nep-law New Economics Papers
on Law and Economics
Issue of 2015‒06‒05
thirteen papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Optimal licensing of uncertain patents in the shadow of litigation By Rabah Amir; David Encaoua; Yassine Lefouili
  2. Does Experience Rating Improve Obstetric Practices? Evidence From Geographical Discontinuities in Italy By Sofia Amaral-Garcia; Paola Bertoli; Veronica Grembi
  3. The Changing Returns to Crime: Do Criminals Respond to Prices? By Mirko Draca; Theodore Koutmeridis; Stephen Machin
  6. The Legal Regulation of the Customs Procedure of the Free Customs Zone in the Eurasian Economic Union By Marina G. Enadarova; Anna S. Petrik
  7. Law enforcement and drug trafficking networks: a simple model1 By Raffo López Leonardo
  8. Thinking, Fast and Slow? Some Field Experiments to Reduce Crime and Dropout in Chicago By Sara B. Heller; Anuj K. Shah; Jonathan Guryan; Jens Ludwig; Sendhil Mullainathan; Harold A. Pollack
  9. What Would Madison Say? By Bruce M. Owen
  10. Crime, Punishment and the Halo Effect of Corporate Social Responsibility By Harrison Hong; Inessa Liskovich
  11. Effects of Employment protection legislation on the ability to downsize: Firms in weaker position are most affected? By Mandakovic, Vesna; Flores, Yarela
  12. Analysis of the First Experiences with the Transfer Pricing Rules in 2012-2013 By Shatalovà, Svetlana; Zakharenkova, E
  13. Land control or interdiction? Searching for a clue in the colombian cocaine market By Arias-R., Omar Fdo.; Aza-Jacome, Alfonso

  1. By: Rabah Amir (University of Iowa [Iowa] - University of Iowa); David Encaoua (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS); Yassine Lefouili (Toulouse School of Economics - CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS)
    Abstract: This paper investigates the choice of a licensing mechanism by the holder of a patent whose validity is uncertain. We provide sufficient conditions of a general nature under which the licensor prefers to use a per-unit royalty contract. In particular we show that this is the case for the holders of weak patents if the strategic effect of an increase in a potential licensee's unit cost on the equilibrium industry profit is positive. The latter condition is shown to hold in a Cournot (resp. Bertrand) oligopoly with homogeneous (resp. differentiated) products under general assumptions on the demands faced by firms. As a byproduct of our analysis, we contribute to the literature on the cost paradox in oligopoly by offering some new insights of independent interest regarding the effects of cost variations on Cournot and Bertrand equilibria.
    Date: 2014
  2. By: Sofia Amaral-Garcia; Paola Bertoli; Veronica Grembi
    Abstract: Using data from 2002 to 2009 inpatient discharge records on deliveries in the Italian region of Piedmont, we assess the impact of an increase in malpractice pressure on obstetric practices, as identified by the introduction of experience-rated malpractice liability insurance. Our identification strategy exploits the exogenous location of public hospitals in court districts with and without schedules for noneconomic damages. We perform difference-in- differences and difference-in-discontinuities analyses. We find that the increase in medical malpractice pressure is associated with a decrease in the probability of performing a C-section from 2.3 to 3.7 percentage points (7% to 11.6% at the mean value of C-section) with no consequences for a broadly defined measure of complications or neonatal outcomes. We show that these results are robust to the different methodologies and can be explained by a reduction in the discretion of obstetric decision making rather than by patient cream skimming.
    Keywords: experience rating; difference-in-discontinuities; scheduled damages; medical liability insurance; C-sections;
    JEL: K13 K32 I13
    Date: 2015–05
  3. By: Mirko Draca; Theodore Koutmeridis; Stephen Machin
    Abstract: In economic models of crime individuals respond to changes in the potential value of criminal opportunities. We analyse this issue by estimating crime-price elasticities from detailed data on criminal incidents in London between 2002 and 2012. The unique data feature we exploit is a detailed classification of what goods were stolen in reported theft, robbery and burglary incidents. We first consider a panel of consumer goods covering the majority of market goods stolen in the crime incidents and find evidence of significant positive price elasticities. We then study a particular group of crimes that have risen sharply recently as world prices for them have risen, namely commodity related goods (jewellery, fuel and metal crimes), finding sizable elasticities when we instrument local UK prices by exogenous shifts in global commodity prices. Finally, we show that changes in the prices of loot from crime have played a role in explaining recent crime trends.
