nep-law New Economics Papers
on Law and Economics
Issue of 2018‒02‒26
nine papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Intergenerational Effects of Incarceration By Bhuller, Manudeep; Dahl, Gordon B.; Loken, Katrine Vellesen; Mogstad, Magne
  2. Legal Advertising and Frivolous Lawsuits. By Yannick Gabuthy; Eve-Angéline Lambert
  3. Common Ownership Concentration and Corporate Conduct By Schmalz, Martin
  4. What Do the Panama Papers Teach Us About the Administrative Law of Corporate Governance Reform in Hong Kong? By Michael, Bryane; Goo, Say-Hak
  5. Technological development and software piracy By Martínez-Sánchez, Francisco; Romeu, Andrés
  6. Follow The Money: Online Piracy and Self-Regulation in the Advertising Industry By Michail Batikas; Jörg Claussen; Christian Peukert
  7. Women's Inheritance Rights Reform and the Preference for Sons in India By Bhalotra, Sonia R.; Brulé, Rachel; Roy, Sanchari
  8. Reconciling Results on Racial Differences in Police Shootings By Roland G. Fryer, Jr
  9. Notice failure revisited: Evidence on the use of virtual patent marking By Gaétan de Rassenfosse

  1. By: Bhuller, Manudeep (University of Oslo); Dahl, Gordon B. (University of California, San Diego); Loken, Katrine Vellesen (Norwegian School of Economics); Mogstad, Magne (University of Chicago)
    Abstract: An often overlooked population in discussions of prison reform is the children of inmates. How a child is affected depends both on what incarceration does to their parent and what they learn from their parent's experience. To overcome endogeneity concerns, we exploit the random assignment of judges who differ in their propensity to send defendants to prison. Using longitudinal data for Norway, we find that imprisonment has no effect on fathers' recidivism but reduces their employment by 20 percentage points. We find no evidence that paternal incarceration affects a child's criminal activity or school performance.
    Keywords: crime, employment, incarceration, recidivism
    JEL: K42 J24 J62
    Date: 2018–01
  2. By: Yannick Gabuthy; Eve-Angéline Lambert
    Abstract: Following a recent wave of deregulation, lawyers now use a large variety of media to advertise their services. A common argument against this increasing reliance on advertising is that it might stir-up frivolous lawsuits. In this article, we investigate the theoretical relevance of this argument by developing an asymmetric information game of litigation where the likelihood of accident and the number of lawsuits are endogenous. The main result shows that this stirring-up effect does not necessarily occur in equilibrium since the impact of advertising on meritless claims results from complex strategic effects arising in the litigation game. In the same way, the welfare analysis highlights that advertising may increase or decrease the social cost of accidents. These results imply that the recent trend toward liberalization of legal advertising should not necessarily be considered as a threat to the efficiency of the tort system.
    Keywords: Litigation, Advertising, Deterrence, Frivolous lawsuits.
    JEL: K13 K41 M37
    Date: 2018
  3. By: Schmalz, Martin
    Abstract: The question of whether and how partial common-ownership links between strategically interacting firms affect firm behavior has been the subject of theoretical inquiry for decades. Since then, consolidation and increasing concentration in the asset-management industry has led to more pronounced common ownership concentration (CoOCo). Moreover, recent empirical research has provided evidence consistent with the literature's key predictions. The resulting antitrust concerns have received much attention from policy makers worldwide. However, the implications are more general: CoOCo affects the objective function of the firm, and therefore has implications for all subfields of economics studying corporate conduct -- including corporate governance, strategy, industrial organization, and all of financial economics. This article connects the papers establishing the theoretical foundations, reviews the empirical and legal literatures, and discusses challenges and opportunities for future research.
    Keywords: Antitrust; control; industry concentration; network; objective of the firm; ownership; shareholder unanimity
    JEL: D21 D22 G10 G30 G32 G34 J41 K21 L10 L16 L21 L40 L41 L42
    Date: 2018–01
  4. By: Michael, Bryane; Goo, Say-Hak
    Abstract: A complex business environment calls for a flexible administrative law for the agencies that oversee corporations. No where illustrates this maxim better than Hong Kong, and its need to reform corporate regulations after the Panama Papers revelations. We describe how only a ‘non-administrative’ administrative law can best cope with the challenges facing the regulation of corporate governance. Such a flexible, results-oriented approach to administrative law develops new principles and tests, rather than gives civil servants instructions. Such an approach to corporate governance can facilitate the assessment of company governance, corporate disclosure, the self-regulation of professional groups like lawyers and accountants, as well as ensure corporations engage in ‘legitimate economic purposes.’ We engage with the literature, showing why such a flexible approach to administrative rulemaking would more likely reduce some of the government regulation and oversight problems exposed by the Panama Papers than previous approaches toward drafting and implementing administrative law (at least in this area).
