nep-law New Economics Papers
on Law and Economics
Issue of 2015‒10‒25
twelve papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. The Economics of the Right to be Forgotten By Byung-Cheol Kim; Jin Yeub Kim
  2. The causal impacts of child labor law in Brazil : some preliminary findings By Piza,Caio; Portela Souza,André
  3. The Effect of Lawyers' Career Concerns on Litigation By Rosa Ferrer
  4. The Effect of Police Response Time on Crime Detection By Jordi Blanes i Vidal; Tom Kirchmaier
  5. Administrative and legal regulation of government reforms in the Russian Federation By Yusupov, Vitaly
  6. Asymmetric Doping Effects and Sanctions in Sporting Contests By Paul O’Sullivan
  7. Pharmaceutical Patents and Generic Entry Competition: A New View on the Hatch-Waxman Act By WAN, Yunyun; MIYAGIWA, Kaz
  8. Is Economics a Good Major for Future Lawyers? Evidence from Earnings Data By Winters, John V.
  9. Tradable Refugee-Admission Quotas (TRAQs), the Syrian Crisis and the New European Agenda on Migration By Fernández-Huertas Moraga, Jesús; Rapoport, Hillel
  10. Interacting Effects of State Cigarette Taxes on Smoking Participation By James M. Bishop
  11. Effect of Legal Issues in Infrastructure Development: The Case of Container Terminal Bids in Jawaharlal Nehru Port Trust By Raghuram, K; Prashanth D. Udayakumar; Richa Prajapathi
  12. Insuring Your Donation – An Experiment By Renate Buijze; Christoph Engel; Sigrid Hemels

  1. By: Byung-Cheol Kim (School of Economics, Georgia Institute of Technology, 221 Bobby Dodd Way, Atlanta, GA 30332-0615); Jin Yeub Kim (Department of Economics, University of Nebraska-Lincoln, 1240 R Street, Lincoln, NE 68588-0489)
    Abstract: We offer an economic analysis of the right to be forgotten (RTBF)-- the right to remove links from the search results --through a legal dispute game between a petitioner and a search engine. Our analysis suggests that the global expansion of the RTBF does not necessarily increase the likelihood of link removals. We also find that the RTBF expansion can either improve or reduce welfare from a social perspective. Therefore, the ongoing debate should be guided by the perspective of achieving a socially optimal level of link removals rather than of a conflict between privacy rights and free speech.
    Keywords: right to be forgotten; privacy; litigation; search engine
    JEL: C72 D82 K20 K41 L86
    Date: 2015–10
  2. By: Piza,Caio; Portela Souza,André
    Abstract: This paper investigates the causal impact of the change in Brazil?s child labor law of December 1998. The change increased the minimum legal age of entry into the labor force from 14 to 16 years. The analysis uses a difference-in-differences approach to estimate the impact of this change in the law on labor force participation rates as a whole, as well as for the formal and informal sectors separately. The results show that the ban reduced participation rates for boys by 4 percentage points and that this effect was mostly driven by the informal sector. No effect is found for girls.
    Keywords: Children and Youth,Labor Markets,Street Children,Labor Policies,Youth and Government
    Date: 2015–10–19
  3. By: Rosa Ferrer
    Abstract: This article studies a model with two lawyers opposing each other in a case where the outcome of the trial depends on the lawyers' talents and choices of effort. The trial outcome provides an implicit incentive because it is informative about the lawyers' talents. Regardless of the functional form used to model the binary trial outcome, the implicit incentive can be characterized by three components, namely, the ex-ante uncertainty on the lawyers' talents, the sensitivity of the trial outcome to the lawyers' talents, and the variance of the noise in the trial outcome, which is endogenous. These components interplay with the lawyers' effort levels, affecting the informativeness of the trial outcome on the lawyers' talents. As a consequence, career concerns introduce distortions in litigation decisions. The strategic interactions that arise affect the equilibrium probability of prevailing in court, litigation costs, and consequently, settlement decisions as well as other stages of the litigation process. Furthermore, the merits of the case serve as a multiplier of the implicit incentive when the sensitivity of the trial outcome to the lawyers' talents is increasing in the difficulty of the case.
