nep-law New Economics Papers
on Law and Economics
Issue of 2022‒02‒14
twenty-one papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. When do more police induce more crime? By Casilda Lasso de la Vega; Oscar Volij; Federico Weinschelbaum
  2. Assessing EU Merger Control through Compensating Efficiencies By Pauline Affeldt; Tomaso Duso; Klaus Gugler; Joanna Piechucka
  3. Fueling Organized Crime: The Mexican War on Drugs and Oil Thefts By Giacomo Battiston; Gianmarco Daniele; Marco Le Moglie; Paolo Pinotti
  4. Anger as a Crime Generating Factor By Cristian Dan
  5. Weather and appeal court decisions in divorce cases in France By Marc Deschamps; Bruno Jeandidier; Julie Mansuy
  6. Incrimination and Forensic Investigation of the Crimes Committed Against Safety and Health at Work in Romanian Legislation By Adrian Cristian Moise
  7. The Use of Experts in Criminal Proceedings in Romania. Inquisitorial Background and Future Trends By Adrian Sandru
  8. Protests and Police Militarization By Christos Mavridis; Orestis Troumpounis; Maurizio Zanardi
  9. Tort Law under Oligopolistic Competition By Gérard Mondello; Evens Salies
  10. Copyright System By Dorel Mihai Vlad
  11. Competitors’ Reactions to Big Tech Acquisitions: Evidence from Mobile Apps By Pauline Affeldt; Reinhold Kesler
  12. 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
  14. Enforcement of labor regulation and the labor market effects of trade: evidence from Brazil By Vladimir Ponczek; Gabriel Ulyssea
  15. The Early Origins of Judicial Stringency in Bail Decisions: Evidence from Early-Childhood Exposure to Hindu-Muslim Riots in India By Nitin Kumar Bharti; Sutanuka Roy
  16. Lenders and risky activities: strict liability or negligence rule? By Gérard Mondello
  17. Voice assistants as gatekeepers for consumption? How information intermediaries shape competition By Noskova, Victoriia
  18. Criminal Participation in the Form of Complicity By Petre Buneci
  19. Social Ties and the Influence of Public Policies on Individual Opinions: The Case of Same-Sex Marriage Laws By Sylvie Blasco; Eva Moreno Galbis; Jeremy Tanguy
  20. Quantitative analysis of constitutions By Gutmann, Jerg; Voigt, Stefan
  21. School Choice with Consent: An Experiment By Claudia Cerrone; Yoan Hermstrüwer; Onur Kesten

  1. By: Casilda Lasso de la Vega; Oscar Volij; Federico Weinschelbaum
    Abstract: We provide a necessary and sufficient condition on the equilibrium of a Walrasian economy for an increase in police expenditure to induce an increase in crime. This perverse effect is consistent with any appropriation technology and could arise even if the level of police protection is the socially optimal one.
    Keywords: Theft, Crime, Police, General Equilibrium, Laffer.
    JEL: D72 D74 H23 K42
    Date: 2022–02–03
  2. By: Pauline Affeldt; Tomaso Duso; Klaus Gugler; Joanna Piechucka
    Abstract: Worldwide, the overwhelming majority of large horizontal mergers are cleared by antitrust authorities unconditionally. The presumption seems to be that efficiencies from these mergers are sizeable. We calculate the compensating efficiencies that would prevent a merger from harming consumers for 1,014 mergers affecting 12,325 antitrust markets scrutinized by the European Commission between 1990 and 2018. Compensating efficiencies seem too large to be achievable for many mergers. Barriers to entry and the number of firms active in the market are the most important factors determining their size. We highlight concerns about the Commission’s merger enforcement being too lax.
