nep-law New Economics Papers
on Law and Economics
Issue of 2023‒01‒30
ten papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Platform mergers: lessons from a case in the digital TV market By Marc Ivaldi; Jiekai Zhang
  2. Collusion Sustainability with a Capacity Constrained Firm By Leonardo Madio; Aldo Pignataro
  3. Immune Deficiency in SARS-CoV-2 Virology — Institutional Crimes and Administrative Oversights By Pachankis, Yang
  4. The Effects of Electronic Monitoring on Offenders and their Families By Julien Grenet; Hans Grönqvist; Susan Niknami
  5. The Scale and Nature of Neighborhood Effects on Children: Evidence from a Danish Social Housing Experiment By Stephen B. Billings; Mark Hoekstra; Gabriel Pons Rotger
  6. The Power of Woke and Other Forms of Disproportionate Punishment By Lars Gårn Hansen
  7. Why Germany’s “Gas Price Brake” Encourages Moral Hazard and Raises Gas Prices By Markus Dertwinkel-Kalt; Christian Wey
  8. Nontariff barriers, trading companies and customs duties evasion By Mattos, Enlinson; Bressan, Rafael
  9. Women's Rights and the Gender Migration Gap By Gutmann, Jerg; Marchal, Léa; Simsek, Betül
  10. The Digital Transformation (DX) and the Financialization of Japan: A Case Study of Private Equity By Ulrike Schaede

  1. By: Marc Ivaldi (TSE-R - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Jiekai Zhang (Department of Management and Organisation, Hanken School of Economics, P.O. Box 479, FI-00101 Helsinki, Finland.)
    Abstract: This paper contributes to the analysis of mergers in two-sided markets, notably those in which a platform provides its service for free on one side but obtains all its revenues from the other, as in the digital TV industry. Specifically, we assess a decision of the French competition authority which approved the merger of the broadcasting services of the TV channels involved but imposed a behavioral remedy prohibiting the merger of their respective advertising sales services. To do so, we build a structural model allowing for multi-homing of advertisers and, using a comprehensive dataset, we estimate the demand of viewers and advertisers. Our evaluation provides evidence that the remedy has been ineffective at limiting the increase in prices and amounts of advertising, due to the cross-side externalities between viewers and advertisers. Without resulting in significant positive effects on the viewers' surplus, the remedy has also drastically increased the advertisers' total cost. Nevertheless, the remedy has benefited the competitors of the merging channels. The main lesson of our analysis is that, in the process of designing competition or regulatory policy for two-sided markets, ignoring the interaction between the two sides of platforms can result in unexpected outcomes.
    Keywords: Two-sided market, Platform merger, Advertising, TV market, Competition policy
    Date: 2022–03–26
  2. By: Leonardo Madio; Aldo Pignataro
    Abstract: We study an infinitely repeated oligopoly game in which firms compete on quantity and one of them is capacity constrained. We show that collusion sustainability is non-monotonic in the size of the capacity constrained firm, which has little incentive to deviate from a cartel. We also present conditions for the emergence of a partial cartel, with the capacity constrained firm being excluded by the large firms or self-excluded. In the latter case, we show under which circumstances the small firm induces a partial conspiracy that is Pareto-dominant. Implications for cartel identification and enforcement are finally discussed.
