nep-law New Economics Papers
on Law and Economics
Issue of 2017‒08‒13
nine papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Responsibility-based allocation of cartel damages By Stefan Napel; Dominik Welter
  2. Whistleblower Rewards, False Reports, and Corporate Fraud By Buccirossi, Paolo; Immordino, Giovanni; Spagnolo, Giancarlo
  3. How to make land titling more rational By Benito Arruñada
  4. Inequality, Crime, and the Long Run Legacy of Slavery By Buonnano, Paolo; Vargas, Juan F.
  5. Criminals on the Field: A Study of College Football By Radek Janhuba; Kristyna Cechova
  6. Working Paper 277 - Deterrence and Legitimacy in Anti-Corruption Policymaking By AfDB AfDB
  7. Doping in teams: A simple decision theoretic model By Dilger, Alexander
  8. Chameleons in the midst of hawks: The real meaning to be attributed to the definition of fraud By DiGabriele, Jim; Ojo, Marianne
  9. Bank secrecy laws and tax havens:Expanding areas and possible roles for computer forensic accounting By DiGabriele, Jim; Ojo, Marianne

  1. By: Stefan Napel; Dominik Welter
    Abstract: Anti-trust infringers are liable jointly and severally, i.e., any offender may be sued and forced to compensate a victim on behalf of all. EU law then grants the singled-out firm a right to internal redress: all infringers are obliged to contribute in proportion to their relative responsibility for the victim’s harm. We operationalize this for hardcore cartels. Responsibility is inferred from how much lower damages could have been, had one or more offenders refused to collaborate. This calls for applying the Shapley value to a model of overcharges. Resulting allocations are characterized for selected market environments and compared to ad hoc distributions based on market shares or profits. A new decomposition of the Shapley value helps to establish bounds on payment obligations.
    Keywords: cartel damages, damage allocation, Shapley value, joint liability, relative responsibility, rule of contribution
    JEL: L40 L13 D04 D43
    Date: 2017–08
  2. By: Buccirossi, Paolo (LEAR); Immordino, Giovanni (Università di Napoli Federico II and CSEF); Spagnolo, Giancarlo (Stockholm Institute of Transition Economics)
    Abstract: It is often claimed that rewards for whistleblowers lead to fraudulent reports, but for several US programs this was not a major problem. We model the interaction between rewards for whistleblowers, sanctions against fraudulent reporting, judicial errors and standards of proof in the court case on the whistleblower's allegations and the possible follow-up for fraudulent allegations. Balancing whistleblower rewards, sanctions against fraudulent reports, and courts' standards of proof is essential for these policies to succeed. When the risk of retaliation is severe, larger rewards are needed and so are tougher sanctions against fraudulent reports. The precision of the legal system must be sufficiently high, hence these programs are not viable in weak institution environments, where protection is imperfect and court precision low, or where sanctions against false reporting are mild. Internal reporting channels may interfere with the external ones in unexpected ways.
    Keywords: Whistleblowers rewards; False allegations; Judicial errors; Standard of proof; Corporate fraud
    JEL: G28 K42
    Date: 2017–06–20
  3. By: Benito Arruñada
    Abstract: Substantial variety exists among systems of land and business formalization both over time and across countries. For instance, England relied on private titling and delayed land registration for centuries. In contrast, early on, its American colonies imported land recordation and its Australian colonies land registration. Similarly, in most of the world, governments used to allow voluntary land titling, in which owners decide whether they register their land. Recently, however, governments and international agencies have more often opted for universal titling, aiming to register all the land in a certain region. This paper critically examines these strategies, analyzing the costs and benefits of the two main decisions: whether to create a public titling system or to rely exclusively on private titling, and the choice between voluntary and universal titling. It concludes that universal titling is seldom optimal. In particular, it argues that lack of titling is more a consequence than a cause of poverty.
    Keywords: Property rights, land policy, land titling, registries, transaction costs, impersonal exchange
    JEL: D23 K11 K12 L85 G38 H41 O17 P48
    Date: 2017–07
  4. By: Buonnano, Paolo; Vargas, Juan F.
    Abstract: This paper investigates the relationship between economic inequality and crime in Colombian municipalities. Following recent scholarly research that suggests that the legacy of slavery is largely manifest in persistent levels of economic inequality, we instrument economic inequality with a census-based measure of the proportion of slaves in each municipality before the abolition of slavery in the 19 century. We also explore the robustness of our estimates to relaxing the exclusion restriction, as the slavery instrument is only plausibly exogenous. We document a strong association between inequality and both violent and property crime rates at the municipal level. Our estimates are robust to including traditional determinants of crime (like population density, the proportion of young males, the average education level, the quality of law enforcement institutions, and the overall economic activity), as well as current ethnic differences and geographic characteristics that may be correlated both with the slave economy and with crime.
