nep-law New Economics Papers
on Law and Economics
Issue of 2023‒09‒18
nine papers chosen by
Yves Oytana, Université de Franche-Comté

  1. Manufacturer Collusion and Resale Price Maintenance By Matthias Hunold; Johannes Muthers
  2. Antitrust enforcement increases economic activity By Babina, Tania; Barkai, Simcha; Jeffers, Jessica; Karger, Ezra; Volkova, Ekaterina
  3. Victimisation and Birth Outcomes By Livia Menezes; Martin Foureaux Koppensteiner
  4. Electoral Sentencing Cycles By David Abrams; Roberto Galbiati; Emeric Henry; Arnaud Philippe
  5. Gentrification and crime: Empirical investigation across American cities By Alessandro Corvasce
  6. Collective Sanction Enforcement: New Experimental Evidence from Two Societies By Kenju Kamei; Smriti Sharma; Matthew J. Walker
  7. Generative Interpretation By Yonathan A. Arbel; David Hoffman
  8. Divorce and Property Division Laws Shape Human Capital Investment By Peter Q. Blair; Elijah Neilson
  9. Does Capitalism Disfavor Women? Evidence from Life Satisfaction By Berggren, Niclas; Bjørnskov, Christian

  1. By: Matthias Hunold; Johannes Muthers
    Keywords: resale price maintenance, collusion, retailing
    JEL: D43 K21 K42 L41 L42 L81
    Date: 2023
  2. By: Babina, Tania; Barkai, Simcha; Jeffers, Jessica; Karger, Ezra; Volkova, Ekaterina
    Abstract: We hand-collect and standardize information describing all 3, 055 antitrust lawsuits brought by the Department of Justice (DOJ) between 1971 and 2018. Using restricted establishment-level microdata from the U.S. Census, we compare the economic outcomes of a non-tradable industry in states targeted by DOJ antitrust lawsuits to outcomes of the same industry in other states that were not targeted. We document that DOJ antitrust enforcement actions permanently increase employment by 5.4% and business formation by 4.1%. Using an event-study design, we find (1) a sharp increase in payroll that exceeds the increase in employment, meaning that DOJ antitrust enforcement increases average wages, (2) an economically smaller increase in sales that is statistically insignificant, and (3) a precise increase in the labor share. While we cannot separately measure the quantity and price of output, the increase in production inputs (employment), together with a proportionally smaller increase in sales, strongly suggests that these DOJ antitrust enforcement actions increase the quantity of output and simultaneously decrease the price of output. Our results show that government antitrust enforcement leads to persistently higher levels of economic activity in targeted industries.
    Keywords: antitrust enforcement, economic activity, employment, business formation
    JEL: L4 E24 K21 J21
    Date: 2023
  3. By: Livia Menezes (University of Birmingham); Martin Foureaux Koppensteiner (University of Surrey)
    Abstract: We estimate the causal effect of individual criminal victimisation in robbery and theft on birth outcomes using a unique dataset from Brazil combining information on the universe of victims of crime with vital statistics data. We find that victimisation during pregnancy reduces birth- weight by about 16 grams - 3 percent of a standard deviation in birthweight - and increases the likelihood of low and extremely low birthweight by about 8.5 and 30 percent, respectively, compared to the baseline. The results are robust to the inclusion of place of residence, maternal and time fixed effects and to the inclusion of a very large array of mother and pregnancy characteristics. We also show that victimisation leads to behavioural adjustments of mothers as we observe a reduction in the number of prenatal visits. Effects are stronger for individuals of lower socio-economic background, indicating that victimisation might contribute to the intergenerational transmission of poverty.
    JEL: I12 J13 K42 O12
    Date: 2023–06
  4. By: David Abrams (University of Pennsylvania); Roberto Galbiati (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Emeric Henry (Sciences Po - Sciences Po); Arnaud Philippe (University of Bristol [Bristol])
    Abstract: We add to our understanding of the optimal method of judicial selection by exploiting an unusual feature in North Carolina: judges rotate location every six months. This allows us to identify the existence and source of sentencing variation over the electoral cycle. We show that when elections approach, felony sentences rise. This increase is found exclusively when judges are sentencing in their district of election, and only when elections are contested. When judges hear cases outside their home district, sentences do not significantly vary over the electoral cycle. Our results show that electoral sentencing cycles can be explained by strategic sentencing by judges in an attempt to please voters. The unique setting allows us to reject alternative behavioral or contextual explanations for the rise in sentences as elections approach. (JEL K42)
    Date: 2023–07
  5. By: Alessandro Corvasce (Università degli Studi di Milano and Università Cattolica del Sacro Cuore)
    Abstract: This presentation examines the impact of gentrification on criminal activity in urban neighborhoods to determine whether this process has a detrimental effect on communities. The study utilizes a newly-built unique dataset of georeferenced crime reports from 14 major American cities matched with census data to identify gentrified areas in the 2010s. To causally evaluate the impact of gentrification on crime, I adopt state-of-the-art event-study models to causally evaluate the effects of gentrification, taking into account variations in the timing of this process across different cities and neighborhoods. The analysis reveals that gentrified areas experienced a statistically significant increase in crime ranging from 11% to 17%. The findings suggest that gentrification has a negative impact on neighborhoods, with property crimes showing the most significant increases. Overall, the study suggests that gentrification may have a criminogenic effect on neighborhoods, highlighting the need for further research and policy attention to this issue.
