New Economics Papers
on Law and Economics
Issue of 2013‒03‒02
six papers chosen by
Jeong-Joon Lee, Towson University

  1. The Transnational Origins of Constituions: Evidence From a New Global Data Set On Constitional Rights By Goderis, B.V.G.; Versteeg, M.
  2. Standard Essential Patents: who is really holding up (and when) ? By Vilen Lipatov, Gregor Langus, Damien Neven
  3. The life satisfaction approach to estimating the cost of crime: An individual's willingness-to-pay for crime reduction By Christopher L Ambrey; Christopher M Fleming; Matthew Manning
  4. Crime and punishment: When tougher antitrust enforcement leads to higher overcharge. By Jensen, Sissel; Kvaløy, Ola; Olsen, Trond E.; Sorgard, Lars
  5. An Economic Analysis of Black-White Disparities in NYPD's Stop and Frisk Program By Decio Coviello; Nicola Persico
  6. Occupational Regulation in the European Legal Market By Mario Pagliero; Edward Timmons

  1. By: Goderis, B.V.G.; Versteeg, M. (Tilburg University, Center for Economic Research)
    Abstract: Abstract Constitutions are commonly described as national products shaped by domestic politics. This paper develops and empirically tests a different hypothesis, which is that constitutions are also shaped by transnational influence, or “diffusionâ€. Constitutional rights can diffuse through four mechanisms: coercion, competition, learning and acculturation. To test diffusion, we traced the historical documents of all post-WWII constitutions and documented the presence of 108 constitutional rights. Using a sample of these rights in 180 countries between 1948 and 2001, we estimate a spatial lag model to explain their adoption. Our results show that countries follow the choices of their former colonizer, countries with the same legal origin, the same religion, the same former colonizer, and the same aid donor. We also find that diffusion explains only 3 percent of the variation in adoption. However, when a country adopts its first constitution, diffusion is much stronger and explains 46 percent of the variation.
    Keywords: constitutions;diffusion;human rights;spatial econometrics
    JEL: K19 C21 O33
    Date: 2013
  2. By: Vilen Lipatov, Gregor Langus, Damien Neven (Graduate Institute of International Studies)
    Abstract: This paper analyzes the effect of injunctions on royalty negotiations for standard essential patents. We develop a model in which courts grant injunctions only when they have sufficient evidence that the prospective licensee is unwilling, in line with the way we understand Courts to operate in Europe. In such a framework the prospective licensee has a powerful strategic tool: the offers that he makes to the patent holder will affect the royalty rate that the Court may adopt as well as the probability of being subject to injunctions (and the liability for litigation costs). We find that despite the availability of injunctions, the holder of a sufficiently weak patent will end up accepting below FRAND rates, in particular when litigation cost are high. We also find that the prospective licensee will sometimes prefer to litigate and the holder of a sufficiently strong patent will always end up in litigation by rejecting offers below FRAND. This arises in particular when the prospective licensee has little to fear from being found unwilling, namely when the trial takes time (so that the threat of injunctions is less powerful), and when litigation costs are low. Importantly, we thus find that hold up (royalties above the fair rate) as well as reverse hold up (royalties below the fair rate) may arise in equilibrium.
    Keywords: standard essential patent, injunctions, hold up, reverse hold up
    JEL: K41 L49 O34
    Date: 2013–02–26
  3. By: Christopher L Ambrey; Christopher M Fleming; Matthew Manning
    Keywords: Cost of crime, property crime, life satisfaction approach, cost-benefit analysis
    JEL: K42 I31 C21
    Date: 2013–01
  4. By: Jensen, Sissel (Dept. of Economics, Norwegian School of Economics and Business Administration); Kvaløy, Ola (University of Stavanger); Olsen, Trond E. (Dept. of Economics, Norwegian School of Economics and Business Administration); Sorgard, Lars (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: The economics of crime and punishment postulates that higher punishment leads to lower crime levels, or less severe crime. It is however hard to get empirical support for this intuitive relationship. This paper o¤ers a model that contributes to explain why this is the case. We show that if criminals can spend resources to reduce the probability of being detected, then a higher general punishment level can increase the crime level. In the context of antitrust enforcement, it is shown that competition authorities who attempt to …ght cartels by means of tougher sanctions for all o¤enders may actually lead cartels to increase their overcharge when leniency programs are in place.
    Keywords: antitrust enforcement; leniency programs; economics of crime.
    JEL: K21
    Date: 2013–02–18
  5. By: Decio Coviello; Nicola Persico
    Abstract: We analyze data on NYPD's "stop and frisk program" in an effort to identify racial bias on the part of the police officers making the stops. We find that the officers are not biased against African Americans relative to whites, because the latter are being stopped despite being a "less productive stop" for a police officer.
    JEL: K42
    Date: 2013–02
  6. By: Mario Pagliero (Department of Economics and Public Finance "G. Prato", University of Torino); Edward Timmons (School of Business, Saint Francis University)
    Abstract: In this paper we provide a cross-country comparison of occupational regulation in the European legal market. Although EU growth and assimilation has resulted in some degree of unity in regulation, significant differences remain in licensing restrictions and in the characteristics of the labor force in the legal market of each country. We discuss the potential policy implications of these differences.
    Keywords: occupational licensing, minimum standards, entry regulation, legal market
    JEL: L4 L5 J44 K2
    Date: 2013–02

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