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on Law and Economics |
| By: | Frédéric Marty (Université Côte d'Azur, France; GREDEG CNRS) |
| Abstract: | In 2005, the European Commission advocated for a more economic approach for enforcing competition laws. The sole criterion for assessing the lawfulness of a market practice should be the appraisal of its net effects on consumer welfare. The Court of Justice was reluctant to adopt such an approach until its 2017 Intel Judgment. Its endorsement - which is debatable insofar as the judgment may give rise to different interpretations - may appear paradoxical in that it is concomitant with a sharp challenge to the consumer welfare criterion in the United States. The purpose of this article is to retrace the history of this criterion, particularly with regard to its adoption in the context of E.U. competition law. Our aim is to show that the criticisms of the effects-based approach can be addressed not by moving away from the consumer welfare criterion but by integrating it into a broader perspective, that also takes into account the protection of the competition process itself. |
| Keywords: | anticompetitive practices, effects-based approach, consumer welfare, ordoliberalism, E.U. competition law |
| JEL: | K21 L41 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2020-13&r=all |
| By: | Calamunci, Francesca (University of Messina); Drago, Francesco (University of Messina) |
| Abstract: | We analyze the economic consequences on firm profitability, performance, and investments of having another firm in the same market affiliated with a criminal organization. We do so by evaluating the spillover effects of a law providing the judicial administration of organized crime firms through the imposition of external managers in order to remove the connection to the criminal organization, and at the same time guarantee the continuity of production. By using detailed information on more than 180,000 companies, we exploit the firms' yearly variation in the exposure to criminal firms' judicial administration in their market (in the same province and industry). The empirical design allows us to control for confounding effects at the firm, market, and year levels. The results show that there is a large, positive spillover from the enforcement law, suggesting that the burden the organized crime firms impose on other firms is very large. Firms' performance and turnover increases by 2.2 and 0.7 percent, respectively, in the first four years after an organized crime firm enters the status of judicial administration. Investments measured by tangible and intangible assets increase with the number of firms entering into judicial administration by 0.75 percent. These results suggest that intensifying confiscation measures against criminal organizations has a strong positive effect on the economy. |
| Keywords: | organized crime, firm level data, policy evaluation |
| JEL: | H00 H32 J00 K14 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13028&r=all |
| By: | Simplice A. Asongu (Yaounde, Cameroon) |
| Abstract: | This study extends the literature on fighting software piracy by investigating how Intellectual Property Rights (IPRs) regimes interact with technology to mitigate software piracy when existing levels of piracy are considered. Two technology metrics (internet penetration rate and number of PC users) and six IPRs mechanisms (constitution, IPR law, main IP laws, WIPO Treaties, bilateral treaties and multilateral treaties) are used in the empirical analysis. The statistical evidence is based on: (i) a panel of 99 countries for the period 1994-2010 and (ii) interactive contemporary and non-contemporary Quantile regressions.The findings show that the relevance of IPR channels in the fight against software piracy is noticeably contingent on the existing levels of technology embodied in the pirated software. There is a twofold policy interest for involving modern estimation techniques such as interactive Quantile regressions. First, it uncovers that the impact of IPR systems on software piracy may differ depending on the nature of technologies used. Second, the success of initiatives to combat software piracy is contingent on existing levels of the piracy problem. Therefore, policies should be designed differently across nations with high-, intermediate- and low-levels of software piracy. |
| Keywords: | Piracy; Business Software; Software piracy; Intellectual Property Rights |
| JEL: | F42 K42 O34 O38 O57 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:20/018&r=all |
| By: | Jetter, Michael (University of Western Australia); Molina, Teresa (University of Hawaii at Manoa) |
| Abstract: | Can democratically elected politicians persuade their constituents to alter policy priorities? With little empirical support for this hypothesis to date, we propose that Rodrigo Duterte's inauguration speech on June 30, 2016 systematically shifted the Filipinos' policy agenda toward prioritizing illegal drugs. We first study day-to-day variation in national and sub-national Google searches over six months, identifying a strong and persistent increase in drug-related searches right after the speech. Placebo tests rule out potentially confounding topics, such as pharmaceutical drugs, Duterte's 'War on Drugs', or common time trends with neighboring countries. Next, to better identify causality, we exploit the exogenous timing of traditional local festivals, which we argue resulted in some of the Philippines' 81 provinces being less exposed to Duterte's speech. The corresponding results are consistent with our hypothesis: less exposed provinces had smaller increases in drug-related Google searches. Finally, we examine individual-level survey responses that more directly capture policy priorities and uncover similar results: crime has moved to the top of the Filipinos' policy agenda. Results that exploit the same identication strategy based on local festivals hint at a causal effect of the speech on these policy priorities. |
