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on Law and Economics |
| By: | Steven Shavell |
| Abstract: | This article studies a model of liability for automobile accidents in the coming world in which automobiles will be autonomous. In that world, travelers will not be drivers, rendering liability premised on driver fault irrelevant as a means of reducing accident dangers. Moreover, no other conventional principle of individual or of manufacturer liability would serve well to do so. Indeed, in the model considered, strict manufacturer liability, recommended by many commentators, would actually tend to leave accident risks unchanged from their levels in the absence of liability. However, a new form of strict liability––the hallmark of which is that damages would be paid to the state––would be superior to conventional rules of liability in alleviating accident risks and would be easy to administer. |
| JEL: | K13 K2 K32 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26220&r=all |
| By: | Darai, D.; Roux, C.; Schneider, F. |
| Abstract: | We study whether firms’ collusive ability influences their incentives to merge: when tacit collusion is unsuccessful, firms may merge to reduce competitive pressure. We run a series of Bertrand oligopoly experiments where the participants decide whether, when, and to whom they send merger bids. Our experimental design allows us to observe (i) when and to whom mergers are proposed, (ii) when and by whom merger offers are accepted, and (iii) the effect on prices when mergers occur in this way. Our findings suggest that firms send more merger offers when prices are closer to marginal costs. Maverick firms that cut prices and thereby fuel competition are the predominant (but reluctant) receivers of these offers. |
| Keywords: | Tacit collusion, Mavericks, Bertrand oligopoly, Experiments |
| JEL: | C91 D43 K21 L13 L41 |
| Date: | 2019–09–17 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1984&r=all |
| By: | Francesco Drago (Università degli studi di Napoli Federico II); Roberto Galbiati (Département d'économie); Francesco Sobbrio |
| Abstract: | This study analyses voters' response to criminal justice policies by exploiting a natural experiment. The 2006 Italian Collective Pardon Bill, designed and promoted by the incumbent center-left (CL) coalition, unexpectedly released about one-third of the prison population, creating idiosyncratic incentives to recidivate across pardoned individuals. Municipalities where resident pardoned individuals had a higher incentive to recidivate experienced a higher recidivism rate. We show that in those municipalities voters "punished'' the CL coalition in the 2008 parliamentary elections. A one standard deviation increase in the incentive to recidivate-corresponding to an increase of recidivism of 15.9 percent-led to a 3.06 percent increase in the margin of victory of the center-right (CR) coalition in the post-pardon national elections (2008) relative to the last election before the pardon (2006). We also provide evidence of newspapers being more likely to report crime news involving pardoned individuals and of voters hardening their views on the incumbent national government's ability to control crime. Our findings indicate that voters keep politicians accountable by conditioning their vote on the observed effects of public policies. |
| Keywords: | Accountability; Retrospective Voting; Natural Experiment; Crime; Recidivism; Media |
| JEL: | D72 K42 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/12b1pd86do8s6p35b4jqn66t0p&r=all |
| By: | Marcelo Bérgolo (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Rodrigo Ceni (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Guillermo Cruces (Universidad Nacional de La Plata (Argentina). Facultad de Ciencias Económicas. Centro de Estudios Distributivos, Laborales y Sociales.); Matías Giaccobasso (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Ricardo Pérez-Truglia (Universidad de California en Los Angeles (EEUU)) |
| Abstract: | The canonical model of Allingham and Sandmo (1972) predicts that firms evade taxes by optimally trading off between the costs and benefits of evasion. However, there is no direct evidence that firms react to audits in this way. We conducted a large-scale field experiment in collaboration with Uruguay’s tax authority to address this question. We sent letters to 20,440 small- and medium-sized firms that collectively paid more than 200 million dollars in taxes per year. Our letters provided exogenous yet nondeceptive signals about key inputs for their evasion decisions, such as audit probabilities and penalty rates. We measured the effect of these signals on their subsequent perceptions about the auditing process, based on survey data, as well as on the actual taxes paid, based on administrative data. We find that providing information about audits had a significant effect on tax compliance but in a manner that was inconsistent with Allingham and Sandmo (1972). Our findings are consistent with an alternative model, risk-as-feelings, in which messages about audits generate fear and induce probability neglect. According to this model, audits may deter tax evasion in the same way that scarecrows frighten off birds. |
| Keywords: | tax, evasion, audits, penalties, frictions |
