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on Law and Economics |
| By: | Tim Friehe; Eric Langlais; Elisabeth Schulte |
| Abstract: | Traditional law and economics analyses of products liability find that different liability regimes lead to the same market outcome, implying that risk-neutral consumers are indifferent between products liability and no products liability. We present a setup in which a group of consumers supports the implementation of products liability although its enforcement is costly. All consumers may prefer the same level of (partial) products liability. |
| Keywords: | Product Liability, Monopoly, Political Economy |
| JEL: | K13 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2018-43&r=law |
| By: | Emons, Winand |
| Abstract: | An antitrust authority deters collusion using fines and a leniency program. It chooses the probability of an investigation. Firms pick the degree of collusion: The more they collude, the higher are profits, but so is the probability of detection. Firms thus trade-off higher profits against higher expected fines. If firms are sufficiently patient, leniency is ineffective; it may even increase collusion. Increasing the probability of an investigation at low levels does not increase deterrence. Increasing the probability of an investigation at high levels reduces collusion, yet never completely. |
| Keywords: | Antitrust; cartels; deterrence; Leniency |
| JEL: | D43 K21 K42 L40 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13262&r=law |
| By: | Michaela Garajová (Masaryk University, Faculty of Law) |
| Abstract: | Punitive damages in international commercial arbitration has been considered more a theoretical than a practical issue, especially in civil law countries. Nevertheless, the national law regulations must provide a way how to react on such claims, particularly in the area of international commercial arbitration. This article is considered primarily with the analysis of the current status quo of certain civil law countries related to punitive damages since not only applicable substantive law, but also procedural law of the seat of arbitration has an impact on the availability of punitive damages in international arbitration. It also discusses legal reasons why punitive damages are of limited relevance in international commercial arbitration that consequently leads to a minimal number of arbitral awards of punitive damages. Despite of infrequency, the importance and clear approach to whether punitive damages should have a place in international commercial arbitration must be drawn. |
| Keywords: | Arbitral award; international commercial arbitration; punitive damages; compensatory principle; enforcement and recognition of arbitral award. |
| JEL: | K13 K33 K40 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:sek:ilppro:7409814&r=law |
| By: | Kevin Levillain (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); 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) |
| Abstract: | For more than twenty years now, Corporate Governance scholars have hesitated between shareholder, director and stakeholder primacy, making the purpose of the corporation " the most important issue in corporate law ". In this paper, we conduct an extensive review of the arguments supporting either of these views in the US context, which shows that analyzing corporate governance through the lens of " primacy " inevitably leads to inconsistent and contradictory interpretations. In the current exploration of new business practices to deal with urgent societal challenges, this misinterpretation undermines the search for conditions to temper the dominant " shareholder value maximization " norm without jeopardizing control and efficiency. Instead we show that interpreting recent US legal innovation requires to drop the concept of " primacy " and to view corporate law as enabling a variety of distribution of decision rights between shareholders and directors. In this light, our model shows that if one is to foster companies' responsible behaviors, it appears necessary to secure both shareholders' and directors' commitment towards a broader purpose. This " commitment " model opens avenues for designing new effective governance practices, including the recent " Benefit Corporation " forms. |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01777788&r=law |
| By: | Kayis-Kumar, Ann |
| Abstract: | Governments and policy-makers are increasingly faced with the trade-off of protecting their tax revenue bases while maintaining their international competitiveness. This is exemplified by the international trend of jurisdictions reducing their headline corporate tax rates, which is often justified on the basis that these cuts will lead to improved efficiency and integrity outcomes. This article explores whether it is more efficient to implement corporate tax cuts or an alternative reform such as an economic rent tax which may better achieve the tax policy goals of efficiency and integrity. In doing so, this article bridges the gap between applied legal research, economic theory and practical optimisation modelling. Specifically, this research presents a simulation analysis of the behavioural responses of a tax-minimising multinational enterprise to both existing and proposed tax regimes and compares efficiency and integrity outcomes upon implementing corporate tax cuts. This is complemented by a legal comparative analysis featuring case studies of an economic rent tax; namely, the Allowance for Corporate Equity (ACE) as introduced in Belgium and Italy. These case studies will focus on the political hurdles to implementing and sustaining these reforms, which will highlight key lessons learnt from the implementation of the ACE in practice. |
| Keywords: | Tax neutrality, Corporate tax reform, Allowance for Corporate Equity |
