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on Law and Economics |
| By: | Woodcock, Ramsi |
| Abstract: | If the state is a force monopolist, as Max Weber famously claimed, then the law is a kind of antitrust policy, with criminal law securing the state’s monopoly on force and constitutional law regulating the exercise of the force monopolist’s power primarily through the right to vote, which makes of the state the equivalent of a consumer cooperative dedicated to the production of security. One consequence of the cooperative approach is that the state’s approach to vertical integration—in this context state ownership of enterprise—has mirrored antitrust’s own approach to the vertical integration of private firms: to authorize integration only where it is likely to benefit consumers, which is rarely when the monopolist sells security, but often in the case of most products sold by private enterprise. Another consequence, low tax rates, differs greatly from antitrust’s own approach to private enterprise, which broadly exempts the charging of high prices from liability. This difference in approach offers a useful lesson for antitrust policy, particularly in the area of digital platforms: that the heart of monopoly power is price, and the best way to dull the power of the platform monopolist is to regulate the prices it can charge and leave the question whether to permit it to integrate vertically to be decided on efficiency grounds. This suggests that the rule proposed by Senator Elizabeth Warren, that no big firm should be allowed to compete on its own platform, which amounts to a prohibition on vertical integration, is likely to be unhelpful. A better approach would be to regulate the fees platforms charge competitors and consumers and allow the tech giants to integrate when doing so would benefit consumers. |
| Date: | 2020–10–03 |
| URL: | http://d.repec.org/n?u=RePEc:osf:lawarx:73fnh&r=all |
| By: | Guido de Blasio (Structural Economic Analysis Directorate, Bank of Italy); Alessio D'Ignazio (Structural Economic Analysis Directorate, Bank of Italy); Marco Letta |
| Abstract: | Using police archives, we apply machine learning algorithms to predict corruption crimes in Italian municipalities during the period 2012-2014. We correctly identify over 70% (slightly less than 80%) of the municipalities that will experience corruption episodes (an increase in corruption crimes). We show that algorithmic predictions could strengthen the ability of the 2012 Italy’s anti-corruption law to fight white-collar delinquencies. |
| Keywords: | crime prediction, white-collar crimes, machine learning, classification trees, policy targeting |
| JEL: | C52 D73 H70 K10 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:saq:wpaper:16/20&r=all |
| By: | Anatoliy Kostruba (Vasyl Stefanyk Precarpathian National University) |
| Abstract: | The work examines aspects of how deprivation of a civil right forms when such rights can determine a possible decrease in quality of life. Authors explore this problem in accordance with provisions of the civil legislation and form practical means for application of the right deprivation mechanism based on the analysis of international legislations. In particular, possibilities of estate seizures and gradual transformation of formalised law space into doctrinal subsystem are analysed. The work investigates the possibility to use measures of both state and private influence in this field and presents prognostic components that can affect regulation variations of estate seizure of estates based on an agreed-upon procedure between states. A different procedure is proposed for joint ownership and realisation of a provision on managing land and ecological legislations as a field of civil relations. The practical aim of the work can be applied to solving disputes regarding the need for joint regulation of civil property relations in international and local civil law. Measures that determine the possibility for structural and comprehensive informing of certain forms and structures of legal science are implemented. |
| Keywords: | legal facts,Legal relationship,Legal regulations,Civil law,law of property |
| Date: | 2020–08–28 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02941855&r=all |
| By: | Laure de Batz (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic; Centre d’Economie de la Sorbonne, Université Paris); Evzen Kocenda (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic; Institute of Information Theory and Automation, Czech Academy of Sciences, Prague, Czech Republic; CESifo, Munich, IOS, Regensburg) |
| Abstract: | We examine how the publication of intentional financial crimes committed by listed firms is interpreted by financial markets, using a systematic and quantitative review of existing empirical studies. Specifically, we conduct a meta-regression analysis and investigate the extent and nature of the impact that the publication of financial misconducts exerts on stock returns. We survey 111 studies, published between 1978 and 2020, with a total of 439 estimates from event studies. Our key finding is that the average abnormal returns calculated from this empirical literature are affected by a negative publication selection bias. Still, after controlling for this bias, our meta-analysis indicates that publications of financial crimes are followed by statistically significant negative abnormal returns, which suggests the existence of an informational effect. Finally, the MRA results demonstrate that crimes committed in common law countries, alleged crimes, and accounting crimes carry particularly weighty information for market participants. The results call for more transparency on side of enforcers along enforcement procedures, to foster timely and proportionate market reactions and support efficient markets. |
