nep-law New Economics Papers
on Law and Economics
Issue of 2020‒01‒13
eighteen papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. The Impact of Experience on How we Perceive the Rule of Law By Benito Arruñada
  2. Unlawfulness and countertypes as a circumstances preventing its attribution within the structure of crime ? based on the example of Polish criminal law By Micha? Grudecki
  3. Vicarious and Contingent Consequences of Adolescent Police Exposure By Kristin Turney
  4. Traditional law in times of the nation state: Why is it so prevalent? By Gutmann, Jerg; Voigt, Stefan
  5. Organized crime and its impact on European security By Dominika Karwoth-Zieli?ska
  6. Roe v. Wade and the Appointment of Justice Kavanaugh to the Supreme Court By Julia Fodor
  7. Immigration and crime: the role of self-selection and institutions By Fabio Mariani; Marion Mercier
  8. Judicial Favoritism of Politicians: Evidence from Small Claims Court By Andre Assumpcao; Julio Trecenti
  9. The Role of Legal Presumptions in Patent Litigation By Alice Guerra;
  10. Perception vs. Experience: Explaining Differences in Corruption Measures Using Microdata By Gutmann, Jerg; Padovano, Fabio; Voigt, Stefan
  11. Breaking the chain: How arrests reduce the probability of near repeat crimes By Wheeler, Andrew Palmer; Riddell, Jordan R.; Haberman, Cory P.
  12. Horizontal mergers on platform markets: cost savings v. cross-group network effects? By Baranes, Edmond; Cortade, Thomas; Cosnita-Langlais, Andreea
  13. Evaluating Employment Arbitration: A Call for Better Empirical Research By Estreicher, Samuel; Heise, Michael; Sherwyn, David; Library, Cornell
  14. Deception Detection in Online Media By Zaynutdinova, Alsu; Pisarevskaya, Dina; Zubov, Maxim; Makarov, Ilya
  15. Analysis of Law Principle of the Agreement Substance between State Coorporation with Farmers By Halim, Paisal
  16. Female labour supply in Italy: the role of parental leave and child care policies By Francesca Carta
  17. Parenting in an Era of Proactive Policing By Kristin Turney
  18. FAIRNESS MEETS MACHINE LEARNING: SEARCHING FOR A BETTER BALANCE By Ekaterina Semenova; Ekaterina Perevoshchikova; Alexey Ivanov; Mikhail Erofeev

  1. By: Benito Arruñada
    Abstract: Experience is a major source of knowledge. Could institutions be improved by eliciting the additional knowledge held by experienced individuals? I show here that in several areas of the law experienced individuals are more critical of institutional quality than inexperienced individuals. Moreover, performance indexes built with experienced subsamples substantially alter country rankings. Assuming no unmeasured confounders, more knowledge arguably leads experienced individuals to revise the more benign view held by the general population, composed mostly of inexperienced individuals. Moreover, experience is a stronger driver than alternative sources of knowledge, including education, which might therefore be reinforcing milder and, arguably, incorrect assessments of institutional quality. After observing how this “experience effect” varies systematically across countries, I conclude by proposing that evaluations of institutional quality pay greater attention to experienced individuals and cautioning against basing inferences on assessments made by the general population.
