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on Law and Economics |
| By: | Amanda Agan; Matthew Freedman; Emily Owens |
| Abstract: | Governments in the U.S. must offer free legal services to low-income people accused of crimes. These services are frequently provided by assigned counsel, who handle cases for indigent defendants on a contract basis. Court-assigned attorneys generally garner worse case outcomes than privately retained attorneys. Using detailed court records from one large jurisdiction in Texas, we find that the disparities in outcomes are primarily attributable to case characteristics and within-attorney differences across cases in which they are assigned versus retained. The selection of low-quality lawyers into assigned counsel and endogenous matching in the private market contribute less to the disparities. |
| JEL: | H44 H76 J15 J38 K14 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24579&r=law |
| By: | Bonica, Adam (Stanford University); Sen, Maya (Harvard University) |
| Abstract: | Using a new dataset capturing the ideological positioning of nearly half a million U.S. judges and lawyers, we present evidence showing how ideology affects the selection of judges across federal and state judiciaries. We document that the higher the court, the more it deviates ideologically from the ideology of attorneys, suggesting ideology plays a strong role in judicial selection. We also show ideology plays stronger roles in jurisdictions where judges are selected via political appointments or partisan elections. Our findings suggest that ideology is an important component of judicial selection primarily where (1)using ideology leads to expected benefits to politicians, (2) when the jurisdiction’s selection process allows ideology to be used, and (3) where it concerns the most important courts. The study is the first to provide a direct ideological comparison across judicial tiers and between judges and lawyers and to explain how and why American courts become politicized. |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp17-048&r=law |
| By: | George S. Mellman |
| Abstract: | 401(k)s are now the main type of employer-sponsored retirement plan. However, these plans are still relatively new, having started as a supplement to defined benefit plans in the early 1980s. As a result, many questions remain unanswered about the legal obligations of the plan fiduciaries, who are responsible for administering the plans and their assets. While the law is clear that plans must be administered for the “sole benefit” of participants, it is less specific on many details: for example, how plan fiduciaries should select the type and number of investment options or determine a reasonable level of fees. Indeed, instead of laying out specific regulations or guidance, the Department of Labor’s (DOL) general approach to overseeing 401(k)s has been through its own enforcement actions or through litigation (mostly privately initiated). This brief looks at the broad complaints that motivate the litigation and how the threat of litigation may affect the retirement industry. This brief is organized as follows. The first section introduces the three main reasons why litigation is brought in the first place: 1) inappropriate investment options; 2) excessive fees; and 3) self-dealing. It then explains that, from the courts’ perspective, fiduciaries’ main responsibility is to follow a prudent process in making plan-related decisions. The section also shows how common each type of litigation is and highlights that recent lawsuits have been more focused on excessive fees than past lawsuits, when investments were more of a focus. The second section turns to the potential effects of this litigation on 401(k) plans. In particular, it points out two major trends that have coincided with the lawsuits: 1) a rise in the use of low-cost index funds, which are perceived as less vulnerable to litigation; and 2) a downward trend in investment and administrative fees. The section also describes one potential negative consequence of litigation – the fear of plan fiduciaries to offer innovative plan options, such as lifetime income products. |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:crr:issbrf:ib2018-8&r=law |
| By: | Jörg Kalbfuß; Reto Odermatt; Alois Stutzer |
| Abstract: | The consequences of legal access to medical marijuana for individual welfare are a matter of controversy. We contribute to the ongoing discussion by evaluating the impact of the staggered introduction and extension of medical marijuana laws across US states on self-reported mental health. Our main analysis is based on BRFSS survey data from more than six million respondents between 1993 and 2015. On average, we find that medical marijuana laws lead to a reduction in the self-reported number of days with mental health problems. Reductions are largest for individuals with high propensities to consume marijuana for medical purposes and people who are likely to suffer from chronic pain. Moreover, the introduction of prescription drug monitoring programs lead to a reduction in bad mental health days only in states that allow medical marijuana. |
| Keywords: | medical marijuana laws, cannabis regulation, mental health, chronic pain, prescription drug monitoring |
| JEL: | H75 I12 I18 I31 K42 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1546&r=law |
| By: | del Río, Fernando |
| Abstract: | We develop a neoclassical growth model with imperfect property rights in which predation entails both waste of resources and deadweight losses, the latter becoming very large when the predation rate is high. According to the model, in the United States, the welfare costs of crime represent a loss of 18.6% of consumption per capita. For a country in the average of the last decile of the distribution of an index of business costs of crime across 94 countries, this loss is 57.8%. Moreover, a one standard deviation increase in the quality index of formal institutions securing property rights increases GDP per worker by 23% for a country with an institutional quality index equal to the average of the last decile of its distribution. |
| Keywords: | Rent-seeking, cross-country differences in TFP and GDP per worker, business costs of crime, institutional quality, welfare costs of crime. |
| JEL: | O10 O4 O43 |
| Date: | 2018–02–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:86246&r=law |
| By: | Ghazala Azmat; Rosa Ferrer (Universitat Pompeu Fabra [Barcelona]) |
| Abstract: | This paper documents the gender gap in performance among high-skilled professionals in the United States. On the basis of widely used performance measures in law firms, we find that male lawyers bill 10 percent more hours and bring in more than twice as much new client revenue as female lawyers. The differential impact across genders in the presence of young children and differences in aspirations to become a law firm partner account for a large share of the difference in performance. We show that accounting for performance has important consequences for gender gaps in lawyers’ earnings and subsequent promotion. |
