nep-law New Economics Papers
on Law and Economics
Issue of 2015‒12‒12
eight papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Institutions and Visa Regimes By Camila Gracheva; Leonid Polishchuk; Koen Schoors; Alexander Yarkin
  2. Enforcement and the Effective Regulation of Labor By Lucas Ronconi
  3. UPP Analysis in Five Recent Merger Cases By Baltzopoulos, Apostolos; Kim, Jaewon; Mandorff, Martin
  4. A Theory of Judicial Retirement By Álvaro Bustos; Tonja Jacobi
  5. Competition Law Enforcement of Viet Nam and the Necessity of a Transparent Regional Competition Policy By Phan Cong THANH
  6. Resource Harvesting Regulation and Enforcement: An Evolutionary Approach By Yannis Petrohilos-Andrianos; Anastasios Xepapadeas
  7. Contagion Risk and Network Design By Diego Cerdeiro; Marcin Dziubinski; Sanjeev Goyal
  8. Fighting Terrorism: Empirics on Policy Harmonization By Asongu, Simplice; Nwachukwu, Jacinta

  1. By: Camila Gracheva (National Research University Higher School of Economics); Leonid Polishchuk (National Research University Higher School of Economics); Koen Schoors (Ghent University); Alexander Yarkin (National Research University Higher School of Economics)
    Abstract: We study the impact on visa restrictions of institutions and social norms in a sending country. To this purpose, we unbundle institutions into “institutions-services”, which complement productive activities and serve as public production inputs, and “institutions-rules”, which strengthen the rule of law and constrain unproductive behavior. We propose a theoretical model which incorporates spillover effects of domestic institutional changes and shows that while stronger institutions-services reduce visa barriers, stronger institutions-rules have the opposite effect. Furthermore, visa barriers are affected by norms and values, which complement formal institutions as factors of visa regimes. We use various empirical models to test and confirm the above conjectures
    Keywords: visa barriers, institutions, norms and values, institutional complementarity
    JEL: D02 F22 F55 K42
    Date: 2015
  2. By: Lucas Ronconi
    Abstract: This paper provides new measures of labor law enforcement across the world. The constructed dataset shows that countries with more stringent de jure regulation tend to enforce less. While civil law countries tend to have more stringent de jure labor codes as predicted by legal origin theory, they enforce them less, suggesting a more nuanced version of legal origin theory. The paper further hypothesizes that in territories where Europeans pursued an extractive strategy, they created economies characterized by monopolies and exploitation of workers, which ultimately led to stringent labor laws in an attempt to buy social peace. Those laws, however, applied de facto only in firms and sectors with high rents and workers capable of mobilizing. Finally, it is shown that territories with higher European settler mortality presently have more stringent de jure labor regulations, lower overall labor inspection, and larger differences in effective regulation of bigger firms.
    Keywords: Child labor, Wages, Labor, Enforcement, Effective regulation, Legal origin, Colonial origin *, IDB-WP-622
    Date: 2015–11
  3. By: Baltzopoulos, Apostolos (Konkurrensverket); Kim, Jaewon (Konkurrensverket); Mandorff, Martin (Konkurrensverket)
    Abstract: A recent development in merger review has been the shift from an approach committed to market definitions, market shares and concentration index appraisals to more effect-based analyses. In this paper we Review and summarize the underpinnings of what has become a popular tool in identifying potentially problematic mergers, known as the Upwards Pricing Pressure (UPP) methodology and discuss how it has been applied in five recent cases reviewed by Konkurrensverket (the Swedish Competition Authority). Thepaper attempts to provide an all-inone guide for practitioners who are interested in getting a full grasp of how the UPP framework has been developed and how to apply it.
    Keywords: unilateral effects; merger Review; diversion ratio; GUPPI; UPP; IPR; CMCR
    JEL: K21 L40
    Date: 2015–09–01
  4. By: Álvaro Bustos; Tonja Jacobi
    Abstract: For over 50 years, narrative and empirical accounts of judicial retirement have selected variables on a range of unstated assumptions, with discordant results. This paper introduces a formal model in which the justices, the President and the Senate are rational agents who aim to shift the median ideology of the Court as close as possible to their own ideologies. The model shows that the probability of retirement depends on a set of personal, contextual and political variables. It provides a more rigorous theory for the effect of extant variables, reveals erroneous conclusions in the literature, and identifies variables that have not been previously appreciated, such as the ideologies of the non-retiring justices and whether the ideology of the retiring justice is moderate or extreme. This more complete explanation of strategic judicial retirements raises empirically testable predictions to differentiate among the disparate findings of the existing literature.
