Regulatory Paradoxes

[oren-perez]

Metaverse Is Not a Place Apart

The metaverse is often imagined as a world apart.

But digital worlds are never immaterial. They depend on cables, servers, energy systems, platforms, laws, and physical infrastructures. They also produce real-world consequences.

In a forthcoming review essay on Mark Findlay’s Governing the Metaverse, I argue that the central challenge is not how to govern a separate virtual realm, but how to govern an increasingly hybrid world where law, code, AI systems, and physical infrastructures continuously interact, generating risks risks for one another.

The Metaverse Is Not a Place Apart: Law, Code, and the Recursive Governance of Digital Space: A Review Essay on Mark Findlay, Governing the Metaverse: Law, Order and Freedom in Digital Space (2025)(May 07, 2026). Available at SSRN: https://ssrn.com/abstract=6730221 

[oren-perez]

connecting academic work with local cause

It's not often that you can connect your academic work with your everyday life. I had the opportunity to publish two papers this past month, both exploring the unique ecosystem of my hometown, Ness Ziona, and the rare black iris that flourishes there The first paper, co-authored with Reuven Cohen and published in PLOS ONE ('Emergent Coordination in Temporal Partitioning Congestion Games'), is more theoretical. It examines the social dynamics of temporal partitioning congestion games (TPGs), where participants must coordinate the optimal use of a limited resource. We used the short blossom season of the black iris as a real-world illustration of TPGs. Here is a link: https://lnkd.in/eDpURFFh. The second paper, co-authored with Orit Rotem and Noam Katzir and published in Land ('Identifying Regulatory Barriers in the Management of Ecological Corridors in an Increasingly Congested Space'), examines the regulatory frameworks for managing ecological corridors in congested areas, using the sandstone hills of Ness Ziona as one of our case studies. Available here: https://lnkd.in/eyhH-iUb. The Black Iris Reserve is currently under threat from a major construction project. If you'd like to join us in our efforts to protect it, please sign the petition here: https://lnkd.in/e8SckfVc Did you have a similar experience? I'd be happy to hear more!

[oren-perez]

The paradox of temporal partitioning congestion games

What do law professors vying for a rare publication slot in top US law reviews, wildflower enthusiasts eager to witness the black iris bloom, and bats competing for limited access to waterholes have in common? In a recent paper I co-authored with Prof. Reuven Cohen published in PLOS ONE - Emergent coordination in temporal partitioning congestion games. PLOS ONE 19(8): e0308341 https://journals.plos.org/plosone/article/citation?id=10.1371/journal.pone.0308341 , we explore these seemingly distinct phenomena through the concept of temporal partitioning congestion games (TPGs). In TPGs, participants must coordinate the optimal timing for using a limited resource. However, achieving an optimal solution is often hindered by a collectively destructive meta-reasoning pattern, trapping users in a socially vicious oscillatory behavior. We tackle this dilemma through a model which we termed the ‘Black Iris Blossom Game’ . More in our paper ...

Emergent coordination in temporal partitioning congestion games

In this article we study the social dynamic of temporal partitioning congestion games (TPGs), in which participants must coordinate an optim

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Can Experts Be Trusted and What Can Be Done About it? Insights from the Biases and Heuristics Literature