    Keywords: reputational gain, effort incentives, Strategic interactions, settlement, endogenous noise
    JEL: D80 K41 L12
    Date: 2015–09
  4. By: Jordi Blanes i Vidal; Tom Kirchmaier
    Abstract: Police agencies devote vast resources to minimising the time that it takes them to attend the scene of a crime. Despite this, the long-standing consensus is that police response time has no meaningful effect on the likelihood of catching offenders. We revisit this question using a uniquely rich dataset from the Greater Manchester Police. To identify causal effects, we exploit discontinuities in distance to the response station across locations next to each other, but on different sides of division boundaries. Contrary to previous evidence, we find large and strongly significant effects: in our preferred estimate, a 10% increase in response time leads to a 4.6 percentage points decrease in the likelihood of detection. A faster response time also decreases the number of days that it takes for the police to detect a crime, conditional on eventual detection. We find stronger effects for thefts than for violent offenses, although the effects are large for every type of crime. We identify the higher likelihood that a suspect will be named by a victim or witness as an important mechanism though which response time makes a difference.
    Keywords: Police crime, organisational performance
    JEL: D29 K40
    Date: 2015–10
  5. By: Yusupov, Vitaly (Russian presidental academy of national economy and public administration (RANEPA))
    Abstract: This is a study of the implementation of the administrative reform in Russia and, in particular, its most important stage - the improvement of public and municipal services. The study was conducted from the standpoint of science of administrative law. We justify a number of practical suggestions for improving the administrative legislation.This is a study of the implementation of the administrative reform in Russia and, in particular, its most important stage - the improvement of public and municipal services. The study was conducted from the standpoint of science of administrative law. We justify a number of practical suggestions for improving the administrative legislation.
    Keywords: administrative reform, Russia
    Date: 2015–09–17
  6. By: Paul O’Sullivan (Economics, National University of Ireland, Maynooth)
    Abstract: This paper analyses a one-shot game where, prior to a contest, two athletes simultaneously decide whether to engage in doping that is not certain to be detected. Doping is assumed to have at least as great a proportional effect on a naturally weaker athlete’s win probability. Given an explicit contest success function, the paper derives an optimal sanction scheme, where sanctions are identically proportional to prizes, sufficient to always induce a no-doping equilibrium. In comparison to previous papers, the winner’s optimal sanction, expressed in terms of talent and doping levels and doping costs, may be lower for all detection probabilities.
    JEL: C72 D78 K42
    Date: 2015
  7. By: WAN, Yunyun; MIYAGIWA, Kaz
    Abstract: We present a formal analysis that sheds new light on the Hatch-Waxman Act. Hatch-Waxman restores incentives to develop new drugs by extending the patent life for them, but also promotes generic entry by reducing entry costs and by providing 180-day marketing exclusivity to a first challenger to the patent. Although these two objectives appear incompatible, our model shows that marketing exclusivity, with a significant entry cost reduction, contributes to incentive restoration. It finds however that social welfare is lower with marketing exclusivity. Finally, our analysis suggests that marketing exclusivity not be granted in the case of drugs for rare diseases.
    Keywords: innovation, generic entry competition, patent, pharmaceuticals, Hatch-Waxman
    JEL: I18 K23 L13
    Date: 2015–08–30
  8. By: Winters, John V. (Oklahoma State University)
    Abstract: The current study examines earnings differences for practicing lawyers by undergraduate major with a focus on economics majors. Some majors do much better than others. Economics majors tend to do very well in both median and mean earnings, and both without and with controlling for individual characteristics. Electrical engineering, accounting, finance, and some other majors also do relatively well. This information is useful for undergraduates planning to attend law school and considering what undergraduate major field to study. Economics appears to be a very good option.