    JEL: K10 K30 K40
    Date: 2014
  5. By: Phan Cong THANH (Vietnam Competition Authority)
    Abstract: Competition is becoming an important issue among the countries of the Association of Southeast Asian Nations (ASEAN). However, having a transparent and positive competition policy is much more difficult than enacting a competition law. Competition policy strongly depends on the enforcement of competition law and the way the government positions competition law in its general policy for developing the national economy. This paper discusses the enforcement of Viet Nam’s competition law and argues for the need for a regional competition policy for ASEAN and the East Asia area which enhances an individual country’s competition policy and prevents conflicts of interest among countries.
    Keywords: Competition policy, industrial policy, regional competition policy, Viet Nam, ASEAN, East Asia, extraterritorial application, compliance, state-owned enterprises.
    JEL: K21
    Date: 2015–12
  6. By: Yannis Petrohilos-Andrianos; Anastasios Xepapadeas
    Abstract: We study the evolution of compliance and regulation in a common pool resource setup with myopic appropriators whose decision on whether to comply or not with the harvesting rule is a result of imitation as described by a proportional rule. The regulator first sets the optimal quota and then harvesters can choose between compliance and violation. We investigate myopic regulation and optimal regulation regimes with both proportional and non-proportional fine formulation and and an endogenized probability of audition. The equilibria are then characterized in terms of their stability properties.
    Keywords: Common pool resources, replicator dynamics, optimal regulation, compliance
    Date: 2015–12–07
  7. By: Diego Cerdeiro (The International Monetary Fund); Marcin Dziubinski (Warsaw University); Sanjeev Goyal (University of Cambridge)
    Abstract: Individuals derive benefits from their connections, but these may, at the same time, transmit external threats. Individuals therefore invest in security to protect themselves. However, the incentives to invest in security depend on their network exposures. We study the problem of designing a network that provides the right individual incentives. Motivated by cybersecurity, we first study the situation where the threat to the network comes from an intelligent adversary. We show that, by choosing the right topology, the designer can bound the welfare costs of decentralized protection. Both over-investment as well as under-investment can occur depending on the costs of security. At low costs, over-protection is important: this is addressed by disconnecting the network into two unequal components and sacrificing some nodes. At high costs, under-protection becomes salient: it is addressed by disconnecting the network into equal components. Motivated by epidemiology, we then turn to the study of random attacks. The over-protection problem is no longer present, whereas under-protection problems is mitigated in a diametrically opposite way: namely, by creating dense networks that expose the individuals to the risk of contagion.
    Keywords: Cybersecurity, Epidemics, Security choice, Externalities
    JEL: D82 D85
    Date: 2015–06
  8. By: Asongu, Simplice; Nwachukwu, Jacinta
    Abstract: This paper models the feasibility of common policy initiatives against global terrorism, as well as timelines for their enforcement. The empirical evidence is based on 78 developing countries for the period 1984-2008. Employed terrorism dynamics are domestic, transnational, unclear and total terrorism. Absolute (or unconditional) and conditional catch-ups are modelled using Generalised Methods of Moments. We establish consistently that, the rate of catch-up is higher in domestic terrorism relative to transnational terrorism. The time to full catch-up required for the implementation of common policies without distinction of nationality is found to be in a horizon of 13.34-19.92 years for domestic terrorism and 24.67-27.88 years for transnational terrorism. Hence, from a projection date of 2009, in spite of decreasing cross-country differences in terrorists’ attacks, there is still a long way to go before feasible common policy initiatives can be fully implemented without distinction of nationality. The paper is original by its contribution to the empirics of conflict resolution through decreasing cross-country differences in terrorism tendencies. Policy implications are discussed.
    Keywords: Terrorism; Common policies; Development
    JEL: C52 D74 F42 K42 O38
    Date: 2015–06

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