nep-law New Economics Papers
on Law and Economics
Issue of 2018‒10‒29
thirteen papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Collusion and Antitrust Enforcement in Advertising-Selling Platforms By Konstantinos Charistos
  2. Light cannabis and organized crime: Evidence from (unintended) liberalization in Italy By Carrieri, Vincenzo; Madio, Leonardo; Principe, Francesco
  3. Do Alimony Regulations Matter inside Marriage? Evidence from the 2008 Reform of the German Maintenance Law By Schaubert, Marianna
  4. Salience and Online Sales: The Role of Brand Image Concerns By Dertwinkel-Kalt, Markus; Köster, Mats
  5. The European Patent System: A Descriptive Analysis By Georg von Graevenitz; Antanina Garanasvili
  6. On the allocation of evidence among cartelists under a leniency program By Konstantinos Charistos
  7. How Do Competition Policy and Data Brokers Shape Product Market Competition? By Koski, Heli
  8. Electronic monitoring of offenders and accused persons in Slovakia in the international and European context By Peter Mihók
  9. The Separation of Directors and Managers: A Historical Examination of the Legal Status of Managers By Blanche Segrestin; Andrew Johnston; Armand Hatchuel
  10. A Victim-Oriented Justice Dispute in the context of the Judicial System Reform in Albania By Romina Beqiri
  11. The Insolvency Regime for Large Enterprises in Italy: An Economic and Legal Assessment By Nazim Belhocine; Daniel Garcia-Macia; José Garrido
  12. Experimental Research on Contests By Sheremeta, Roman
  13. The Effects of Flood Insurance on Housing Markets By Indaco, Agustín; Ortega, Francesc; Taspinar, Süleyman

  1. By: Konstantinos Charistos (Department of Economics, University of Macedonia)
    Abstract: This paper underlines the impact of indirect network externalities on the effectiveness of antitrust enforcement to deter collusion between advertising-selling platforms. Since two-sided collusion is less likely to be sustained as consumers (e.g. readers/viewers) become more ad-avoiders while the opposite is true for one-sided collusion, firms may be induced to semi-collude (collude on advertising while competing for consumers) instead of colluding on both sides. When firms semi-collude on advertising and consumers are neutral towards advertisements, the imposition of fines based on the illegal gain of the colluding side (one-sided fines) enhances cartel deterrence compared to fines based on the total illegal profits (two-sided fines).
    Keywords: Antitrust enforcement, Collusion, Media markets.
    JEL: K21 L12 L41
    Date: 2018–10
  2. By: Carrieri, Vincenzo; Madio, Leonardo; Principe, Francesco
    Abstract: The effect of marijuana liberalization on crime is object of a large interest by social scientists and policy-makers. However, due to the scarcity of relevant data, the displacement effect of liberalization on the supply of illegal drugs remained substantially unexplored. This paper exploits the unintended liberalization of cannabis light (C-light, i.e. with low THC) occurred in Italy in December 2016 by means of a legislative gap, to assess its effect in a quasi-experimental setting. Although the liberalization interested all the Italian territory, the intensity of liberalization in the short-run varied according to the pre-liberalization market configuration of grow-shops, i.e. shops selling industrial canapa-related products that have been able to first place the canapa flowers (C-light) on the new market. We exploit this variation in a Differences-in-Differences design using a unique dataset on monthly confiscations of drugs at province level (NUTS-3 level) over the period 2016-2018 matched with data on the geographical location of shops and socio-demographic variables. We find that the legalization of C-light led to a reduction of 12% of confiscation of marijuana per each pre-existing grow-shop and a significant reduction of other canapa-derived drugs (plants of cannabis and hashish). Back-to-envelope calculations suggest that forgone revenues for criminal organizations amount to at least 160-200 million Euros per year. These results support the argument that, even in a short period of time and with an imperfect substitute, the organized crime's supply of illegal drugs is displaced by the entry of official and legal retailers.
    Keywords: cannabis,marijuana light,crime,illegal market,diff-in-diff
    JEL: K23 K42 H75 I18
    Date: 2018
  3. By: Schaubert, Marianna
    Abstract: This study investigates how West German spouses have responded by adjusting their time allocation to the alimony reform introduced in 2008. This reform imposed financial self-responsibility after a finalized divorce. It weakened the relative bargaining position of the spouse with a claim for maintenance in the case of a potential divorce prior to the law change. Therefore, the present study helps to verify bargaining models by considering the 2008 policy change as a shift of spousal bargaining power. Estimating di_erence-in-di_erences models I find that, indeed, wives who face a potential low alimony loss might have increased their working hours as a result of the 2008 reform. To my knowledge, the present investigation is the first analysis of the behavioral response of individuals in longer marriages to the 2008 reform. Its approach to identifying those who have been (dis)advantaged by this reform is a new one, proposing a method that reflects the realities of alimony arrangements in Germany.