    Keywords: institutions, experience, knowledge, perception, rule of law, measurement
    JEL: D02 D71 D83 K12 K14 K31 K32 K41 K42
    Date: 2019–12
  2. By: Micha? Grudecki (University of Silesia in Katowice)
    Abstract: In the article, the author attempts to collectively characterize one of the two types of circumstances precluding attribution of unlawfulness to the perpetrator's behavior, thus exempting him from criminal liability. The author presents circumstances (referred to as countertypes) which, by way of exception, exempt certain behaviors from criminal law prohibition. In the system of Polish criminal law, they correspond to justifications made as defenses. Despite the existence of different cultures and legal systems, both in specific parts of the world and in specific countries, relations in the reality are the same. A crime committed by a person in all countries of the world will be the same undesirable act occurring in the real world, regardless of how it is perceived by legal dogmatics. In all places, the structure of crime is based on similar elements. Therefore, an analysis based on the Polish legal order and conclusions derived from the normative structures and the criminal model adopted in our legal system will be valuable for all lawyers and representatives of the judiciary, regardless of the country in which they live.These considerations are based on the model of crime adopted by the Author, derived from the concept of conjugate norms, widely accepted among Polish criminal lawyers. At the beginning, the author discusses the meaning of such terms as ?legal provision,? ?conjugate norm,? ?sanctioned norm? and ?sanctioning norm,? which make basic concepts in Polish criminal law. Then he moves on to the nature of criminal unlawfulness and shows the sources of conjugate norms. He discusses the related doubts and tries to solve them.In the second part of the article, the author outlines problems connected with the legal nature of circumstances referred to as countertypes. He discusses five possible ways of accounting for their legal nature, rejects the incorrect ones and adopts his own position. The most important issues relating to the essence of countertypes are also highlighted. For example, the author argues that a subjective element is a necessary part of each countertype.
    Keywords: criminal law, model of crime, justifications, defenses
    JEL: K14 K40 K49
    Date: 2019–10
  3. By: Kristin Turney (University of California, Irvine)
    Abstract: Police stops are a pervasive form of criminal justice contact among adolescents that have adverse repercussions for mental health. Yet the mental health consequences of adolescent police stops likely proliferate, vicariously, to parents of adolescents exposed to this form of criminal justice contact. In this article, I conceptualize adolescent police stops as a stressor, drawing on the stress process perspective to examine how and under what conditions adolescent police stops damage the mental health of adolescents’ mothers. The results, based on data from the Fragile Families and Child Wellbeing Study, suggest three conclusions. First, the mental health consequences of adolescent police stops proliferate vicariously, increasing depression and anxiety among adolescents’ mothers. This relationship persists across a series of modeling strategies that progressively adjust for observed confounders, including adolescent characteristics including delinquency, substance use, and other forms of criminal justice contact. Second, the relationship between adolescent police stops and mothers’ mental health is contingent, especially concentrated among mothers with prior exposure to the criminal justice system (either via themselves or their adolescents’ fathers). Third, mothers’ emotional support buffers the relationship between adolescent police stops and mothers’ mental health. Taken together, this research highlights the role of police exposure as a stressor with both vicarious and contingent consequences and, accordingly, documents the expansive and proliferating repercussions of police contact.
    JEL: K42
    Date: 2019–10
  4. By: Gutmann, Jerg; Voigt, Stefan
    Abstract: In many modern nation states, both rich and poor, traditional law to this day plays an important role. Given the almost universal prevalence of traditional law, it is surprising how little we know about it. This is the first study that tries to take stock of traditional law from a cross-country perspective. We are also interested in the compatibility of traditional law with state-enforced law and, in particular, with the basic traits of the rule of law. Based on a sample of up to 134 countries, we find that no "typical" traditional law exists, but that traditional law varies in many dimensions such as its timely enforcement, its impartiality, and its protection of basic human rights. Societies that rely extensively on traditional law score low regarding both the rule of law and per capita income. Historical and geographical factors are important predictors of the contemporaneous reliance on traditional law. State antiquity, for example, reduces the prevalence of traditional law, as does a high share of descendants from European populations.
