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Licensed Unlicensed Requires Authentication Published by De Gruyter August 18, 2019

Money Talks: Institutional Investors and Voice in Contract

Roy Kreitner


Contracts are the building blocks of markets, where participation is typically understood through choice: to buy or not to buy, and if so, from whom? In other words, contract choices allow participation by exit, with little need for discussion. However, in some instances markets may be open to a fair degree of voice. Market behavior is not always a take it or leave it endeavor, and market participation does not always entail the kind of passivity associated with the role of the price taker. At least when some contract parties put their minds to it, markets may retreat from the mechanics of pure preference satisfaction and interact with a realm of reasoned deliberation, where some market reasons are significantly public-minded. This essay explores the potential of contracts to become a locus of deliberative participation in the context of institutional investment (primarily by pension funds) and investors’ pursuit of commitments to nonfinancial goals.

* Professor of Law, Tel Aviv University. For helpful discussions, I am grateful to Yishai Blank, Hanoch Dagan, Sharon Hannes, Ron Harris, Doreen Lustig, Nadav Orian Peer, Ariel Porat, and participants at the conference on Freedom, Choice and Contracts, and in particular to Kathryn Judge for her insightful comments. Cite as: Roy Kreitner, Money Talks: Institutional Investors and Voice in Contract, 20 Theoretical Inquiries L. 511 (2019).

Published Online: 2019-08-18
Published in Print: 2019-07-26

© 2019 by Theoretical Inquiries in Law

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