nep-law New Economics Papers
on Law and Economics
Issue of 2023‒07‒31
seven papers chosen by
Yves Oytana, Université de Franche-Comté

  1. The Impact of Fear on Police Behavior and Public Safety By Sungwoo Cho; Felipe Gonçalves; Emily Weisburst
  2. The nexus between illegal trade and environmental crime By Shunta Yamaguchi
  3. A Dynamic Analysis of Criminal Networks By Luca Colombo; Paola Labrecciosa; Agnieszka Rusinowska
  4. Illicit Shadows: An Economic Analysis of Trade Gaps in Cultural Goods through the Italian Market By Acciai, Elia; Belloni, Michele; Della Giusta, Marina; Segre, Giovanna
  5. Start-up Acquisitions, Venture Capital and Innovation: A Comparative Study of Google, Apple, Facebook, Amazon and Microsoft By Klaus Gugler; Florian Szücs; Ulrich Wohak
  6. On the need to anticipate behavioral responses to policies: the case of multiple refilings on taxpayer behavior in Ecuador By Gómez-Rámirez, Leopoldo; Sánchez, Gonzalo E.
  7. Market Power and Regulation in Pharmaceutical Markets By Gugler, Klaus; Szücs, Florian

  1. By: Sungwoo Cho; Felipe Gonçalves; Emily Weisburst
    Abstract: We examine how changes in the salience of workplace risk affect police behavior and public safety. Specifically, we investigate cases of police officer deaths while on duty. Officers respond to a peer death by decreasing arrest activity for one to two months, consistent with heightened fear. Reductions are largest for low-level arrests and are more pronounced in smaller cities. Crime does not increase on average during this period, nor do we observe crime spikes in cities with larger or longer arrest declines. While shocks in fatality risk generate substantial enforcement responses, officer fear is unlikely to harm public safety.
    JEL: J28 J45 K42
    Date: 2023–06
  2. By: Shunta Yamaguchi
    Abstract: Environmental crime is on the rise and is of growing concern to policy makers, to legitimate businesses, and more broadly to the general public. It is growing rapidly worldwide on average at over 8% per year, with an estimated value between USD 110-281 billion in 2018. Emerging issues include wildlife trafficking, illegal timber, illegal mining, illegal chemicals, illegal waste trafficking, and illegal, unreported and unregulated (IUU) fishing. Environmental crime can have serious implications to human health and the environment, to the global economy, and more broadly to good governance, national security and sustainable development.Addressing these criminal activities affecting the environment is difficult exclusively at the national level as they often extend on a transnational scale. In this context, this report provides a snapshot of cross-border environmental crime and available initiatives to tackle illegal activities at a transnational scale, with a particular focus on multilateral and regional frameworks. The key message from this report is that the increasing prevalence of cross-border environmental crime is due to regulatory failures and the growing involvement of transnational organised crimes, which require an internationally co-ordinated response, both at the multilateral and regional level.
    Keywords: environment policy, environmental crime, illegal, illegal chemicals, illegal timber, illegal trade, illegal waste, Trade and environment, trade policy, unreported and unregulated fishing, wildlife tracking
    JEL: F18 F64 K42 Q56
    Date: 2023–07–06
  3. By: Luca Colombo (Rennes School of Business, Rennes); Paola Labrecciosa (ESSCA School of Management (Paris Campus)); Agnieszka Rusinowska (CNRS, Paris School of Economics, Centre d'Economie de la Sorbonne)
    Abstract: We take a novel approach based on differential games to the study of criminal networks. We extend the static crime network game (Ballester et al., 2006, 2010) to a dynamic setting where criminal activities negatively impact the accumulation of total wealth in the economy. We derive a Markov Perfect Equilibrium (MPE), which is unique within the class of strategies considered, and show that, unlike in the static crime network game, the vector of equilibrium crime efforts is not necessarily proportional to the vector of Bonacich centralities. Next, we conduct a comparative dynamic analysis with respect to the network size, the network density, and the marginal expected punishment, finding results in contrast with those arising in the static crime network game. We also shed light on a novel issue in the network theory literature, i.e., the existence of a voracity effect. Finally, we study the problem of identifying the optimal target in the population of criminals when the planner's objective is to minimize aggregate crime at each point in time. Our analysis shows that the key player in the dynamic and the static setting may differ, and that the key player in the dynamic setting may change over time