    Keywords: Traditional law,Customary Law,Informal Law,Personal Law,Indigenous Law,Religious Law,Legal Pluralism,Rule of Law,Hybrid Law,Internal Institutions
    JEL: H11 K10 K36 O17 O57
    Date: 2019
  5. By: Dominika Karwoth-Zieli?ska (Cracow University of Economics)
    Abstract: Security and defence of its citizens are of the high importance of each state. Especially organised crime poses a major threat to the internal security and the fight against organized crime poses a serious challenge for the services of almost all countries. Organised crime syndicates are behind many serious crimes whose impact is felt on a global level. Criminal activities are no longer limited to one continent only -numerous organised crime groups are active in the EU, often with cross-border reach and multi-ethnic composition. These groups - with roots in Asian, American or African and also European regions- often attempt to influence the European law enforcement agencies, the courts, the media, public officials or politicians at various levels to ensure they're implementing their purposes. Organised crime finds itself particularly quickly in the environment and the spread of new technologies. The main areas of action of these criminal groups are production, smuggling, and drug trafficking, trafficking of human beings, human smuggling, arms trafficking, smuggling of excise goods, gambling, extortion racketeering, etc. Especially in nowadays Europe we are dealing with enormous threats to the European standard of civilizations which raises the question facing the future of Europe itself. Different views on the cultural specificities and European historical roots could cause perceived and real threats to identity. The lack of unanimity and different opinion about the concept of the nation and the sphere of competence of Member States of the EU between governments and politicians contribute to facilitating the operation of organised crime. In many countries the questions about values such as the centrality of the human being, freedom, respect for human rights, justice and solidarity and about the relationship between immigrants and host societies, even the confusion over immigration and crime arises. Any crisis and abolishing of western civilization's standards will let to chaos, threats to European stability and the spread of criminal activity.
    Keywords: European security, organized crime, trafficking of human beings, illegal immigration, European identity, European stability
    JEL: F50
    Date: 2019–10
  6. By: Julia Fodor (Károli Gáspár University)
    Abstract: While Roe v. Wade (1973) is one of the landmark court cases of the 20th century, Norma Nelson McCorvey, the woman behind the case who has been catapulted to world ?fame? as Jane Roe, the plaintiff of Roe v. Wade, is much less well-known. Norma, a victim of abuse throughout her childhood, was struggling with addictions of alcohol and drugs. By age 21 she had given birth twice, and was pregnant for the third time. She was desperate to have an abortion, so she lied about having been raped in the hope that it would secure her the right to an abortion in the State of Texas where otherwise she would have been denied that choice. The Supreme Court?s verdict came too late for Jane Roe. She never got that abortion or any abortion for that matter in her lifetime, yet her name is inseparably coupled with women?s right to abortion in America. The US Supreme Court by a 7:2 ruling decided that state laws that ban abortion are unconstitutional. Could that decision be actually overturned if the number of conservative justices outnumbered that of the liberal justices?In my paper I intend to discuss how Jane Roe?s change of views on abortion and her request for a retrial of her case in 2004 by the US Supreme Court foreshadowed some of the most significant changes in the pro-life/pro-choice landscape. I will also touch upon the dynamics behind the fact that 45 years after the legalization of abortion in America Roe v. Wade was the most frequently mentioned case during the Senate Judiciary Committee?s Brett Kavanaugh hearings in 2018. Justice Kennedy, whose place on the Supreme Court was filled by Brett Kavanaugh, had been a swing vote on social issues, mostly voting in favor of abortion rights. President Trump, on the other hand, has ?long vowed to appoint justices who would reverse Roe and allow the states to determine whether abortion should be legal?. Throughout the hearings, Kavanaugh would consistently decline to confirm or deny if he would be willing to reverse Roe v. Wade.
    Keywords: Abortion rightsWomen's rightsSupreme CourtRoe v. WadeAppointment of Kavanaugh
    JEL: D72 D74
    Date: 2019–10
  7. By: Fabio Mariani (IRES/LIDAM, UCLouvain; IZA, Bonn); Marion Mercier (CNRS, Universite Paris-Dauphine PSL, LEDa-DIAL, Paris; IZA, Bonn)
    Abstract: Contrarily to popular perception, empirical evidence suggests that immigrants do not commit more crimes than natives, in spite of having lower legitimate earning opportunities. To make sense of this, we propose a novel theoretical framework based on a predator/prey model of crime, where endogenous migration decisions and career choices (between licit and illicit activities) are jointly determined. In this setting, we show that the involvement of migrants in crime crucially depends on self-selection into migration, as well as productivity and institutional quality in the host economy. We also nd that stricter immigration policies may induce an adverse selection of migrants, and eventually attract more foreign-born criminals. Finally, a dynamic extension of our model can account for the higher crime rates of second-generation immigrants and, based on the interplay between crime and institutions, highlights the critical role of immigration and assimilation for the long-run evolution of crime and the rule-of-law in host countries.
