New Economics Papers
on Law and Economics
Issue of 2013‒01‒12
two papers chosen by
Jeong-Joon Lee, Towson University

  1. The Role of Social Factors in Explaining Crime By Hamzah, Siti Nur Zahara; Lau, Evan
  2. Expectation Damages and Bilateral Cooperative Investments By Göller, Daniel

  1. By: Hamzah, Siti Nur Zahara; Lau, Evan
    Abstract: Utilizing Malaysia data from 1973 to 2008, the study reveals that crime can be influenced by population, fertility, unemployment, and GDP in either the long-run or short-run period. This study also further analysed beyond sample estimations of the variables involved and found that although violent crime can be explained in the short-run only from the VECM analysis, it is found to be explained by other explanatory variables in the long-run of beyond sample for at least 50 years ahead. It is important for policy makers to focus in both social structure and economic conditions to help prevent crime in the long-run.
    Keywords: fertility; violent; property; unemployment; VECM; causality
    JEL: C32 A13 J22 K42
    Date: 2013–01–01
  2. By: Göller, Daniel
    Abstract: We examine the efficiency of the standard breach remedy expectation damages in a setting of bilateral cooperative investment by a buyer and a seller. Contracts may specify a required quality level and an upper bound to the cost of production. We find that it is optimal to write an augmented Cadillac contract that sets one threshold such that it cannot be met with positive probability together with an extreme price. Then, one of the parties becomes a residual claimant of the trade relationship. The other threshold can be used to balance the incentives of the other party. --
    JEL: K12 C70 D86
    Date: 2012

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