    Keywords: Compensating efficiencies, Efficiency gains, Merger control, Concentration, Screens, HHI, Mergers, Unilateral Effects, Market Definition, Entry barriers
    JEL: L19 L24 L40 K21
    Date: 2021
  3. By: Giacomo Battiston; Gianmarco Daniele; Marco Le Moglie; Paolo Pinotti
    Abstract: We show that the War on Drugs launched by the Mexican President Felipe Calderón in 2007 pushed drug cartels into large-scale oil thefts. Municipalities that the presidential candidate’s party barely won at the local elections in 2007-2009 exhibit a larger increase in illegal oil taps over the following years, compared to municipalities in which the presidential candidate’s party barely lost the elections. Challenger cartels in the drug market leapfrog incumbent drug cartels when entering the new illegal activity, analogous to what is typically observed in legal markets. Since challengers and incumbents specialize in different criminal sectors, the expansion of challengers does not increase violence in municipalities traversed by oil pipelines. At the same time, the municipalities traversed by a pipeline witness a decrease in schooling rates.
    Keywords: Organized crime, War on Drugs, Oil thefts, Leapfrogging
    JEL: K42 L20
    Date: 2022
  4. By: Cristian Dan (Dimitrie Cantemir Christian University of Bucharest, Romania)
    Abstract: In the early stages of the evolution of the human species, feelings and sensations played a particularly important role in adapting and sustaining existential activities and how to integrate man in relation to the surrounding nature. Of all the feelings, the predominant psychological characteristic was the feeling of anger, coming from the need to preserve, to defend life and things acquired, in front of the attackers who could be both fierce animals and other fellows of the same species. For millions of years, these mechanisms have contributed to the intrinsic and external development of society, being present in human interactions within tribes, cities, villages and cities. Being a sentimental trait developed over such a long period of time, the feeling of anger, inscribed in human DNA, is nowadays a dangerous factor, generating antisocial behaviors and actions that are subject to Criminal Law, which we often learn to control it. The article aims to analyze this mechanism, from a historical, psychological and cultural point of view in relation to Criminal Law and the facts determined by this feeling, highlighting, on the one hand, the crimes that can be committed under its rule, and on the other part, the methods of preventing and combating them identified in today’s society.
    Keywords: anger, morality, genetics, criminal law, crime, psychology, embezzlement, theft, violence, history, legal system, conduct, prevention, combat, rape
    Date: 2021–08
  5. By: Marc Deschamps (CRESE - Centre de REcherches sur les Stratégies Economiques (EA 3190) - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE]); Bruno Jeandidier (BETA - Bureau d'Économie Théorique et Appliquée - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Julie Mansuy (BETA - Bureau d'Économie Théorique et Appliquée - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: While there is a fairly extensive literature on the relationship between weather and productivity, little research has focused on the impact of weather on judicial activity. The findings from the few investigations conducted arrive at different conclusions depending on the country. We contribute to this area of research by conducting the first analysis using French data. We propose an empirical analysis of the impact of outdoor temperature and rainfall levels on court decisions made in French courts of appeal during divorce proceedings, based on a sample of approximately 4,000 court decisions correlated with daily and geo-localized meteorological data. The analysis focuses on decisions regarding the amount of child support to be paid. We show that, all other things being equal, when it is very hot at night preceding the judgment, the panels of judges tend to set lower amounts of child support.
    Keywords: Appeal judge's decisions,Weather,Child support,Divorce,France,Law and economics
    Date: 2021–12–21
  6. By: Adrian Cristian Moise (Spiru Haret University of Bucharest, Bucharest, Romania)
    Abstract: The study makes a detailed analysis of the main aspects related to the incrimination and the forensic investigation of the crimes committed against safety and health at work in Romanian legislation. Thus, the study first analyzes the offences against safety and health at work contained in the Romanian Criminal Code: the offence of not taking the legal measures of safety and health at work provided by Article 349 of the Romanian Criminal Code and the offence of non-compliance with the legal measures of safety and health at work, stipulated by Article 350 of the Romanian Criminal Code. The study also presents and analyzes the provisions of Article 264 and of Article 265 of the Romanian Labour Code, which refer to crimes in the field of labour relations, safety and health at work. Moreover, the article analyzes and presents some aspects related to Law no. 319/2006 on safety and health at work. This study presents and analyzes several aspects related to the investigation of crimes against safety and health at work, such as: the main issues that need to be clarified by investigating an accident at work and the disposition and conduct of some criminal prosecution acts.
