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on Law and Economics |
| By: | Gérard Mondello (Université Côte d'Azur, France; GREDEG CNRS) |
| Abstract: | The efficiency criterion (the highest care level at the lowest accident cost) indisputably governs the comparison of performance between strict liability and negligence. This view stems from the standard accident model development in the 70's and the 80's that ensures under ideal conditions, the equivalence between regimes and assume their potential substitutability. We develop a more general accident model (under risk universe) with divergent views among the parties about the damage. It follows that efficiency is no longer a relevant criterion. liability regimes belong to specific fields: Ultra-hazardous activities for strict liability and the remaining areas of negligence. |
| Keywords: | Tort law, Unilateral accident model, Risk, Safety, Strict liability, Negligence, Ultra-hazardous activities |
| JEL: | D62 K13 K23 K32 Q52 Q58 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2020-18&r=all |
| By: | Marco Di Cataldo (Department of Economics, University Of Venice Cà Foscari; London School of Economics); Nicola Mastrorocco (Trinity College Dublin) |
| Abstract: | What is the impact of organised crime on the allocation of public resources and on tax collection? This paper studies the consequences of collusion between members of criminal organisations and politicians in Italian local governments. In order to capture the presence of organised crime, we exploit the staggered enforcement of a national law allowing the dissolution of a municipal government upon evidence of collusion between elected officials and the mafia. We measure the consequences of this infiltration of mafia groups within local governments by using data on public spending, local revenues, and elected politicians at the municipality level. Difference-in-differences estimates reveal that infiltrated local governments spend more on average for construction and waste management, less for municipal police and public transport, and collect fewer taxes for waste and garbage. In addition, we uncover key elements of local elections associated with mafia-government collusion. |
| Keywords: | Organised crime, collusion, local public finance, municipalities, Italy |
| JEL: | K42 H72 D72 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2020:04&r=all |
| By: | Budzinski, Oliver; Gruésevaja, Marina; Noskova, Victoriia |
| Abstract: | The importance of digital platforms and related data-driven business models is ever increasing and poses challenges for the workability of competition in the respective markets (tendencies towards dominant platforms, paying-with-data instead of traditional money, privacy concerns, etc.). Due to such challenges, investigations of such markets are of high interest. One of recent cases is the investigation of Facebook's data collection practices by German competition authorities. Our paper, in contrast to the wide stream of legal studies on this case, aims to analyze whether Facebook's practices regarding data collection could constitute an abuse of market power from an economic perspective, more specifically against the background of modern data economics. In doing so we summarize the state of the advanced theories, including influences from behavioral economics, addressing such markets, and discuss four potential theories of harm. |
| Keywords: | data economics,big data,economics of privacy,competition,Facebook case,paying-with-data,abuse of dominance,market power,digital economy |
| JEL: | K21 L41 L86 L12 M21 L14 K42 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuiedp:139&r=all |
| By: | Wallimann, Hannes (Faculty of Economics and Social Sciences); Imhof, David; Huber, Martin |
| Abstract: | We propose a new method for flagging bid rigging, which is particularly useful for detecting incomplete bid-rigging cartels. Our approach combines screens, i.e. statistics derived from the distribution of bids in a tender, with machine learning to predict the probability of collusion. As a methodological innovation, we calculate such screens for all possible subgroups of three or four bids within a tender and use summary statistics like the mean, median, maximum, and minimum of each screen as predictors in the machine learning algorithm. This approach tackles the issue that competitive bids in incomplete cartels distort the statistical signals produced by bid rigging. We demonstrate that our algorithm outperforms previously suggested methods in applications to incomplete cartels based on empirical data from Switzerland. |
| Keywords: | Bid rigging detection; screening methods; descriptive statistics; machine learning; random forest; lasso; ensemble methods |
| JEL: | C21 C45 C52 D22 D40 K40 |
| Date: | 2020–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:fri:fribow:fribow00513&r=all |
| By: | Thomas Simon (Johns Hopkins University) |