| Keywords: | agenda setting, persuasion, policy priorities |
| JEL: | D72 H11 H75 I12 K42 N45 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13027&r=all |
| By: | Santiago Tobón; Santiago Gómez; Daniel Mejía |
| JEL: | C23 D04 H41 K42 |
| Date: | 2020–03–20 |
| URL: | http://d.repec.org/n?u=RePEc:col:000122:018058&r=all |
| By: | Argenton, Cedric (Tilburg University, Center For Economic Research); Wang, Xiaoyu (Tilburg University, Center For Economic Research) |
| Abstract: | In this paper, we investigate how loss aversion affects people's behavior in civil litigation. We find that a loss-averse plaintiff demands a higher offer for small claims to maintain her threat to proceed to trial compared to a loss- neutral plaintiff. For larger claims, a loss-averse plaintiff demands a lower offer to increase the settlement probability as loss pains her extra in trial. We also investigate how various policies affect loss-averse litigants' settlement decisions. Only a reduction in the asymmetry of information about trial odds uniformly leads to higher settlement rates. |
| Keywords: | settlement; loss aversion; Asymmetric Information |
| JEL: | D82 K41 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiucen:b6c48abc-9b47-4c3b-848b-3213082fe848&r=all |
| By: | Anatoliy Kostruba (Vasyl Stefanyk Precarpathian National University); Mykhailo Khomenko; Oleksii Kot |
| Abstract: | The article is dedicated to the problem of studying the mechanism of legal regulation of social relations as well as one of its elements, namely, the rule of law. Due to the fact that legal regulation is characterized by general properties, laws and tendencies, the issue of rights-terminating legal facts in the mechanism of legal regulation of civil relations is actual and requires in-depth scientific research. The article aims to determine the place of rules of law and rights-terminating legal facts in the mechanism of legal regulation of social relations. The authors come to the conclusion that the mechanism of achieving the aim of legal regulation should be understood as a consistent chain of changes in individual legal phenomena: legal fact, rights and duties which exist in the civil-legal relations that arose on its basis, implementation of these rights and duties, and if necessary, their protection as well. |
| Keywords: | legal facts,rights-terminating legal facts,mechanism of legal regulation,legal regulation,rule of law,Contracts,theory of law |
| Date: | 2018–10–22 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02510656&r=all |
| By: | Jesus Fernandez-Villaverde (University of Pennsylvania) |
| Abstract: | Can arti?cial intelligence, in particular, machine learning algorithms, replace the idea of simple rules, such as ?rst possession and voluntary exchange in free markets, as a foundation for public policy? This paper argues that the preponderance of the evidence sides with the interpretation that while arti?cial intelligence will help public policy along important aspects, simple rules will remain the fundamental guideline for the design of institutions and legal environments where markets operate. “Digital socialism” might be a hipster thing to talk about in Williamsburg or Shoreditch, but it is as much of a chimera as “analog socialism.” |
| Keywords: | Arti?cial intelligence, machine learning, economics, law, rule of law |
| JEL: | D85 H10 H30 |
| Date: | 2020–03–20 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:20-010&r=all |
| By: | Patrick M. Kline; Christopher R. Walters |
| Abstract: | This paper develops methods for detecting discrimination by individual employers using correspondence experiments that send fictitious resumes to real job openings. We establish identification of higher moments of the distribution of job-level callback rates as a function of the number of resumes sent to each job and propose shape-constrained estimators of these moments. Applying our methods to three experimental datasets, we find striking job-level heterogeneity in the extent to which callback probabilities differ by race or sex. Estimates of higher moments reveal that while most jobs barely discriminate, a few discriminate heavily. These moment estimates are then used to bound the share of jobs that discriminate and the posterior probability that each individual job is engaged in discrimination. In a recent experiment manipulating racially distinctive names, we find that at least 85% of jobs that contact both of two white applications and neither of two black applications are engaged in discrimination. To assess the potential value of our methods for regulators, we consider the accuracy of decision rules for investigating suspicious callback behavior in various experimental designs under a simple two-type model that rationalizes the experimental data. Though we estimate that only 17% of employers discriminate on the basis of race, we find that an experiment sending 10 applications to each job would enable detection of 7-10% of discriminatory jobs while yielding Type I error rates below 0.2%. A minimax decision rule acknowledging partial identification of the distribution of callback rates yields only slightly fewer investigations than a Bayes decision rule based on the two-type model. These findings suggest illegal labor market discrimination can be reliably monitored with relatively small modifications to existing correspondence designs. |
| JEL: | C14 C44 C9 J7 J71 K31 K42 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26861&r=all |
