|
on Law and Economics |
| By: | Emmanuelle Auriol (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - 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); Erling Hjelmeng (UiO - University of Oslo, Norwegian School of Economics and Business Administration - Norwegian School of Economics and Business Administration); Tina Søreide (Norwegian School of Economics and Business Administration - Norwegian School of Economics and Business Administration) |
| Abstract: | By combining approaches from the economic theory of crime and of industrial organization, this paper analyzes optimal enforcement for three different forms of corporate misconduct that harm competition. The analysis shows why corporate crime is more harmful in large markets, why governments have a disinclination to sanction firms whose crime materializes abroad, and why leniency for those who self-report their crime is a complement, and not a substitute, to independent investigation and enforcement. As public authorities rely increasingly on self-reporting by companies to detect cartels, the number of leniency applications is likely to decline, and this is borne out by data. Upon a review of 50 cases of corporate liability from five European countries, competition law enforcement, governed by a unified legal regime, is more efficient than enforcement in bribery and money laundering cases, governed by disparate criminal law regimes. Sanction predictability and transparency are higher when governments cooperate closely with each other in law enforcement, when there are elements of supra-national authority, and when the offense is regulated by a separate legal instrument. Given our results, Europe would benefit from stronger supra-national cooperation in regulation and enforcement of transnational corporate crime, especially for the sake of deterrent penalties against crime committed abroad. |
| Keywords: | Corporate liability, Corruption, Collusion, Antitrust, Money Laundering, Deterrence, Sanctions, Litigation |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04498703&r=law |
| By: | Ramón Rey; Günther G. Schulze; Nikita Zakharov |
| Abstract: | This paper investigates the effect of Venezuelan transit migration on crime rates in Colombia. We exploit the reopening of the Venezuela-Colombia border in 2016, which has led to a surge in transit migration, and geospatial information about the distinct routes through which the migrants crossed Colombia. Employing a difference-in-differences approach and propensity score matching, we find that transit migration increased property crime rates in crossed municipalities, with both native Colombians and Venezuelan refugees seeing higher victimization rates. Violent crimes remained unaffected. This is the first study to document a link between transit migration and crime. |
| Keywords: | transit migration, crime, migration |
| JEL: | K42 F22 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10953&r=law |
| By: | Alberto Galasso; Hong Luo |
| Abstract: | We examine the relationship between product liability litigation and innovation by systematically combining data on product liability lawsuits with data on new product introductions in a panel dataset of leading medical device firms. We first document a decline in the propensity to introduce new products for both defendant firms and other firms operating in litigated device categories. This decline, however, does not spill over to other device categories, and we also do not find any slowing down in firms' patenting activities. We then show that changes in two features of the regulatory environment---(1) the availability of public information regarding adverse events and (2) federal law taking precedence over state law---substantially affect the likelihood of litigation. These changes also provide quasi-exogenous variations in litigation that confirm our baseline findings. Finally, we show that litigation appears to induce firms to develop safer devices. Overall, our findings suggest that product liability litigation affects the rate and direction of technological progress, and that safety regulation and liability regimes interact with one another in significant ways. |
| JEL: | K13 K41 L51 O32 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32215&r=law |
| By: | Hoffmann, Jakob (LMU Munich); Glückler, Johannes; Khuchua, Tamar; Lachapelle, Francois; Lazega, Emmanuel; Zipf, Marius |
| Abstract: | While realist approaches towards judicial decision-making have become predomi- nant, their appropriateness is much less obvious for specialized or technical fields of law, such as patent litigation, and evidence is much scarcer than for generalist courts. Addressing this scarcity, the paper assesses judge-level variation in deci- sion outcomes based on a sample of 1, 722 collegial decisions on patent validity at the German Federal Patent Court. Using a Bayesian mixed membership multilevel model, we find that after controlling for variation due to other contextual factors, there remains significant statistical variation in the propensity to nullify a patent at the level of individual judges. However, judge effects are relatively weak and uncer- tain, indicating mitigation of individual deviation through collegiality. We conclude by discussing the relevance of consistent judicial outcomes beyond the studied con- text and especially in transnational harmonization processes, such as initialized by the recent establishment of the Unified Patent Court. |
| Date: | 2024–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:p354r&r=law |
| By: | Matthew Gibson (Williams College and IZA) |
| Abstract: | Adam Smith alleged that employers often secretly combine to reduce labor earnings. This paper examines an important case of such behavior: illegal no-poaching agreements through which information-technology companies agreed not to compete for each other’s workers. Exploiting the plausibly exogenous timing of a U.S. Department of Justice investigation, I estimate the effects of these agreements using a difference-in-difference design. Data from Glassdoor permit the inclusion of rich employer- and job-level controls. On average the no-poaching agreements reduced salaries at colluding firms by 5.6 percent, consistent with considerable employer market power. Stock bonuses and job satisfaction were also negatively affected. |
| Keywords: | No-poach agreement, employer market power, Silicon Valley, tech companies, Glassdoor, compensation |
