nep-law New Economics Papers
on Law and Economics
Issue of 2021‒02‒01
ten papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Horizonal Merger Analysis By Louis Kaplow
  2. Legal access to alcohol and its impact on drinking and crime By Dehos, Fabian
  3. Do Stronger Employment Discrimination Protections Decrease Reliance on Social Security Disability Insurance? Evidence from the U.S. Social Security Reforms By Patrick Button; Mashfiqur R. Kahn
  4. The inefficiency of the death penalty for rape in Nigeria By Aladetoyinbo, Muyiwa
  5. The Endogenous Formation of Common Pool Resource Coalitions By Carlos A. Chávez; James J. Murphy; Felipe J. Quezada; John K. Stranlund
  6. Religious Leaders and Rule Of Law By Sultan Mehmood; Avner Seror
  7. Digital control over the working process technological and legal aspects By Andreeva, Andriyana; Asenov, Oleg
  8. Market Concentration in Europe: Evidence from Antitrust Markets By Pauline Affeldt; Tomaso Duso; Klaus Gugler; Joanna Piechucka
  9. How Law and Economics Was Marketed in a Hostile World: The Institutionalization of the Field in the United States from the Immediate Post-War Period to the Reagan Years By Thierry Kirat; Frédéric Marty
  10. Machine Learning and Perceived Age Stereotypes in Job Ads: Evidence from an Experiment By Ian Burn; Daniel Firoozi; Daniel Ladd; David Neumark

  1. By: Louis Kaplow
    Abstract: Economic analysis of competition regulation is most developed in the domain of horizontal mergers, and modern agency guidelines reflect a substantial consensus on the appropriate template for merger assessment. Nevertheless, official protocols are understood to rest on a problematic market definition exercise, to use HHIs and ΔHHIs in ways that conflict with standard models, and more broadly to diverge with how economic analysis of proposed mergers should be and often is conducted. These gaps, unfortunately, are more consequential than is generally appreciated. Moreover, additional unrecognized errors and omissions are at least as important: analysis of efficiencies, which are thought to justify a permissive approach, fails to draw on the most relevant fields of economics; entry is often a misanalyzed afterthought; official information collection and decision protocols violate basic tenets of decision analysis; and single-sector, partial equilibrium analysis is employed despite the presence of substantial distortions (many due to imperfect competition) in many sectors of the economy. This article elaborates these deficiencies, offers preliminary analysis of how they can best be addressed, and identifies priorities for further research.
    JEL: D43 K21 L13 L41
    Date: 2020–12
  2. By: Dehos, Fabian
    Abstract: This paper leverages a discontinuity in legal access to alcohol at age 16 to estimate its impacts on teenage drinking and crime in Germany, a country with very high consumption levels. Using detailed survey data and administrative crime records from 2005 to 2015, I detect considerable increases in drinking participation, frequency, and intensity at the legal cutoff along the middle and lower end of the distribution. These increases coincide with discrete jumps in criminal engagement under the influence of alcohol, mostly due to violent and property crimes. I provide evidence that changes in drinking intensity induce these crimes, implying a drinking-crime elasticity of 0.4 at age 16.
    Keywords: Alcohol,crime,minimum legal drinking age
    JEL: I12 I18 K42
    Date: 2020
  3. By: Patrick Button (Tulane University, NBER, and IZA); Mashfiqur R. Kahn (Bates White Consulting)
    Abstract: The United States Social Security Amendments of 1983 (SSA1983) increased the full retirement age (FRA) and increased penalties for retiring before the FRA. This cut to retirement benefits caused spillover effects on Social Security Disability Insurance (SSDI) applications and receipt by making SSDI relatively more generous. We explore if stronger disability and age discrimination laws moderated these spillovers, using variation whereby many state laws are broader or stronger than federal law. We estimate the effects of these laws on SSDI applications and receipt using a difference-in-differences approach, comparing cohorts affected by SSA1983 to similarly aged unaffected cohorts, across states. We find that a broader definition of disability, where only a medically diagnosed condition is required to be covered under state law, significantly reduces SSDI applications induced by SSA1983, but has no effect on SSDI receipt, likely because the foregone applications were for those with less severe conditions that were unlikely to have been approved for SSDI. We find some evidence that other broader or stronger features of state disability discrimination laws reduce both SSDI applications and receipt. We do not find much evidence that age discrimination laws reduce spillovers to SSDI. These results suggest that broader and stronger disability discrimination laws reduce employment barriers, allowing older individuals to work longer, possibly reducing reliance on SSDI and costly applications to SSDI.
    Keywords: Disability, aging, discrimination, employment law; disability insurance; Social Security, Americans with Disability Act, Age Discrimination in Employment Act, Social Security Amendments of 1983
    JEL: H55 J71 J78 K31 J14 J26
    Date: 2020–05
  4. By: Aladetoyinbo, Muyiwa
    Abstract: In Nigeria, the most severe punishment for rape is life imprisonment. Recently there has been pressure on the legislature to approve the death penalty as punishment to curb the menace of rape. The paper evaluates negative implications that the death penalty will have on the crime of rape in Nigeria.
    Keywords: Rape, death penalty, punishment, Nigeria, Severity of punishment, certainty of punishment.