    Keywords: crimes committed against safety and health at work, incrimination, forensic, investigation; work accident, criminal prosecution act, Romanian Criminal Code, Romanian Labour Code, Law no. 319/2006
    Date: 2021–08
  7. By: Adrian Sandru (Institute of Juridical Studies Acad. Andrei Rădulescu of Romanian Academy, Romania)
    Abstract: This paper aims to study and expose by comparing the institution of scientific evidence and the use of the expert in criminal proceedings, starting from the structural differences in evidence legal framework between the adversarial system and the continental system, to comparing procedural details on the disposition, conduct or assessment of an expert report. A comparative analysis of different legal systems, pointing out their advantages and disadvantages, should not lead necessary to a legal transplant, but could generate new visions that can materialize in certain proposals to improve criminal proceedings legislation through innovative legislative solutions that are inspired both from adversarial and continental systems and taking into consideration all the rules of criminal procedure at Romanian internal level.
    Keywords: expert evidence, criminal proceedings, evidence law, scientific evidence
    Date: 2021–08
  8. By: Christos Mavridis (Middlesex University London); Orestis Troumpounis (University of Padova and Lancaster University); Maurizio Zanardi (University of Surrey)
    Abstract: What is the role of the militarization of law enforcement agencies in the U.S. in the 2020 wave of protests? This paper shows that aggregate transfers of military equipment up to 2019 increased both the incidence and number of protests in a given county in 2020. However, militarization is not a significant determinant neither of violent protests nor of COVID-related protests. Hence, with our results mostly driven by protests related to the BLM movement, we argue that the 2020 wave of protests is directly linked to the hotly debated 1033 program, largely responsible for the excessive militarization of local law enforcement agencies in the past decades.
    Date: 2022–01
  9. By: Gérard Mondello (UCA - Université Côte d'Azur); Evens Salies
    Abstract: This article extends the unilateral accident standard model to allow for Cournot competition. Assuming risk-neutrality for the regulator and injurers, it analyzes three liability regimes: strict liability, negligence rule, and strict liability with administrative authorization or permits systems. Under competition the equivalence between negligence rule and strict liability no longer holds, and negligence insures a better level of social care. However, enforcing both a permit system and strict liability restores equivalence between liability regimes. However, whatever the current regime, competition leads to lower the global safety level of industry.
    Keywords: Tort Law,Strict Liability,Negligence rule,Imperfect Competition,Oligopoly,Cournot Competition. JEL: D43,L13,L52,K13
    Date: 2021–12–26
  10. By: Dorel Mihai Vlad (Dimitrie Cantemir Christian University from Bucharest, Romania)
    Abstract: The protection of copyright and related rights is done through a series of administrative, civil, and criminal law means. The appearance of a law, in accordance with the relevant international legislation, allowed entry into legality in this field as well, due to the changes in technology that required this. Also, the regulation of related rights was another step in creating the legislative framework necessary to defend these rights.
    Keywords: copyright, system, innovation, technological transfer, competitiveness
    Date: 2021–08
  11. By: Pauline Affeldt; Reinhold Kesler
    Abstract: Since 2010, Google, Apple, Facebook, Amazon, and Microsoft (GAFAM) have acquired more than 400 companies. Competition authorities did not scrutinize most of these transactions and blocked none. This raised concerns that GAFAM acquisitions target potential competitors yet fly under the radar of current merger control due to the features of the digital economy. We empirically study the competitive effects of big tech acquisitions on competitors in a relevant online market. We identify acquisitions by GAFAM involving apps from 2015 to 2019, matching these to a comprehensive database covering apps available in the Google Play Store. We find that competing apps tend to innovate less following an acquisition by GAFAM, while there seems to be no impact on prices and privacy-sensitive permissions of competing apps. Additionally, we find evidence that affected developers reallocate innovation efforts to unaffected apps and that affected markets experience less entry post-acquisition.
