nep-law New Economics Papers
on Law and Economics
Issue of 2023‒07‒24
eight papers chosen by
Yves Oytana, Université de Franche-Comté

  1. Access to Guns in the Heat of the Moment: More Restrictive Gun Laws Mitigate the Effect of Temperature on Violence By Colmer, Jonathan; Doleac, Jennifer
  2. European Insolvency Law and Firm Leverage By Fien van Solinge; Beau Soederhuizen
  3. Mafia Origins, Land Distribution, and Crop Diversification By Michele Battisti; Giovanni Bernardo; Andros Kourtellos; Andrea Mario Lavezzi
  4. Coordination in the Fight Against Collusion By Rey, Patrick; Iossa, Elisabetta; Loertscher, Simon; Leslie M. Marx,
  5. Come Out and Play: Public Space Recovery, Social Capital, and Citizen Security By Braun, Matías; Gallego, Francisco; Soares, Rodrigo R.
  6. Imperfect Collusion On Surveilled Markets With Free Entry By Ludwig von Auer; Tu Anh Pham
  7. Simultaneous Decision Making of Juries: Evidence From the Paris Labor Court By Claudine Desrieux; Romain Espinosa; Michael Visser
  8. Hugo Grotius on Exchange and Price By André Lapidus

  1. By: Colmer, Jonathan (University of Virginia); Doleac, Jennifer (Texas A&M University)
    Abstract: Gun violence is a major problem in the United States, and extensive prior work has shown that higher temperatures increase violent behavior. In this paper, we consider whether restricting the concealed carry of firearms mitigates or exacerbates the effect of temperature on violence. We use two identification strategies that exploit daily variation in temperature and variation in gun control policies between and within states. Our findings suggest that more prohibitive concealed carry laws attenuate the temperature–homicide relationship. Additional results suggest that restrictions primarily decrease the lethality of temperature–driven violent crimes, rather than their overall occurrence, but may be less effective at reducing access to guns in more urban areas.
    Keywords: right-to-carry, temperature, crime, homicide
    JEL: K42 Q51 I18
    Date: 2023–06
  2. By: Fien van Solinge (CPB Netherlands Bureau for Economic Policy Analysis); Beau Soederhuizen (CPB Netherlands Bureau for Economic Policy Analysis)
    Abstract: In our new study we find that strengthening insolvency law increases the amount of long-term debt, as a percentage of total assets, on firms’ balance sheets in Europe. Since we also find a negative effect on short-term leverage, it seems that improving insolvency law causes a shift from short-term to long-term debt. Longer debt maturities can protect firms from rising interest rates and credit crunches. Furthermore, we find that these effects are stronger for large firms with a lot of tangible assets and in countries with short insolvency procedures. These findings are relevant for policy makers because there are proposals to further harmonize insolvency law in the European Union (EU). The first steps have already been taken. In 2019 the EU adopted a directive to harmonize preventative restructuring. Currently, a Commission proposal on further harmonization of in-court insolvency procedures is being discussed in the European Parliament. The goal is to strengthen European capital markets and to enhance financing possibilities for firm. Therefore, our study adds to the policy debate and gives insight into the possible effects changing insolvency law could have.
    JEL: G15 G32 G33 K22
    Date: 2023–07
  3. By: Michele Battisti; Giovanni Bernardo; Andros Kourtellos; Andrea Mario Lavezzi
    Abstract: This paper explores the historical roots of land inequality in Sicily and its relationship with the Mafia presence. Using earthquake intensity as an instrumental variable to address endogeneity concerns, we find that greater land inequality in the past leads to a higher incidence of Mafia activity. Moreover, we show that contemporaneous socio-economic conditions did not drive the effect but reflected persistent historical inequality patterns. Our results suggest that policies to reduce land inequality and promote land reform could have effectively curbed organized crime in Eastern Sicily and other areas with a similar history of inequality.
    Keywords: organized crime. mafia, land inequality
    JEL: K42 H11 H75
    Date: 2023–06–06
  4. By: Rey, Patrick; Iossa, Elisabetta; Loertscher, Simon; Leslie M. Marx,
    Abstract: While antitrust authorities strive to detect, prosecute, and thereby deter collusive conduct, entities harmed by that conduct are also advised to pursue their own strategies to deter collusion. The implications of such delegation of deterrence have largely been ignored, however. In a procurement context, we find that buyers may prefer to accommodate rather than deter collusion among their suppliers. We also show that a multi-market buyer, such as a centralized procurement authority, may optimally deter collusion when multiple independent buyers would not, consistent with the view that “large” buyers are less susceptible to collusion.
    Keywords: Collusion; Cartel; Auction; Procurement; Reserves; Sustainability and initiation of collusion; Coordinated effects
    JEL: D44 D82 H57 L41
    Date: 2023–06–05
  5. By: Braun, Matías (Universidad de los Andes); Gallego, Francisco (Pontificia Universidad Catolica de Chile); Soares, Rodrigo R. (Insper, São Paulo)
