nep-law New Economics Papers
on Law and Economics
Issue of 2019‒11‒18
seven papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Organised Crime and Technology By Mustafa Caglayan; Alessandro Flamini; Babak Jahanshahi
  2. Delegation in a multi-tier court system: are remands in the U.S. federal courts driven by moral hazard? By Sarel, Roee; Demirtas, Melanie
  3. Big Tech Acquisitions and the Potential Competition Doctrine: The Case of Facebook By Mark Glick; Catherine Ruetschlin
  4. Recovery of Residential Premises through Adoption of Alternative Dispute Resolution (ADR) Techniques: Experience from Lagos, Nigeria By D. T. Olapade; B. Olapade; B. T. Aluko
  5. Do sugar taxes affect the right consumers ? By SERSE Valerio,
  6. Greater US Gun Ownership, Lethality and Murder Rates: Analysis and Policy Proposals By Schiff, Maurice
  7. Employment Protection Legislation and Economic Resilience: Protect and Survive? By Nadav Ben Zeev; Tomer Ifergane

  1. By: Mustafa Caglayan (Heriot Watt University, School of Social Sciences, Edinburgh, EH144AS, UK); Alessandro Flamini (University of Pavia); Babak Jahanshahi (University of Edinburgh)
    Abstract: We show that mafias harm technological development. We provide evidence that forced resettlement of bosses promoted mafias rooting in northern Italy. With forced resettlement as exogenous source of variation, we unveil that mafias cause a reduction in technology levels. Moving to a technology generating flow -innovation- we demonstrate that mafias stifle innovation. We argue that without mafia, Nature selects agents for their innovation capacity. Instead, with mafia, agents face an alternative strategy: relate with mafia; this strategy, infringing property rights and competition, hinders innovation. Using evolutionary dynamics, we show that while mafias decrease innovation, proper sanctions/indemnities can address the problem.
    Keywords: Organised crime, evolutionary game theory, innovation, technology
    JEL: O17 O30 C73 R11 K14 K42
    Date: 2019–11
  2. By: Sarel, Roee; Demirtas, Melanie
    Abstract: We analyze the countervailing incentives that mid-level appellate judges face when deciding whether to remand a case back to the lower court. Although appellate courts' ability to remand cases can mitigate moral hazard problems, by restraining trial court judges, it may sometimes instead exacerbate such problems - by enabling the midlevel appellate judges to circumvent the top-level court's preferences through delegation. Our empirical assessment reveals a 'Subsequent Remand Effect': cases that are remanded by the Supreme Court to the appellate court are far more likely to be subsequently remanded again to the district court compared to other cases. We check whether this effect originates from legitimate case-relevant reasons or from moral hazard by exploiting variations in ideological distances between court levels and through a textual analysis. We find that the size of the effect varies with the composition of ideologies, which seems consistent with moral hazard.
    Keywords: remands,federal courts,appeals,judicial ideology,ideological distance
    JEL: K41 D02 P48
    Date: 2019
  3. By: Mark Glick (University of Utah); Catherine Ruetschlin (University of Utah)
    Abstract: The Big Tech companies, including Google, Facebook, Amazon, Microsoft and Apple, have individually and collectively engaged in an unprecedented number of acquisitions. When a dominant firm purchases a start-up that could be a future entrant and thereby increase competitive rivalry, it raises a potential competition issue. Unfortunately, the antitrust law of potential competition mergers is ill-equipped to address tech mergers. We contend that the Chicago School`s assumptions and policy prescriptions hobbled antitrust law and policy on potential competition mergers. We illustrate this problem with the example of Facebook. Facebook has engaged in 90 completed acquisitions in its short history (documented in the Appendix to this paper). Many antitrust commentators have focused on the Instagram and WhatsApp acquisitions as cases of mergers that have reduced potential competition. We show the impotence of the potential competition doctrine applied to these two acquisitions. We suggest that the remedy for Chicago School damage to the potential competition doctrine is a return to an empirically tractable structural approach to potential competition mergers.