| JEL: | C93 H26 K34 K42 Z13 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:ulr:wpaper:dt-12-19&r=all |
| By: | Johnson, Matthew S; Levine, David I; Toffel, Michael W |
| Abstract: | We study how a regulator can best allocate its limited inspection resources. We direct our analysis to a US Occupational Safety and Health Administration (OSHA) inspection program that targeted dangerous establishments and allocated some inspections via random assignment. We find that inspections reduced serious injuries by an average of 9% over the following five years. We use new machine learning methods to estimate the effects of counterfactual targeting rules OSHA could have deployed. OSHA could have averted over twice as many injuries if its inspections had targeted the establishments where we predict inspections would avert the most injuries. The agency could have averted nearly as many additional injuries by targeting the establishments predicted to have the most injuries. Both of these targeting regimes would have generated over $1 billion in social value over the decade we examine. Our results demonstrate the promise, and limitations, of using machine learning to improve resource allocation. JEL Classifications: I18; L51; J38; J8 |
| Keywords: | Social and Behavioral Sciences, Public Policy |
| Date: | 2019–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:indrel:qt1gq7z4j3&r=all |
| By: | Munoz, Pablo; Micco, Alejandro |
| Abstract: | We study the impact of a reform that increased the regulatory burden on temporary agency work (TAW) in Chile. Using a panel of manufacturing plants, we show that the use of TAW fell immediately after the regulation, with differential effects by plants’ size and volatility. Difference-in-differences estimates suggest that plants using TAW substituted away from agency workers after the regulation, increasing regular work by 9.2%. Despite this substitution effect, total employment decreased by 8.6% in these plants. We report less precise evidence of negative scale effects on output and profits. |
| Keywords: | Law, Social and Behavioral Sciences, Global Labor, Labor Markets, Public Policy |
| Date: | 2019–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:indrel:qt60t4b2jp&r=all |
| By: | Li Li (Zhejiang Sci-Tech University, Hangzhou City, China) |
| Abstract: | China’s market economy is based on state power guidance, so the administrative agencies may abuse their public power excluding or restricting market competitions that cause administrative monopoly. The special investigative measures should be taken in administrative monopoly investigation on account of its public power background. Mandatory interview with executive officers and mandatory reporting of the administrative agencies are the mainly special measures during those investigative procedures, while on-site investigations need to be avoided. Unlike ordinary measures, these two special measures are mandatory which means if the investigating authority or its chief executive rejected report or interview who will be admonished by his superior even punished by crime of dereliction. Recently the Chinese People’s Congress Standing Committee is studying how to revise the antitrust law, we suggest to add those special mandatory measures in the future Chinese Antitrust law. |
| Keywords: | investigation, measures, administrative monopoly, Antitrust Law |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:smo:cpaper:38ll&r=all |
| By: | Silviu-Ștefan Petriman (Master at †Dimitrie Cantemir†Christian University of Bucharest, Romania) |
| Abstract: | The article presents a few issues about the importance and necessity of a court-appointed lawyer in the criminal trial. In order to secure the right to defence, if the suspect or defendant has not appointed a lawyer to represent his/her interests, the judicial body has the obligation to take measures in order to appoint a public defender. Therefore, the protection of such rights must be material and objective, not only theoretical and illusory. But the appointment of a lawyer only is not enough to provide effective assistance. The public defender is appointed on written demand of court, justice of peace, preliminary chamber judge, criminal investigation or search body, bar council. The suspect or defendant is not allowed to elect a public defender. If appointed, the public defender has the obligation to provide legal assistance less when there is a conflict of interest between the lawyer or a suspect or defendant. This measure is determined both for consolidating the idea of fair, transparent justice and for securing a fair trial to the individuals criminally accused. |
| Keywords: | criminal accusation, fair trial, Lawyer, legal assistance, right to defence |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:smo:cpaper:55sp&r=all |
| By: | Nicoleta-Elena Heghes (“Dimitrie Cantemir†Christian University of Bucharest, Romania); Victoria Cristiean (“Dimitrie Cantemir†Christian University of Bucharest, Romania) |
