nep-law New Economics Papers
on Law and Economics
Issue of 2017‒01‒29
seven papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Property as sequential exchange: The forgotten limits of private contract By Benito Arruñada
  2. How Antitrust Enforcement Can Spur Innovation: Bell Labs and the 1956 Consent Decree By Fackler, Thomas A.; Nagler, Markus; Schnitzer, Monika; Watzinger, Martin
  3. Screening for Patent Quality : Examination, Fees, and the Courts By Schankerman, Mark; Schütt, Florian
  4. Uncovering the Gender Participation Gap in Crime By Campaniello, Nadia; Gavrilova, Evelina
  5. Using Internal and External Sources of Information to Reduce Customs Evasion By Cyril CHALENDARD
  6. Effects of Maternal Work Incentives on Youth Crime By Hope Corman; Dhaval Dave; Ariel Kalil; Nancy E. Reichman
  7. Reasonable doubt revisited By Tsakas, Elias

  1. 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
  2. By: Fackler, Thomas A.; Nagler, Markus; Schnitzer, Monika; Watzinger, Martin
    Abstract: We study the 1956 consent decree against the Bell System to investigate whether patents held by a dominant firm are harmful for innovation and if so, whether compulsory licensing can provide an effective remedy. The consent decree settled an antitrust lawsuit that charged Bell with having foreclosed the market for telecommunications equipment. The terms of the decree allowed Bell to remain a vertically integrated monopolist in the telecommunications industry, but as a remedy, Bell had to license all its existing patents royalty-free. Thus, the path-breaking technologies developed by the Bell Laboratories became freely available to all US companies. We show that in the first five years compulsory licensing increased follow-on innovation building on Bell patents by 17%. This effect is driven mainly by young and small companies. Yet, innovation increased only outside the telecommunications equipment industry. The lack of a positive innovation effect in the telecommunications industry suggests that market foreclosure impedes innovation and that compulsory licensing without structural remedies is ineffective in ending it. The increase of follow-on innovation by small and young companies is in line with the hypothesis that patents held by a dominant firm act as a barrier to entry for start-ups. We show that the removal of this barrier increased long-run U.S. innovation, corroborating historical accounts.
    Keywords: Antitrust; Compulsory Licensing; innovation; Intellectual Property
    JEL: K21 L40 O3 O33 O34
    Date: 2017–01
  3. By: Schankerman, Mark; Schütt, Florian (Tilburg University, TILEC)
    Abstract: We develop an integrated framework to study how governments can improve the quality of patent screening. We focus on four key policy instruments: patent office examination, pre- and post-grant fees, and challenges in the courts. We show that there are important complementarities among these instruments, and identify conditions under which they can be used to achieve either partial or complete screening. We simulate the model to study the welfare effects of different policy reforms. We show that intensifying patent office examination, frontloading patent fees and capping litigation costs all generate welfare gains, while replacing examination with a pure registration system reduces welfare.
    Keywords: innovation; patents; screening; litigation; courts; patent fees
    JEL: D82 K41 L24 O31 O34 O38
    Date: 2016
  4. By: Campaniello, Nadia; Gavrilova, Evelina
    Abstract: Research on the gender variation in the crime market, a peculiar labor market for illegal activities, is limited, although the issue is relevant per se and for its policy implications. We document a gender gap in criminal activities, based on property and white collar crimes, using data from the U.S. National Incident Based Reporting System. We show that there is a gender participation gap where around 30 percent of the crimes are committed by females. In order to explain, at least in part, the gender participation gap we investigate whether there are differences in incentives to be involved in criminal activities and in responsiveness to these incentives across gender. In particular we focus on criminal earnings and probability of arrest. We show that on average females earn 18 percent less than males while they face the same likelihood of arrest. We find that females are more responsive to changes in the expected probability of arrest, while males respond more to changes in the expected illegal earnings. The fact that females behave differently than males has implications for the heterogeneity in response to crime control policies. In addition, using a Blinder-Oaxaca type decomposition technique, we find that differences in incentives explain about 12 percent of the gender crime gap, while differences in responsiveness explain about 55 percent of the gap.
    Date: 2016–10
  5. By: Cyril CHALENDARD
    Abstract: This paper aims to identify some factors that reduce evasion of customs duties in developing countries. Following the recent literature on customs evasion, we proxy customs fraud by discrepancies in bilateral trade statistics. Estimates first show that the more frequently a product is imported, the more customs fraud reduces. We argue that this result is indicative of the fact that customs officers use what they have learned from similar import declarations - use customs' internal information - to better assess the compliance of declarations. Then, we show that relying on an information provider - a pre-shipment inspection company in our case - seems to increase tax enforcement. Results indicate that pre-shipment inspections significantly reduce observed discrepancies in trade statistics. In line with previous studies, we find that the semi-elasticity of evasion increases with the tax rate. Finally, estimates confirm that enforcement is product-varying. Results are robust to various robustness checks.
    Keywords: Use of internal information, External Information acquisition, Customs enforcement, Tax evasion, Pre-shipment inspections.
    JEL: O17 F13 K42 H83 H26
    Date: 2017–01
  6. By: Hope Corman; Dhaval Dave; Ariel Kalil; Nancy E. Reichman
    Abstract: This study exploits differences in the implementation of welfare reform across states and over time to identify causal effects of maternal work incentives, and by inference employment, on youth arrests between 1990 and 2005, the period during which welfare reform unfolded. We consider both serious and minor crimes as classified by the FBI, investigate the extent to which effects were stronger in states with more stringent work incentive policies and larger welfare caseload declines, and use a number of different model specifications to assess robustness and patterns. We find that welfare reform led to reduced youth arrests for minor crimes, by 7-9 %, with similar estimates for males and females, but that it did not affect youth arrests for serious crimes. The results from this study add to the scant literature on the effects of maternal employment on adolescent behavior by exploiting a large-scale social experiment that is still in effect to this day, and provide some support for the widely-embraced argument that welfare reform would discourage undesirable social behavior, not only of mothers, but also of the next generation.
    JEL: I3 J22 J48 K4
    Date: 2017–01
  7. By: Tsakas, Elias (General Economics 1 (Micro))
    JEL: D81 D83 K40 K41
    Date: 2016

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