nep-law New Economics Papers
on Law and Economics
Issue of 2017‒01‒22
ten papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Three Economist’s Tools for Antitrust Analysis: A Non-Technical Introduction By Pittman, Russell
  2. Property as sequential exchange: The forgotten limits of private contract By Benito Arruñada
  3. The Costs and Benefits of Migration into the European Union: Debunking Contemporary Myths with Facts By Ivo J. Leke; Simplice Asongu
  4. Stigmatising Prostitution: Some Evidence from the UK By Francesca Bettio; Marina Della Giusta; Maria Laura Di Tommaso; Sarah Jewell
  5. Ask for the Moon, Settle for the Stars. What is a Reasonable Period to Comply with WTO Awards? By Petros C. Mavroidis; Niall Meagher; Thomas J. Prusa and Tatiana Yanguas
  6. The WTO Dispute Settlement System 1995-2015: A Data Set and its Descriptive Statistics By Johannesson, Louise; Mavroidis, Petros C.
  7. What shapes social attitudes toward corruption in China? Micro-level evidence By Fungáčová, Zuzana; Määttä, Ilari; Weill, Laurent
  8. The impact of structural reforms of the judicial system: a survey By Ana Gouveia; Sílvia Santos; Corinna Herber
  9. Green licenses and environmental corruption: a random matching model By A. Antoci; S. Borghesi; G. Iannucci
  10. Cybersecurity and risk behaviour on mobile individual consumers in Spain By Martínez de Ibarreta, Carlos; Gijón, Covadonga

  1. By: Pittman, Russell
    Abstract: The importance of economics to the analysis and enforcement of competition policy and law has increased tremendously in the developed market economies in the past forty years. In younger and developing market economies, competition law itself has a history of twenty to twenty-five years at most – sometimes much less – and economic tools that have proven useful to competition law enforcement in developed market economies in focusing investigations and in assisting decision makers in distinguishing central from secondary issues are inevitably less well understood. This paper presents a non-technical introduction to three economic tools that have become widespread in competition law enforcement in general and in the analysis of proposed mergers in particular: critical loss analysis, upward pricing pressure, and the vertical arithmetic.
    Keywords: Merger enforcement; Critical loss analysis; Upward pricing pressure; Vertical arithmetic; Horizontal mergers; Vertical mergers; Antitrust economics.
    JEL: K21 L4 L40 L41 L42
    Date: 2017–01–13
  2. By: Benito Arruñada
    Abstract: The contractual, single-exchange framework in Coase (1960) contains the implicit assumption that exchange in property rights does not affect future transaction (i.e., trading) costs. This is pertinent for analyzing use externalities but limits our understanding of property institutions: a central problem of property markets lies in the interaction among multiple transactions, which causes exchange-related and non-contractible externalities. By retaining a single-exchange simplification, the economic analysis of property has encouraged views that: (1) overemphasize the initial allocation of property rights, while some form of recurrent allocation is often needed; (2) pay scant attention to legal rights, although these determine enforceability and, therefore, economic value; and (3) overestimate the power of unregulated private ordering, despite its inability to protect third parties. These three biases have been misleading policy in many areas, including land titling and business firm formalization
    Keywords: Property rights, Externalities, enforcement, transaction costs, public ordering, private ordering, impersonal exchange, organized markets, blockchain
    JEL: D23 K11 K12 L85 G38 H41 O17 P48
    Date: 2017–01
  3. By: Ivo J. Leke (Heverlee, Belgium); Simplice Asongu (Yaoundé, Cameroon)
    Abstract: The purpose of this study is to dispel some myths associated with migrants in order to improve socio-economic appraisal of the consequences of the recent surge of migrants into Europe. We argue that: (i) the concern about loss of Christian cultural values is lacking in substance because compared to a relatively near historical epoch or era, very few European citizens do go to Church in contemporary Europe; (ii) the threat to European liberal institutions is falsifiable and statistically fragile because it is not substantiated with significant evidence; (iii) the insignificant proportion of the Moslem population that is aligned with Islamic fundamentalism invalidates the hypothesis on importation of radical Islamic fundamentalism and (iv) the concern about social security burden is relevant only in the short-term because of Europe’s ageing population.
