tipping Between Managers and Shareholders ................................................... 862 D. The TPM/MH and the Choice of Ownership Structure ...................................... 863 E. Summary--The Potential Domain of the TPM/MH ............................................ 864 IV. A BRIEF EMPIRICAL RESEARCH AGENDA ................................................................. 865 V . C ON CLUSION ............................................................................................................ 867 I. INTRODUCTION Like agency models, team production models are appealing. They make clear and sometimes startling predictions based on a compact set of assumptions. Team production models generally predict that the team will produce more surplus if control over that surplus is neither specified ex ante, nor left wholly unspecified for ex post resolution, but * Assistant Professor of Law, Harvard Law School; B.A., 1986, University of Virginia; J.D., 1989 New York University Law School. My thanks to Margaret Blair, Michele Cotton, Gordon Smith, Lynn Stout, Eric Talley, and Michael Wachter for comments, and my thinking also benefited from participants in the Conference on Team Production in Business Organizations at the Gewirz Center, sponsored by The Alfred P. Sloan Foundation and Georgetown University Law Center (March 4-5, 1989). The usual disclaimer applies.

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