| Keywords: | Meta-Analysis; Event study; Financial Misconduct; Fraud; Financial Markets, Information and Market Efficiency; Returns; Listed Companies |
| JEL: | C83 G14 G18 K42 N24 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2020_40&r=all |
| By: | Paganelli, Maria Pia; Simon, Fabrizio; Assistant, JHET |
| Abstract: | For Adam Smith a crime is not the result of a rational calculation of loss and gain, but the consequence of envy and a vain desire to parade wealth to attract the approbation of others, combined with a natural systematic bias in overestimating the probability of success. Similarly, Smith does not conceive of legal sanctions as a rational deterrent, but as deriving from the feeling of resentment. While the prevailing approach of the eighteenth century is a rational explanation of crime and a utilitarian use of punishment, Adam Smith instead builds his theory of criminal behavior and legal prosecution consistently on the sentiments. A well-functioning legal system is thus an unintended consequence of our desire to bring justice to the individual person, not the result of a rational calculation to promote the public good, just like a well-functioning economic system is the unintended consequence of our desire to better our own condition, not the result of a rational calculation to promote public good. |
| Date: | 2020–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:x82yh&r=all |
| By: | Anatoliy Kostruba (Vasyl Stefanyk Precarpathian National University); Yurii Shemshuchenko (V.M. Koretsky Institute of State and Law, National Academy of Sciences of Ukraine) |
| Abstract: | This study sets the task of studying the legal aspects of corporate governance in the context of existing international law. Consideration of issues related to the legal aspects of corporate governance is of great importance for the development of common criteria for evaluating their activities from the point of view of existing legal norms. The development of ever new forms of public organizations and the need to develop legislative norms to regulate their activities only emphasizes the importance of the issue under study. The relevance of this problem is of particular importance in light of the fact that to date, the laws of most countries have not yet developed clear criteria governing the corporate activity. This fact leads to difficulties in studying this issue and the high probability of misunderstanding in matters of corporate activity and corporate governance features, not to mention giving this activity a proper assessment from the standpoint of the norms of current legislation. This study sets the task of studying the fundamental legal rules regulating the corporate governance of Ukraine and foreign countries with the identification of the similarities and differences of existing legal standards. The method of comparative analysis of works of domestic and foreign researchers in the framework of the subject under consideration was selected. The applied value of this material is to identify the main criteria for the compliance of the current aspects of corporate governance with international law with a view to the subsequent application of the results in practice. The research prospects in this direction from a legal point of view consist in comparing the current legislative acts regulating international law with regard to corporate governance issues, which opens up great opportunities for analysis of all the provisions of corporate governance and bringing them into line with the norms of existing international law. |
| Date: | 2020–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02946112&r=all |
| By: | Bernhardt, Lea (Helmut Schmidt University, Hamburg) |
| Abstract: | In this paper, we analyse the final decisions for merger cases prepared by the European Commission (EC) since 1990 and build a unique subsample for all non-cleared cases. These incorporate all merger notifications which were either withdrawn by the notifying parties or have been prohibited by the European Commission.We find a sudden decline in prohibitions and withdrawals of cases since 2002 and explore three judicial defeats of the European Commission as determining factors behind these developments. We also find a higher likelihood of withdrawal or prohibition if cases are registered in sectors which incorporate firms in the business of information and communication or transportation and storage. When classifying the documents with a supervised machine learning algorithm, we are able to automatically identify the cleared versus the non-cleared cases with over 90% accuracy. Finally, we find that network effects, high market shares and the risk of collusion are the main competitive concerns which contribute to prohibition decisions in the information and communications sector. |