| JEL: | C61 H2 K34 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:89703&r=law |
| By: | Henry, Emeric; Loseto, Marco; Ottaviani, Marco |
| Abstract: | Dynamic adoption policies of activities with uncertain returns are characterized by three key decisions: in the ex ante experimentation phase, the decisions when to abandon experimentation and when to introduce to market; in the ex post learning phase, the decision when to withdraw following the accumulation of bad news. In a tractable continuous-time model, we study the optimal mix of the three instruments regulators employ to align the private incentives of firms: ex ante approval regulation, ex post withdrawal regulation, and liability. Our results can rationalize the array of regulatory environments observed across applications ranging from product safety to patent protection. We also consider costly lying and show that the social planner can be better off when the firm privately observes research results. |
| Keywords: | Approval Regulation; Experimentation; Liability; Withdrawal |
| JEL: | D18 D83 K13 K2 M38 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13224&r=law |
| By: | D. Mark Anderson; Joseph J. Sabia; Erdal Tekin |
| Abstract: | Debate over safe-storage gun regulations has captured public attention in the aftermath of several high-profile shootings committed by minors. Whether these laws actually decrease youth gun violence, however, is an unanswered question. Using data from the FBI’s Supplementary Homicide Reports for the period 1985-2013, this study is the first to estimate the relationship between child access prevention (CAP) laws and firearm-related homicides committed by juveniles. Our results suggest that CAP laws are associated with a 19 percent reduction in juvenile firearm-related homicides. The estimated effect is stronger among whites than blacks and is driven by states enforcing the strictest safe-storage standard. We find no evidence that CAP laws are associated with firearm-related homicides committed by adults or with non-firearm-related homicides committed by juveniles, suggesting that the observed relationship between CAP laws and juvenile firearm-related homicides is causal. |
| JEL: | H7 K4 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25209&r=law |
| By: | Peter Mihók (Univerzita Mateja Bela v Banskej Bystrici); Martin Orviský (Univerzita Mateja Bela v Banskej Bystrici); Anna Va?ová (Univerzita Mateja Bela v Banskej Bystrici) |
| Abstract: | This paper deals with the legal roles, and to a small extent also with the professional ethics of defence attorneys in relation to the use of electronic monitoring in the criminal justice field. Its scientific aim is twofold: (1) to briefly summarize relevant results of the pilot research conducted within the Slovak-national project acronymed IAEMPS, and (2) to compare them with the relevant desk research results concerning the USA and the EU. In the concluding part, the authors open the discussion about the potential shifts of emphasis (a) from technical aspects of EM aimed at replacing imprisonment to electronically monitored probation programs as autonomous sentences; and (b) from ?traditional penal? attorneys to ?more holistic defence attorneys?. |
| Keywords: | electronic monitoring (EM), attorneys, probation, Slovakia, the IAEMPS project. |
| JEL: | K14 K00 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:sek:ilppro:7410348&r=law |
| By: | Iva Fellerova Palkovska (Masaryk University, Faculty of Law) |
| Abstract: | The Court of Justice of the European Union is an independent judicial organ of the European Union. Its decisions possess usual characteristics and procedural aspects that judicial decisions in general have. In this respect we may consider res judicata principle, precedential effect and temporal effect of Court?s decisions. However, some of these characteristics are modified due to the specific nature and aim of judicial process on the EU level. The aim of the paper will be to define the aforementioned characteristics of the Court of Justice decisions, to analyze them on the basis of Court?s jurisprudence and to deal with them in depth in the context of EU judiciary. |
| Keywords: | European Union, procedural law, judicial process, res judicata, precedent, precedential effect, temporal limitation of judgments, procedural aspects. |
| JEL: | K40 K33 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:sek:ilppro:7409910&r=law |
| By: | Simplice Asongu (Yaoundé/Cameroon); Christelle Meniago (Sol Plaatje University, South Africa) |
| Abstract: | This study examines the persistence of software piracy with internet penetration vis-à-vis of PC users, conditional on Intellectual Property Rights (IPRs) institutions. The empirical evidence is based on a panel of 99 countries for the period 1994-2010 and the Generalised Method of Moments. The main finding is that, compared to internet penetration, PC usage is more responsible for the persistence of global software piracy. Knowing how technology affects the persistence of piracy is important because it enables more targeted policy initiatives. We show that the sensitivity of software piracy to IPRs mechanisms is contingent on the specific technology channels through which the pirated software is consumed. |
| Keywords: | Piracy; Business Software; Software piracy; Intellectual Property Rights |
| JEL: | F42 K42 O34 O38 O57 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:18/041&r=law |
| By: | Nicola Branzoli (Bank of Italy); Giovanna Messina (Bank of Italy); Elena Pisano (Bank of Italy); Giacomo Ricotti (Bank of Italy); Ernesto Zangari (Bank of Italy) |
