In Chapter 6, we confront the reality that many dog owners must eventually face decisions about their dogs’ end-of-life, potentially including hard decisions about euthanasia or costly medical interventions. We frame these decisions about ending life in terms of the owners’ fiduciary responsibilities and what they imply across different property rights regimes. We show how framing the relationship between dogs and humans in terms of principal-agent theory may offer some novel insights about responsibilities. We explore the appropriateness of euthanasia and how individual preferences and societal perspectives on its appropriateness have changed over time. We then examine the growth in pet health insurance and pre-paid veterinary plans and how this growth affects the economics of the choice between various treatments and euthanasia. We conclude by considering how individual and societal attitudes toward the use of dogs in medical research have changed over time. Nonetheless, although the number of dogs used in research has declined in recent years, many dogs still suffer and experience premature death.

This chapter reviews the academic thinking on the role of private and public organizations in generating social benefits, beginning with an analysis of their relative ability to provide public goods and examining other theories of incomplete contracting, relational governance, government failure, justice, and probity. The chapter offers an encompassing comparative analysis of the various factors that affect the merits and costs of alternative public and private arrangements.

This chapter outlines existing theories of company law and corporate governance and related insights that are used to frame the analysis in this book, including those of Adam Smith, Berle and Means, Coase, Klausner, Alchian & Demsetz, Jensen & Meckling, Hart, Roe and Bainbridge.

This chapter offers a new explanation for mandatory fiduciary protections in certain business relationships—the preservation of trust that might otherwise be eroded through the bargaining process. Any contract a hypothetical entrepreneur and an investor might enter would inevitably be incomplete and give rise to potential opportunistic behavior. While the parties could draft a more detailed agreement prohibiting various forms of opportunism, the very act of bargaining over these protections could undermine whatever trust existed between the parties at the outset of their relationship. By contrast, a prohibition limiting opportunism in state-imposed fiduciary obligations removes the invocation of distrust by either party to the agreement. Fiduciary protections, however, do not provide a perfect solution in all business relationships. Although fiduciary duties can usefully constrain opportunism and preserve trust in vertical business relationships, such as in a simple principal-agent arrangement, other situations involve complexity that pose challenges for fiduciary law. We illustrate this observation with examples of various horizontal conflicts, or diverging interests, in the venture capital-backed startup context. To the extent that contract and fiduciary law are each incomplete, a residual domain for trust and other mechanisms for risk reduction or self help remains.