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on Law and Economics |
| By: | Rey, Patrick; Polo, Michele |
| Abstract: | This paper analyses the impact of commitments on antitrust enforcement. These tools, introduced in Europe by the Modernization reform of 2003, are now used intensively by the European Commission and by National Competition Agencies. We consider a setting where a firm can adopt a practice that is either pro- or anti-competitive; the firm knows the nature of the practice whereas the enforcer has only prior beliefs about it. If the firm adopts the practice, the enforcer then decides whether to open a case. When commitments are available, the firm can offer a commitment whenever a case is opened; the enforcer then decides whether to accept it or run a costly investigation that may or may not bring supporting evidence. We show that introducing commitments weakens enforcement when the practice is likely to be anti-competitive. The impact of commitments is however more nuanced when the practice is less likely to be anti-competitive. |
| Keywords: | Antitrust enforcement ; Commitment ; Remedies ; Deterrence |
| JEL: | L40 K21 K42 |
| Date: | 2022–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:126713&r= |
| By: | Maria Koumenta (Queen Mary, University of London); Mario Pagliero (University of Turin, Collegio Carlo Alberto, CEPR); Davud Rostam-Afschar (University of Mannheim, University of Hohenheim) |
| Abstract: | We study how licensing, certification and unionisation affect the wages of natives and migrants and their representation among licensed, certified, and unionized workers. We provide evidence of a dual role of labor market institutions, which both screen workers based on unobservable characteristics and also provide them with wage setting power. Labor market institutions confer significant wage premia to native workers (3.9, 1.6, and 2.7 log points for licensing, certification, and unionization respectively), due to screening and wage setting power. Wage premia are significantly larger for licensed and certified migrants (10.2 and 6.6 log points), reflecting a more intense screening of migrant than native workers. The representation of migrants among licensed (but not certified or unionized) workers is 14% lower than that of natives. This implies a more intense screening of migrants by licensing institutions than by certification and unionization. |
| Keywords: | Occupational regulation, Licensing, Certification, Unionization, Migration, Wages |
| JEL: | J61 J31 J44 J71 J16 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2022-606&r= |
| By: | Aitor Erce (Navarra Public University); Enrico Mallucci (Board of Governors of the Federal Reserve System); Mattia Picarelli (ESM) |
| Abstract: | We introduce a novel database on sovereign defaults that involve public debt instruments governed by domestic law. By systematically reviewing a large number of sources, we identify 134 default and restructuring events of domestic debt instruments, in 52 countries from 1980 to 2018. Domestic-law defaults are a global phenomenon. Over time, they have become larger and more frequent than foreign-law defaults. Domestic-law debt restructurings proceed faster than foreign ones, often through extensions of maturities and amendments to the coupon structure. While face value reductions are rare, net-present-value losses for creditors are still large. Unilateral amendments and post-default restructuring are the norm but negotiated pre-default restructurings are becoming increasingly frequent. We also document that domestic-law defaults typically involve debt denominated in local currency and held by resident investors. We complement our analysis with a collection “sovereign histories", which provide the fine details about each episode. |
| Keywords: | Public debt, sovereign default, domestic law, database |
| JEL: | E62 E65 F34 G01 H12 H63 K00 K41 |
| Date: | 2022–03–10 |
| URL: | http://d.repec.org/n?u=RePEc:stm:wpaper:51&r= |
| By: | Haucap, Justus; Heldman, Christina; Rau, Holger A. |
| Abstract: | Many cartels are formed by individual managers of different firms, but not by firms as collectives. However, most of the literature in industrial economics neglects individuals' incentives to form cartels. Although oligopoly experiments reveal important insights on individuals acting as firms, they largely ignore individual heterogeneity, such as gender differences. We experimentally analyze gender differences in prisoner's dilemmas, where collusive behavior harms a passive third party. In a control treatment, no externality exists. To study the influence of social distance, we compare subjects' collusive behavior in a within-subjects setting. In the first game, subjects have no information on other players, whereas they are informed about personal characteristics in the second game. Results show that guilt-averse women are significantly less inclined to collude than men when collusion harms a third party. No gender difference can be found in the absence of a negative externality. Interestingly, we find that women are not sensitive to the decision context, i.e., even when social distance is small they hardly behave collusively when collusion harms a third party. |
