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The legal system affects behavior not just directly, by imposing sanctions, but also indirectly, by producing information on how people behave. For example, internal company documents exposed during litigation will help third parties assess whether they trust a company and want to keep doing business with it. The law therefore affects behavior by shaping reputations. Drawing on economics, communications, and a nascent multidisciplinary literature on reputation, Roy Shapira highlights how reputation works, and how information from the courtroom affects the court of public opinion, with a particular emphasis on the role of the media. By fleshing out interactions between law and reputation, Shapira corrects common misperceptions about the ability of market forces to discipline corporate behavior and adds to timely, ongoing debates such as the desirability of heightened pleading standards or mandatory arbitration clauses. Law and Reputation should interest any scholar who invokes notions of market discipline in their work.

Addresses a gap in academic literature by showing how legal and non-legal systems interact
Reevaluates the desirability of legal institutions according to how they contribute to information production
Provides a nuanced, grounded basis for policy implications by revisiting the conventional wisdom that treats reputation as justification for scaling back legal intervention



Table of Contents

1. How Reputation Works
2. How The Legal System Affects Reputation
3. Private Litigation. Corporate Law´s Puzzle
4. Public Enforcement. The Sec´s Settlement Practices
5. Corporate Philanthropy As Signaling And Co-Optation
6. Regulators´ Reputation
7. The Case For Openness
8. The Case Against Mandatory Arbitration
Conclusion.