nep-law New Economics Papers
on Law and Economics
Issue of 2020‒04‒13
fifteen papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Global Software Piracy, Technology and Property Rights Institutions By Simplice A. Asongu
  2. Wanted: A Standard for Virtual Patent Marking By Gaetan de Rassenfosse; Kyle Higham
  3. Do-It-Yourself Medicine? The Impact of Light Cannabis Liberalization on Prescription Drugs By Carrieri, Vincenzo; Madio, Leonardo; Principe, Francesco
  4. Optimal Reduction of Cartel Fines induced by the Settlement Procedure By Fotis, Panagiotis; Tselekounis, Markos
  5. Early Release and Recidivism By Meier, Armando N.; Levav, Jonathan; Meier, Stephan
  6. Do Patents Enable Disclosure? Evidence from the Invention Secrecy Act By Gaetan de Rassenfosse; Gabriele Pellegrino; Emilio Raiteri
  7. Economic and social effects of money laundering: the UK case By Barnes, Paul
  8. The Second Convict Age: Explaining the Return of Mass Imprisonment in Australia By Leigh, Andrew
  9. Same-Sex Couples and the Marital Surplus: The Importance of the Legal Environment By Delhommer, Scott M.; Hamermesh, Daniel S.
  10. The Rule of Law and its Impact on Socio- Economic, Environmental, Gender and Cultural Issues By Anatoliy Kostruba
  11. Whistleblowing Behavior in Organizations By Quinteros, María José; Villena, Marcelo J.; Villena, Mauricio G.
  12. The Persistence of Weapons: Global Evidence By Simplice A. Asongu; Joseph I. Uduji; Elda N. Okolo-Obasi
  13. The Effect of Outside Temperature on Criminal Court Sentencing Decisions By Evans, Sally; Siminski, Peter
  14. Do Processing Times Affect the Distribution of Asylum Seekers across Europe? By Bertoli, Simone; Brücker, Herbert; Fernández-Huertas Moraga, Jesús
  15. Negotiations in planning and urban land consolidation By Sky, Per Kåre

  1. By: Simplice A. Asongu (Yaounde, Cameroon)
    Abstract: This study extends the literature on fighting software piracy by investigating how Intellectual Property Rights (IPRs) regimes interact with technology to mitigate software piracy when existing levels of piracy are considered. Two technology metrics (internet penetration rate and number of PC users) and six IPRs mechanisms (constitution, IPR law, main IP laws, WIPO Treaties, bilateral treaties and multilateral treaties) are used in the empirical analysis. The statistical evidence is based on: (i) a panel of 99 countries for the period 1994-2010 and (ii) interactive contemporary and non-contemporary Quantile regressions.The findings show that the relevance of IPR channels in the fight against software piracy is noticeably contingent on the existing levels of technology embodied in the pirated software. There is a twofold policy interest for involving modern estimation techniques such as interactive Quantile regressions. First, it uncovers that the impact of IPR systems on software piracy may differ depending on the nature of technologies used. Second, the success of initiatives to combat software piracy is contingent on existing levels of the piracy problem. Therefore, policies should be designed differently across nations with high-, intermediate- and low-levels of software piracy.
    Keywords: Piracy; Business Software; Software piracy; Intellectual Property Rights
    JEL: F42 K42 O34 O38 O57
    Date: 2020–01
  2. By: Gaetan de Rassenfosse (Ecole polytechnique federale de Lausanne); Kyle Higham (Ecole polytechnique federale de Lausanne)
    Abstract: Patent marking is used by patentees to provide a form of notice to the public about the existence of a patent and can increase damages awarded in cases of infringement. Historically, marking is done by listing the associated patents on the product they cover. Virtual patent marking (VPM), or webmarking, offers patentees a convenient alternative to this practice by allowing patentees to place a web address, linking to a list of the associated patents, on the product instead of the static patent list. However, due to uncertainty in the legal community about proper implementation, adoption has been slow, despite broad agreement on their many advantages over traditional marking. In this article, we lay out guidelines for the proper implementation of VPMs and call for a formal standard to encourage their adoption.