| Keywords: | Collusion,Cartels,Competition Policy,Antitrust,Gender Differences |
| JEL: | C92 D01 D43 J16 K21 L13 L41 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:380&r= |
| By: | Adachi, Yuko; Iwasaki, Ichiro |
| Abstract: | This paper traces the survival status of 93,260 Russian business firms in the period of 2007–2019 and empirically examines the determinants of the acquisition of financially distressed companies (i.e., distressed acquisitions). We found that, of 93,260 firms, 50,743 failed in management, and among these distressed firms, 10,110 were rescued by acquisition during the observation period. Our empirical results indicate that, in Russian regions, the weakness of the legal system tends to increase the probability of distressed acquisitions, while other socioeconomic risks negatively affect it. These tendencies are common in most industries and regions. It is also revealed that, in the most developed area, monotown enterprises are more likely to be bailed out by acquisition after management failure than other firms, but it is not always true for the whole nation. |
| Keywords: | legal weakness, investment risk, financial distress, distressed acquisitions, Russia |
| JEL: | C35 D02 D22 E02 G34 K20 L22 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:hit:rrcwps:98&r= |
| By: | Camila Steffens; Paula Pereda |
| Abstract: | urrent evidence is still mixed regarding the effectiveness of smoking bans for reducing firsthand smoking. We provide novel insights about their effects on young adults' smoking prevalence, initiation and cessation. We also highlight the importance of considering enforcement and addiction levels when evaluating these policies. Exploiting the staggered roll-out of smoking bans across Brazilian capitals within a difference-in-differences framework, we find that they reduced smoking prevalence by at least 9% but only when strongly enforced. The effect is primarily explained by cessation among youths with low levels of addiction. We find no impacts on initiation, which could be partly explained by the fact that smoking initiation among Brazilians typically happens before the legal age to purchase tobacco products. |
| Keywords: | Smoking bans; Addiction; Policy enforcement |
| JEL: | D04 D12 I12 I18 |
| Date: | 2022–03–22 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2022wpecon03&r= |
| By: | Leticia Fernandez; Sharon Ennis; Sonya R. Porter; Elizabeth Carson |
| Abstract: | Previous studies report that individuals who have been imprisoned have higher mortality rates than their demographic counterparts in the general population, particularly non-Hispanic white former prisoners. Most of these studies have been based on a single state’s prison system, and the extent to which their findings can be generalized has not been established. In this study we explore the role that race/Hispanic origin, other demographic characteristics, and custodial/ criminal history factors have on post-release mortality, including on the timing of deaths. We also assess whether conditional release to community supervision or reimprisonment may explain the higher post-release mortality found among non-Hispanic whites. In the second part of the analysis, we estimate standardized mortality ratios (SMRs) by sex, age group, and race/Hispanic origin using as reference the U.S. general population. The data come from state prison releases from the Bureau of Justice Statistics’ (BJS) National Corrections Reporting Program (NCRP). The NCRP records were linked to the Census Numident to identify deaths occurring within five years from prison release. We also linked NCRP records to previous decennial censuses and survey responses to obtain self-reported race and Hispanic origin if available. We found that non-Hispanic white former prisoners were more likely to die within five years after prison release and more likely to die in the initial weeks after release compared to racial minorities and Hispanics. Reimprisonment, age at release, and a history of multiple prison terms had a similar influence on the odds of dying across all race/Hispanic origin groups. Other factors, such as the type of release and the duration of the last term in prison, were associated with higher risks of mortality for some groups but not for others. |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:22-06&r= |
| By: | Fischer, Kai |
| Abstract: | Firms often sell a transparent base product and a valuable add-on product. If only some consumers are aware of the latter, the add-on's effect on the base product's price will be ambiguous. Cross-subsidization between products to bait uninformed consumers might lower, intrinsic utility from the add-on for informed consumers might raise the price. We study this trade-off in the gasoline market by exploiting an alcohol sales prohibition at stations as an exogenous shifter of add-on availability. Gasoline margins drop by 5% during the prohibition. The effect is mediated by shop variety and local competition. Implications for gasoline market definition arise. |
| Keywords: | Off-Premise Alcohol Prohibition,Gasoline Market,Multi-Product Firms |
| JEL: | L11 L91 R41 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:386&r= |