Experts play an important role in the European Union ("EU") regulatory apparatus. They assist the EU Commission in multiple functions ranging from designing policies to the implementation of regulatory schemes. Experts work closely with various EU agencies such as the European Food Safety Authority (EFSA), the European Securities and Markets Authority (ESMA) or the European Integrated Pollution Prevention and Control (IPPC) Bureau (EIPPCB). Critiques have focused in this context on the problem of experts' conflict of interests (COI) which, due to misaligned incentives, can generate opinions that do not serve the public interest. This paper focuses on a different type of epistemic failure that could hinder the work of experts: their susceptibility to cognitive biases. This cognitive fallibility can generate mistaken policy advice even when incentives are not misaligned. The influence of experts on regulatory output creates a dilemma: how far can experts be trusted and what kind of mechanisms can be used to improve the epistemic credibility of their advice? The literature on cognitive biases suggests that the regulatory indifference to this problem is a cause for concern. There is broad evidence demonstrating that expert judgment is subject to various biases, such as the hindsight bias, confirmation bias or quantification bias. The paper considers the implications of this phenomenon to the regulatory project. It starts by examining those cognitive biases which are more critical to the work of experts in the regulatory context. It then moves to examine the question of de-biasing. Are there institutional mechanisms that can be used in order to de-bias experts' judgment? This question is particularly important because conventional control mechanisms such as judicial review or tort liability have generally failed to fulfill this task. The paper examines to what extent the psychological literature on de-biasing could provide insights to the regulatory context, noting the linkages between potential de-biasing mechanisms and the current regulatory framework governing experts' behavior. It concludes with a reflection on the challenges and prospects of the de-biasing project. It argues that the de-biasing project faces some difficult challenges, which need to be taken into account as we delineate its objectives. These challenges reflect, primarily, the broad range of cognitive biases underlying human reasoning (which calls for a differential, context-dependent de-biasing strategy) and the intrinsic limitations of self-reflexive, introspective de-biasing strategies. The scale and scope of these challenges mean also that attaining a bias-free decision-making environment is not achievable and our expectations from the de-biasing project should be formed with this understanding in mind.

Available at SSRN: http://ssrn.com/abstract=2490407

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The Hybrid Legal-Scientific Dynamic of Transnational Scientific Institutions

Just uploaded to SSRN:

Perez, Oren, The Hybrid Legal-Scientific Dynamic of Transnational Scientific Institutions (May 15, 2014). Forthcoming, European Journal of International Law, 2014. Available at SSRN: http://ssrn.com/abstract=2437400

Here is the abstract:

The objective of the present article is to develop a better understanding of the institutional dynamic of transnational regulatory scientific institutions (RSIs). RSIs play a significant role in the transnational regulatory process by mediating between the scientific community and policy-making bodies. I argue that RSIs have a hybrid structure involving both political-legal and epistemic authority. The hybrid structure of RSIs, their capacity to exert both normative and epistemic authority, constitutes an innovative response to the demand of modern society for scientific certainty and to the scarcity of normative power in the international domain. This hybrid nature has a triple structure, involving three complementary pairs: law~science, law~non-law, and science~pseudoscience. I examine the way in which RSIs cope with the challenge of maintaining their epistemic and legal authority against the tensions generated by their hybrid structure. The discussion of hybrid authority is related to the problem of scientific uncertainty. I examine this theoretical argument drawing on an in-depth analysis of three RSIs that reflect the institutional diversity of the RSI network: the Intergovernmental Panel on Climate Change (IPCC), the International Commission on Non-Ionizing Radiation Protection (ICNIRP), and the European Committee of Homeopaths (ECH). I conclude with a discussion of some of the policy issues associated with the institutional design of RSIs. The policy discussion refers first to the risk posed by RSIs' hybrid structure to their internal stability; and second to some potential adverse social impacts which need to be considered alongside RSIs' projected benefits.

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One of the issues i explore in the paper is the idea of "fragile equilibrium".

This is image by Martin Koegl provides a good insight into the meaning of this term (Fragile Equilibrium | Water Drop Sculptures by Martin Koegl, at: http://waterdrop-photography.com/drop-art-galleries/drop-sculptures/fragile-equilibrium.html) 

[oren-perez]

Can Experts be trusted?

The EU is highly dependent on its network of experts. . The EU Commission is advised by about 1000 expert groups, which assemble more than 30,000 experts (for updated info: http://ec.europa.eu/transparency/regexpert/index.cfm).

But can this network be trusted? Despite recent reforms there seems to be grounds for concerns.  A report by the Alliance for Lobbying Transparency and Ethics Regulation (ALTER-EU), which looked at all the expert groups established between 20 September 2012 and 20 September 2013, criticized the Commission for failing to meet us its commitment to reform the experts consultation process, noting that "Across all newly created Expert Groups, there are more corporate representatives than all other stakeholders combined" ((http://www.alter-eu.org/documents/2013/11/a-year-of-broken-promises). A paper by Robinson et al criticizes EFSA for its failure to properly regulate conflict of interests in its risk assessment process, focusing on the example of GMO food (Claire Robinson, et al., Conflicts of interest at the European Food Safety Authority erode public confidence, 67 Journal of Epidemiology and Community Health  717-720 2013). See also the European Court of Auditors. Management of conflict of interest in selected EU agencies: Special report no. 15. Luxembourg, 2012.