    Keywords: Migration; Crime.
    JEL: F22 K42 O17
    Date: 2019–12
  8. By: Andre Assumpcao; Julio Trecenti
    Abstract: Multiple studies have documented racial, gender, political ideology, or ethnical biases in comparative judicial systems. Supplementing this literature, we investigate whether judges rule cases differently when one of the litigants is a politician. We suggest a theory of power collusion, according to which judges might use rulings to buy cooperation or threaten members of the other branches of government. We test this theory using a sample of small claims cases in the state of S\~ao Paulo, Brazil, where no collusion should exist. The results show a negative bias of 3.7 percentage points against litigant politicians, indicating that judges punish, rather than favor, politicians in court. This punishment in low-salience cases serves as a warning sign for politicians not to cross the judiciary when exercising checks and balances, suggesting yet another barrier to judicial independence in development settings.
    Date: 2020–01
  9. By: Alice Guerra (University of Bologna - Department of Economics); (Oslo Business School, Oslo Metropolitan University; School of Business and Economics, UiT the Arctic University of Norway)
    Abstract: We formally analyze the effects of legal presumptions in patent litigation. We set up a novel contest model to study litigation outcomes, judgement errors, and resource dissipation under three alternative presumption criteria: a presumption that the patent is valid; a presumption that the patent is invalid; no presumption regarding validity. Our findings reveal that any legal presumption – either in favor of validity or invalidity – is preferable than a no-presumption criterion when there is high uncertainty about the patent’s objective merit.
    Keywords: Patent, Litigation, Presumptions, Persuasion
    JEL: K41 C72 D74
    Date: 2019–10–29
  10. By: Gutmann, Jerg; Padovano, Fabio; Voigt, Stefan
    Abstract: Understanding corruption is at the heart of treating the dysfunctionality of many countries' public sectors. Yet, most corruption research suffers from one common problem: There is no "objective" measure of public-sector corruption for a cross-section of countries. Most studies on the determinants or the effects of corruption rely on indicators of corruption perception. In recent years, a second type of indicator reflecting stated experiences with bribery has become available. If corruption perception is primarily informed by experience with corruption, these two types of indicators should be very highly correlated. In fact, they are not. This paper deals with the divergence between these two types of corruption indicators. We examine the variation in individual corruption perception that cannot be explained by individual corruption experience alone. We find that both respondent characteristics and country characteristics affect corruption perception beyond what can be explained by individuals' first-hand experience of corruption. Some of these biases may force us to reevaluate results of corruption research that is based on perception data, as well as the anti-corruption policies designed after these results.
    Keywords: Corruption Experience,Corruption Measurement,Corruption Perception,Governance Indicators,Institutional Quality,Subjective Indicators
    JEL: D73 C8 K42 O17
    Date: 2019
  11. By: Wheeler, Andrew Palmer (University of Texas at Dallas); Riddell, Jordan R.; Haberman, Cory P.
    Abstract: Objectives: Near repeat patterns have been identified for a host of different crimes, but effective strategies to reduce near repeats have had more variable results. This study identifies near repeat crime patterns in Dallas, Texas and examines the effects of an arrest on reducing the probability of future crime. Method: Using open source crime data from the Dallas Police Department from July 2014 through June 2018, we identified near repeat patterns for shootings, interpersonal robberies, residential burglaries, and thefts from motor vehicles. Logistic regression models were used to test the effect of an arrest on reducing near repeat crimes; controls for geographic, demographic, and temporal factors were included in each model. Results: Near repeat calculations suggest violent crime clustered closely in time and space, with property crime dispersed over larger spatial and temporal dimensions. Across all four crime types, findings suggest arrests resulted in 20% to 40% reductions in a near repeat follow up crime. Conclusions: In line with past research on shootings, arrests reduced the likelihood of subsequent crimes. This suggests policing strategies to increase arrests may be a fruitful way to reduce near repeat crime patterns. Code to replicate the analysis can be found at: ve/AABgFB8zwGHG6xjExvaD01EGa?dl=0.