| Abstract: | Although the indirect (Bilateral Investment Treaties (BITs), arbitral decisions, and Corporate Social Responsibility (CSR)) and direct (Accord, Alliance) responses to the Rana Plaza and similar disasters, eventually, made improvements for workers in the Ready Made Garment (RMG) industry, they ultimately have proven unsatisfactory because they do not challenge the fundamental and structural impediment, namely, the dominance of the economic investment regime over human rights. A new paradigm anchored in health law creates an entirely new and fresh framework for rethinking the problems. Within that health paradigm, a ban on workplace smoking can provide a wedge for opening the door for workers to begin to make fundamental changes in their well-being. Health, for far too long, has remained at the bottom of the human rights hierarchy. Putting health first actually makes it more likely that safety issues will be adequately addressed in a systematic and meaningful way. Giving priority to health rights creates opportunities to radically change the terms of the debates. Using a ban on workplace smoking provides a wedge and the first step to effecting this radical transformation. |
| Keywords: | corporate social responsibility, bilateral investment treaties, industrial disasters, right to health, workers rights |
| JEL: | K32 K31 K33 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:10012671&r=all |
| By: | Batabyal, Amitrajeet; Beladi, Hamid |
| Abstract: | We focus on the interaction between a male employee and his supervisor and analyze a game-theoretic model of sexual harassment in the workplace. The male employee is accused of sexually harassing a female employee and the supervisor's task is to gather evidence and then determine whether to legally charge the male employee with sexual harassment. The evidence gathering process is random and concrete evidence is available to the supervisor with probability one-half. Our analysis of this strategic interaction leads to four results. First, we delineate the game in extensive form. Second, we specify the matrix that represents the normal form of the extensive form. Third, we show that there is no pure-strategy Nash equilibrium in the game between the male employee and his supervisor. Finally, we show that there exists a mixed-strategy Nash equilibrium in the same male employee-supervisor game. |
| Keywords: | Evidence, Mixed-Strategy Nash Equilibrium, Sexual Harassment, Supervisor |
| JEL: | J71 K42 |
| Date: | 2020–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:100181&r=all |
| By: | Walter, György |
| Abstract: | Though it seems as if personal bankruptcy regulation was a new legislative solution of the last decades, handling personal bankruptcies has a long history and broad legislative background. The need for implementing a modern regulatory framework for handling personal bankruptcies goes back to the second part of the 20th century, when personal, consumer lending reached a massive volume, and non-performing defaulted portfolios resulted in serious macroeconomic, social, and political impact. Many countries have introduced measures to handle defaulted personal loans, and personal bankruptcy regulations were launched in most European countries during the last 30 years. Though structures are different, the general elements of such systems could be outlined. One of the most disputed principles of the systems is the handling of “fresh start” and the implicated degree of the “leniency” of the systems. In this working paper, I present the brief history, the structural elements of personal bankruptcy regulations, and the building blocks of the fresh start. I also discuss three different legislative solutions: the US, the Austrian, and the Hungarian model. I conclude that there are continuous changes in the systems regarding the handling of fresh start. While the US legislation moves to the less lenient direction, there are measures from European countries to change the laws to more debtor-friendly systems. The Hungarian version was created to follow the strict, less lenient structures in a time when some countries in the region moved towards more lenient systems. |
| Keywords: | bankruptcy, government policy and regulation, fresh start |
| JEL: | G18 G33 K35 |
| Date: | 2020–05–14 |
| URL: | http://d.repec.org/n?u=RePEc:cvh:coecwp:2020/02&r=all |
| By: | Nicolas Jacquemet (PSE - Paris School of Economics); Stéphane Luchini (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Antoine Malezieux; Jason Shogren (UW - University of Wyoming) |
| Abstract: | Why do people pay taxes? Rational choice theory has fallen short in answering this question. Another explanation, called "tax morale", has been promoted. Tax morale captures the behavioral idea that non-monetary preferences (like norm-submission, moral emotions and moral judgments) might be better determinants of tax compliance than monetary trade-offs. Herein we report on two lab experiments designed to assess whether norm-submission, moral emotions (e.g. affective empathy, cognitive empathy, propensity to feel guilt and shame) or moral judgments (e.g. ethics principles, integrity, and moralization of everyday life) can help explain compliance behavior. Although we find statistically significant correlations of tax compliance behavior with empathy and shame, the economic significance of these correlations are low–—more than 80% of the variability in compliance remains unexplained. These results suggest that tax authorities should focus on the institutional context, rather than individual preference characteristics, to handle tax evasion. |
| Keywords: | tax evasion,tax morale,morality,personality traits,psychometrics |
| Date: | 2019–06–26 |
| URL: | http://d.repec.org/n?u=RePEc:hal:pseptp:hal-02290402&r=all |
| By: | Devi Brands (Vrije Universiteit Amsterdam); Joris Klingen (Vrije Universiteit Amsterdam); Francis Ostermeijer (Vrije Universiteit Amsterdam) |