    JEL: K14 K3 K42
    Date: 2020–11–23
  5. By: Carlos A. Chávez (Universidad de Talca); James J. Murphy (Department of Economics, University of Alaska Anchorage); Felipe J. Quezada (University of Massachusetts Amherst); John K. Stranlund (University of Massachusetts Amherst)
    Abstract: We develop a theoretical model of endogenous CPR coalition formation in which the resource is co-defended with costly monitoring by coalition members and sanctions for encroachment imposed by the government. We demonstrate that CPR coalitions can form even when monitoring is so costly that coalition members choose not to monitor for encroachment, but the coalitions will be relatively small. Larger coalitions will form if monitoring costs are low enough to yield effective deterrence. We tested the results of the model using lab-in-field experiments with fishers who were members of Chile’s territorial use rights fisheries (TURFs) and in the lab with Chilean university students. We find that fishers frequently formed CPR coalitions, even when they could not deter outsider poaching. Fishers usually formed the grand coalition when the monitoring cost was low, but they formed smaller coalitions when monitoring was more costly. Fishers invested in monitoring frequently and these investments reduced poaching. Relative to open access, when coalitions formed, total harvest effort was curtailed and earnings for coalition members generally increased. Students formed coalitions less frequently, these coalitions tended to be small, and they infrequently invested in monitoring, even when it was profitable to do so. Consequently, student coalition member earnings were not better off on average than under open access.
    Keywords: experimental economics, Common pool resources; enforcement; field experiments; poaching; territorial use rights fisheries; social dilemma; fisheries management; development economics; co-enforcement; coalition formation; encroachment
    JEL: C72 C90 C93 D70 K42 Q22 Q28 Q56 H40
    Date: 2021–01
  6. By: Sultan Mehmood (New Economic School); Avner Seror (Aix-Marseille School of Economics)
    Abstract: In this paper, we provide systematic evidence of how historical religious institutions affect the rule of law. In a difference-in-differences framework, we show that districts in Pakistan where the historical presence of religious institutions is higher, rule of law is worse. This deterioration is economically significant, persistent, and explained by the rise of religious leaders elected to political office. We explain our findings with a model where religious leaders leverage their high legitimacy to run for office and influence Courts. Our estimate of the economy-wide losses attributed to land expropriation by religious leaders through Courts is about 0.06 percent of GDP every year.
    Keywords: Leaders, Religion, Rule of Law
    JEL: K10 K40 Z12
    Date: 2021–01
  7. By: Andreeva, Andriyana; Asenov, Oleg
    Abstract: The purpose of this article is to examine two main aspects of the control over the working process technological and legal. In their interconnection they reflect the new means, through which the employers perform their functions on management and control over the workers and employees, and at the same time also is made legal analysis of the applicable and related Labour Law regulations. The reflection of the digitalization on the working legal relations is multidirectional and the authors put the focus on the employers control, presenting through the complex examination some of the advantages of the introduction of different controlling means for digital control and at the same time the related risks. The question of the necessity of new legal frame, guaranteeing the protection of the rights of workers and employees is also discussed. Based actualization of the Labour Law legislation in the part of the control.
    Keywords: digital control, Labour legislation, digitalization, working process, rights and obligations of the parties.
    JEL: K31
    Date: 2020
  8. By: Pauline Affeldt; Tomaso Duso; Klaus Gugler; Joanna Piechucka
    Abstract: An increasing body of empirical evidence is documenting trends toward rising concentration, profits, and markups in many industries around the world since the 1980s. Two major criticisms of these studies is that concentration and market shares are poorly measured at the national industry level while firm level revenues are a poor indicator of product sales. We use a novel database that identifies over 20,000 product/geographic antitrust markets affected by over2,000 mergers scrutinized by the European Commission between 1995 and 2014. We show that concentration, as measured by the market-specific post-merger HHI, is larger than reported in the extant literature (at least) by a factor of ten. We also show that concentration has increased over time on average. Yet, there is a great deal of heterogeneity across geographic markets and within broader industries. In a regression analysis that exploits this within-industry variation, we show that barriers to entry are unambiguously positively related to concentration irrespective of time periods, sectors of activity, and geographical market dimension analyzed. Strict past merger enforcement negatively correlates with concentration. Yet, this effect is stronger in the earlier decade (1995-2004) than subsequently. Intangibility of investments consistently displays positive correlation with concentration only for EU wide and worldwide services markets. In contrast, the correlation is negative in national markets. This underscores the importance of the large heterogeneity present in concentration developments across markets.
    Keywords: Concentration, HHI, market definition, entry barriers, mergers, merger control, intangibles
    JEL: L24 L44 K21 O32
    Date: 2021
  9. By: Thierry Kirat (Université Paris-Dauphine; PSL Research Université; IRISSO CNRS); Frédéric Marty (Université Côte d'Azur, France; GREDEG CNRS)
    Abstract: This article discusses the institutionalization of the field of Law and Economics in the United States from the post-war period to the Reagan administration. It emphasizes the role of pro-market corporate foundations in the development of Law and Economics. It analyses individual and collective trajectories, including research projects, training programs led with judges, as well as leading academics contributions and judicial and administrative careers. It ultimately focuses on the impact of this institutionalization on judging methods.
    Keywords: Law and Economics, Foundations, Antitrust, Conservatism
    JEL: B21 B31 K21 N42
    Date: 2021–03
  10. By: Ian Burn; Daniel Firoozi; Daniel Ladd; David Neumark
    Abstract: We explore whether ageist stereotypes in job ads are detectable using machine learning methods measuring the linguistic similarity of job-ad language to ageist stereotypes identified by industrial psychologists. We then conduct an experiment to evaluate whether this language is perceived as biased against older workers. We find that language classified by the machine learning algorithm as closely related to ageist stereotypes is perceived as ageist by experimental subjects. The scores assigned to the language related to ageist stereotypes are larger when responses are incentivized by rewarding participants for guessing how other respondents rated the language. These methods could potentially help enforce anti-discrimination laws by using job ads to predict or identify employers more likely to be engaging in age discrimination.
    JEL: J14 J71 K31
    Date: 2021–01

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