New Economics Papers
on Law and Economics
Issue of 2007‒09‒24
three papers chosen by
Jeong-Joon Lee, Towson University

  1. Risks and Prices: The Role of User Sanctions in Marijuana Markets By Rosalie Liccardo Pacula; Beau Kilmer; Michael Grossman; Frank J. Chaloupka
  2. Remedy for Now but Prohibit for Tomorrow: The Deterrence Effects of Merger Policy Tools By Barros, Pedro Pita; Clougherty, Joseph A; Seldeslachts, Jo
  3. Which Reputations Does a Brand Owner Need? Evidence from Trade Mark Opposition By Georg von Graevenitz

  1. By: Rosalie Liccardo Pacula; Beau Kilmer; Michael Grossman; Frank J. Chaloupka
    Abstract: User sanctions influence the legal risk for participants in illegal drug markets. A change in user sanctions may change retail drug prices, depending on how it changes the legal risk to users, how it changes the legal risk to dealers, and the slope of the supply curve. Using a novel dataset with rich transaction-level information, this paper evaluates the impact of recent changes in user sanctions for marijuana on marijuana prices. The results suggest that lower legal risks for users are associated with higher marijuana prices in the short-run, which ceteris paribus, implies higher profits for drug dealers. Additionally, the findings have important implications for thinking about the slope of the supply curve and interpreting previous research on the effect of drug laws on demand for marijuana.
    JEL: I18 K42
    Date: 2007–09
  2. By: Barros, Pedro Pita; Clougherty, Joseph A; Seldeslachts, Jo
    Abstract: Antitrust policy involves not just the regulation of anti-competitive behavior, but also an important deterrence effect. Neither scholars nor policymakers have fully researched the deterrence effects of merger policy tools, as they have been unable to empirically measure these effects. We consider the ability of different antitrust actions – Prohibitions, Remedies, and Monitorings – to deter firms from engaging in mergers. We employ cross-jurisdiction/pan-time data on merger policy to empirically estimate the impact of antitrust actions on future merger frequencies. We find merger prohibitions to lead to decreased merger notifications in subsequent periods, and remedies to weakly increase future merger notifications: in other words, prohibitions involve a deterrence effect but remedies do not.
    Keywords: antitrust; deterrence; merger policy; remedies
    JEL: K21 L40 L49
    Date: 2007–08
  3. By: Georg von Graevenitz (Georg von Graevenitz,, INNO-tec, Munich School of Management, Kaulbachstraße 45, D 80539,Munich.)
    Abstract: At least two: the reputation of their brand and a reputation for being tough on imitators of this brand. Sustaining a brand requires both investment in its reputation amongst consumers and the defence of the brand against followers that infringe upon it. I study the defence of trade marks through opposition at a trade mark office. A structural model of opposition and adjudication of trade mark disputes is presented. This is applied to trade mark opposition in Europe. Results show that brand owners can benefit from a reputation for tough opposition to trade mark applications. Such a reputation induces applicants to settle trade mark opposition cases more readily.
    Keywords: trade marks, opposition, intellectual property rights, reputation
    JEL: K41 L00 O31 O34
    Date: 2007–07

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