    Abstract: This paper examines the effects of renovating deteriorated public spaces on local socioeconomic outcomes. We analyze the impacts of a randomized experiment implemented in 28 fragile neighborhoods of Santiago, Chile. Our findings indicate that the renovation of local squares led to increased use and maintenance of the public space, enhanced neighborhood engagement, and a stronger sense of ownership among residents, along with a reduction in leisure activities outside the neighborhood. Moreover, treated neighborhoods experienced improvements in public security perceptions both within the square and in the broader neighborhood area. We also observe positive effects on trust (among acquaintances) and participation in community organizations. By exploring heterogeneous treatment effects across neighborhoods, we do not find evidence supporting theories emphasizing the joint determination of public security and social capital. Instead, our results suggest that the effects are better explained by increased neighborhood use, particularly in areas that are densely populated and have a higher proportion of social housing.
    Keywords: public space recovery, crime, social capital, urban infrastructure
    JEL: K42 O18 R53
    Date: 2023–06
  6. By: Ludwig von Auer; Tu Anh Pham
    Abstract: Surveys of cartel proceedings reveal that illegal cartels usually (1) attempt to minimize the risk of detection, (2) achieve merely imperfect levels of collusion, (3) compete against some fringe firms, and (4) adjust to market entries and exits. By contrast, existing oligopoly models of collusive behavior consider only some of the four listed stylized facts and, thus, run the risk of missing important interdependencies between them. Therefore, the present paper develops a general quantity leadership model that simultaneously accommodates all four stylized facts. Within this model, an imperfectly colluding group of firms competes against independent fringe rivals. The market is surveilled by an antitrust authority that has three different policy instruments at its disposal: Ensuring free market access, obstructing collusion, and discouraging collusion through law enforcement. The results of the model indicate that the latter two instruments are rather ineffective.
    Keywords: antitrust, fringe, oligopoly, stability, sustainability
    JEL: L0 L1
    Date: 2023
  7. By: Claudine Desrieux (CRED - Centre de Recherche en Economie et Droit - Université Paris-Panthéon-Assas); Romain Espinosa (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique, CRED - Centre de Recherche en Economie et Droit - Université Paris-Panthéon-Assas); Michael Visser (Centre de Recherche en Économie et STatistique (CREST))
    Abstract: This paper analyzes the decisions made by juries at the Paris Labor Court. These juries (made up of two judges representing workers' unions and two representing employers' federations) decide how much money defendants (employers) should pay to plaintiffs (employees). Multiple cases are typically examined during a court session, and the jury then decides simultaneously how each plaintiff is to be compensated after all cases have been heard. We exploit the quasi-random assignment of cases and juries to sessions and estimate simultaneous Tobit models, accounting thereby for the mass at zero of the awarded amount and the simultaneous nature of the decision process. The awarded amount is not affected by the (average) amount awarded to other plaintiffs, suggesting that in this respect a simultaneous decision process is preferable to a sequential one (wherein decisions have been shown to be affected by path dependency). Furthermore, the awarded amount is significantly higher when one or both employee representatives are left-wing orientated, or if the jury is headed by a judge from a workers' union. Finally, plaintiffs get less money when they are examined in sessions containing relatively many cases.
    Keywords: Labor dispute, simultaneous judicial decision-making
    Date: 2022–11–17
  8. By: André Lapidus (PHARE - Philosophie, Histoire et Analyse des Représentations Économiques - UP1 - Université Paris 1 Panthéon-Sorbonne)
    Abstract: This paper explores the way Grotius, in the chapter on contracts of the book from De Jure Belli ac Pacis (1625) where the causes of the birth of war are discussed, elaborated an original understanding of exchange and price which occupies an interesting position between the scholastic analysis where price was compared to a norm of just price and the later articulation, in classical economic thought, betweentypicallynatural prices and market prices. With Grotius, the issue was no longer the morality or sinfulness of the transaction, and not yet its exclusive economic concern, but its lawfulness. Drawing on Roman law, his starting point was a critical construction of a typology of acts from which he derived a normative analysis of exchange, which combined three types of equality, relating to information, to the absence of coercion and, finally, to the thing exchanged itself. The realisation of this equality in exchange first makes it possible to identify the legally acceptable price associated with it, a common price understood in an equivalent way by a socially recognised need that measures it or by the labour and expenses of the merchants. This legal acceptance then extends to transaction prices that may deviate from the common price, either because of variations in the tastes of the parties and in the scarcity of the good, or because, in the absence of a common judge, under the law of nations, of the agreement of the seller and buyer through a bargaining process made it acceptable.
    Keywords: Grotius, Price, Exchange, Contract
    Date: 2023–06–01

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