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on Law and Economics |
| By: | Sophia du Plessis (Department of Economics, Stellenbosch University); Bjoern Hartig (Royal Holloway, University of London); Ada Jansen (Department of Economics); Krige Siebrits (Department of Economics, Stellenbosch University) |
| Abstract: | The effective enforcement of traffic laws is critical for improved road safety outcomes. Decisions to follow traffic rules and pay fines are influenced by formal institutions (e.g. laws, court summons, and fines) as well as informal institutions (e.g. norms and aspects of culture). Formal and informal institutions create incentives that should be designed to steer individuals’ behaviour towards desired outcomes. Unfortunately, there is no reason to believe that the institutions to deal with traffic violations in South Africa currently create effective incentives. This paper discusses the findings of a controlled laboratory experiment that tested the efficacy of different financial incentives which may influence the payment of traffic fines. An early payment discount similar to the incentive under AARTO was compared to a late payment penalty (used in other countries, for example, some states in the USA), and to the absence of any incentives. Furthermore, we examined whether the willingness to settle fines is sensitive to the likelihood of detection by the authorities. We found that introducing financial incentives significantly increases voluntary payment of fines, irrespective of whether immediate payment is encouraged with a discount or late payment is discouraged with a surcharge. In addition, subjects are more sensitive to the likelihood of detection when financial incentives are present. |
| Keywords: | Traffic laws, law enforcement, South Africa, laboratory experiments, human behaviour |
| JEL: | B52 C91 D02 D04 K42 L91 L98 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers332&r=all |
| By: | Federica Nieri; Luciano Ciravegna; Ruth V. Aguilera; Elisa Giuliani |
| Abstract: | We study emerging market multinational enterprises' (EMNEs) involvement in corporate wrongdoing, focusing on multiple explanatory antecedents identified by the literature, yet not explored from a configurational perspective. We use fuzzy set qualitative comparative analysis (fsQCA) to examine firms from eight emerging markets between 2003 and 2012. We uncover three equifinal configurations of corporate wrongdoing, all involving highly internationalized EMNEs: (1) the struggling state owned EMNE – a large, old, underperforming SOE, operating in home and host markets with high quality institutions; (2) the striving EMNE - a young, small, high performing EMNE, operating in home and host markets with low quality institutions; (3) and the careless state owned EMNE - an old, large, high performing SOE, operating in home and host markets with low quality institutions. Our findings enrich existing and often conflicting theoretical explanations through a configurational perspective, shedding light on the causal conjunctions between EMNEs' internationalization, home and host markets institutions, and the other antecedents of wrongdoing identified by the literature. We contribute to the EMNEs literature by studying the antecedents of involvement in wrongdoing, which can potentially threaten their efforts to overcome the liability of origin and acquire legitimacy with international stakeholders. |
| Keywords: | Corporate wrongdoing; emerging market multinationals (EMNEs); fuzzy sets qualitative comparative analysis (fsQCA); institutions; internationalization; state owned enterprises (SOEs) |
| JEL: | F23 M14 K40 |
| Date: | 2019–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:pie:dsedps:2019/255&r=all |
| By: | Chin, Jason (University of Queensland) |
| Abstract: | Proprietary estoppel provides one of equity’s most powerful remedies. Estoppel is an equitable doctrine which arises when one party acts on the reliance of the promise of another. The promise and corresponding reliance creates a quasi-contract with reliance acting as an alternative to the consideration usually required in contracts. Proprietary estoppel is distinct from other equitable estoppels in that a proprietary estoppel can act as a ‘sword’ and form the basis of a cause of action. If all of the parts of proprietary estoppel are made out, a court can modify or create property rights to satisfy the equity. With regard to the Canadian experience, the Court of Appeal for Ontario recently noted that proprietary estoppel has received “somewhat uneven treatment in Canada.” It is within this context that the Court of Appeal for British Columbia split on the proper scope for the Supreme Court of Canada. In Cowper-Smith v Morgan, the Supreme Court of Canada has both clarified the test for — and arguably expanded the scope of — proprietary estoppel in the context of promises exchanged between children over their mother’s care during her lifetime. The fact that a party lacks an interest in the disputed property at the time of the promise does not negate the obligation of fulfilling the promise. Instead, when the party responsible for the expectation has or acquires sufficient interest in the property, proprietary estoppel will attach to that interest and protect the equity. This article will discuss the law of proprietary estoppel in other jurisdictions and how the Supreme Court of Canada has infused this remedy with greater flexibility to satisfy the equity. |
| Date: | 2018–07–17 |
| URL: | http://d.repec.org/n?u=RePEc:osf:lawarx:sjzdq&r=all |
| By: | Janecek, Vaclav |