| By: | Bas Scheer (CPB Netherlands Bureau for Economic Policy Analysis); Wiljan van den Berge (CPB Netherlands Bureau for Economic Policy Analysis); Maarten Goos; Alan Manning; Anna Salomons |
| Abstract: | The rising incidence of alternative work arrangements raises questions about worker outcomes in non-standard labor contracts. However, causal evidence on the effects of flexible contracts on labor market outcomes of individual workers is scarce. We study this question using data on payrolling, a work arrangement where employees are on the payroll of one company while performing their job duties at another firm. Like employment agencies, payroll companies can offer flexible employment contracts. Payrolling is a growing phenomenon on the Dutch labor market, and is particularly prevalent in low-wage jobs in the service sector. We show that employees who receive a payrolling contract subsequently have a reduced chance of employment, a lower incidence of permanent contracts, lower pension contributions, and lower growth in hourly wages. Some of this effect disappears in the three years after payrolling as employees switch jobs. These findings are based on payrolling prior to the 2020 enactment of new labor law in the Netherlands (Wet Arbeidsmarkt in Balans WAB). This law equates the legal protection of employees on payrolling contracts to that of standard contracts, including pension accrual. Future research could consider whether adverse effects for individual employees have indeed been remedied since the introduction of this law. |
| JEL: | J31 J32 J41 J42 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:435&r= |
| By: | Crampes, Claude; Von Der Fehr, Nils-Henrik |
| Abstract: | Reaping the full benefits from cross-border interconnection typically requires reinforcement of national networks. When the relevant parts of the networks are complements, a lack of coordination between national transmission system operators typically results in investment below optimal levels in both interconnectors and national infrastructure. A subsidy to financially sustain interconnector building is not sufficient to restore optimality; indeed, even when possible, such subsidisation may have to be restrained so as not to encourage cross-border capacities that will not be fully utilised due to lack of investment in national systems. |
| Keywords: | electrical grid; interconnector; externality; regulation; regional; cooperation |
| JEL: | H77 K23 L51 L94 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:126719&r= |
| By: | Martin, Simon; Rasch, Alexander |
| Abstract: | We analyze the effects of better algorithmic demand forecasting on collusive profits. We show that the comparative statics crucially depend on the whether actions are observable. Thus, the optimal antitrust policy needs to take into account the institutional settings of the industry in question. Moreover, our analysis reveals a dual role of improving forecasting ability when actions are not observable. Deviations become more tempting, reducing profits, but also uncertainty concerning deviations is increasingly eliminated. This results in a u-shaped relationship between profits and prediction ability. When prediction ability is perfect, the "observable actions" case emerges. |
| Keywords: | Algorithm,Collusion,Demand forecasting,Unobservable actions,Secretprice cutting |
| JEL: | L41 L13 D43 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:382&r= |
| By: | Mikula, Štepán (Masaryk University, Brno, Czech Republic); Reggiani, Tommaso (Cardiff Business School) |
| Abstract: | Through a correspondence study, this paper investigates whether employers discriminate job applicants based on their living conditions. Exploiting the natural setting provided by a Rapid Re-housing Program, we sent 1,347 job applications for low-qualified front-desk jobs in Brno, Czech Republic. The resumes exogenously differed in only one main aspect represented by the address of the applicants, signaling both the quality of the neighborhood and the quality of the housing conditions in which they were living. We found that while the higher quality of the district has a strong effect in increasing the hiring chances (+20%) the actual improvement of the living conditions standards, per se, does not generate any significant positive effect. |
| Keywords: | correspondence study, labor discrimination, housing conditions, Rapid Re-housing. |
| JEL: | C93 J08 J71 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:cdf:wpaper:2022/8&r= |
| By: | Chiang, Ting-Wei; Wu, Xiaoping |
| Abstract: | This working paper provides a statistical analysis of 74 patent families which cover subject matter relevant to ten COVID-19 vaccines. These vaccines have accounted for 99% of the global COVID-19 vaccine production as of 31 December 2021, comprising over ten billion doses. Eight of them, namely BNT162b2 (Pfizer/BioNTech), AZD1222 (AstraZeneca/Oxford), Ad26.COV2-S (J&J), mRNA1273 (Moderna), BBIBP-CorV (Sinopharm/Beijing), Coronavac (Sinovac), Covaxin (Bharat/ICMR), and NVX-CoV2373 (Novavax), have been approved by the World Health Organization (WHO) for inclusion in its Emergency Use Listing (EUL). The analysis is based on VaxPaL, a COVID-19 vaccines patent database developed by the Medicines Patent Pool (MPP). Through the detailed examination of patent applicants, filing dates, and offices of first and subsequent filing, the paper identifies patterns and trends of innovation and patenting activities of COVID-19 vaccines in WTO Members, and presents the legal status of the 74 patent families in 105 jurisdictions. This information may provide useful background for policymakers on the significance and potential impact of these patent families with relevance to the access to and production of these vaccines in their individual countries. This, in turn, may help support practical assessments as to potential options within and beyond the current TRIPS framework to promote equitable access to COVID-19 vaccines. |