    Keywords: antitrust, capacity constraints, collusion, partial cartel
    JEL: D21 L13 L41
    Date: 2022
  3. By: Pachankis, Yang
    Abstract: Introduction: The research was conducted during the COVID-19 (SARS-CoV-2) lockdown measures of People’s Republic of China (PRC) with a history & continuation of nuclear proliferation, current electronic warfare, metallic pollution from military heavy industry, and actinic radiation pollutants from chip production. Apart from the biomedical harm sources, the purposes behind the source productions such as chips have been the sources of psychological tortures in neuro-cognitive warfare. The research adopted a human security paradigm primarily in mainland China with multilateral and global implications. Methodology: The research was conducted with the pressure of human trafficking conducted by the PRC. It counteracts the PRC’s disinformation with empirical research, analysis, and psychotherapeutic approaches. The meta-analysis demonstrates that PRC’s declared pandemic responses in fact have not contributed to the positive duties in protecting the public’s right to health, and on the contrary, its accumulated environmental determinants along with power intentions only worsened the public’s autonomous selfceare and mutual assistance responses in the public health situations. Results: The environmental factors in PRC substantially undermine the referential values of biomedical data in international settings, and if applicable, biomedical products export in the global supply chain. Genetic technologies based on applied research in telomerase must have thorough assessments in their impacts on telomeres consumption. Renormalization from and further research into nuclear proliferation and environmental determinants is the only way to improve public health. The PRC has never fulfilled any duties to the liberal institutions nor the territorial civil society. Military intervention and peacekeeping are necessary for PRC’s judicial independence.
    Keywords: COVID-19 politicization, crime against humanity, disinformation, immune system, morality, right to health
    JEL: I12 I14 I18 K14 K21 K32 K33 K42 Q27 Q34 Q49 Q51 Q53 Q54 Q55
    Date: 2023–01–02
  4. By: Julien Grenet (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - 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, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - 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); Hans Grönqvist (Linnaeus University, IFAU - Institute for Evaluation of Labour Market and Education Policy); Susan Niknami (Stockholm University)
    Abstract: Electronic monitoring (EM) is a popular instrument to reduce large prison populations. Evidence on the effects of EM on criminal recidivism is, however, limited and it is unclear how this alternative to incarceration affects the labor market outcomes of offenders. Moreover, little is known about potential spillover effects on family members. We study the introduction of EM in Sweden in 1997 wherein offenders sentenced to up to three months in prison were given the possibility to avoid entering prison by substituting to EM. Our difference-indifferences estimates comparing the change in the prison inflow rate of eligible offenders to that of non-eligible offenders with slightly longer sentences show that the reform dramatically decreased incarcerations. Our main finding is that EM lowers criminal recidivism and improves offenders' labor market outcomes. There is also some evidence of improvements in the short and intermediate run outcomes of the children of the offenders. The main channels through which EM operates seem to be by allowing offenders to maintain regular work and potentially also by reducing employer discrimination. Our calculations suggest that the social benefits of EM are at least six to nine times larger than the fiscal savings from reduced prison expenditure. This makes the welfare improvements from EM potentially much greater than what has been previously recognized.
    Keywords: Electronic monitoring, Incarceration, Labor supply, Crime, Spillovers
    Date: 2023–01
  5. By: Stephen B. Billings; Mark Hoekstra; Gabriel Pons Rotger
    Abstract: Recent research documents a causal impact of place on the long-run outcomes of children. However, little is known about which neighborhood characteristics are most important, and at what scale neighborhood effects operate. By using the random assignment of public housing along with administrative data from Denmark, we get inside the “black box” of neighborhood effects by defining neighborhoods using various characteristics and scales. Results indicate effects on mental health and especially education are large but local, while effects on drug possession operate on a much broader scale. Additionally, unemployment and education are better predictors of outcomes than neighborhood income.
    JEL: I38 K42 R23
    Date: 2022–12
  6. By: Lars Gårn Hansen (Department of Food and Resource Economics, University of Copenhagen)
    Abstract: I suggest that simple enforcement and lobbying models may explain how a small minority of dedicated believers (religious fundamentalists, animal rights activists, woke activists, etc.) are able to impose changes in behavior on the majority in a society who do not believe. With this, a society typically has two stable states: one with and one without the majority changing behavior. I show how activists can facilitate transition to their preferred state by focusing punishment on subsets of the behavior they want to change and on subgroups of the majority one at a time, as well as by exploiting inherent advantages they have in lobbying the leadership of subgroups with power hierarchies (corporations, universities, organizations, etc.). The willingness of dedicated believers to inflict highly disproportionate punishment on members of the majority turns out to be critical for their ability to facilitate transition. I show that transition to the state in which the majority changes behavior may substantially reduce social welfare. I conclude with a discussion of strategies for avoiding transition, which the majority may consider.