| Abstract: | This note critically comments on the Court of Appeal’s decision in OMV Petrom SA v Glencore International AG. By introducing a penal element to the enhanced interest rate pursuant to CPR Pt 36, the Court of Appeal has extended the justificatory reasons for those awards beyond compensation. This note argues that Petrom-like awards should not be ordered in the future and that the Civil Procedure Rule Committee should amend the CPR accordingly. One issue is that the Petrom award was based on analogical application of the CPR, which implies that the Court of Appeal’s reasoning was in fact not governed by CPR Pt 36. Another issue is that the existing common law principles—as the next best source of law for the Court of Appeal’s decision—do not support the ruling either. This is because, first, the Petrom award was made in respect of the defendant’s malicious defence even though malicious defence does not constitute a common law tort. Secondly, the penal element in Petrom functioned as punitive damages even though the existing common law principles regarding punitive damages prevent courts from making such awards in similar cases. |
| Date: | 2019–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:osf:lawarx:p2ewt&r=all |
| By: | Hilda Bongazana Dondolo (Tshwane University of Technology); Lerato Mamadiye Phume (Tshwane University of Technology); David Pieter Conradie (Tshwane University of Technology) |
| Abstract: | While social media have offered opportunities for information sharing, creating an interaction among people and organisations including the legal profession, an understanding of how the legal profession intend to use social media to carry out their daily activities is not known. The purpose of this study was to test a model which measured the proposed predictors of intentions to use social media in the legal profession. Hypotheses were formulated and data were collected from 350 respondents employed in the Department of Justice and Constitutional Development, National Prosecution Authority, Legal Aid South Africa, Legal Resource Centre and South African Human Rights Commission. Research scales for the study were adapted from previous research and were modified to fit this study?s research context. The results indicate that perceived ease of use, perceived reachability and job relevance predict legal profession intentions to use social media. Implications and the implications of the study were discussed. |
| Keywords: | Intentions, legal profession, perceived ease of use, job relevance, perceived reachability |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:9912232&r=all |
| By: | Cofone, Ignacio (McGill University); Robertson, Adriana |
| Abstract: | Privacy loss is central to privacy law scholarship, but a clear definition of the concept remains elusive. We present a model that both captures the essence of privacy loss and can be easily applied to policy evaluations and doctrinal debates. To do so, we use standard Bayesian statistics to formalize a key intuition: that information privacy is fundamentally linked to how much other people know about you. A key advantage of our model is that, for the first time, it takes privacy preferences seriously while maintaining tractability. Another key advantage is that, by viewing privacy as a continuum, it is more realistic and is better suited for evaluating “gray areas” than prior models. We apply this framework to two central areas of privacy law: the common law privacy tort and the Fourth Amendment’s third-party doctrine. In the tort context, we first show how our proposal helps to clarify current law, and then use it to distinguish between the two interests protected by the privacy tort: privacy interests and reputational interests. We then propose a simple framework for judges to use in providing remedies for both classes of claims. We then move on to the third party doctrine. We show that many of the shortcomings associated with the doctrine stem from the misguided assumption that privacy is dichotomous rather than a spectrum, as in our model. We then liken this to the standard of care familiar from tort law, and show how the current doctrine results in the equivalent of a strict liability standard, rather than a more appropriate negligence-based standard. |
| Date: | 2019–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:osf:lawarx:6d3gy&r=all |
| By: | Pandya, Sachin S. (University of Connecticut) |
| Abstract: | This paper shows how, under existing tax law, illegal wage underpayment by an employer (sometimes called “wage theft”) may generate employer tax liability for unreported income or disallowed business expense deductions. Given that the tax authority needs information from the underpaid worker to prove such liability, the paper identifies two ways that a worker can transmit that information to a tax authority: becoming a tax informant, or bringing a qui tam action under a state false claims act. Finally, the paper discusses possible influences on the decision of the unpaid worker to inform on the employer to the tax authority, and considers the conditions under which a tax authority is likely to audit an employer based on such information. In so doing, the paper identifies a new approach to combating wage theft and an undiscovered implication of basic income tax law. |
| Date: | 2018–11–17 |
| URL: | http://d.repec.org/n?u=RePEc:osf:lawarx:7qxv4&r=all |
| By: | Elena Argentesi; Paolo Buccirossi; Emilio Calvano; Tomaso Duso; Alessia Marrazzo; Salvatore Nava |
| Abstract: | This paper presents a broad retrospective evaluation of mergers and merger decisions in the digital sector. We first discuss the most crucial features of digital markets such as network effects, multi-sidedness, big data, and rapid innovation that create important challenges for competition policy. We show that these features have been key determinants of the theories of harm in major merger cases in the past few years. We then analyse the characteristics of almost 300 acquisitions carried out by three major digital companies –Amazon, Facebook, and Google –between 2008 and 2018. We cluster target companies on their area of economic activity and show that they span a wide range of economic sectors. In most cases, their products and services appear to be complementary to those supplied by the acquirers. Moreover, target companies seem to be particularly young, being four-years-old or younger in nearly 60% of cases at the time of the acquisition. Finally, we examine two important merger cases, Facebook/Instagram and Google/Waze, providing a systematic assessment of the theories of harm considered by the UK competition authorities as well as evidence on the evolution of the market after the transactions were approved. We discuss whether the CAs performed complete and careful analyses to foresee the competitive consequences of the investigated mergers and whether a more effective merger control regime can be achieved within the current legal framework. |