This data which could be more easily extracted with the use of the new experts registry raises worries of intensive influence by corporate interests on the EU expert-network.

Regulatory reaction to this problem remains relatively thin... 

[oren-perez]

3 comments on the Netflix story (by Alexis C. Madrigal in the Atlantic)

1) The introspective power of the algorithm: "It's not just that Netflix can show you things you might like, but that it can tell you what kinds of things those are. It is, in its own weird way, a tool for introspection". I'm not sure to what extent this introspective capacity is manifested in reality but this is interesting.

2) Bugs and ghosts in the machine - its seems that the combination of machine learning and human intelligence (through the human tagging process) produced inexplicable anomalies (e.g., the popularity of Perry Mason's stars in netflix altgenres). Todd Yellin, Netflix's VP of Product had the following to say about that: "

"Let me get philosophical for a minute. In a human world, life is made interesting by serendipity,"... "The more complexity you add to a machine world, you're adding serendipity that you couldn't imagine. Perry Mason is going to happen. These ghosts in the machine are always going to be a by-product of the complexity. And sometimes we call it a bug and sometimes we call it a feature.".

3) Can netflix be duplicated? One example is Pandora's Music Genome Project. But can it be applied to politics - imagine an algorithm that studies our political preferences and recommends how we should vote on the next elections?

See, Alexis C. Madrigal, How Netflix Reverse Engineered Hollywood

http://www.theatlantic.com/technology/archive/2014/01/how-netflix-reverse-engineered-hollywood/282679/ 

[oren-perez]

How Netflix Reverse Engineered Hollywood

Fascinating article in the Atlantic by ALEXIS C. MADRIGAL (JAN 2 2014) - http://www.theatlantic.com/technology/archive/2014/01/how-netflix-reverse-engineered-hollywood/282679/ 

Does it mean that we could become the prisoners of our historical preferences (just as the economists would have liked?)?

[oren-perez]

Courage, Regulatory Responsibility, and the Challenge of Higher-Order Reflexivity

Courage, Regulatory Responsibility, and the Challenge of Higher-Order Reflexivity

Oren Perez Regulation & Governance (2013) Abstract:     

Contemporary regulators must respond to ever-increasing societal demands in various domains. Regulators must cope with these demands under conditions of extreme epistemic scarcity and ideological divide. This leaves regulators perplexed about what action they should take. Regulatory praxis offers two primary responses to this moral and epistemic dilemma: technical canonization and reflexive regulation. While these two approaches represent contrary regulatory philosophies, they suffer from two common blind spots: (a) disregard of the critical role of discretionary judgment in regulatory action; and (b) disregard of the dilemma of higher-order reflexivity. The article explores the idea of higher-order reflexivity in the regulatory context. This exploration renders visible the abysses that are faced by regulators as they attempt to resolve regulatory dilemmas through a cognizant and introspective process. The article argues that the Socratic concept of courage and the idea of forward-looking responsibility provide a plausible framework for thinking about the challenge of regulatory judgment. It concludes with a discussion of the legal and institutional mechanisms that could both facilitate and put to scrutiny the realization of this ideal (but noting also several features of the contemporary regulatory system which constitute potential barriers).

Date posted: February 3, 2014  

Suggested Citation

Perez, Oren, Courage, Regulatory Responsibility, and the Challenge of Higher-Order Reflexivity (February 2, 2014). Regulation & Governance (2013). Available at SSRN: http://ssrn.com/abstract=2389619

[oren-perez]