    Keywords: Antitrust Law, Big Tech Companies, Digital Markets, Mergers, Potential Competition Big Tech Acquisitions and the Potential Competition Doctrine: The Case of Facebook
    JEL: K21 L40 L86
    Date: 2019–10
  4. By: D. T. Olapade; B. Olapade; B. T. Aluko
    Abstract: One of the remedies of breach of covenant(s) in landlord tenancy relationship is recovery of premises. This is apart from reasons of personal use and/or the need for comprehensive renovation/adaptation/conversion. Whereas it is easy as said or as may be engrossed in the Agreement to recover possession in case of breach of covenants(s), it is not so easy in practical term. The usual approach of achieving this in practice is through recourse to litigation which is expensive, time consuming and also result into loss of income to the property. This paper aim at exploring the use of ADR techniques as a legitimate means of ejection of recalcitrant tenant in property without the use of “power of threat”. This is with a view of providing information that will improve property investment and management. The paper adopt a case study approach using five selected case studies where ADR approach were employed to recover premises. The experience from the case studies shows that the use of ADR in premises recovery is effective but also has its challenges. In the five case studies, consent judgment, mediation, arbitration and negotiation that often includes persuasion and inducement were employed to recover premises in less than three months compared to an average of eighteen months using litigation. Also, the cost in all the cases are lower where they exist at all than when litigation that ends with FIFE and the incidental expenses thereof are employed. The paper provides challenges and useful information to practitioners on the use of effective alternative approach to recover premises from recalcitrant tenants.
    Keywords: Alternative Dispute Resolution (ADR); breach of covenant; ejection of tenant; Property; tenancy
    JEL: R3
    Date: 2018–09–01
  5. By: SERSE Valerio, (Université catholique de Louvain, CORE, Belgium)
    Abstract: Sugar taxes are often considered as a possible tool to tackle excessive sugar consumption. This paper estimates a dynamic multinomial Logit model of cola demand on a novel supermarket scanner dataset in order to study preference heterogeneity and state dependence in product choice. The model estimates allow evaluating the effectiveness of taxation in reducing demand for sugary colas across different consumer types. The results show that a sugar tax would be less effective among the targeted population of heavy sugar consumers. This policy, however, would be more effective among low-income households. Tax policy simulations show that a specific tax on sugar should be preferred to an ad-valorem tax on sugary colas on both corrective and equity grounds. This is because ad-valorem taxes can lead low-income households and heavy sugar consumers to substitute from expensive to cheaper sugary brands. Lastly, because households exhibit state dependence in cola choice, sugar taxes would be more effective in reducing sugar consumption in the long-run.
    Keywords: heterogeneity in preferences, state dependence, sugar taxes, discrete choice models
    JEL: D12 H31 I18 Q18
    Date: 2019–09–01
  6. By: Schiff, Maurice
    Abstract: This paper examines the US gun-related murder (GM) rate and places it in an international perspective. The data show that the US GM rate is 27 times the average rate for 22 other developed countries (ODC). Its gun ownership rate is 5.4 times that of ODC and the murder rate per gun is 5 times that of ODC. Thus, as is done in the paper, an effective reduction of the US GM rate requires an analysis of both the high gun ownership rate and the high murder rate per gun. The paper examines about fifteen gun-policy reforms – including their impact, cost, structure for maximum benefit – and other reforms affecting the GM rate. It also looks at the GM impact of immigration and of programs that provide alternative life pursuits for young men at risk. It further presents a number of policy implications and some new proposals designed to reduce the GM rate. Four appendices provide 1) results from two recent opinion polls on gun-policy reforms, 2) a detailed analysis of the relationship between gun ownership and the GM rate, 3) calculations of gun buyback costs, and 4) a correction of existing results on the Brady Bill’s impact on gun ownership.
    Keywords: US vs. Other developed countries,gun-related murder rate,gun-ownership rate,murder rate per gun,gun policy reforms,new policy proposals
    JEL: F22 H20 K14
    Date: 2019
  7. By: Nadav Ben Zeev (BGU); Tomer Ifergane (BGU)
    Keywords: Employment protection, Factor Misallocation, Total Factor Productivity, Credit Supply Shocks, Economic resilience, Business cycles, Local projections
    JEL: E02 E24 E32 E60 J08
    Date: 2019

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