| Keywords: | digital markets, mergers, network effects, big data, platforms, ex-post, antitrust |
| JEL: | L40 K21 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7985&r=all |
| By: | Charles Murry (Department of Economics, Boston College); Peter Newberry (Penn State University) |
| Abstract: | Many U.S. states restrict the ability of franchisors to terminate or restructure franchise contracts through regulation. We empirically examine the effect of these regulations on the franchising decisions of firms at the local level. Using data from the quick-service restaurant industry, we find that franchise regulations are associated with 12% fewer franchises in the average zip-code. We find evidence that the impact of the regulation varies based on the local characteristics of a zip-code and can be as high as 16%. |
| Keywords: | Franchising, Entry, Regulatory Capture, Retailing |
| JEL: | L22 L26 K20 |
| Date: | 2020–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:boc:bocoec:991&r=all |
| By: | Street, Leslie (Mercer University); Hansen, David R. |
| Abstract: | Each state has its own method for officially publishing the law. This article looks at the history of legal publishing for the fifty states before looking at how legal publishing even in moving to electronic publishing may not ensure public access to the law. The article addresses barriers to free access to the law in electronic publishing including copyright, contract law, and potentially, the Computer Fraud and Abuse Act. The article concludes with prescriptions for how different actors, including state governments, publishers, libraries, and others can ensure robust public access to the law moving forward. |
| Date: | 2019–04–29 |
| URL: | http://d.repec.org/n?u=RePEc:osf:lawarx:xnbcp&r=all |
| By: | Natalia V. Rostovtseva (National Research University Higher School of Economics) |
| Abstract: | This paper examines one of the most important concepts of intestate succession – inheritance by right of representation. The following analysis is based on civil law in Russia and France. The paper provides an overview of the meaning and the role of the right of representation, determines those who can inherit by right of representation under the Russian and French civil codes as well as the grounds for succession; examines the limitations on inheritance by right of representation under civil law in both states; identifies the legal nature of the rights of the representing heirs. Specific attention is paid to the issue of representation of the parent who is the commorient of the decedent. As a result of the comparative study, the author makes proposals on the improvement of the concept of inheritance by right of representation in Russia and France |
| Keywords: | inheritance by right of representation, intestate succession, the time of opening of an inheritance, commorients, renunciation of inheritance. |
| JEL: | Z |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:91/law/2019&r=all |
| By: | Rios, Vicente |
| Abstract: | This study investigates the evolution of the shadow economy in Spain during the period 1986-2016 using the Currency Demand Approach by means of Bayesian Model Averaging econometric techniques. The results of the empirical analysis suggest that the average share of the underground economy as a percentage of the GDP during 1986-2016 was the 18.2% whereas in 2016, the estimated size was the 11.95%. The estimated figures for the period under consideration are in line with the averaged estimates of previous studies for the same time frame. Nevertheless, a remarkable difference between previous analysis and the estimated pattern stemming from this study is that the size of the shadow economy depicts an inverted U shape time profile, with a marked reduction in the years after the Great Recession. With the estimates of the shadow economy in hand, the importance of the drivers of the shadow economy in Spain is investigated by means of Bayesian Model Averaging methods. The main finding of this analysis is that the key factors driving variations in the size of the shadow economy are the taxes, the level of education and the distribution of employment across sectors. |
| Keywords: | Shadow Economy, Spain, Currency Demand, Bayesian Model Averaging |
| JEL: | C11 H11 H26 K42 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:97504&r=all |
| By: | Compton, Andrew |
| Abstract: | In this paper, I explore how property crime can affect static and dynamic general equilibrium behavior of households and firms. I calibrate a model with a representative firm and heterogeneous households where households have the choice to commit property crime. In contrast to previous literature, I treat crime as a transfer rather than home production. This creates a feedback loop wherein negative productivity shocks increase property crime which further depresses legitimate work and capital accumulation. These responses by households are particularly important when thinking about the effect of property crime on the economy. Household and firm losses account for 24% of compensating variation (CV) and 37% of lost production. This suggests that behavioral responses are quite important when calculating the cost of property crime. Finally, on the margin, decreasing property crime by 1\% increases social welfare by 0.19%, but the effect is diminishing suggesting that reducing crime entirely may not be optimal from a policymakers perspective. |
| Keywords: | Crime, Welfare, Police, Public Goods, Business Cycles |
| JEL: | E26 E32 H41 K1 |
| Date: | 2019–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:97002&r=all |