    Date: 2019–07–25
  12. By: Baranes, Edmond; Cortade, Thomas; Cosnita-Langlais, Andreea
    Abstract: We study the impact of cost savings on the outcome of horizontal mergers between two-sided platforms. We consider four symmetrically differentiated platforms located equidistantly on the unit circle and competing in membership fees. Users on both sides single-home, and we allow for both positive and negative cross-group externalities. We find that the impact of merger cost savings on prices is generally not monotonic, and that synergies are necessary for horizontal platform mergers to be Pareto-improving. Furthermore, the merger may benefit users on one side while harming users on the opposite side, which raises some interesting questions for the enforcement of merger control on two-sided markets.
    Keywords: horizontal merger, two-sided markets, cost savings, indirect network effects, merger control
    JEL: D43 K21 L41
    Date: 2019–05
  13. By: Estreicher, Samuel; Heise, Michael; Sherwyn, David; Library, Cornell
    Abstract: 70 Rutg. L. Rev. 101 (2018). Since at least 1991, issues surrounding mandatory arbitration of employment and other disputes have intrigued, perplexed, angered, gratified, and confounded academics, politicians, lawyers, and others.As with many legal issues, the first wave of scholarly work centered on the law. As the law has pretty much settled, academics have turned to empirical work, focusing on how employment arbitration works, and how it compares to employment litigation. In part due to pressure from California legislation, the American Arbitration Association (“AAA”), the nation’s leading provider of arbitration services, opened access to its data base. Owing to inevitable data limitations, most analyses have focused on outcomes—comparisons between litigation verdicts/judgments and arbitration awards. This work suffers from a serious selection bias, for there is no reason to believe that cases that result in arbitration awards are otherwise comparable to cases that have survived the several serious gauntlets that lie in the path of a case before it goes to trial. Because mediation is often an initial step in most employment arbitration system and arbitrators are not likely to consider dispositive motions, weaker cases are likely to get to a hearing in arbitration than in court. We wholeheartedly endorse good empirical work as an important means of understanding and addressing controversial policy issues, especially in the arbitration arena, and tried our hand at such work a decade ago. We have written this paper to encourage research that goes beyond evaluating awards within the AAA data set and to engage in a longitudinal study of the history of claims—from when they are initially filed with administrative agencies or arbitration organizations to when they are settled or adjudicated.
    Date: 2019–08–01
  14. By: Zaynutdinova, Alsu; Pisarevskaya, Dina; Zubov, Maxim; Makarov, Ilya
    Abstract: Russian Federation and European Union are fighting againstfake news together with other countries in various topics. The disinform-ation affected British referendum of existing EU, the US election andCatalonia’s referendum are broadly studied. A need for automated fact-checking increases, European Commission’s Action Plan 8 is an evidence.In this work, we develop a model for detecting disinformation in Russianlanguage in online media. We use reliable and unreliable sources to com-pare named entities and verbs extracted using DeepPavlov library. Ourmethod shows four time greater recall compared to chosen baseline.
    Keywords: Fake news; Information extraction; Fact checking; Deep-Pavlov; Named Entities
    JEL: C6 K42 M38 Z18
    Date: 2019–09–23
  15. By: Halim, Paisal
    Abstract: The research aims to describe the substance of the agreement between enterprises with farmers in South Sulawesi. This is the qualitative research and focusing of applicable law principle in agreement. The aggreement between PTPN XIV (one of state own enterprises in Indonesia) and the farmers was the research subject. This research obtained 20 farmers and employees of PTPN XIV as informant. The research concluded the partnership pattern between the company and the farmers was the empowermentprocess of the community around the business unit.The agreement elaborated of rights and obligations of company and farmers. The legal principle contained in the agreement is principle of freedom, pact-sunt servanda principle, principle of fariness, good faith principle and principle of trust.