    Keywords: differential games; Markov Perfect Equilibrium; criminal networks; Bonacich centrality; key player
    JEL: C73 D85 K42
    Date: 2022–02
  4. By: Acciai, Elia (University of Torino); Belloni, Michele (University of Torino); Della Giusta, Marina (University of Turin); Segre, Giovanna (University of Torino)
    Abstract: This paper provides evidence of a consistent gap in the value of cultural goods exported from Italy and the value declared by its trading partners in official trade statistics for the period 1994-2021 and discusses it in the context of the literature on illicit trafficking in cultural property, a phenomenon that plights a number of both developing and developed countries rich in cultural heritage. Differences between the four categories of cultural goods recorded (archaeological goods, antiquities, paintings, and sculptures) are exploited to highlight potential areas where trafficking might be expected to be larger. We construct a panel dataset to estimate a gravity model of the gap including market size, extent of trade, level of corruption and adoption of protective legislation (UNESCO and UNIDROIT) and discuss results indicating further questions to be investigated in this important and to date under researched policy area.
    Keywords: illicit trafficking, cultural property, trade, corruption, UNESCO, UNIDROIT
    JEL: F13 F14 K12 K42 O17 Z11 Z13
    Date: 2023–07
  5. By: Klaus Gugler (Department of Economics, Vienna University of Economics and Business); Florian Szücs (Department of Economics, Vienna University of Economics and Business); Ulrich Wohak (Department of Economics, Vienna University of Economics and Business)
    Abstract: We evaluate the impact of big-tech acquisitions on the incentives for investment and innovation. Using data on several hundred acquisitions by Google, Apple, Facebook, Amazon and Microsoft (GAFAM), we study the evolution of venture capital investment and patenting relative to control groups. The results show a clear negative impact on investment, while the effect on innovation depends on the acquirer and period. Both outcomes improve over time, as GAFAM firms become more similar in terms of their product and tech-portfolios, increasing competition. Yet, around 10% of acquisitions impact both metrics negatively.
    Keywords: M&A, big-tech, innovation, investment
    JEL: D22 G34 K21 L41
    Date: 2023–07
  6. By: Gómez-Rámirez, Leopoldo; Sánchez, Gonzalo E.
    Abstract: In this paper we document the use of multiple refilings to evade taxes using administrative data from Ecuador. Then, we develop a model to study the role of multiple refilings on the behavior of taxpayers that received tax notifications because they under-reported taxes. Our model finds that if multiple refilings are possible, then the better decision for selfish taxpayers is to evade taxes. Differently, the model finds that if multiple refilings are not possible, then for taxpayers who exhibit strong social preferences their better decision is to comply even if the probability of being notified is relatively low. The model also shows that banning the possibility of multiple refilings is a necessary but not sufficient condition to achieve true reporting. Nevertheless, the results imply that for both selfish and socially minded taxpayers, limiting the use of multiple refilings reduces their expected payoff of tax evasion and, therefore, increases the probability of tax compliance.
    Keywords: Tax compliance; refiling; tax evasion; Ecuador; policies future effects
    JEL: C72 H25 H26 K42
    Date: 2023–06
  7. By: Gugler, Klaus; Szücs, Florian
    Abstract: We exploit the regulatory environment in the Austrian pharmaceutical market to study the effects of price regulation on market outcomes and consumer welfare. We evaluate all mergers of drug producers in the 2009-2017 period and find that the coexisting regulated and unregulated markets were unequally affected. While M&A have substantially increased prices without regulation, particularly for price-inelastic products, prices did not increase under regulation. Instead, variety increased in regulated markets. Therefore, regulation can successfully mitigate the effects of market power: whereas M&A decrease consumer welfare absent regulation, the additional product variety increases consumer welfare in the regulated market.
    Keywords: pharmaceuticals; regulation; market power; consumer welfare; pharma mergers; product variety
    Date: 2023–07

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