    Keywords: Alimony,family,bargaining,institutional change,labor supply,time allocation
    JEL: D13 J12 J13 J22 K36
    Date: 2018
  4. By: Dertwinkel-Kalt, Markus; Köster, Mats
    Abstract: We provide a novel intuition for the observation that many brand manufacturers have restricted their retailers' ability to resell brand products online. Our approach builds on models of salience according to which price disparities across distribution channels guide a consumer's attention toward prices and lower her appreciation for quality. Thus, absent vertical restraints, one out of two distortions – a quality or a participation distortion – can arise in equilibrium. The quality distortion occurs if the manufacturer provides either an inefficiently low quality under price salience or an inefficiently high quality in order to prevent price salience. The participation distortion arises as offline sales might be entirely abandoned in order to prevent prices from becoming salient. Both distortions are ruled out if vertical restraints are imposed. As opposed to the current EU legislation that considers a range of vertical restraints as being hardcore restrictions of competition, we show that these constraints can be socially desirable if salience effects are taken into account.
    Keywords: Salience,Online Sales,Antitrust,Vertical Restraints,Distribution Channels
    JEL: D21 K21 L42
    Date: 2018
  5. By: Georg von Graevenitz (Queen Mary, University of London); Antanina Garanasvili (Bournemouth University)
    Abstract: The European Patent System consists of national patent offices (NPOs) and the supranational European Patent Office (EPO). EPO and the NPOs have granted patents in Europe side-by-side since 1980. The resulting patent system is complicated and less coordinated than might be expected. Firms must consider a number of variables when selecting the route of patenting they take within this system: price, rigour of examination, duration of examination, quality of legal redress. To date there is little descriptive evidence on how firms choose between EPO and national offices. This paper provides a rich descriptive analysis of patenting in Europe. We analyze how origin, size and technological focus of companies, affect how they choose among patent offices within the EPS and report differences in examination durations and grant rates across patent offices.
    Keywords: Patents, European Patent System, Validation, Patent Propensity
    JEL: O34 O31 L20 K11
    Date: 2018–10
  6. By: Konstantinos Charistos (Department of Economics, University of Macedonia)
    Abstract: The impact of leniency programs on cartelists’ decision to allocate the incriminating evidence is investigated. Firms are allowed to possess either exclusive or common pieces of cartel-related evidence. The cartel organization is able to allocate the incriminating evidence in an attempt to enhance the sustainability of the illicit agreement. Assuming that the Antitrust Authority (AA) provides incentives that induce confession, reporting is either partial or universal. It is shown that in the former case the cartel organization selects to split and equally share the evidence (each firm possesses only exclusive pieces) whereas in the latter case every firm may possess perfect evidence. Unless the conviction of an investigated cartel is unlikely, when the AA optimally anticipates the cartel’s ability to allocate the evidence, only partial information is obtained.
    Keywords: Antitrust enforcement, Collusion, Leniency programs.
    JEL: K21 L12 L41
    Date: 2018–10
  7. By: Koski, Heli
    Abstract: Abstract This paper empirically analyzes how a data broker affects competition in oligopolistic product markets. It examines a unique case concerning the two dominant Finnish food retail companies’ voluntary withdrawal from information exchange via a data broker. Moreover, the companies jointly approached the Finnish antitrust authority, originating an investigation whether their prior horizontal information exchange was illegal. This resulted in the permanent termination of a data broker’s business in the Finnish food retail sector. The empirical analysis employs quarterly data from the food retail sector of the old EU15 countries for 2005–2017. The difference-in-differences model is used to explore the competitive impacts of a termination of vertical and horizontal information exchange via a data broker in the Finnish food retail sector. Data suggest that competition was less fierce and product prices higher after the termination of information exchange via a data broker. Longer-term evidence on the price increase in the absence of a data broker is inconclusive. Furthermore, discontinuation of data exchange from the downstream to the upstream firms facilitated downstream bargaining power and generated a long-term increase in the gap between retail and producer prices.
    Keywords: Data brokers, Market for data, Competition, Competition policy
    JEL: L11 L13 L41 L81
    Date: 2018–10–26
  8. By: Peter Mihók (Univerzita Mateja Bela v Banskej Bystrici)
    Abstract: The first program of Electronic monitoring of offenders and accused persons in Slovakia was launched by Law adopted in 2015 and shaped by the results of the pilot project co financed by the European Union. The aim of this presentation/paper is threefold: (1) to briefly summarize the key facts and data concerning this program, (2) to introduce the project titled ?Interdisciplinary approach to electronic monitoring of accused and convicted persons in the Slovak environment? (acronymed IAEMPS), and (3) to present the results of the research concerning the international and European context of the above mentioned Slovak national program, carried out within the IAEMPS project.
    Keywords: Slovakia, electronic monitoring (EM), the national EM program, Acquis communautaire, the IAEMPS project
    JEL: J18 K14 K33
    Date: 2018–07
  9. By: Blanche Segrestin (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Andrew Johnston (University of Sheffield [Sheffield]); Armand Hatchuel (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique)
    Abstract: While management emerged as a distinctive function at the turn of the 20 th century, managers, unlike directors, have no particular status in law. This article examines how technological and innovation concerns motivated the rise of management but shows that they were largely overlooked by corporate law after 1945.