| Abstract: | The offense as a fact forbidden by the rules of criminal law cannot exist without the unavoidable consequence of criminal liability, which, in its turn, would be without object without a criminal sanction, without a punishment. Neither punishment can be conceived without the existence of criminal liability and it is based only on the offense. Conditional liberation constitutes a measure of both criminal and social policy that is particularly important for achieving the purpose of punishment. Conditional liberation is conceived as an incentive for convicts who give evidence of correction by reducing the period of deprivation of liberty, being designed to accelerate the process of re-education and social reinsertion of the convict. |
| Keywords: | conditional liberation, convicts, measures, punishment, recidivists |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:smo:cpaper:33nh&r=all |
| By: | Raphael Auer |
| Abstract: | The spread of distributed ledger technology (DLT) in finance could help to improve the efficiency and quality of supervision. This paper makes the case for embedded supervision, ie a regulatory framework that provides for compliance in tokenised markets to be automatically monitored by reading the market's ledger, thus reducing the need for firms to actively collect, verify and deliver data. After sketching out a design for such schemes, the paper explores the conditions under which distributed ledger data might be used to monitor compliance. To this end, a decentralised market is modelled that replaces today's intermediary-based verification of legal data with blockchain-enabled data credibility based on economic consensus. The key results set out the conditions under which the market's economic consensus would be strong enough to guarantee that transactions are economically final, so that supervisors can trust the distributed ledger's data. The paper concludes with a discussion of the legislative and operational requirements that would promote low-cost supervision and a level playing field for small and large firms. |
| Keywords: | tokenisation, asset-backed tokens, stablecoins, cryptoassets, cryptocurrencies, regtech, suptech, regulation, supervision, Basel III, proportionality, blockchain, distributed ledger technology, digital currencies, proof-of-work, proof-of-stake, permissioned DLT, economic consensus, economic finality, fintech, compliance, auditing, accounting, privacy, digitalisation, finance, banking |
| JEL: | D40 D20 E42 E51 F31 G12 G18 G28 G32 G38 K22 L10 L50 M40 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:811&r=all |
| By: | Lucian A. Bebchuk; Alon Brav; Wei Jiang; Thomas Keusch |
| Abstract: | An important milestone often reached in the life of an activist engagement is entering into a “settlement” agreement between the activist and the target’s board. Using a comprehensive hand-collected data set, we analyze the drivers, nature, and consequences of such settlement agreements. Settlements are more likely when the activist has a credible threat to win board seats in a proxy fight and when incumbents’ reputation concerns are stronger. Consistent with incomplete contracting, face-saving benefits and private information considerations, settlements commonly do not contract directly on operational or leadership changes sought by the activist but rather on board composition changes. Settlements are accompanied by positive stock price reactions, and they are subsequently followed by changes of the type sought by activists, including CEO turnover, higher shareholder payouts, and improved operating performance. We find no evidence to support concerns that settlements enable activists to extract rents at the expense of other investors. Our analysis provides a look into the “black box” of activist engagements and contributes to understanding how activism brings about changes in target companies. |
| JEL: | G12 G23 G32 G35 G38 K22 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26171&r=all |
| By: | Yuqing Wang; Yan Ru Pei |
| Abstract: | We develop a general model for finding the optimal penal strategy based on the behavioral traits of the offenders. We focus on how the discount rate (level of time discounting) affects the criminal propensity on the individual level, and how the aggregation of these effects influences criminal activities on the population level. The effects are aggregated based on the distribution of discount rate among the population. We study this distribution empirically through a survey with 207 participants, and we show that it follows zero-inflated exponential distribution. We quantify the effectiveness of the penal strategy as its net utility for the population, and show how this quantity can be maximized. During the maximization procedure, we discover that the effectiveness of DWI deterrence depends critically on the amount of fine and prison condition. |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1909.06509&r=all |
| By: | Nadezdha Baryshnikova (School of Economics, University of Adelaide); Shannon. F. Davidson (Deloitte); Dennis Wesselbaum (University of Otago) |
| Abstract: | In this paper, we study the weather-crime relationship using a unique high-frequency, city-level data set for the United States with 2.4 mio. observations. In contrast to the existing literature using (often) daily data, we match hourly observations of weather and crime. Our results show that using daily observations overestimates the effect of temperature and underestimates the effect of precipitation on crime and leads to different conclusions about the significance of variables. We document evidence for a non-linear relationship between weather variables and crime. Again, results differ greatly between daily and hourly observations. |