| Abstract: | We provide novel evidence on the effect of smart phone use on road accidents. We exploit variation in phone usage fees in the Netherlands following a change in European Union (EU) roaming regulations implemented in 2017. The growth rate of mobile data roaming increased substantially after the change, which allows us to estimate a difference-in-differences model where non-Dutch drivers from the EU are treated, while Dutch drivers serve as control group. Our results suggest that around 10% of vehicles involved in accidents can be explained by the use of smart phones, and that these accidents mainly happen on urban roads. |
| Keywords: | road safety, accident risk, smart phones, urban roads |
| JEL: | K42 R41 I12 |
| Date: | 2020–05–17 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20200024&r=all |
| By: | Rozo, Sandra V.; Anders, Therese; Raphael, Steven |
| Abstract: | We study whether the forced removal of undocumented immigrants from the United States increases violent crime in Mexican municipalities. Using municipal panel data on homicide rates matched with annual deportation flows from the United States to Mexico, we assess whether municipalities with repatriation points experience higher violent crime with surges in deportation flows. We consistently find that municipalities with greater geographic exposure to deportation flows have higher violent crime. The effects are mostly driven by increments in homicide rates of young males and minors. |
| Keywords: | Crime,Migration,Latin America |
| JEL: | O15 R2 K37 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:545&r=all |
| By: | Iñaki Aldasoro; Leonardo Gambacorta; Paolo Giudici; Thomas Leach |
| Abstract: | Cyber incidents are becoming more sophisticated and their costs difficult to quantify. Using a unique database of more than 100,000 cyber events across sectors, we document the characteristics of cyber incidents. Cyber costs are higher for larger firms and for incidents that impact several organisations simultaneously. The financial sector is exposed to a larger number of cyber attacks but suffers lower costs, on average, thanks to proportionately greater investment in information technology (IT) security. The use of cloud services is associated with lower costs, especially when cyber incidents are relatively small. As cloud providers become systemically important, cloud dependence is likely to increase tail risks. Crypto-related activities, which are largely unregulated, are particularly vulnerable to cyber attacks. |
| Keywords: | cyber risk, cloud services, financial institutions, bitcoin, cryptocurrencies, cyber cost, cyber regulation |
| JEL: | D5 D62 D82 G2 H41 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:865&r=all |
| By: | Jorge Gallego; Mounu Prem; Juan F. Vargas |
| Abstract: | The public health crisis caused by the COVID-19 pandemic, coupled with the subsequent economic emergency and social turmoil, has pushed governments to substantially and swiftly increase spending. Because of the pressing nature of the crisis, public procurement rules and procedures have been relaxed in many places in order to expedite transactions. However, this may also create opportunities for corruption. Using contract-level information on public spending from Colombia’s e-procurement platform, and a difference-in-differences identification strategy, we find that municipalities classified by a machine learning algorithm as traditionally more prone to corruption react to the pandemic-led spending surge by using a larger proportion of discretionary non-competitive contracts and increasing their average value. This is especially so in the case of contracts to procure crisis-related goods and services. Our evidence suggests that large negative shocks that require fast and massive spending may increase corruption, thus at least partially offsetting the mitigating effects of this fiscal instrument. |
| Keywords: | Corruption, COVID-19, Public procurement, Machine learning |
| JEL: | H57 H75 D73 I18 |
| Date: | 2020–05–14 |
| URL: | http://d.repec.org/n?u=RePEc:col:000518:018164&r=all |
| By: | Oğuzhan Okumuş, Mehmet |
| Abstract: | This paper investigates the impact of economic and socio-cultural pull factors on migration decisions of graduate students and highly skilled professionals with a specific focus on recent highly skilled Turkish immigration in Berlin. The main hypotheses of this study are that economic factors play a significantly more important role in the migration decisions of highly skilled professionals whereas socio-cultural factors have a significantly more impact on graduate student migration. The data are collected through an online survey and analyzed in the light of previous literature on highly skilled immigration. Compatible with the results of earlier studies, the findings reveal significant differentiation in the effect of economic pull factors on highly skilled professionals compared to graduate students, especially in the domains career opportunities, employment opportunities and expectations for a higher quality of life. Sociocultural pull factors appear to have insignificant difference despite being favored more by immigrants who moved to Berlin through an educational channel. Altogether, these results indicate the importance of diversified migration policies for the distinct needs of different highly skilled groups. |
| Keywords: | Highly skilled immigration,Brain drain,Germany,Turkey |
| JEL: | J61 J15 K37 O15 F66 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ipewps:1422020&r=all |