    Keywords: Mergers and acquisitions, digital markets, GAFAM, apps, innovation, privacy, event study
    JEL: K21 L41 L86 G34
    Date: 2021
  12. By: Thierry Kirat (IRISSO - Institut de Recherche Interdisciplinaire en Sciences Sociales - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Frédéric Marty (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015-2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur)
    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
    Date: 2021–01–28
  13. By: Gérard Mondello (UCA - Université Côte d'Azur)
    Abstract: The efficiency criterion (the highest care level at the lowest accident cost) indisputably governs the comparison of performance between strict liability and negligence. This view stems from the standard accident model development in the 70's and the 80's that ensures under ideal conditions, the equivalence between regimes and assume their potential substitutability. We develop a more general accident model (under risk universe) with divergent views among the parties about the damage. It follows that efficiency is no longer a relevant criterion. liability regimes belong to specific fields: Ultra-hazardous activities for strict liability and the remaining areas of negligence.
    Keywords: Strict Liability,Unilateral Accident Model,Negligence Rule,Ultra-hazardous activities
    Date: 2021–12–26
  14. By: Vladimir Ponczek (Institute for Fiscal Studies); Gabriel Ulyssea (Institute for Fiscal Studies)
    Abstract: How does enforcement of labor regulations shape the labor market effects of trade? Does the informal sector introduce greater de facto flexibility, reducing employment losses during bad times? To tackle these questions, we exploit local economic shocks generated by trade liberalization and variation in enforcement capacity across local labor markets in Brazil. In the aftermath of the trade opening, regions with stricter enforcement observed: (i) lower informality effects; (ii) larger losses in overall em-ployment; and (iii) greater reductions in the number of formal plants. Regions with weaker enforcement observed opposite effects. All these effects are concentrated on low-skill workers. Our results indicate that greater de facto labor market flexibility introduced by informality allows both formal firms and low-skill workers to cope better with adverse labor market shocks.
    Date: 2021–03–23
  15. By: Nitin Kumar Bharti (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Sutanuka Roy
    Abstract: We estimate the causal effects of judges' exposure to communal violence during early childhood on pretrial detention rates by exploiting novel administrative data on judgments and detailed resumes of judicial officers born during 1955-1991. Our baseline result is that judges exposed to communal violence between ages 0 and 6 years are 16% more prone to deny bail than the average judge, with the impact being stronger for the experience of riots between ages 3 and 6 years. The observed judicial stringency is driven by childhood exposure to riots with a higher duration of state-imposed lockdowns and low riot casualties.
    Keywords: Early-childhood,Pretrial Detention,Judicial Bias,Communal Violence Early-childhood,Communal Violence
    Date: 2022–01
  16. By: Gérard Mondello (UCA - Université Côte d'Azur)
    Abstract: The amendments made to CERCLA in 1996 reinforced the exemption of lenders that finance ultra-hazardous activities. Then, they become involved in liability only if they manage or own polluting activities. The paper compares strict liability and negligence rule in an agency model of vicarious liability type, and proposes to restore lenders as principal by applying negligence rules to them while operators would resort to a strict liability rule. This scheme leads the lender to propose to the borrower the most favorable loan level that induces the latter to provide the socially optimal security level.
    Keywords: Strict liability,negligence rule,moral hazard,judgment-proof,lenders,risky activities. JEL: K0,K32,Q01,Q58
    Date: 2021–12–26
  17. By: Noskova, Victoriia
    Abstract: In December 2020, new regulation of digital markets was proposed by European Commission. It specifically addresses main concerns raised by business behavior of operators of core services in their gatekeeping positions. However, voice assistants (or digital personal assistants, DPAs, e.g. Apple's Siri, Amazon's Alexa, Google Assistant) are not included into this regulation. In contrast, the Internal Market and Consumer Protection Committee of European Parliament suggested to include them. This paper argues that (i) voice assistants as gatekeepers for consumption should be listed among core services, (ii) some Digital Market Act's obligations need to be adopted to fit specifics of voice assistants, (iii) two relevant dimensions of power should be included into rebuttable presumptions used for competition policy and regulation: market power on voice assistants' market and ecosystem of related markets (cross-market integration criterion), (iv) growth of new gatekeepers should be prevented, among other means by stricter merger control.