    Keywords: patent notice, product, standard, virtual patent marking, webmarking
    JEL: K20 K40 O34
    Date: 2020–03
  3. By: Carrieri, Vincenzo (Magna Graecia University); Madio, Leonardo (Toulouse School of Economics); Principe, Francesco (Erasmus School of Economics)
    Abstract: Governments worldwide are increasingly concerned about the booming CBD (cannabidiol) products. However, little is known about the impact of their liberalization. We study a unique case of unintended liberalization of a CBD-based product (light cannabis) that occurred in Italy in 2017. Using unique and high-frequency data on prescription drug sales and by exploiting the staggered local availability of the new product in each Italian province, we document a significant substitution effect between light cannabis and anxiolytics, sedatives, opioids, anti-depressants, and antipsychotics. Such medical non-adherence is consistent with a self-medication interpretation. Results are informative for regulators and suggest that policies contrasting this "green oil" boom risk to disregard the effective need of patients to seek effective reliefs of their symptoms.
    Keywords: light cannabis, self-medication, marijuana, difference-in-difference, prescription drugs, CBD
    JEL: H51 H75 I18 K32 K42
    Date: 2020–03
  4. By: Fotis, Panagiotis; Tselekounis, Markos
    Abstract: EC’s Notice on the conduct of settlement procedures mentions that if the EC decides to reward a firm for settlement in the framework of its Notice, a reduction of 10% on cartel fine will be granted to that firm. In this paper, we compare the cartel profits with the ones derived when the cartel members decide to settle with competition authority so as to find the optimal reduction on cartel fines that fulfills EC’s Notice goal of inducing all cartel firms to participate in the settlement procedure. We find that such reduction is negatively correlated with the likelihood that the cartel would be detected, meaning that a higher probability of cartel detection is required for a lower reduction to be effective.
    Keywords: Antitrust policy; Competition policy; Cartel fines; Settlement Procedure
    JEL: K21 L13 L41
    Date: 2020–03–17
  5. By: Meier, Armando N. (University of Chicago Booth School of Business); Levav, Jonathan (Stanford University); Meier, Stephan (Columbia University)
    Abstract: Does early release decrease or increase the probability that ex-convicts will return to prison? We exploit unique data from Israeli courts, where appearance before the judge throughout the day has an arbitrary component. We first show that judges more often deny parole requests of prisoners appearing further from the judges' last break. We then use this variation in instrumental variable estimations and find that early releases reduce the propensity of prisoners to return to prison. Robustness checks suggest that later and earlier cases are largely comparable and that potential selection is unlikely to explain the results.
    Keywords: parole, recidivism, early release, sentence length, judges
    JEL: D9 K14 K40
    Date: 2020–03
  6. By: Gaetan de Rassenfosse (Ecole polytechnique federale de Lausanne); Gabriele Pellegrino (Ecole polytechnique federale de Lausanne); Emilio Raiteri (Eindhoven University of Technology)
    Abstract: This paper provides novel empirical evidence that patents enable knowledge disclosure. The analysis exploits the Invention Secrecy Act, which grants the U.S. Commissioner for Patents the right to prevent disclosure of new inventions that represent a threat to national security. Using a two-level matching approach, we document a negative and large relationship between the enforcement of a secrecy order and follow-on inventions, as captured with patent citations and text-based measures of invention similarity. The effect of secrecy orders is particularly salient for geographically-distant parties and for inventions in the same technological field as the secreted patent.