| Keywords: | COVID-19,vaccine,patent,whole virus,viral vector,protein subunit,mRNA,filing dates,office of first filing,office of subsequent filing,legal status |
| JEL: | K11 K15 K30 O30 O31 O34 I18 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wtowps:ersd20221&r= |
| By: | Qingyang Lin (IHEID, Graduate Institute of International and Development Studies, Geneva) |
| Abstract: | Switzerland implemented an immigration quota system to manage the inflow of immigration between 1970 and 2002. This paper adopts a difference-in-difference strategy taking advantage of subnational variations in the implementation of the quota system to evaluate this migration policy. An instrument variable of antiimmigration attitudes is used to address the potential endogeneity issue. The author finds that the immigration quota system slowed down the growth of foreign population in Switzerland, but had no impact on unemployment. Moreover, such immigration restriction lowered the average skill level of the Swiss population which in turn hurt the productivity of the Swiss economy. |
| Keywords: | Migration; Anti-Immigration Attitudes; Unemployment; Labor Skills |
| JEL: | F22 J21 J24 J61 K37 |
| Date: | 2022–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:gii:giihei:heidwp05-2022&r= |
| By: | Kai Hao Yang (Cowles Foundation and School of Management, Yale University); Alexander K. Zentefis (Yale School of Management) |
| Abstract: | We assess the capacity of gerrymandering to undermine the will of the people in a representative democracy. Citizens have political positions represented on a spectrum, and electoral maps separate people into districts. We show that unrestrained gerrymandering can severely distort the composition of a legislature, potentially leading half the population to lose all representation of their views. This means that, under majority rule in the congress, gerrymandering enables politicians to enact any legislation of their choice as long as it falls within the interquartile range of the political spectrum. Just as worrisome, gerrymandering can rig any legislation to pass instead of the median policy, which would otherwise prevail in a referendum against any other choice. |
| Keywords: | Gerrymandering, representatives, legislature, Bayesian persuasion |
| JEL: | D72 D78 D82 K16 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2328&r= |
| By: | Wenli Li (Federal Reserve Bank of Philadelphia); Costas Meghir (Cowles Foundation, Yale University, NBER, IZA, CEPR and IFS); Florian Oswald (SciencesPo, Paris) |
| Abstract: | We specify and estimate a lifecycle model of consumption, housing demand and labor supply in an environment where individuals may file for bankruptcy or default on their mortgage. Uncertainty in the model is driven by house price shocks, education specific productivity shocks, and catastrophic consumption events, while bankruptcy is governed by the basic institutional framework in the US as implied by Chapter 7 and Chapter 13. The model is estimated using micro data on credit reports and mortgages combined with data from the American Community Survey. We use the model to understand the relative importance of the two chapters (7 and 13) for each of our two education groups that differ in both preferences and wage profiles. We also provide an evaluation of the BAPCPA reform. Our paper demonstrates importance of distributional effects of Bankruptcy policy. |
| Keywords: | Lifecycle, Bankruptcy, Housing, Mortgage Default, Labor Supply, Consumption, Education, Insurance, Moral hazard |
| JEL: | G33 K35 J22 J31 D14 D18 D52 D53 E21 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2327&r= |
| By: | Giuseppe Della Rocca; Sebastiano Fadda (dpt. Economia); Maria Giovannone; Anna M. Ponzellini |
| Abstract: | The pandemic has forced people and organizations to discover that it is possible to workn“remotely”. This paper collects various contributions that analyse the many aspects of “smartly organized” work, namely its legal implications, the problem of planning efficient timing in order to ensure full complementarity between remotely managed functions and functions managed in presence, the need to revise job contents and old standardized routines and, the repercussions on social relations and on a series of variables such as environment, transport, health, urban planning, land planning,location of structures for "leisure” and social life. |
| Keywords: | Smart working, jobs contents, work organization, social relations |
| JEL: | J08 J5 J53 K31 L23 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:ast:wpaper:0057&r= |