    Keywords: Woke activism, Private enforcement, Lobbying.
    JEL: D0 D7 H0 P4 L51
    Date: 2023–01
  7. By: Markus Dertwinkel-Kalt; Christian Wey
    Abstract: To help German households and firms with exploding energy costs, the German government is about to implement a new transfer scheme called “gas price brake.” A unique feature of this energy price relief measure is that both households and the industry receive a transfer that increases in one’s actual gas price. In a formal model, we show that such a transfer scheme creates incentives for moral hazard of gas providers to raise gas prices. We also show that competition does not help to overcome this adverse effect of the gas price brake. An equivalent critique applies to the electricity price brake that is to be implemented at the same time as the gas price brake.
    Keywords: energy prices, energy policy, consumer protection policy, gas price brake
    JEL: D04 L12 Q48 K33
    Date: 2022
  8. By: Mattos, Enlinson; Bressan, Rafael
    Abstract: This paper leverages an exogenous tariff reform in Brazil with rich administrative data to document the elasticity of customs duties evasion (ECDE) for the universe of importers in Brazil. We focus on the role of two modulators of ECDE: (i) nontariff barriers (NTB) and (ii) trading companies. Our findings are threefold. First, we estimate the elasticity of misreported imports to be larger than that in comparable literature. Controlling for misclassification, our results suggest an increase of 2.43% in evasion for each percentage point increase in tariff rate for missing values and 1.45% for missing quantities. Second, NTBs can reduce the elasticity of evasion up to 0.91 and -0.06, for value and quantity, respectively. This finding reinforces the NTB’s stricter enforcement role due to its papertrail. Third, we find no evidence that trading companies evade differently than other importers. Auditing policies and reputation concerns are investigated.
    Date: 2022–12–19
  9. By: Gutmann, Jerg; Marchal, Léa; Simsek, Betül
    Abstract: This is the first global study of how institutionally entrenched gender discrimination affects the gender migration gap (GMG) using data on 158 origin and 37 destination countries over the period 1961-2019. We estimate a gravity equation derived from a random utility maximization model of migration that accounts for migrants' gender. Instrumental variable estimates indicate that increasing gender equality in economic or political rights generally deepens the GMG, i.e., it reduces female emigration relative to that of men. In line with our theoretical model, this average effect is driven by higher-income countries. In contrast, increased gender equality in rights reduces the GMG in lower-income countries by facilitating female emigration.
    Keywords: Discrimination, Gender equality, Individual rights, Migration, RUM model
    JEL: F22 J16 J71 K38 O15 P48
    Date: 2023
  10. By: Ulrike Schaede (Full Professor, School of Global Strategy and Policy, University of California, San Diego (E-mail:
    Abstract: This paper argues that Japan is experiencing an increase in " financialization" - a process of marketization where the primary focus in all transaction is on the immediate monetary value earned. Left unregulated, excessive financialization can erode the core architecture and health of an economy. Japan's financialization will be further accelerated by the interrelated forces of the digital transformation (DX), societal and employment system changes, and the need for corporate reinvention and repositioning. To showcase the difficulty of finding a balance between the positive discipline of the market and the dangers of excessive short-termism, this paper introduces Japan's emerging private equity (PE) market. Corporate need for a new market for spinouts and carve-outs meets global investors eager to find alternative investments. Together, they create new pressures for short-term financial results, even for companies not targeted by these investments, thus increasing financialization overall. The paper introduces recent U.S. proposals on regulating the PE industry to ensure long-term value creation while reining in financial schemes that are detrimental to the health of companies and the economy. As Japan shows signs of increasing financialization, it may warrant attention to the current discussion regarding the PE industry in the U.S.
    Keywords: Japan, financialization, marketization, private equity, digital transformation, corporate reorganization
    JEL: G30 L10 K20
    Date: 2022–12

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