| Abstract: | After a brief review of the economic literature, the paper offers a comparative analysis of the main features of capital income taxation in Italy, the EU and the US. The paper also analyses the recent evolution of capital taxation and portfolio allocation in Italy. The findings point to high heterogeneity in the choice of the type of tax system, taxation level and forms of preferential taxation, suggesting no convergence towards a single model of taxation among countries. However, a common feature of most systems is that capital income is taxed more lightly than labour income. The heterogeneity in the tax treatment of households’ savings is likely to persist in the future; recent developments at international level concerning the transparency of taxation are expected to increase governments’ degrees of freedom in choosing their preferred tax system. Empirical evidence for Italy suggests that the tax burden on financial assets has increased in recent years but the evolution of financial assets over time is not particularly sensitive to tax changes. |
| Keywords: | capital income, taxation, savings |
| JEL: | E21 H24 K34 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_464_18&r=law |
| By: | Valerio De Stefano; Antonio Aloisi |
| Abstract: | This report maps a kaleidoscopic array of platform-mediated working arrangements, by clustering the findings into three main subsets (passenger transport services, professional crowdsourcing, on-demand work at the client’s premises). Many initiatives taken by the European institutions and aimed at promoting decent work in the collaborative economy are analysed including (i) the European Commission’s Communication 356/2016, (ii) the principles enshrined in the European Pillar of Social Rights, and (iii) the ruling by the European Court of Justice on the nature of the service provided by Uber. After exploring the existing legal framework in several European countries, this study goes into the issue of the legal status of platform–based or –mediated workers by analysing what is at stake in pending litigations on the proper classification. In the end, this report is meant to contrast the sense that new realities of work have outgrown legal concepts. The application of existing regulation must be reinforced, in order to avoid the risk that platform workers are considered by default as falling in a normative vacuum. In the end, creating a level playing field between the traditional and the digitally-enabled companies is the only way to reap full benefits of the on-going digital transformation. |
| Keywords: | Digital labour platforms, gig workers, collaborative economy |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc112243&r=law |
| By: | Hong, Suting (Shanghai Tech University); Hunt, Robert M. (Federal Reserve Bank of Philadelphia); Serfes, Konstantinos (Drexel University) |
| Abstract: | We construct a two-period model of revolving credit with asymmetric information and adverse selection.In the second period, lenders exploit an informational advantage with respect to their own customers. Those rents stimulate competition for customers in the first period. The informational advantage the current lender enjoys relative to its competitors determines interest rates, credit supply, and switching behavior. We evaluate the consequences of limiting the repricing of existing balances as implemented by recent legislation. Such restrictions increase deadweight losses and reduce ex ante consumer surplus. The model suggests novel approaches to identify empirically the effects of this law. |
| Keywords: | Financial contracts; Credit Card Accountability Responsibility and Disclosure Act; holdup; risk-based pricing; credit supply |
| JEL: | D14 D18 D86 G28 K12 |
| Date: | 2018–11–07 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:18-23&r=law |
| By: | Daniel Borebly (Department of Economics, University of Strathclyde) |
| Abstract: | The German Aviation Tax (AT) is a tax levied on departing passengers from German airports. The synthetic control method is used to generate counterfactual passenger numbers for German airports. The synthetic control method is used to generate counterfactual passenger numbers for German airports, and for airports outside Germany but near the German border. The results presented are consistent with cross-border substitution of passenger demand in response to AT. Most AT exempt airports near the borders have made sizable, significant, gains in passenger numbers since Germany introduced AT. Within Germany, there appears to be a clear distinction in the impact on small/regional airports and that on larger hubs. |
| Keywords: | aviation taxes, passenger demand, synthetic control |
| JEL: | H26 H30 L93 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:str:wpaper:1816&r=law |
| By: | Johansson, Dan (Örebro University School of Business); Stenkula, Mikael (Research Institute of Industrial Economics (IFN)); Wykman, Niklas (Örebro University School of Business) |
| Abstract: | The tax system has at times favoured firm control through private foundations, which has been argued to inhibit high-impact entrepreneurship and economic growth. However, research has been hampered due to a lack of systematic historical tax data. The purpose of this study is threefold. First, we describe the evolution of tax rules for private foundations in Sweden between 1862 and 2018. Second, we calculate the marginal effective tax rate on capital income. Third, we examine the incentives to use private foundations as a means for corporate control by comparing the taxation of private foundations and of high-impact entrepreneurs. Tax incentives help explain why economically significant private foundations were founded between World War I and the 1960s. |
| Keywords: | Family firms; Foundations; High-impact entrepreneurship; Owner; Taxation |
| JEL: | D31 H32 K34 L26 N23 O43 P12 P14 |
| Date: | 2018–11–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1245&r=law |