    Keywords: disclosure, follow-on invention, knowledge diffusion, patent
    JEL: O31 O33 O34
    Date: 2020–03
  7. By: Barnes, Paul
    Abstract: Money laundering is one of the largest economic problems of the 21st century with huge social implications and effects. It enables the richest and most powerful in society to take advantage of globalisation and differences across countries. It is only for less well-off money laundering regulations in the UK are stringent and enforced. Money laundering is not a ‘victimless crime’. The individual(s) or the country (and inhabitants) from which the money is stolen are, by definition, the victims/losers, whilst the money is used in the recipient country to support the criminal’s lifestyle or other activities such as drug importation, child sexual exploitation, human trafficking and terrorism and so on, alternatively, invested in property until a profitable opportunity arises. This paper examines the problem both generally and the UK in particular. It describes the main forms and types of money laundering and the devices used. This is followed by sections on its effects on an economy and contains an empirical study of this as it affects London property prices, the actions taken by UK regulators against money launderers, their advisers and agents. The final section discusses some recent initiates and recommendations as to what can and should be done.
    Keywords: money laundering shell companies financial crime
    JEL: G38 K22
    Date: 2020–03–09
  8. By: Leigh, Andrew (Australian National University)
    Abstract: Constructing a new series of incarceration rates from 1860 to 2018, I find that Australia now incarcerates a greater share of the adult population than at any point since the late nineteenth century. Much of this increase has occurred since the mid-1980s. Since 1985, the Australian incarceration rate has risen by 130 percent, and now stands at 0.22 percent of adults (221 prisoners per 100,000 adults). Recalculating Indigenous incarceration rates so that they are comparable over a long time span, I find that incarceration rates for Indigenous Australians have risen dramatically. Fully 2.5 percent of Indigenous adults are incarcerated (2481 prisoners per 100,000 adults), a higher share than among African-Americans. The recent increase in the Australian prison population does not seem to be due to crime rates, which have mostly declined over the past generation. Instead, higher reporting rates, stricter policing practices, tougher sentencing laws, and more stringent bail laws appear to be the main drivers of Australia's growing prison population.
    Keywords: prison, jail, incarceration, crime
    JEL: I30 K14 N30
    Date: 2020–03
  9. By: Delhommer, Scott M. (University of Texas at Austin); Hamermesh, Daniel S. (Barnard College)
    Abstract: Same-sex couples' marital surplus, their excess total income over that predicted by their work times and predicted wages, increases little as the duration of their relationship lengthens. When/where same-sex marriage is legal, it rises sharply as duration increases. The availability of legal domestic partnership or civil union has no effect on the surplus. The likelihood of home ownership conditional on demographic characteristics also increases with partnerships' duration only when/where same-sex marriage is legal. These results, based on data from the American Community Survey 2013-17, support the notion that greater legal protection enhances partners' incentives to invest in their relationship.
    Keywords: gains from marriage, same-sex partnership, home ownership
    JEL: J12 J16 K30
    Date: 2020–03
  10. By: Anatoliy Kostruba (Vasyl Stefanyk Precarpathian National University)
    Abstract: Legal science indicates the complexity of its subject. The law regulates not only the social relations themselves, but also affects all related industries. The signing of contracts follows the economy and relations between economic agents. At the time when the world trade is developing more, and more actively, the levelling of differences between legal systems allows to expand the boundaries of cooperation and ensure the exchange of goods and services almost without restrictions
    Keywords: Law & society,Law & Economics,civil law
    Date: 2019–08–03
  11. By: Quinteros, María José; Villena, Marcelo J.; Villena, Mauricio G.
    Abstract: We develop a game theoretical model of whistleblowing behavior in organizations, focusing speci�fically on the role of incentives aimed at encouraging this type of behavior. We also analyze the potential impacts of whistleblowing behavior on the persistence of corruption. First, we present a static game consisting of two employees with three available strategies: honest, corrupt and whistleblowing behavior. Later, we examine the pure and mixed Nash equilibrium strategies of the game. Second, we use the concept of replicator dynamics to formally explore the local asymptotic stability of whistleblowing behavior within organizations. Our main results show that whistleblowing as a mechanism to control wrongdoing is only relevant under the existence of external monitoring (if the probability of detecting wrongdoing with an external mechanism is close to zero, then in the long term, all employees will begin to behave corruptly). We also show that whistleblowers reduce the minimum wages required to avoid corruption within an organization, making it less costly for an organization to combat corruption. Finally, we claim that whistleblowing strategies seem to be less attractive for activities with very high bribery in comparison to the rewards for whistleblowers, for example, this could be the case of manufacturing or retail, but not for �nancial services in general.