    Keywords: Hong Kong corporate governance,non-administrative administrative law,presumption of disclosure,legitimate economic purposes
    Date: 2017
  5. By: Martínez-Sánchez, Francisco; Romeu, Andrés
    Abstract: In this paper, the authors analyze the differences in piracy rates from one country to another. Like previous papers on the topic, they find that more developed countries have lower incentives for pirating. Unlike previous papers, they find that the piracy rate is positively correlated with the tax burden rate but negatively correlated with the domestic market size and exports over GDP. The authors also separate the impacts of education and R&D on piracy, and find two effects with opposite signs. Moreover, they find that those countries with smaller, more efficient bureaucracies are likely to protect intellectual property more effectively. Finally, they show that the spread of access to the Internet is negatively correlated with the software piracy rate.
    Keywords: piracy rate,education,R&D,quality bureaucracies,intellectual property,internet
    JEL: K42 L86 O3 O57
    Date: 2018
  6. By: Michail Batikas; Jörg Claussen; Christian Peukert
    Abstract: In this paper, we study the effects of a self-regulatory effort, orchestrated by the European Commission, that aims to reduce advertising revenues for publishers of copyright infringing content. Historical data lets us follow how the third-party advertising and tracking services associated with a large number of piracy websites and a corresponding set of legitimate “placebo” websites change after the agreement to self-regulate went in place. We find that larger EU-based advertisers comply with the initiative and reduce their connections with piracy websites. We do not find reductions for other non-advertising services that track consumers, which has potentially important implications for the efficiency of targeted advertising.
    Keywords: piracy, copyright enforcement, online advertising, natural experiment
    JEL: K40 L50 L80
    Date: 2018
  7. By: Bhalotra, Sonia R. (University of Essex); Brulé, Rachel (New York University, Abu Dhabi); Roy, Sanchari (King's College London)
    Abstract: We investigate whether legislation of equal inheritance rights for women modifies the historic preference for sons in India, and find that it exacerbates it. Children born after the reform in families with a first-born daughter are 3.8–4.3 percentage points less likely to be girls, indicating that the reform encouraged female foeticide. We also find that the reform increased excess female infant mortality and son-biased fertility stopping. This suggests that the inheritance reform raised the costs of having daughters, consistent with which we document an increase in stated son preference in fertility post-reform. We conclude that this is a case where legal reform was frustrated by persistence of cultural norms. We provide some suggestive evidence of slowly changing patrilocality norms.
    Keywords: inheritance rights, ultrasound, female foeticide, sex selection, son preference, gender, India
    JEL: O12 K11 I21
    Date: 2017–12
  8. By: Roland G. Fryer, Jr
    Abstract: Police use of force – particularly lethal force – is one of the most divisive issues of the twenty-first century. To understand the nexus of race, criminal justice, and police brutality, academics and journalists have begun to amass impressive datasets on Officer-Involved-Shootings (OIS). I compare the data and methods of three investigative journalism articles and two publications in the social sciences on a set of five rubrics and conclude that the stark differences between their findings are due to differences in what qualifies for a valid research design and not underlying differences in the datasets.
    JEL: J0 K0
    Date: 2018–01
  9. By: Gaétan de Rassenfosse
    Abstract: One source of uncertainty in the patent system relates to the difficulty in identifying products that are protected with a patent. This paper studies the adoption by U.S. patentees of “virtual patent marking,” namely the online provision of constructive notice to the public that an article is patented. It proposes a simple model of the decision to adopt patent marking and empirically examines factors that affect adoption. Data suggest that about 12 percent of patent holders overall provide virtual marking information (and perhaps about 25 percent of commercially active assignees). Econometric analysis suggests that the most discriminant factor of the adoption of virtual marking is the size of the patent portfolio. The likelihood of adoption increases with portfolio size, consistent with evidence that firms with a larger patent portfolio are more likely to be infringed.
    JEL: D23 K29 O34
    Date: 2018–02

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