    Date: 2018–07
  10. By: Romina Beqiri (European University of Tirana)
    Abstract: The position and status of victims in the criminal justice process have been the subject of recent developments at the domestic, European and international levels in many aspects. The adoption of domestic legislations reflects the understanding of the challenges faced by victims and their commitment to a progressive judicial system. In this context, the recent amendments to its Code of Criminal Procedure in light of the recent Judicial System Reform by Albania seem to be a positive development towards the extensive participation of victims of crime in criminal proceedings. However, there are debates whether the right to participate is practically implemented and what is its impact on the criminal trial. This research shows the demand for the establishment of a neutral support mechanism to assist victims at all stages of the judicial process - from investigation to a final judgment. This paper addresses the perceptions and expectations of the judicial staff to address all the issues pertaining to victims? needs in and outside the criminal proceedings. This article aims: (1) to shed a light on the reasons behind the Judicial System Reform approach to amend the Code of Criminal Procedure rather than to adopt a comprehensive and comprehensible victim-oriented justice; (2) to reflect upon the role and rights of victims in the Albanian criminal justice system; and (3) to conclude with the recommendation to set up an effective long-term mechanism with the sole responsibility to provide the required support and assistance to the victims in Albania and in the context of the Kosovo Specialist Chamber.
    Keywords: victim participation, victim?s rights, psycho-social assistance and protection, financial compensation, mediation
    JEL: K14 K33 K49
    Date: 2018–07
  11. By: Nazim Belhocine; Daniel Garcia-Macia; José Garrido
    Abstract: The modernization of Italy’s insolvency framework has been the subject of much interest in recent years, related not least to its role in potentially facilitating an efficient allocation of resources. A unique feature of Italy’s insolvency framework is a special regime for large enterprises known as “extraordinary administration”. This paper evaluates the merits of this special regime by assessing its efficacy and success in achieving its stated goals and comparing its features to international standards and best practices. It finds that the special regime tends to impose large costs on creditors and the state. The regime results, in most cases, in the sale of parts of the group, followed by a liquidation phase of the remaining assets which can take longer than the general regime, hindering legal certainty for creditors and more generally economic efficiency, investment and job creation. Based on international best practices and experience, consideration should be given to folding the special regime into the general insolvency regime, possibly with provisions to allow for state intervention in specific well-defined circumstances.
    Date: 2018–09–28
  12. By: Sheremeta, Roman
    Abstract: Costly competitions between economic agents are modeled as contests. Researchers use laboratory experiments to study contests and test comparative static predictions of contest theory. Commonly, researchers find that participants’ efforts are significantly higher than predicted by the standard Nash equilibrium. Despite overbidding, most comparative static predictions, such as the incentive effect, the size effect, the discouragement effect and others are supported in the laboratory. In addition, experimental studies examine various contest structures, including dynamic contests (such as multi-stage races, wars of attrition, tug-of-wars), multi-dimensional contests (such as Colonel Blotto games), and contests between groups. This article provides a short review of such studies.
    Keywords: Contest; All-pay auction; Tournament; Dynamic Contest; Multi-battle Contest; Multi-dimensional Contest; Group Contest; Rent-seeking; Experiment; Overbidding; Over-dissipation; Incentive Effect; Size Effect; Discouragement Effect; Strategic Momentum
    JEL: C7 C9 D4 D7 D9 H4 J4 K4 L2 M5
    Date: 2018–10–03
  13. By: Indaco, Agustín (CUNY Graduate Center); Ortega, Francesc (Queens College, CUNY); Taspinar, Süleyman (Queens College, CUNY)
    Abstract: We analyze the role of food insurance on the housing markets of coastal cities. To do so we have assembled a parcel-level dataset including the universe of residential sales for three coastal urban areas in the United States – Miami-Dade county (2008- 2015), New York city (2003-2016), and Virginia Beach (2000-2016) – matched with their FEMA food maps, which characterize the food risk level for each property. First, we compare trends in housing values and sales activity among properties on the foodplain, as defined by the National Flood Insurance Program (NFIP), relative to properties located elsewhere within the same city. Despite the heightened food risk in the last two decades, we did not find evidence of divergent trends, suggesting that food insurance may have cushioned the effects of the increase in food risk. Secondly, we analyze the effects of the recent reforms to the NFIP. In 2012 and 2014, Congress passed legislation that led to important increases in insurance premia and updates of food maps. We fail to find an effect of increases in premia on the values of foodplain properties in Virginia Beach and Miami-Dade, but we do find evidence of an effect in New York coinciding with the aftermath of hurricane Sandy. We also find some evidence of price changes for properties that experienced a change in risk classification in the new FEMA food maps. We conclude that the full effects of the 2012-2014 food insurance reforms have not yet taken place but will probably materialize in the future.
    Keywords: climate change, real estate, cities, flood insurance
    JEL: H56 K42 R33
    Date: 2018–09

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