HRN is launched

In cooperation with Bar-Ilan University, we are pleased to announce the creation of the Hebrew Research Network (HRN). HRN will provide a worldwide, online community for research in all areas of social science and humanities studies written in Hebrew, following the model of other subject matter networks within SSRN. We expect HRN to become a comprehensive online resource, providing scholars with access to current work in their field and facilitating further research and scholarship. HRN is sponsored by Bar-Ilan University Faculty of Law, the Center on Israeli Corporate Governance (Graduate School of Business Administration). Bar-Ilan University Faculty of Law is one of the leading law schools in Israel. Its faculty is committed to a combined local and universal scholarly agenda, and it is known worldwide for the excellence of its research in both English and Hebrew. SSRN is collaborating with ProQuest to support SSRN's new Open Access network initiatives. Key to serious research, ProQuest's services are renowned gateways to the world's knowledge including journals, case studies, dissertations, governmental and cultural archives, news, historical collections and e-books. The company's information solutions integrate and aggregate these primary and secondary sources, including SSRN working papers. HRN's founding directors are:

Oren Perez, Professor at the Bar Ilan Faculty of Law and Hanan Mandel, faculty member at Ono Academic College Faculty of Law, Guest Lecturer at Bar-Ilan University, Deputy Editor of Democratic Culture journal.

Initially, HRN will begin with the Hebrew Legal Research eJournal (HRN-LSN) and the Hebrew Business Administration & Economics Research eJournal (HRN-BAE). In the future, HRN will offer eJournals in other areas of study in the social sciences and humanities. Subscriptions will be free during the first year. HEBREW LEGAL RESEARCH eJOURNAL View Papers: http://www.ssrn.com/link/HRN-LAW.html Subscribe: http://hq.ssrn.com/jourInvite.cfm?link=HRN-LAW

Editors: Ariel Bendor Bar-Ilan University - Faculty of Law, Hanan Mandel Ono Academic College Faculty of Law, Bar-Ilan University - Faculty of Law, and Oren Perez Bar-Ilan University - Faculty of Law

Description: This eJournal includes working and accepted paper abstracts in all areas of law, including Contracts, Torts, Antitrust Law, Corporations, Economic Analysis of Law, Legal Procedure, Family Law, Criminal law, Constitutional Law, International Law and Environmental Law and policy.

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Editors: Meni Abudy Bar-Ilan University - Graduate School of Business Administration, Yael Carmi Bar-Ilan University - Graduate School of Business Administration, and Hanan Mandel Ono Academic College Faculty of Law, Bar-Ilan University - Faculty of Law

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HOW TO SUBSCRIBE You can subscribe to the eJournals by clicking on the "subscribe" link listed below each eJournal's name. You can change your eJournal subscriptions by logging into SSRN User HQ. If you have any problems, please contact us for assistance by email: [email protected] or by phone: 877-SSRNHelp (877 777 6435) in the United States, or [phone] outside of the United States. We are open Monday through Friday between the hours of 8:30AM and 6:00PM, United States Eastern. SSRN's eLIBRARY SSRN's searchable electronic library contains abstracts, full bibliographic data, and author contact information for more than 527,100 papers, more than 244,500 authors, and full text for more than 432,200 papers. The eLibrary can be accessed at http://papers.ssrn.com. SSRN supports open access by allowing authors to upload papers to the eLibrary for free through the SSRN User HeadQuarters at http://hq.ssrn.com, and by providing free downloading of those papers. Downloads from the SSRN eLibrary in the past 12 months total more than 10.7 million, with more than 72.6 million downloads since inception. SSRN's PROFESSIONAL DIRECTORY Searching on an individual's name in the author field on our search page at http://ssrn.com/search provides the best single professional directory of scholars in the social sciences and humanities. Complete contact information for authors, including email, postal, telephone, and fax information, is available there. SSRN's MISSION SSRN's objective is to provide rapid, worldwide distribution of research to authors and their readers and to facilitate communication among them at the lowest possible cost. In pursuit of this objective, we allow authors to upload papers without charge. And, any paper an author uploads to SSRN is downloadable for free, worldwide. Sincerely, Oren Perez and Hanan Mandel Directors Hebrew Research Network

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The story of Citizendium - the lost battle against Wikipedia

Citizendium was established by Larry Sanger, one of the founders of Wikipedia because he felt there should be a greater role for credentialed experts (http://en.citizendium.org/). This reflects some of the greatest critiques against Wikipedia - that the knowledge it produces is unreliable - compared against sources such as Britannica.