    Keywords: Migration; the European Union; Development
    JEL: F20 J61 J83 K31 O15
    Date: 2016–11
  4. By: Francesca Bettio (Department of Economics and Statistics, University of Siena); Marina Della Giusta (Department of Economics, University of Reading); Maria Laura Di Tommaso (; Sarah Jewell (Department of Economics, University of Reading)
    Abstract: The question of how to regulate prostitution and whether it is or not a criminal activity has long been debated, and social norms around the sex industry both underpin and reflect the views of participants in the industry as well as those of society: prostitution is seen by some as an activity to be condemned and others as a part of the entertainment industry. Here we present economic models of paid sex and show to what extent they help understand this activity, as well as how they differ from models of crime, and discuss how these models can be used to analyise policy and to what extent they predict what is observed empirically. We then discuss what happens when criminalising prostitution, making use of changes in legislation in the United Kingdom, which moved from a relatively permissive regime under the Wolfenden Report of 1960, to a much harder line of aiming to crack down on porsitution with the Prostitution (Public Places) Scotland Act 2007 and the Policing and Crime Act of 2009 in England and Wales. We make use of two waves of the British National Survey of Sexual Attitudes and Lifestyles (Natsal2, conducted in 2000-2001 and Natsal3, conducted in 2010-2012) to investigate the effects of criminalisation on both the amount and composition of demand, and draw some implications on the welfare effects of considering prostitution a form of crime.
    JEL: C35 J16 J22 K42
    Date: 2016–12–21
  5. By: Petros C. Mavroidis; Niall Meagher; Thomas J. Prusa and Tatiana Yanguas
    Abstract: The World Trade Organization (WTO) dispute settlement process allows a defending Member a “reasonable period of time” (RPT) to implement any findings that its contested measures are inconsistent with WTO law. If agreement on this RPT cannot be reached, Article 21.3(c) of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) provides for the possibility of arbitration on the length of the RPT. The DSU provides limited guidelines on the RPT, stating only that it should not normally exceed 15 months. In practice, Arbitrators have developed the standard that the RPT should reflect the shortest possible period under the domestic legal system of the defending Member to make the changes necessary to comply with the WTO rulings. Our research confirms that in practice Arbitrators have determined this period by “splitting the difference” approximately between the periods suggested by the complaining and defending Member. In addition, the process appears to reward defending Members that request an RPT that exceeds the 15-month guideline in Article 21.3(c).
    Keywords: WTO, Dispute Settlement, Reasonable Period of Time
    JEL: K40
    Date: 2016–09
  6. By: Johannesson, Louise (Research Institute of Industrial Economics (IFN)); Mavroidis, Petros C. (Columbia Law School)
    Abstract: In this paper, we provide some descriptive statistics of the first twenty years of the WTO (World Trade Organization) dispute settlement. The database used in this paper was assembled by the authors and has been publicly available ( The statistical information that we present here is divided into three thematic units: the statutory and de facto duration of each stage of the process, paying particular attention to the eventual conclusion of litigation; the identity and participation in the process of the various institutional players, that is, not only complainants and defendants, but also third parties, as well as the WTO judges (panelists and Appellate Body members); and, finally, information regarding the subject-matter of various disputes, regarding the frequency with which claims regarding consistency of measures with the covered agreements (but also, at a more disaggregate level, e.g., specific provisions) have been raised. We call our work “descriptive statistics”, because, in an effort to provide raw material that will help researchers to conduct their research as they see fit, we have consciously refrained from systematically interpreting the data that we have assembled.