    Keywords: Crime, goods prices, metal crime, commodity prices
    JEL: K42
    Date: 2015–06
  4. By: Golik V. Yuri (Eletskii State University. I.A. Bunin, Russia)
    Abstract: "Everyone has their own truth, and the truth is one at all," Russia folk wisdom. Why do we have to dive into a philosophical matter and learn the truth? The answer is quite simple. First, it allows to approximate the law to the socio - political reality that surrounds us. Changing reality - and the law should be changed. Secondly, it will construct the law itself as a specimen as "whole". Hence affect the level of codification of the criminal law. Third, a good law - a great help for practice. Hence the practice should increasingly start to fit the realities that surround us. To a certain degree, and it must respond to the expectations of those social, which exist in the community. Fourth, all of this together should affect on improving the fight against crime. If we can not eradicate crime, it does not mean that we can not help themselves and do not reduce crime to silent (for society) threshold. The paper does not define truth. I did it on purpose. Dove shared basic installation understand the truth, I gave everyone the opportunity to answer the eternal question - What is truth? Truth - is a process. A process that has a beginning for humans, but is infinite to humanity. A road by walking.
    Keywords: Truth, Criminal Law.
    JEL: K1 K14
    Date: 2014–10
  5. By: Ivanskyy Andrey Yosipovich (Honoured Lawyer of Ukraine)
    Abstract: The correlation of legal presumptions with such interconnecting categories as legal hypothesis, legal version, legal axiom and legal principles is analyzed. Certain features of practical application of presumption of guiltlessness and presumption of knowledge of financial legislation in financial law are determined. The functions of legal presumption in financial law are grounded.
    Keywords: legal presumption, financial legal responsibility, presumption of guiltlessness, presumption of knowledge of financial legislation.
    JEL: G3 G38
    Date: 2015–01
  6. By: Marina G. Enadarova (National Research University Higher School of Economics); Anna S. Petrik (National Research University Higher School of Economics)
    Abstract: This paper analyses the legal substance of the customs procedure of the free customs zone in the Eurasian Economic Union by investigating its main features and peculiarities. In particular, we show that the customs procedure of the free customs zone is an economic instrument of state regulation of foreign trade activity in the Eurasian Economic Union. Also, we highlight the need for the harmonization of the provisions of the current legislation on the respective customs procedure between the member states of the Eurasian Economic Union. We also show that the legal regulation of this customs procedure is now generally compliant with WTO law.
    Keywords: special economic zone, free economic zone, customs procedure of the free customs zone, Customs Union in the framework of the Eurasian Economic Community, Eurasian Economic Union
    JEL: K33 K39
    Date: 2015
  7. By: Raffo López Leonardo
    Abstract: This article presents a theoretical model to explain the performance of illicit drug markets. The analytical framework is based on the oligopoly model of Poret and Téjedo (2006), but the latter is extended in a crucial respect: the influence of drug trafficking networks in the illicit drug markets is considered. The proposed model indicates that Poret and Téjedo were correct: the aggregate quantity of drugs sold is negatively affected by the intensity of the law enforcement policies applied and positively affected by the number of traffickers in the market. We also determined that the individual and aggregate sales in the market are positively affected by the network’s average density. Our model is useful for explaining the failure of the war against drugs to halt the reproduction and expansion of illegal activities at a global level during the three past decades.