But Citizendium has failed producing only a fraction of the content generated by Wikipedia and attracting very little attention. Citizendium is not alone - other examples of failed competing projects are Veropedia and Knol (http://www.techdirt.com/articles/20080220/214906310.shtml).

These failures also highlight the basic puzzle of the Wikipedia project - isn’t Wikipedia an “impossible good”, which - given its strong public good nature - could have never evolved (due to collective action problems). The success of Wikipedia seems to lie in the ingenious combination of technology (Web+Wiki) and social innovation (the structure of the Wiki community, e.g., the discussion room and the rules governing editing privileges). The competitors have not been able to provide a better package. In addition Wikipedia now enjoys a network advantage which makes it very difficult for any competitor to enter the market – even competitors (e.g., Knol) that are supported by other giant (google, http://www.gwern.net/Wikipedia%20and%20Knol).

Still the question remains - to what extent can we trust Wikipedia and whether its peer-production model can be transferred to other domains facing collective action barriers?

  Giles, J. (2005). Internet encyclopedias go head to head. Nature, 438, 900–901

Karpf, D. (2011). Open Source Political Community Development: A Five-Stage Adoption Process. Journal of Information Technology & Politics, 8(3), 323-345, 329.

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What is the value of "Dissent"?

What is the value of the well-established legal tradition of "dissent"? In most common law jurisdictions, when courts issue a split decision, they present the dissenting opinions alongside the majority position. But this is not a necessary feature of court procedures. One could imagine system in which only the majority view would be published with the debate continuing internally.

A recent interesting take on that question comes from the debate about the reference to consensus in transnational regulatory scientific institutions (RSIs) like the IPCC or ICNIRP. Scientists have criticized this practice as being inconsistent with the spirit of science. Scientific progress depends on "continual challenges to the current state of always-imperfect knowl­edge".[1] The presence of credible minority views actually enhances the epistemic authority of science by demonstrating that the deliberative framework of the RSI has been sensitive to competing points of view.[2]

It is interesting to think about well-entrenched legal traditions through this different frame.

For some legal work on "dissent" have a look at: Lani Guinier, Foreword: Demosprudence Through Dissent, 122 Harvard Law Review  4 (2008) and William J Brennan Jr, In defense of dissents, 37 Hastings LJ  427 (1985).

  For an interesting blogpost -Fighting Groupthink With Dissent

 see: http://www.spring.org.uk/2009/07/fighting-groupthink-with-dissent.php

[1]   Daniel Sarewitz, The voice of science: let's agree to disagree, 478 Nature  7-7 (2011). Michael Oppenheimer, et al., The limits of consensus, Science Magazine's State of the Planet 2008-2009: with a Special Section on Energy and Sustainability  123 (2008) 

[2] Mike Hulme, Lessons from the IPCC: do scientific assessments need to be consensual to be authoritative?, in FUTURE DIRECTIONS FOR SCIENTIFIC ADVICE IN (Robert Doubleday & James Wilsdon eds., 2013) 142, 145-146.

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social network analysis and the law

Legal scholarship is still lagging behind in the use of network analysis. I wonder why this is the case? Here is a little paper that explores this methodology - drawing upon the famous work on Erdos collaboration network - using Cass Sunstein instead: SIX DEGREES OF CASS SUNSTEIN: COLLABORATION NETWORKS IN LEGAL SCHOLARSHIP, Paul H. Edelman & Tracey E. George, 2007, 11 Green Bag 2d 19.  And here is one of the famous images of Erdos collaborative network (of course only depicting part of the network) (you can read more about it here: http://www.oakland.edu/enp/)

[oren-perez]

New paper: Whose Administrative Law is it Anyway? How Global Norms Reshape the Administrative State

Whose Administrative Law is it Anyway? How Global Norms Reshape the Administrative State by Daphne Barak-Erez and Oren Perez. Here is the abstract:

