New Economics Papers
on Law and Economics
Issue of 2008‒08‒31
two papers chosen by
Jeong-Joon Lee, Towson University

  1. Public Choice and the Economic Analysis of Anarchy: A Survey By Powell, Benjamin; Stringham, Edward P.
  2. Forensic Econometrics: The Effect of Duggan and Levitt’s Study on Corruption in Professional Sumo By Helmut Dietl; Markus Lang; Stephan Werner

  1. By: Powell, Benjamin (Suffolk University, Department of Economics); Stringham, Edward P. (Klagenfurt University)
    Abstract: Public choice economists began studying the economics of anarchy in the 1970s. Since then, the amount of research on anarchy has burgeoned. This article surveys the important public choice contributions to the economics of anarchy. Following the lead of the early public choice economists, many current economists are researching and analyzing how individuals interact without government. From their non-public-interested explanations of the creation of government law enforcement to their historical studies of attempts to internalize externalities under anarchy, public choice scholars are arriving at a more realistic perspective on government and how people interact when government law enforcement is lacking. Although the economics of politics often receives more attention, the economics of anarchy is an important area of research in public choice.
    Keywords: Anarchism; Lawlessness; Order; Internalization of Externalities; Self-Governance
    JEL: D74 H11 K42
    Date: 2008–08–19
  2. By: Helmut Dietl (Institute for Strategy and Business Economics, University of Zurich); Markus Lang (Institute for Strategy and Business Economics, University of Zurich); Stephan Werner (Institute for Strategy and Business Economics, University of Zurich)
    Abstract: In the December 2002 issue of the American Economic Review, Mark Duggan and Steven D. Levitt published an article on corruption in professional sumo. In this article, the authors provide empirical evidence for match rigging in professional sumo. The article caused tremendous attention and uproar because sumo wrestling has a more than 2000 year-old history and is usually characterized by honesty, tradition and rituals. In this paper, we analyze the effect of Duggan and Levitt’s econometric research on corruption in sumo wrestling by comparing the outcome of critical matches before, during and after the period of the publication process. We show that Duggan and Levitt’s study significantly reduced corruption in sumo wrestling. The reduction is caused by two effects. First, the sumo association reacted to Duggan and Levitt’s study by reducing the value of the eighth win. Second, we show that the level of corruption is heavily influenced by public scrutiny. Moreover, we identify two additional strategies for match rigging: sudden weakness and stable reciprocity.
    Keywords: Corruption incentive scheme social ties monitoring
    JEL: K42 L83 M21 M52
    Date: 2008–08

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