| Keywords: | Crime, Non-linearity, Weather |
| JEL: | K42 Q54 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:adl:wpaper:2019-07&r=all |
| By: | Alexandru Peicea (“Alexandru Ioan Cuza†Police Academy, Bucharest, Romania) |
| Abstract: | : It is widely known that corruption worldwide generates harmful effects, affecting the economy of the whole planet over time, the good development of social relations and the trust of citizens in their own state, governors and civil servants. Taking bribes is one of the most serious offenses under the Romanian Penal Code, which is also the result of the punishment stipulated by the law to be applied to the persons committing such offenses. In order to prevent and combat this harmful phenomenon, the Romanian legislature regulated in a special law higher punishments for committing the bribery offense for persons occupying a certain position in the state or having a certain quality, circumstance which increases the degree of social danger created for social relations protected by the rule of criminalization. This paper aims to deal with the constitutive content of the bribery offense in Romania and to present relevant judicial practice issues in this field. |
| Keywords: | bribery, corruption, jurisprudence, punishment |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:smo:cpaper:56ap&r=all |
| By: | Ovidiu Andrei Hamburda (University “Stefan cel Mare,†Suceava, Romania) |
| Abstract: | The studies and research show that in almost all countries of the world, violent crimes are on the rise. Against this background, the criminal prosecution authorities - the police and the prosecutor's office, as institutions of the rule of law, improve investigative procedures, using the scientific means and methods necessary to prove guilty and to prosecute the perpetrators. Human-environment interaction gives rise to the most different traces that can be useful in determining the time or succession of occurrence events, as well as determining human behavior in this process. Any human activity deployed in time and space, through physical movements, leaves in that place different changes from the previous situation, which is preserved for an appreciable period of time. Depending on all the elements presented, you can reconstitute the dynamic picture of the deed. The traces come to occupy the central place in science of forensics, so that at present no one can imagine a crime committed by physical movements of the person, without the proper traces being made at the place where it was committed. |
| Keywords: | crime, forensics, investigation, movement, police, traces |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:smo:cpaper:31ho&r=all |
| By: | Tiberiu Viorel Popescu (“Academician David Davidescu†Center for Studies and Research in Agro-Forestry Biodiversity) |
| Abstract: | No common reasons can be identified for the fundaments of the right to punish, the right not to punish or the right to decriminalize, although, at first sight, the three rights seem to have similar origins. As the right to impose a punishment derives from the law, so a law must also reflect the right to defer a punishment, to waive its application, or to decriminalize a certain conduct. A brief analysis of the right not to punish can also reflect the reason, the conditions, and, possibly, its limits. These can often be arbitrarily interpreted in practice due to reasons that must be identified. An arbitrary exercise of the right to amnesty or to grace, or poor implementation in the Romanian-German law of restorative justice, may have adverse consequences in terms of the safety of social values. To prevent arbitrariness and to ensure social security, the functions of the public authorities play an essential role. At present, only the legislative function generates the law, and the judicial function ensures that the law is implemented or it may order a punishment to be enforced if the law is violated. |
| Keywords: | Criminology, Criminal Law, Law, right, punishment |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:smo:cpaper:35pt&r=all |
| By: | Emima Alistar ("Dimitrie Cantemir" Christian University, Bucharest, Romania) |
| Abstract: | Most specialists agree that between law and morals there is a close connection, because the moral principles of good, justice and truth are appliances and promoted by the rule of law, even if the right and the moral retains its identity. However, over time, their views on the problem of knowing what is the relationship between law and morals were contradictory. Between law and morals, I consider that there is only an apparent contradiction, because the two concepts are complementary. The right would seem a trap for lawyers in that could make them to resist the temptation to not see beyond the letter of the law, given that the need for law enforcement and understanding of its spirit. A true man of law must not only know the law but also to look beyond it and realize that the main attraction of the moral law. |
| Keywords: | : law, moral, philosophy, religion, rationality |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:smo:cpaper:53eh&r=all |