New Economics Papers
on Law and Economics
Issue of 2005‒10‒15
four papers chosen by
Jeong-Joon Lee, Towson University

  1. Private v. Public Antitrust Enforcement: A Strategic Analysis By R. Preston McAfee; Hugo Mialon; Sue Mialon
  2. Private Antitrust Litigation: Procompetitive or Anticompetitive? By R. Preston McAfee; Hugo Mialon; Sue Mialon
  3. The Effects of the Fourth Amendment: A Strategic Model of Crime and Search By Hugo Mialon; Sue Mialon
  4. Transparency and Third Party Participation in Investor-State Dispute Settlement Procedures By OECD

  1. By: R. Preston McAfee; Hugo Mialon; Sue Mialon
    Abstract: We compare private and public enforcement of the antitrust laws in a simple strategic model of antitrust crime and lawsuit. The model highlights the tradeoff that private firms are ex ante more likely than the government to be informed about actual antitrust violations, but are also more likely to use the antitrust laws strategically, to the disadvantage of consumers. With coupled damages (according to which the plaintiff receives what the defendant pays), if the court is sufficiently accurate, adding private to public enforcement always increases social welfare, while if the court is less accurate, it increases welfare only if the government is sufficiently inefficient in litigation. Moreover, pure private enforcement is never strictly optimal. However, in general, achieving the welfare-maximizing outcome requires private enforcement with damages that are both multiplied and decoupled.
    Date: 2005–08
  2. By: R. Preston McAfee; Hugo Mialon; Sue Mialon
    Abstract: The antitrust laws are intended to permit procompetitive actions by firms and deter anticompetitive actions. We consider firms’ incentives to use the antitrust lawsuits for strategic purposes, in particular to prevent procompetitive efficiency-improvement by rival firms. Our main result is that, ceteris paribus, smaller firms in more fragmented industries are more likely to use the antitrust laws strategically than larger firms in concentrated industries.
    Date: 2005–08
  3. By: Hugo Mialon; Sue Mialon
    Abstract: The Fourth Amendment requires police to have probable cause before searching people or their property in criminal investigations. In practice, it is enforced through the exclusionary rule: if police search without probable cause, any evidence found in the search may be excluded from court. We analyze the effects of this rule on equilibrium elements of social welfare in a strategic model of crime and search. The rule always increases crime. But it has two opposing effects on police searches. It directly reduces them by reducing the chances that they lead to successful conviction, but it also indirectly increases them by increasing crime. If the indirect effect dominates, the rule actually increases searches, and has an ambiguous effect on searches of the innocent. If the direct effect dominates, it reduces searches and wrongful searches. In contrast, direct police accountability for wrongful searches unambiguously reduces searches and wrongful searches.
    Date: 2005–08
  4. By: OECD
    Abstract: The present document surveys the issues related to transparency and third party participation in investor-state dispute settlement procedures. Section I examines the way in which the current rules apply to these issues. Section II describes the steps taken to improve the transparency of the system at the governmental level, by the arbitral Tribunals and the International Centre for the Settlement of Investment Disputes (ICSID). Section III examines the perceived advantages as well as the challenges of additional transparency. The last section sums up.
    Date: 2005–05

This issue is ©2005 by Jeong-Joon Lee. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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