    Keywords: Voice Assistants,Gatekeepers,Digital Market Act,Digital Personal Assistants,Virtual Assistants,Competition in Digital Markets,Competitive Bottleneck,Information Intermediaries,Platform Competition,Smart Speakers,Siri,Alexa,Google Assistant
    JEL: K21 L1 L4 L86 O33 D4
    Date: 2021
  18. By: Petre Buneci (Ecological University of Bucharest, Romania)
    Abstract: The plurality of criminals over time has evolved, so that today we have a natural plurality, constituted plurality, occasional plurality or criminal participation. Thus, within the criminal participation, the accomplices carry out a secondary activity in the sense of facilitating, helping or promising the perpetrator (co-perpetrators) who commit the act directly. This activity of the accomplice takes place before or at the same time as the commission of the criminal act. In judicial practice, the modalities of complicity (previous, concomitant, moral, and material, negative) in which a person intentionally facilitates or helps the perpetrator to commit a criminal act have been shown.
    Keywords: plurality, criminal participation, complicity, authors, co-authors, Criminal Code
    Date: 2021–08
  19. By: Sylvie Blasco (GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - UM - Le Mans Université, IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics); Eva Moreno Galbis (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université); Jeremy Tanguy (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc)
    Abstract: This paper evaluates if same-sex marriage (SSM) laws, approved in several European Union countries over the past decades, have contributed to favor gay-friendly opinions among people depending on their social interactions. We propose a dyadic model in which individuals learn about the social norm conveyed by a law through strong and weak ties. We show that the relative importance of these social ties in shaping individuals' opinions depends on the alignment between the law and the local social norm. Using the 2002–2016 European Social Surveys, we test the theoretical predictions with a pseudo-panel dynamic difference-in-difference setting relying on the progressive adoption of SSM in European countries. We show that strong ties induce a lower increase in gay-friendly opinions following the adoption of SSM when the law is aligned with the local social norm. When the law clashes with this norm, strong ties induce a larger increase.
    Date: 2022–03–01
  20. By: Gutmann, Jerg; Voigt, Stefan
    Abstract: Since the time of the Protestant reformation, Western societies typically consider themselves not to be governed by divine law but based on a social contract. While all rules governing a society are part of this social contract, a country's written constitution is a central and possibly the most important manifestation of the social contract. Once it is accepted that the contents of a constitution are subject to human design, scholars interested in the organization of human societies will ask themselves how constitutions should look like. Or less normatively speaking, the question arises what consequences can be expected from the design of different elements of a constitution. For a long time, (comparative) constitutional legal scholars have tried to evaluate the consequences of constitutional design by drawing on and comparing select country cases. Such a qualitative empirical research approach, however, has its limitations. While it might be suitable to generate theories of how constitutions work, it is difficult to assess whether these explanations are valid when applied to a larger set of constitutions (i.e., whether findings from a single or few countries can be generalized) and whether one theory potentially outperforms other theories in explaining differences across countries and time. Thanks to the ever-increasing availability of sophisticated statistics software, powerful personal computers, and well-trained researchers, quantitative analyses of constitutions have surged in recent decades. (...)
    Date: 2022
  21. By: Claudia Cerrone (Middlesex University); Yoan Hermstrüwer (Max Planck Institute for Research on Collective Goods, Bonn); Onur Kesten (School of Economics, The University of Sydney)
    Abstract: Public school choice often yields student placements that are neither fair nor efficient. Kesten (2010) proposed an efficiency-adjusted deferred acceptance algorithm (EADAM) that allows students to consent to waive priorities that have no effect on their assignment. In this article, we provide first experimental evidence on the performance of EADAM. We compare EADAM with the deferred acceptance mechanism (DA) and with two variants of EADAM. In the first variant, we vary the default option: students can object – rather than consent – to the priority waiver. In the second variant, the priority waiver is enforced. We find that both efficiency and truth-telling rates are substantially higher under EADAM than under DA, even though EADAM is not strategy-proof. When the priority waiver is enforced, we observe that efficiency further increases, while truth-telling rates decrease relative to the EADAM variants where students can dodge the waiver. Our results challenge the importance of strategy-proofness as a condition of truth-telling and point to a trade-off between efficiency and vulnerability to preference manipulation.
    Keywords: efficiency-adjusted deferred acceptance algorithm, school choice, consent, default rules, law
    JEL: C78 C92 D47 I20 K10
    Date: 2022–02–09

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