    Keywords: whistleblowing, corruption, game theory, replicator dynamics, incentives.
    JEL: C73 K4 M12
    Date: 2019–11–24
  12. By: Simplice A. Asongu (Yaounde, Cameroon); Joseph I. Uduji (University of Nigeria, Nsukka, Nigeria); Elda N. Okolo-Obasi (University of Nigeria, Nsukka, Nigeria)
    Abstract: This study investigates persistence (or hysteresis) in weapons using a panel of 163 countries for the period 2010 to 2015. The following are some main findings. (i) Compared to countries that are landlocked, persistence in heavy weapons is more apparent in nations that are open to the sea. (ii) Relative to the Middle East & North Africa (MENA), heavy weapons is more persistent in the East Asia and the Pacific countries. This tendency is consistent with “weapons imports†. (vi) Evidence of persistence is not very apparent in “weapons imports†with the exception of the fact that it is higher in low income countries, compared to their high income counterparts. Hence, there is less hysteresis in weapons exports when compared with heavy weapons when weapons exports. (v) The determinants of persistence employed in the conditioning information set are contingent on fundamental characteristics and panels. Policy implications are discussed.
    Keywords: War; Armaments; Global evidence; Persistence
    JEL: H56 L64 K42 P50
    Date: 2019–01
  13. By: Evans, Sally (University of Technology, Sydney); Siminski, Peter (University of Technology, Sydney)
    Abstract: Climate change has stimulated growing interest in the influence of temperature on cognition, mood and decision making. This paper is the first investigation of the impact of temperature on the outcomes of criminal court cases. It is motivated by Heyes and Saberian (2019, AEJ: Applied Economics), who found strong effects of temperature on judges' decisions in immigration cases, drawing on 207,000 cases. We apply similar methods to analyse 2.8 million criminal court cases in the Australian state of New South Wales from 1994 to 2019. Most of the estimates are precise zeros. We conclude that outcomes of criminal court cases (which are far more prevalent globally than immigration cases) are not influenced by fluctuations in temperature, an unsurprising but reassuring result.
    Keywords: criminal courts, temperature, climate, decision making
    JEL: K14 K41 Q54
    Date: 2020–02
  14. By: Bertoli, Simone (CERDI, University of Auvergne); Brücker, Herbert (Institute for Employment Research (IAB), Nuremberg); Fernández-Huertas Moraga, Jesús (Universidad Carlos III de Madrid)
    Abstract: More than 3 million asylum seekers arrived into Europe between 2014 and 2016, and we analyze the role of destination-specific policy measures in shaping their location choices. We bring to the data a gravity equation that reflects the uncertainty that asylum seekers face, concerning the chances of obtaining refugee protection, the processing time and the risk of repatriation. These factors shaped the distribution of asylum seekers, and produced heterogeneous effects across different origin countries. German efforts to expand their processing capacity produced a significant increase in applications from origins with high recognition rates, which were mostly diverted away from Sweden.
    Keywords: refugees, recognition rate, processing time, gravity equations, migration
    JEL: F22 K37
    Date: 2020–02
  15. By: Sky, Per Kåre (Centre for Land Tenure Studies, Norwegian University of Life Sciences)
    Abstract: Negotiations are important in urban densification processes. In particular, integrative negotiations seem to be relevant. The conflicts between neighbors and developers can be challenging to resolve. Land readjustment is used in several countries to merge properties or reshape properties in conjunction with densification projects. Conflicts can be handled and reduced by land readjustment. Should such a measure be relevant in Norway, it is recommended, among other things, that a majority of landowners within a land readjustment area must be in favor. There is a need for changes in both the Land Consolidation Act and the Planning and Building Act. Voluntary land readjustment should also be encouraged.
    Keywords: Land Consolidation; Land Readjustment; Negotiation; Urban Development.
    JEL: C78 K11 O20
    Date: 2020–03–31

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.