| Keywords: | Performance measures; Gender gaps; High-skilled professionals |
| JEL: | M52 J16 K40 J44 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/3t1fcs7p369jmaalnboqhpgknn&r=law |
| By: | Ivaldi, Marc; Lagos, Vicente |
| Abstract: | The Coordinate Price Pressure Index (CPPI) measures the incentives of two competitors to engage in a particular type of Parallel Accommodating Conduct (PAC). Specifically, it measures the incentives of a leader firm to initiate a unilateral percentage price increase, with the expectation that a follower firm will match it. Using a large set of simulated markets, we measure the accuracy of the index in terms of predicting the impact of a merger on firms’ incentives to engage in PAC. Results suggest that the CPPI only displays a fair performance when predicting an increase in firm’s incentives to engage in PAC, and only in mergers in which the diversion ratio between the target and the acquiring firm is low. However, the index displays a poor performance when predicting mergers with a significant anticompetitive effect. |
| Keywords: | Coordinate Price Pressure Index ; Parallel Accommodating Conduct ; Merger Simulation |
| JEL: | K21 L41 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:32620&r=law |
| By: | Paech, Philipp |
| Abstract: | Since the emergence of the virtual currency Bitcoin in 2009, a new, Internet-based way of recording entitlements and enforcing rights has increasingly captured the interest of businesses and governments. The technology is commonly called ‘blockchain’ and is often associated with a closely related phenomenon, the ‘smart contract’. The market is now exploring ways of using these concepts for financial assets, such as securities, legal tender and derivative contracts. This article develops a conceptual framework for the governance of blockchain-based networks in financial markets. It constructs a vision of how financial regulation and private law should set the boundaries of this new technology in order to protect market participants and societies at large, while at the same time allowing for the necessary room for innovation. |
| Keywords: | blockchain technology; fintech; financial assets; financial regulation; private law; private international law |
| JEL: | K11 K12 K22 K33 |
| Date: | 2016–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:87569&r=law |
| By: | Deborah Leshinsky |
| Abstract: | The courts are currently ill equipped to assess property valuations. Judges face conflicts in the system, and there is a lack of clarity regarding current market valuations. At present, arbitrary and unpredictable valuations are being accepted. Current outcomes can be harmful to litigants and wasteful to society. Judges face the same valuation uncertainty as the parties themselves. Expert witnesses consequently are always going to be called by the courts therefore the system is in need of a set of new protocols to minimize such a requirement. This study intends to fulfill an identified need by providing more depth to the existing knowledge. The findings are designed to make a contribution to academic research in this field. In order to minimize and eliminate errors, maintain credibility, and refrain from bias, property valuers must not deviate from the true value of property. As part of my methodology I propose to utilize GIS method with the valuations that come to the court regarding the estimation of the peoples income well being and happiness. The people who bring property valuations to the court would need to be classified in areas and people in regard to employment. |
| Keywords: | Family Law valuations; Property Valuations; property valuations and seperation; propety and divorce; valuations and the expert wittness |
| JEL: | R3 |
| Date: | 2017–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2017_385&r=law |
| By: | Anastasia Danilov; Kiryl Khalmetski; Dirk Sliwka |
| Abstract: | It has been argued that guilt aversion (the aversion to violate others’ expectations) and the compliance to descriptive social norms (the aversion to act differently than others in the same situation) are important drivers of human behavior. We show in a formal model that both motives are empirically indistinguishable when only one benchmark (another person’s expectation or a norm) is revealed as each of these benchmarks signals information on the other one. To address this problem, we experimentally study how individuals react when both benchmarks are revealed simultaneously. We find that both types of information affect transfers in the dictator game. At the same time, the effect of the recipient’s expectation is non-monotonic as dictators use the disclosed expectation in a self-serving way to decrease transfers. |
| Keywords: | guilt aversion, social norms, conformity, dictator game |
| JEL: | C91 D83 D84 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6999&r=law |
| By: | Alejandro Micco; Pablo Muñoz-Henríquez |
| Abstract: | The incidence of alternative work arrangements has risen during recent decades, affecting the shape of the economy and leading to calls for changes in labor regulation. In this paper, we study the demand for temporary agency work (TAW) and the effects of a reform in Chile that increased the regulatory burden on TAW. In examining a sample of manufacturing plants, we not only show that plant-level volatility and relative size are key determinants of the demand for TAW, but also that both characteristics became more important after the change in regulation. We also evaluate the effects of the regulation on the plants’ performance. We find that plants using TAW increased their share of non-agency workers by around 12%, while their total employment shrank by 7% as a response to the regulation. Reassuringly, plants with higher shares of agency workers -consequently more exposed to the regulatory change- experienced larger changes in employment. Finally, we only find partial evidence of a differential negative effect on output, and we do not detect any significant impact of this regulation on value added. |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:udc:wpaper:wp463&r=law |
| By: | Petros C. Mavroidis; Damien J. Neveny |
| Abstract: | This paper considers the APEC and proposed EGA agreements which grant tariff concession in favor of "green" goods. We find that the practical significance of the APEC agreement should not be overestimated as it involves modest tariff concessions over a subset of goods which are not heavily traded. Still, these agreements involve a paradigm shift to the extent that they use tariffs concessions negotiated on a plurilateral basis as a policy instrument to meet public policy concern, instead of making market access conditional on meeting national regulations. We model the mechanism through which these tariff preferences provide incentives to change production in favor of green goods in exporting countries and highlight the challenges that the implementation of these agreements involve. |
| Keywords: | WTO, APEC, EGA, Tari¤s, Terms of Trade, ex outs |
| JEL: | K40 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2018/20&r=law |