    Keywords: Educación, Economía, Equidad e inclusión social, Investigación socioeconómica, Pobreza, Seguridad,
    Date: 2016
  5. By: Radek Janhuba (CERGE-EI, a joint workplace of Charles University and the Economics Institute of the Czech Academy of Sciences, Politickych veznu 7, 111 21 Prague, Czech Republic); Kristyna Cechova (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic)
    Abstract: Economists have found mixed evidence on what happens when the number of police increases. On the one hand, more law enforcers means higher probability of detecting a crime, which is known as monitoring effect. On the other hand, criminals incorporate this increase into their decision making process and thus may commit less crimes, constituting the deterrence effect. This study analyzes the effects of an increase in the number of on-field college football officials, taking players as potential criminals and officials as law enforcers. Analyzing a novel play by play dataset from two seasons of college football, we report evidence of a monitoring effect being present in the overall dataset. This effect is mainly driven by offensive penalties which are called in the area of jurisdiction of the added official. The decomposition of the effect provides a limited evidence for the presence of the deterrence effect in the case of penalties with severe punishment and committed by teams with moderately high ability.
    Keywords: Football, Official, Crime, Deterrence
    JEL: H43 K14
    Date: 2017–07
  6. By: AfDB AfDB
    Date: 2017–08–01
  7. By: Dilger, Alexander
    Abstract: A simple decision theoretic model shows the doping incentives for a member of a professional sports team. Depending on the detection probability and the punishment, a sportsman dopes not at all, at a medium or at the maximal level. The whole team has a higher incentive than an individual team member that at least some of its members dope. That there are not many proven cases of doping in team sports could be because doping is less effective or because the incentives to cover it are higher than in individual sports.
    JEL: D81 D82 K42 L83
    Date: 2017
  8. By: DiGabriele, Jim; Ojo, Marianne
    Abstract: The assumption of a different name for professional purposes dates back centuries – where environments did not encourage certain practices by certain genders. Even presently, the Internet Revolution – fuelled by online transactions and practices, is inducing many to assume measures aimed at the protection of their data – as well as privacy. How important is a professional career or the need to protect privacy such that the necessary, consequent (and ultimate) change involved with official documents also justifies such change? It will be argued by some that getting used to a new name is just a matter which can be adjusted to (and easily over time) – particularly with ease during an age where all documentation is also increasingly becoming digital. And what of those who have done nothing at all to change their names – but who have already been defined by society through their names – even though such definition or expectations may not necessarily accord with their true or real nature? Are they to be criticized for choosing to live genuine lives – which are regarded as contrary to societal expectations – by virtue of prior and already perceived perceptions? A case of the character or person (behind the name) not corresponding to what was expected – hence in the public view, not the real deal? As well as highlighting what should constitute ultimate considerations in determining whether fraudulent acts have been committed, this paper and presentation also aims to highlight challenges faced in an increasingly digital economy – as well as highlight the role of forensic accountants in addressing such challenges.
    Keywords: digital economy; fraud and error detection; forensic accounting; privacy protection
    JEL: E3 E5 G1 G2 G3 K2 M41
    Date: 2017–08
  9. By: DiGabriele, Jim; Ojo, Marianne
    Abstract: Over the years, forensic accounting has expanded not just in respect of investigative accounting, but also in relation to areas which encompass forensic valuation studies and computer forensics. Whilst fraud detection has continued to constitute a vital element which links forensic accounting and auditing – particularly in matters relating to audit trails, new possibilities and roles continue to emerge in relation to forensic accounting – and in view of greater manipulative and innovative areas which have been fostered by improved, sophisticated and advanced technologies. Such technologies facilitating highly innovative criminal cover-ups which have continued to prove invaluable for the set-up and facilitation of fraudulent and fictitious accounts which have not only encouraged money laundering activities, but also criminal engagement in bank secrecy and transfers involving tax havens.
    Keywords: bank; secrecy; tax havens; forensic accounting
    JEL: K2 M4 N2
    Date: 2017–08

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