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on Law and Economics |
| By: | Joanna Shepherd; Paul H. Rubin |
| Abstract: | This Chapter summarizes the literature on the economic analysis of the criminal law. First, it discusses the positive theory of criminal behavior and reviews the empirical evidence in support of the theory. Then, it discusses the normative theory of how public law enforcement should be designed to minimize the social costs of crime. |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:emo:wp2003:1304&r=law |
| By: | Leonardo Becchetti (University of Rome "Tor Vergata"); Rocco Ciciretti (University of Rome "Tor Vergata"); Pierluigi Conzo (University of Turin) |
| Abstract: | The legal origin literature documents that civil and common law traditions have different impact on rules and economic outcomes. We contribute to this literature by investigating the relationship between corporate social responsibility and legal origins. Consistently with the main differences in historical and legal backgrounds and net of industry specific effects, the common law origin has a significant and positive impact on the Corporate Governance and Community Involvement domains, while the French legal tradition of civil law on the Human Resources domain. We also document that the lack of observable differences in the environmental domain can be explained by firms' progressive convergence to industry sustainability standards. |
| Keywords: | legal origins, corporate social responsibility, environmental standards, corporate governance, civil law, common law |
| JEL: | K10 K20 K31 K32 D60 |
| Date: | 2013–10–04 |
| URL: | http://d.repec.org/n?u=RePEc:rtv:ceisrp:291&r=law |
| By: | Long, Iain W. (Cardiff Business School) |
| Abstract: | Organised crime is unique within the underground economy. Unlike individual criminals, criminal organisations can substitute between a variety of inputs; chiefly labour and effort. This paper considers the effect of several popular anti-crime policies in such an environment. Using a profit maximisation framework, I find that certain policies may cause the organisation to reduce its membership in favour of more intensive activity. Others may lead to increases in membership. Consequently, policies designed to reduce the social loss suffered as a result of criminal activities may actually increase it. Results prove robust to differences in hiring practices on the part of the criminal organisation. |
| Keywords: | Organised crime; Crime policy; Occupational choice |
| JEL: | J24 J28 K42 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:cdf:wpaper:2013/10&r=law |
| By: | Francesco Bripi (Bank of Italy) |
| Abstract: | This paper studies the effects of differences in local administrative burdens in Italy in the years preceding a major reform that sped up firm registration procedures. Combining regulatory data from a survey on Italian provinces before the reform (costs and time to start a business) with industry-level entry rates of limited liability firms, I explore the effects of regulatory barriers on entry across industries with different natural propensities to enter the market. Using different specifications the estimates show that lengthier and, to some extent, more costly procedures reduced the entry rate of limited liability firms in sectors with naturally high entry rates. These results also hold when I include measures of local financial development and of efficiency of bankruptcy procedures. Overall, the analysis confirms the view that administrative burdens on new start-ups matter for business creation. |
| Keywords: | entry regulation, entrepreneurship, doing business |
| JEL: | G18 G38 L51 M13 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_932_13&r=law |
| By: | Megan MacGarvie; Petra Moser |
| Abstract: | Proponents of stronger copyright terms have argued that stronger copyright terms encourage creativity by increasing the profitability of authorship. Empirical evidence, however, is scarce, because data on the profitability of authorship is typically not available to the public. Moreover at current copyright lengths of 70 years after the author’s death, further extensions may not have any effects on the profitability of authorship. To investigate effects of copyright at lower pre-existing levels of protection, this chapter introduces a new data set of publishers’ payments to authors of British fiction between 1800 and 1830. These data indicate that payments to authors nearly doubled following an increase in the length of copyright in 1814. These findings suggest that – starting from low pre-existing levels of protection – policies that strengthen copyright terms may, in fact, increase the profitability of authorship. |
| JEL: | K11 N83 O31 O34 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19521&r=law |
| By: | Sovinsky, Michelle (Department of Economics, University of Warwick & The University of Zurich); Eric Helland (Claremont McKenna College) |
| Abstract: | Every year thousands of firms are engaged in research joint ventures (RJV), where all knowledge gained through R&D is shared among members. Most of the empirical literature assumes members are non-cooperative in the product market. But many RJV members are rivals leaving open the possibility that firms may form RJVs to facilitate collusion. We examine this by exploiting variation in RJV formation generated by a policy change that affects the collusive benefits but not the research synergies associated with a RJV. We use data on RJVs formed between 1986 and 2001 together with firm-level information from Compustat to estimate a RJV participation equation. After correcting for the endogeneity of R&D and controlling for RJV characteristics and firm attributes, we find the decision to join is impacted by the policy change. We also find the magnitude is significant: the policy change resulted in an average drop in the probability of joining a RJV of 34% among telecommunications firms, 33% among computer and semiconductor manufacturers, and 27% among petroleum refining firms. Our results are consistent with research joint ventures serving a collusive function. JEL classification: research and development ; research joint ventures ; antitrust policy ; collusion JEL codes: L24 ; L44 ; K21 ; O32 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1030&r=law |
| By: | António Brandão (Cef.up and Faculdade de Economia do Porto.); Joana Pinho (Cef.up and Faculdade de Economia do Porto.); Hélder Vasconcelos (Cef.up and Faculdade de Economia do Porto.) |
| Abstract: | We characterize collusion sustainability in markets where demand growth may trigger the entry of a new firm whose efficiency may be different from the efficiency of the incumbents. We find that the profit-sharing rule that firms adopt to divide the cartel profit after entry is a key determinant of the incentives for collusion (before and after entry). In particular, if the incumbents and the entrant are very asymmetric, collusion without side- payments cannot be sustained. However, if firms divide joint profits through bargaining and are sufficiently patient, collusion is sustainable even if firms are very asymmetric. |
| Keywords: | Collusion; Growing demand; Nash bargaining; Profit-sharing. |
| JEL: | K21 L11 L13 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:510&r=law |
| By: | Christian A. Vossler; Michael McKee |
| Abstract: | As policy makers recognize the complexity of the tax system can result in some “evasion” being due to errors, there has been increasing focus on the role of taxpayer services as a tool in the enforcement regime. Such programs can improve the image of the tax agency but the critical issue is the effect on tax reporting. While the earlier focus has been on tax evasion, tax overreporting is also an issue since it leads to inefficient resource allocation. Thus, the present paper focusses on the effectiveness of taxpayer service programs in enhancing tax reporting. Data are collected on tax reporting decisions via laboratory experiments designed to implement the tax reporting task. To investigate the effects of taxpayer services, we “complicate” these compliance decisions of subjects, and then provide “services” from the “tax administration” that allow subjects to compute more easily their tax liabilities. Briefly, we find that our subjects are less likely to file when tax liability is uncertain but the provision of information offsets this effect; it appears that simply providing the service, even an imperfect service, increases the propensity to file and the accuracy of the filing. Key Words: tax information services; tax reporting; behavioral economics; experimental economics |
| JEL: | H2 H26 C91 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:apl:wpaper:13-24&r=law |
| By: | Naomi E. Feldman; Peter Katuscak; Laura Kawano |
| Abstract: | We develop a model of how taxpayers update beliefs over their tax rates when they encounter a non-salient tax liability change. We test the model's hypotheses using the loss of the Child Tax Credit when a child turns 17. Because this tax liability change is lump-sum and predictable, there should be no reaction in labor income if taxpayers are fully informed. Using this age discontinuity, we find, however, that losing the credit reduces household labor income. This finding suggests that taxpayers misperceive the source of tax liability changes, leading to under- or over-reactions to changes in marginal tax rates. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2013-66&r=law |