The emergence of global norms of administrative law reshapes the administrative state. In many areas, covering diverse topics such as trade, financial regulation, public health and the environment, various international agencies have acquired increasing influence over domestic regulatory processes. The integration with the global arena requires the state to forgo some of its regulatory powers. This Article focuses on the normative challenges posed by this new reality. Part I explicates the way in which the argument presented differs from the global administrative law literature. Whereas global administrative law studies the meta-norms that regulate the activities of global administrative bodies, we focus on the way in which international norms reshape decision-making processes within domestic bureaucracies. This Article develops an analytical schema that captures the distinct impacts of global administrative law on the domestic level. This schema distinguishes between three forms of influence: the substitution of domestic administrative discretion by global standards, the emergence of universal standards of administrative due process, and the globally inspired transference of enforcement responsibilities. Part II maps the various mechanisms through which transnational regulatory processes intervene in the local realm, reshaping the contours of domestic administrative law. The Article takes a pluralistic approach by highlighting the diverse sources and paths through which global law influences the domestic realm. Thus we focus both on the influence of the WTO system, as reflected in the three recent rulings against the U.S. (the Tuna-Labeling, Clove Cigarettes and  Country of Origin Labeling (COOL) Requirements cases) and on the influence of private transnational institutions such as the International Organization for Standardization, certification bodies such as Social Accountability International (SAI), and regulatory scientific institutions such as the International Commission on Non-Ionizing Radiation Protection (ICNIRP). Part III proceeds to examine the normative challenges posed by these transnational regulatory processes. We start by exploring the hidden ideological agendas of this new global normative body, highlighting especially its neo-liberal, capitalist origins. We then move to discuss the problematic of fragmented accountability regimes. These reflections question the legitimacy of the new body of globalized administrative law and point to the need to adapt our democratic conceptions and practices to this new reality. In this context, our approach steers a middle course between the extremes of sovereign exceptionalism and global constitutionalism, focusing on the potential of administrative law for democratic innovativeness

 http://lsolum.typepad.com/legaltheory/2013/07/downl.html

[oren-perez]

New website to Bar Ilan Environmental Law Clinic

http://envclinic.biu.ac.il/

וזה הציטוט שבחרנו לאתר

" גאה ואציל שט כדור הארץ במרחב  כמו ספינת דגל מלכותית, ואנו  על סיפונה, משרבבים צוואר לראות:  היכן אנחנו? לאן נגיע?"

(חנוך לוין/ ההולכים בחושך)

[oren-perez]

Jacques Ellul and regulatory techniques

In the The Technological Society (1964) Jacques Ellul  - an important French writer who did not reach the same influence as some of his contemporaries - speaks about the potential situation in which techniques become autonomous, driven by their own necessities and internal rules "a complete separation of the goal from the mechanism"(133).

This could lead to a loss of responsibility -  once the technique gains autonomy, there is no one left to be held responsible: "No one at all is responsible for anything" (J. Ellul, Technological Bluff (Eerdmans Pub Co., 1990) 300).

It is interesting to think about the relevance of his work to current regulatory trends - especially the increasing use of computational models.

[oren-perez]

Computational models in contemporary regulation

What do we know about the role of computational models in regulation?

The use of such models raise various questions about the capacity of regulators to control their operation, the relationships between regulators & experts and how all this factors into debates about civic participation (e.g., open-gov and open-data initiatives). The story of the reliance by financial inst's. (prior to the financial crisis on VaR — Value at Risk is particularly worth thinking about) - but as Wagner tells us - similar models are used by environmental regulators.

For some interesting recent interventions on these questions see:

Fanto, J. 2009. Anticipating the Unthinkable: The Adequacy of Risk Management in Finance and Environmental Studies. Wake Forest L. Rev., 44: 731.

Miller, G., & Rosenfeld, G. 2009. Intellectual Hazard: How Conceptual Biases in Complex Organizations Contributed to the Crisis of 2008. NYU Law and Economics Research Paper(09-43).

Nocera, J. 2009. Risk Mismanagement. N.Y. TIMES Magazine (Jan. 4, 2009): 24 (http://www.nytimes.com/2009/01/04/magazine/04risk-t.html?pagewanted=all&_r=0).

Rappaport, S. 1996. Abstraction and unrealistic assumptions in economics∗. Journal of Economic Methodology, 3(2): 215-236.

Wagner, W., Fisher, E., & Pascual, P. 2010. Misunderstanding Models in Environmental and Public Health Regulation. NYU Envtl. LJ, 18: 293.