    Keywords: WTO; Dispute Settlement; Panel; Appellate Body
    JEL: K40
    Date: 2017–01–10
  7. By: Fungáčová, Zuzana; Määttä, Ilari; Weill, Laurent
    Abstract: ​This research investigates the determinants of corruption in China using micro-level data. We use survey data on 6,000 households from 28 provinces to estimate logit models that show how corruption perceptions and attitudes to corruption are shaped by individual and provincial determinants. Respondents who see themselves as lower class, as well as members of the Communist Party of China, are more likely to perceive and reject corruption than other respondents. People in rural areas perceive less corruption, but do not differ in their attitudes toward corruption.
    JEL: H11 K42 P16
    Date: 2016–12–05
  8. By: Ana Gouveia (GPEARI - Research and Economic Policy Division); Sílvia Santos; Corinna Herber
    Abstract: This paper surveys the literature on the impact of structural reforms of the judicial system. We focus on two key types of reforms: those enhancing the overall efficiency of the system, in terms of quantitative outcomes; and those aiming at enhancing the bankruptcy regime. In the first branch, and given the way the existing literature is organized, we proceed in two steps. We first provide an overview of the studies linking judicial reforms with sectoral performance. We then elaborate on the effects of this improved performance on economic outcomes. In the second branch, we directly present the impact on economic outcomes, in particular concerning access to finance and investment. In a nutshell, reforms that increase courts’ size, increase spending on information and communication technologies (ICT), improve governance or foster education and training have a positive impact on judicial efficiency, which, in turn, promotes investment, ensures better credit and allows firms to thrive. Concerning bankruptcy regimes, there is evidence that a more efficient system is related with a lower cost of funding and a higher amount and length of credit in the economy and consequently with more investment, innovation and entrepreneurship. These empirical results highlight the relevance of promoting judicial system reforms, as a way to ensure sustained economic growth.
    Keywords: Structural reforms; judicial system; bankruptcy regimes, economic growth
    JEL: C22 E24 E31 J64
    Date: 2017–01
  9. By: A. Antoci; S. Borghesi; G. Iannucci
    Abstract: This paper studies environmental corruption via a random matching evolutionary game be- tween a population of firms and a population of bureaucrats who have to decide whether to release a “green” license to the firms. A firm obtains the license if the bureaucrat checks that it complies with environmental regulations, otherwise it is sanctioned. The model assumes that there are two types of bureaucrats (honest and dishonest), two types of firms (com- pliant and non-compliant), and two possible crimes (corruption and extortion). Corruption occurs when a dishonest bureaucrat accepts a bribe from a non-compliant firm, while extor- tion occurs when a dishonest bureaucrat claims a bribe from a compliant firm. When there is no dominance of strategies, we show that there exist two bistable regimes, in which two attractive stationary states exist, and two regimes with an internal stable equilibrium, corre- sponding to the mixed strategy Nash equilibrium of the one-shot static game, surrounded by closed trajectories. From comparative statics analysis performed on the latter two dynamic regimes, it emerges that policy instruments may help the Public Administration reduce both corruption and extortion, although increasing sanctions and detection probability do not al- ways get the desired results.
    Keywords: Bureaucratic corruption,Evolutionary games,Environmental regulations,Eco- nomics of crime.
    Date: 2016
  10. By: Martínez de Ibarreta, Carlos; Gijón, Covadonga
    Abstract: Nowadays a big and increasing proportion of world's population uses Internet in their day life and web connection via mobile is having a growing importance. Day by day there is more information about the risks and dangers of a misuse of Internet and mobile phones, which may involve all sorts of negative consequences, from computer malfunction to economical or personal damages. Almost 30% of Spanish mobile users acknowledge to have suffered any kind of mobile security incident during the last three months, whereas roughly 20% of them acknowledge to have suffered any kind of fraud via mobile. Consequently, a significant fraction of users has been victim of some kind of cyber-attacks. In this paper it is observed, among others, positive relationship between level of security measures and level of attacks or frauds. There are two possibilities: the risk compensation theory or protection after an attack or fraud.
    Keywords: cybersecurity,mobile,cyber-attacks,fraud,behaviour
    Date: 2016

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