    Keywords: Keywords: drug trafficking, illegal markets, law enforcement, social networks, gametheory, oligopoly
    JEL: K42 D43 L13 C72 D85
    Date: 2015–05–01
  8. By: Sara B. Heller; Anuj K. Shah; Jonathan Guryan; Jens Ludwig; Sendhil Mullainathan; Harold A. Pollack
    Abstract: This paper describes how automatic behavior can drive disparities in youth outcomes like delinquency and dropout. We suggest that people often respond to situations without conscious deliberation. While generally adaptive, these automatic responses are sometimes deployed in situations where they are ill-suited. Although this is equally true for all youths, disadvantaged youths face greater situational variability. This increases the likelihood that automaticity will lead to negative outcomes. This hypothesis suggests that interventions that reduce automaticity can lead to positive outcomes for disadvantaged youths. We test this hypothesis by presenting the results of three large-scale randomized controlled trials (RCTs) of interventions carried out on the south and west sides of Chicago that seek to improve the outcomes of low-income youth by teaching them to be less automatic. Two of our RCTs test a program called Becoming a Man (BAM) developed by Chicago-area non-profit Youth Guidance; the first, carried out in 2009-10, shows participation improved schooling outcomes and reduced violent-crime arrests by 44%, while the second RCT in 2013-14 showed participation reduced overall arrests by 31%. The third RCT was carried out in the Cook County Juvenile Temporary Detention Center (JTDC) in 2009-11 and shows reductions in return rates of 22%. We also present results from various survey measures suggesting the results do not appear to be due to changes in mechanisms like emotional intelligence or self-control. On the other hand results from some decision-making exercises we carried out seem to support reduced automaticity as a key mechanism.
    JEL: C91 C93 D03 D1 I24 I3 I32 K42
    Date: 2015–05
  9. By: Bruce M. Owen (Stanford University)
    Abstract: Lawful political corruption is a costly feature of modern American politics, and a failure of Madisonian democracy. The propensity of political agents to self-service at the expense of the peoples’ well-being may not have changed much since 1787, but that propensity is now applied to a vast government that touches virtually every aspect of our lives. After examining conventional solutions to the problem of political corruption, this paper explores possible Madisonian remedies—that is, remedies invoking rivalrous political institutions. The paper con-cludes with a proposal for the addition of an "umpire" function to U.S. constitutional structure. Officials performing this function would have the power to veto legislation that significantly re-duces aggregate well-being or that produces regressive redistribution. Historical precedents, illustrative details, and impediments are discussed.
    Keywords: Madisonian democracy, political economy, constitutional law, corruption, Citizens United.
    JEL: H1 K1
    Date: 2015–05
  10. By: Harrison Hong; Inessa Liskovich
    Abstract: Three reasons are often cited for the value of corporate social responsibility: product quality signalling, delegated giving, and the halo effect. Previous tests cannot separate these channels because they focus on consumers, who value all three. We focus on prosecutors, who are only susceptible to the halo effect. Using Foreign Corrupt Practices Act enforcements, we find that social responsibility is associated with 2 million dollars less in fines, though it is uncorrelated with bribe characteristics and cooperation, which should entirely determine sanctions following Becker (1974). We show that this bias is likely a halo effect and not prosecutorial conflict of interest.
    JEL: G0 K0
    Date: 2015–05
  11. By: Mandakovic, Vesna; Flores, Yarela (School of Business and Economics, Universidad del Desarrollo)
    Abstract: The research on downsizing has focused either on the causes or on the effects of downsizing on firms’ performance. This paper empirically investigates how the interaction between increasing employment protection legislation (EPL) and firms’ attributes affects downsizing decisions, our hypothesis are founded in the fact that the negative effect of EPL in downsizing can be attenuated or enhanced in the presence of heterogeneous attributes of firms.
    Keywords: Employment protection legislation, Labor, Downsizing, Firm heterogeneity, Developing economies
    Date: 2014
  12. By: Shatalovà, Svetlana (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Zakharenkova, E (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: The report presents the analysis of the preliminary results of the new transfer pricing law introduction in Russia as well as the recommendations on the improvement of the relevant legislation and administrative practice. The results of the work are based on the thorough analysis of the transfer pricing theory and practice in Russia and worldwide.
    Keywords: transfer pricing law, legislation, administrative practice
    Date: 2015–04
  13. By: Arias-R., Omar Fdo.; Aza-Jacome, Alfonso
    Abstract: The purpose of this note is to estimate the relative impact of interdiction and land control on the colombian cocaine market. The government interdicts part of the cocaine traffic and controls part of the arable land with the aim of weakening this illegal market. Our estimation depends on the price elasticity of the coca-leaf supply, in particular, the importance of the land with respect to other factors in the production of coca-leaf.
    Keywords: cocaine, coca-leaf, land control, interdiction
    JEL: D42 J42 K42
    Date: 2015–05–31

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