    Date: 2023–08–11
  6. By: Kenju Kamei (Faculty of Economics, Keio University); Smriti Sharma (Business School, Newcastle University); Matthew J. Walker (Business School, Newcastle University)
    Abstract: Sanction enforcement offers the potential to mitigate free riding on punishment among multiple third parties. Cross-societal differences in the effectiveness of sanction enforcement may be explained by factors rooted in cultural evolution. This paper provides the first experiment to study third-party enforcement of punishment norms with and without opportunities for higher-order punishment by selecting two different societies in terms of the degree of ancestral kinship ties: India and the United Kingdom. In both societies, third parties strongly inflict punishment when they encounter a norm violation, and a third party's failure to punish the norm violator invites higher-order punishment from their fellow third parties. These behavioral patterns are consistent with a model of social preferences and literature from anthropology and theoretical biology. On the other hand, two clear cross-societal variation emerges. First, third-party enforcement is stronger in the UK than in India. Parallel to this behavioral pattern, a supplementary survey also validates the conjecture that people in a society with looser ancestral kinship ties (the UK) are relatively more willing to engage in pro-social punishment. Second, intriguingly, the group size effect varies across the two societies: whereas third parties free ride on others' punitive acts in the UK, they punish more when in the presence of other third parties in India.
    Keywords: Experiment, Cross-societal variation, Public Goods, Third-party punishment, Higher-order
    JEL: C92 H41 D01 D91
    Date: 2023–08–21
  7. By: Yonathan A. Arbel; David Hoffman
    Abstract: We introduce generative interpretation, a new approach to estimating contractual meaning using large language models. As AI triumphalism is the order of the day, we proceed by way of grounded case studies, each illustrating the capabilities of these novel tools in distinct ways. Taking well-known contracts opinions, and sourcing the actual agreements that they adjudicated, we show that AI models can help factfinders ascertain ordinary meaning in context, quantify ambiguity, and fill gaps in parties' agreements. We also illustrate how models can calculate the probative value of individual pieces of extrinsic evidence. After offering best practices for the use of these models given their limitations, we consider their implications for judicial practice and contract theory. Using LLMs permits courts to estimate what the parties intended cheaply and accurately, and as such generative interpretation unsettles the current interpretative stalemate. Their use responds to efficiency-minded textualists and justice-oriented contextualists, who argue about whether parties will prefer cost and certainty or accuracy and fairness. Parties--and courts--would prefer a middle path, in which adjudicators strive to predict what the contract really meant, admitting just enough context to approximate reality while avoiding unguided and biased assimilation of evidence. As generative interpretation offers this possibility, we argue it can become the new workhorse of contractual interpretation.
    Date: 2023–08
  8. By: Peter Q. Blair; Elijah Neilson
    Abstract: In theory, unilateral divorce laws alter the private incentive to invest in human capital by permitting either spouse to initiate the division of the marital assets. Using several causal research designs we show that both men and women are less likely to attain a bachelor’s degree in states with unilateral divorce laws—especially individuals who were exposed to the laws when making educational choices and who live in states requiring an even split of assets upon divorce. Unilateral divorce laws do not distort human capital investment generically—but rather in contexts where the property division laws invite moral hazard.
    JEL: D13 J12 J13 J24 K11 K12 K36
    Date: 2023–08
  9. By: Berggren, Niclas (Research Institute of Industrial Economics (IFN)); Bjørnskov, Christian (Aarhus University and)
    Abstract: There is widespread concern, especially in certain feminist circles, that a market-oriented economic system, or capitalism, disfavors women. This could take many forms, such as lower wages for the same type of work, reduced career opportunities, disparities in ownership and the upholding of traditional gender roles. In all, this could influence overall life satisfaction such that capitalism confers more life satisfaction on men than on women. We test empirically whether this concern is justified. Using the epidemiological approach to rule out reverse causality, we first confirm previous findings that most areas of economic freedom (legal quality in particular, but also monetary stability, openness and regulation) are beneficial for general life satisfaction. When looking at women and men separately, we find virtually no statistically significant differences, and in the cases we do, the estimates reveal a more beneficial outcome for women. Hence, we conclude that capitalism does not seem to favor men more than women in terms of life satisfaction.
    Keywords: Economic freedom; Capitalism; Market economy; Life satisfaction; Gender; Happiness
    JEL: B52 D02 D63 F13 H11 I31 K20 K38 P16
    Date: 2023–08–28

This nep-law issue is ©2023 by Yves Oytana. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.