| By: | Diana Capone (Bank of Italy) |
| Abstract: | Two kinds of measures aimed at fostering gender diversity are applied in Italian banks: non-prescriptive measures set by supervisory rules, and binding measures set by the law on listed companies. This study analyses the effects of these measures on the composition of banks’ boards, between 2014 and 2018, comparing listed banks and unlisted banks. The analysis provides a complete picture of the impact of quotas for listed banks, by integrating supervisory information on all members of banks’ boards, gathered by the Bank of Italy, with additional information on board members’ backgrounds collected from their CVs, and with information on the structure and functioning of boards collected from the reports on corporate governance. In particular, the analysis shows that, between 2014 and 2018, the increase in the number of women on banks’ boards was associated with the enhanced independence and competence of female directors and with their stronger involvement in the work of the boards. Furthermore, the analysis shows that these improvements have had a positive impact on those board characteristics that the scientific literature and the Bank of Italy consider to be key for the effectiveness of the board in fulfilling its mandate. In terms of policy decisions, the results of the analysis suggest that the existing measures need to be strengthened for unlisted banks. |
| Keywords: | banking, corporate governance, board effectiveness, gender diversity |
| JEL: | G21 G28 M14 K23 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_552_20&r=all |
| By: | Charles W. Calomiris; Harry Mamaysky; Ruoke Yang |
| Abstract: | We derive a measure of firm-level regulatory costs from the text of corporate earnings calls. We then use this measure to study the effect of regulation on companies’ operating fundamentals and cost of capital. We find that higher regulatory cost results in slower sales growth, an effect which is mitigated for large firms. Furthermore, we find a one-standard deviation increase in our preferred measure of regulatory cost is associated with an increase in firms’ cost of capital of close to 3% per year. These findings suggest that regulatory risk is a major cost to firms, but the largest firms are able to manage that risk better. |
| JEL: | G18 G38 K2 L51 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26856&r=all |
| By: | Andrew Leigh |
| Abstract: | Constructing a new series of incarceration rates from 1860 to 2018, I find that Australia now incarcerates a greater share of the adult population than at any point since the late nineteenth century. Much of this increase has occurred since the mid-1980s. Since 1985, the Australian incarceration rate has risen by 130 percent, and now stands at 0.22 percent of adults (221 prisoners per 100,000 adults). Recalculating Indigenous incarceration rates so that they are comparable over a long time span, I find that incarceration rates for Indigenous Australians have risen dramatically. Fully 2.5 percent of Indigenous adults are incarcerated (2481 prisoners per 100,000 adults), a higher share than among African-Americans. The recent increase in the Australian prison population does not seem to be due to crime rates, which have mostly declined over the past generation. Instead, higher reporting rates, stricter policing practices, tougher sentencing laws, and more stringent bail laws appear to be the main drivers of Australia’s growing prison population. |
| Keywords: | prison, jail, incarceration, crime |
| JEL: | I30 K14 N30 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8163&r=all |
| By: | Mercedes Campi; Alessandro Nuvolari |
| Abstract: | This paper revises and updates the Campi-Nuvolari index of intellectual property protection for plant varieties (Campi and Nuvolari, 2015). The new index has been updated and provides yearly scores for the period 1961-2018 for a total number of 104 countries, which have legislation on plant variety protection in force. The new evidence highlights the tendency towards more similar and stronger systems of intellectual property rights (IPRs) worldwide, regardless of individual characteristics of countries. The signing of the TRIPS and of trade agreements with TRIPS-Plus provisions are major drivers of this process. In addition, certain features of countries such as the regulatory environment, the level of human capital, the importance of agricultural production, and openness to trade, are also significant determinants of the evolution of IPRs systems. We conclude discussing other possible applications of the data. |
| Keywords: | Intellectual property rights; Plant breeders' rights; Patents; Agricultural development; International comparison. |
| Date: | 2020–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2020/06&r=all |
| By: | Cascino, Stefano |
| Abstract: | Barthelme et al. (2018) examine the real effects of pension accounting regulation and provide evidence consistent with the claim that recent changes in financial reporting rules affect pension asset allocation decisions. Their study offers an interesting opportunity to highlight the importance of evidence-based policymaking in the field of financial reporting. I discuss some empirical challenges that the authors face to causally identify the effects they examine to show how a closer cooperation between academia and regulators can enable researchers to overcome identification challenges and help produce even more policy-relevant research. |
| Keywords: | regulation; evidence-based policymaking; accounting standards; pension asset allocation; IAS 19R; real effects |
| JEL: | A11 G18 G30 G32 G38 K22 L51 M41 |
| Date: | 2018–09–19 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:90194&r=all |