    Date: 2018–05–25
  16. By: Francesca Carta (Bank of Italy)
    Abstract: Parental leave and child care policies are the two main family-friendly programs adopted in developed countries intended to provide parents with a satisfactory work-family balance. An important goal is to foster the labour supply of mothers, usually the primary caregivers in the family. In Italy female and maternal labour supply are historically low, and the inadequacy of the parental leave and child care systems is often called into question. Based on the features of existing public policies in this area and on the international empirical evidence, we conclude that there is scope to foster quality child care support to further improve female labour supply in Italy. Moreover, increasing the length of paternity leave may help to re-balance the domestic workload among genders and overcome stereotypes.
    Keywords: Family Law, Child care, Gender, Female Labour Supply
    JEL: H40 J13 J16 J22 K36
    Date: 2019–12
  17. By: Kristin Turney (University of California, Irvine)
    Abstract: Research increasingly documents the adverse consequences of police contact among adolescents, with police contact facilitating physical and mental health impairments, legal cynicism, and delinquency. The life course perspective suggests the repercussions of adolescent police contact likely extend beyond the adolescent to the broader family unit, but little research investigates this proliferation. The author used data from the Fragile Families and Child Wellbeing Study, a longitudinal survey of children who became adolescents during an era of proactive policing, to examine the relationship between adolescent police contact and four aspects of family life: mothers’ parenting stress, mothers’ monitoring, mothers’ discipline, and the mother-adolescent relationship. Adolescent police contact, especially invasive police contact, is associated with increased parenting stress, increased discipline, and decreased engagement, net of adolescent and family characteristics that increase the risk of police contact. There is also suggestive evidence that adolescent police contact is more consequential when mothers themselves experienced recent police contact. Taken together, these findings suggest the repercussions of police contact extend beyond the individual and proliferate to restructure aspects of family relationships.
    JEL: K42 J13
    Date: 2019–11
  18. By: Ekaterina Semenova (National Research University Higher School of Economics); Ekaterina Perevoshchikova (National Research University Higher School of Economics); Alexey Ivanov (National Research University Higher School of Economics); Mikhail Erofeev (Lomonosov Moscow State University)
    Abstract: Machine learning (ML) affects nearly every aspect of our lives, including the weightiest ones such as criminal justice. As it becomes more widespread, however, it raises the question of how we can integrate fairness into ML algorithms to ensure that all citizens receive equal treatment and to avoid imperiling society’s democratic values. In this paper we study various formal definitions of fairness that can be embedded into ML algorithms and show that the root cause of most debates about AI fairness is society’s lack of a consistent understanding of fairness generally. We conclude that AI regulations stipulating an abstract fairness principle are ineffective societally. Capitalizing on extensive related work in computer science and the humanities, we present an approach that can help ML developers choose a formal definition of fairness suitable for a particular country and application domain. Abstract rules from the human world fail in the ML world and ML developers will never be free from criticism if the status quo remains. We argue that the law should shift from an abstract definition of fairness to a formal legal definition. Legislators and society as a whole should tackle the challenge of defining fairness, but since no definition perfectly matches the human sense of fairness, legislators must publicly acknowledge the drawbacks of the chosen definition and assert that the benefits outweigh them. Doing so creates transparent standards of fairness to ensure that technology serves the values and best interests of society
    Keywords: Artificial Intelligence; Bias; Fairness; Machine Learning; Regulation; Values; Antidiscrimination Law;
    JEL: K19
    Date: 2019

This nep-law issue is ©2020 by Eve-Angeline Lambert. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.