| Keywords: | mergers; competition policy; EU Commission; classification; network effects |
| JEL: | G34 K21 L40 |
| Date: | 2020–10–08 |
| URL: | http://d.repec.org/n?u=RePEc:ris:vhsuwp:2020_184&r=all |
| By: | Xu, J.; Pollitt, M.; Xie, B-C.; Yang, C-H. |
| Abstract: | China is reforming its electricity supply industry under the guidance of the No.9 document published in 2015. However, such reform has not been supported by new legislation until now. China unveiled an Energy Law draft in April 2020 for public consultation. It is widely regarded as an attempt to provide a legal foundation for ongoing energy sector reforms. This paper introduces the legislative background to China’s Energy Law and then identifies the weaknesses of the April 2020 Energy Law draft from the perspective of international experience. We find that although the Energy Law draft represents positive progress on the vertical unbundling and the price mechanism with respect to the competitive and natural monopoly segments of the power sector, it still does not provide adequate support for most other elements. The enacted Energy Law needs to make more explicit provision on horizontal restructuring, incentive regulation, privatization and independent regulation, while the 1995 Electricity Law should also be updated to include reference to the spot market and efficient allocation of transmission capacity as secondary legislation. |
| Keywords: | No.9 Document, Energy Law, power market reform |
| JEL: | K32 |
| Date: | 2020–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2091&r=all |
| By: | Ryo Nakajima (Faculty of Economics, Keio University); Michitaka Sasaki (Organization for Research Initiative and Promotion, Tottori University); Ryuichi Tamura (Faculty of International Studies and Regional Development, University of Niigata) |
| Abstract: | This paper explores the unproductive procrastination behavior of patent examiners, probes whether such behavior is caused by present-biased preferences, and estimates the magnitude. We set out a quasihyperbolic discounting model where a patent examiner is assigned a biweekly quota of patent application reviews and determines the level of effort by the deadline. We estimate the present-bias factor of each patent examiner based on patent prosecution data in the U.S. and find that the proportion of present-biased individuals exceeds the majority. We demonstrate that the job separation rate is higher for less present-biased patent examiners, and a fragmented work quota can improve patent examination quality and timeliness. |
| Keywords: | patent examination, procrastination, present bias, quasihyperbolic discounting |
| JEL: | D03 J01 K29 O34 |
| Date: | 2020–09–19 |
| URL: | http://d.repec.org/n?u=RePEc:keo:dpaper:2020-015&r=all |
| By: | Nancy Kong; Uwe Dulleck; Adam Jaffe; Shupeng Sun; Sowmya Vajjala |
| Abstract: | Encouraging inventors to disclose new inventions is an important economic justification for the patent system, yet the technical information contained in patent applications is often inadequate and unclear. This paper proposes a novel approach to measure disclosure in patent applications using algorithms from computation allinguistics. Borrowing methods from the literature on second language acquisition, we analyze core linguistic features of 40,949 U.S. applications in three patent categories related to nanotechnology, batteries, and electricity from 2000 to 2019. Relying on the expectation that universities have more incentives to disclose their inventions than corporations for either incentive reasons or for different source documents that patent attorneys can draw on, we confirm the relevance and usefulness of the linguistic measures by showing that university patents are more readable. Combining the multiple measures using principal component analysis, we find that the gap in disclosure is 0.4 SD, with a wider gap between top applicants. Our results do not change after accounting for the heterogeneity of inventions by controlling for cited-patent fixed effects. We also explore whether one pathway by which corporate patents become less readable is use of multiple examples to mask the “best mode” of inventions. By confirming that computational linguistic measures are useful indicators of readability of patents, we suggest that the disclosure function of patents can be explored empirically in a way that has not previously been feasible. |
| Keywords: | patent disclosure, computational linguistic analysis, readability |
| JEL: | K11 O31 O34 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8571&r=all |
| By: | Basu, Rahul |
| Abstract: | Norway’s management of its North Sea oil endowment, especially its future generations Oil Fund, is considered the global best practice. Some practice aspects such as no flaring of gas or a moderate pace of extraction go against standard economic theory. The public trust doctrine in law provides a useful lens to understand Norway’s model, and provides lessons for mineral owners world-wide. |
| Keywords: | Intergenerational Equity; Public Trust Doctrine; |
| JEL: | K0 L72 N5 O1 P2 P48 Q3 |
| Date: | 2020–09–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:102856&r=all |