    Keywords: college major, earnings, economics major, lawyers, attorneys
    JEL: I20 J24 J31
    Date: 2015–10
  9. By: Fernández-Huertas Moraga, Jesús (Universidad Autónoma de Madrid); Rapoport, Hillel (Paris School of Economics)
    Abstract: The Syrian Civil War gave rise to the largest refugee flight reaching Europe since the Yugoslavian wars in the 1990s. The crisis evidenced the deficiencies of the European Union Asylum Policy, which struggled both to offer solutions to Syrian refugees and to efficiently allocate costs across Member States. We draw on previous theoretical work to simulate how a system of tradable refugee-admission quotas coupled with a matching mechanism assigning refugees to their preferred destinations and destinations to their preferred types of refugees would give more flexibility to Member States while respecting refugee rights and preferences.
    Keywords: immigration policy, EU policy, tradable quotas, refugee resettlement, asylum seekers, international public goods
    JEL: F22 F5 H87 I3 K33
    Date: 2015–10
  10. By: James M. Bishop (Oklahoma State University)
    Abstract: A state cigarette tax increase may deter some residents from smoking, but other residents may avoid the higher tax by purchasing cigarettes from another state. Using U.S. health survey micro data from 1999 to 2012, this paper measures how border-crossing opportunities affect the smoking deterrence achieved by a cigarette tax increase. I estimate by two-way fixed effects regression that a $1 state cigarette tax increase decreases the smoking rate by an additional 0.58 percentage points for each dollar of cigarette tax in the nearest lower-tax state. However, each successive $1 tax increase decreases the smoking rate by 0.38 fewer percentage points than the last. I show that the signs of these terms can be theoretically derived without parametric assumptions. I observe that, as both home and nearest lower taxes rose from 1999 to 2012, the mean effectiveness of a home state tax increase remained roughly constant over the period. My results imply that the lowest-tax states are those with the greatest power to reduce the national smoking rate.
    Keywords: Cigarette Taxes, Smoking, Tax Avoidance, Border-crossing
    JEL: I12 I18 H26 H73
    Date: 2015–10
  11. By: Raghuram, K; Prashanth D. Udayakumar; Richa Prajapathi
    Abstract: The Jawaharlal Nehru Port Trust (JNPT) is the largest container port in India, handling about 40% of India’s container traffic in 2014-15. JNPT has five container terminals (CT) out of which three have already been operationalised, a standalone CT of 330 metres (m) is partially operationalised and a fourth CT is under construction. While the first CT, Jawaharlal Nehru Port Container Terminal, is operated by JNPT, the other four CTs have been licensed to private operators under public-private partnership mode. The development of the CTs is a case study to understand how various conflicts have been addressed or accentuated by policy makers, legal and regulatory authorities, and the mechanisms used to resolve them. Following a case-based analytical approach, case studies, court judgements, published and unpublished papers, media reports, primary data from discussions, and secondary data have been examined to construct a chronological story of the bids for the five CTs during the twenty five years since the commissioning of the port in 1989. The concessioning of each CT to a private stakeholder involved contentious issues which prompted the authorities to revise policy guidelines periodically to address them. Consequent and prolonged litigation resulted in time and cost overruns. Various issues, like policy formulation, contractual rights versus policy guidelines, strategic risks, monopoly prevention versus scale economies, market risks, effect of elections, leadership changes, security clearances, mutuality and clarity in documentation, that emerged during the bidding processes, have been crystallised as lessons learnt.
  12. By: Renate Buijze (Erasmus University Rotterdam (EUR) - Erasmus School of Law); Christoph Engel (Max Planck Institute for Research on Collective Goods, Bonn); Sigrid Hemels (Erasmus University Rotterdam (EUR) - Erasmus School of Law)
    Abstract: An increasing fraction of donations is channeled through donation intermediaries. These entities serve multiple purposes, one of which seems to be providing donors with greater certainty: that the donation reaches its intended goal, and that the donor may be sure to get a tax benefit. We interpret this function as insurance and test the option to insure donations in the lab. Our participants indeed have a positive willingness to pay for insurance against either risk. Yet the insurance option is only critical for their willingness to donate to a charity if the uncertainty affects the proper use of their donation.
    Keywords: Insurance, charity, Donation, donation intermediary
    JEL: D64 H25 D03 H31 D12 G22 K34 L31
    Date: 2015–10

This nep-law issue is ©2015 by Eve-Angeline Lambert. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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