| JEL: | J42 K42 L41 K21 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:24-398&r=law |
| By: | Federico Fornasari (Bank of Italy); Giacomo Roma (Bank of Italy) |
| Abstract: | Insolvent firms' liquidation procedures are of crucial importance to the economic system, influencing ex ante the price and quantity of credit granted and ex post the reallocation of productive factors. Nevertheless, there are no studies available that evaluate the functioning of judicial liquidation procedures comparatively. The paper contributes to filling this gap in the literature and analyses the rules on asset liquidation in Italy, France, Germany and Spain, as they have recently been reformed. It focuses on the planning of liquidation procedures, on how assets are sold and how the appointed professionals are remunerated. Although some provisions may partially account for the different recovery rates and duration of procedures, these seem primarily due to institutional and contextual factors rather than to regulatory specificities. |
| Keywords: | bankruptcy law, civil justice efficiency, non-performing loans |
| JEL: | G21 K10 K40 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_828_24&r=law |
| By: | Grenet, Julien (Paris School of Economics); Grönqvist, Hans (Department of Economics and Statistics); Niknami, Susan (Stockholm University) |
| Abstract: | Electronic monitoring (EM) has emerged as a popular tool for curbing the growth of large prison populations. Evidence on the causal effects of EM on criminal recidivism is, however, limited and it is unclear how this alternative to incarceration affects the labor supply of offenders and the outcomes of their family members. We study the countrywide expansion of EM in Sweden in 1997 wherein offenders sentenced to up to three months in prison were granted the option to substitute incarceration with EM. Our difference-in-differences estimates, which compare the change in the prison inflow rate of treated offenders to that of non-treated offenders with slightly longer sentences, show that the reform significantly decreased the number of incarcerations. Our main finding is that EM not only lowers criminal recidivism but also increases labor supply. Additionally, EM improves the educational attainment and early-life earnings of the children whose parents were exposed to the reform. The primary mechanisms through which EM operates appear to involve the preservation of offenders’ ties to the labor market, by reducing the barriers to both finding a job and changing employers. Our calculations suggest that the social benefits stemming from EM are about seven times larger than the fiscal savings associated with reduced prison expenditures, implying that the welfare gains from EM could be much greater than previously acknowledged. |
| Keywords: | Electronic monitoring; Incarceration; Labor supply; Crime; Spillovers |
| JEL: | K42 |
| Date: | 2024–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:vxesta:2024_002&r=law |
| By: | Roberto Galbiati (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Emeric Henry (Institut d'Études Politiques [IEP] - Paris); Nicolas Jacquemet (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, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Formal enforcement punishing defectors can sustain cooperation by changing incentives. In this paper, we introduce a second effect of enforcement: it can also affect the capacity to learn about the group's cooperativeness. Indeed, in contexts with strong enforcement, it is difficult to tell apart those who cooperate because of the threat of fines from those who are intrinsically cooperative types. Whenever a group is intrinsically cooperative, enforcement will thus have a negative dynamic effect on cooperation because it slows down learning about prevalent values in the group that would occur under a weaker enforcement. We provide theoretical and experimental evidence in support of this mechanism. Using a lab experiment with independent interactions and random rematching, we observe that, in early interactions, having faced an environment with fines in the past decreases current cooperation. We further show that this results from the interaction between enforcement and learning: the effect of having met cooperative partners has a stronger effect on current cooperation when this happened in an environment with no enforcement. Replacing one signal of deviation without fine by a signal of cooperation without fine in a player's history increases current cooperation by 10%; while replacing it by a signal of cooperation with fine increases current cooperation by only 5%. |
| Keywords: | Enforcement, social values, cooperation, learning, spillovers, repeated games, experiments |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-04511257&r=law |
| By: | Beber, Bernd (RWI); Ebert, Cara (RWI); Sievert, Maximiliane (RWI) |
| Abstract: | We investigate the extent to which asylum policies that aim to deter individuals from migrating irregularly in fact do so. We specifically consider effects of Germany's recent and high-profile asylum policy adjustments, which include accelerated asylum decision processes, the prospect of asylum processing outside of Europe, the introduction of a payment card to replace cash benefits, and an extended waiting period for native-level benefits. In order to estimate effects of these policy measures on irregular migration intent, we implement a conjoint experiment with 989 men aged 18–40 in four cities in Senegal, a population of most-likely migrants in a country where irregular migration to Europe is highly salient. We find that offshoring the asylum process significantly and substantially lowers irregular migration intentions across nearly all types of subjects. Extending the waiting time for native-level benefits only has a small, marginally significant effect on intent, and no effect among the poorest subjects and those that are most motivated to migrate internationally. Neither reducing asylum processing times nor replacing cash benefits with a payment card significantly alters intentions. We note that the presence or absence of an effect does not resolve political and normative questions concerning these policies, which are beyond the scope of this particular study. |
| Keywords: | asylum policy, irregular migration, conjoint experiment |
| JEL: | F22 J61 K37 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16850&r=law |
| By: | Dinarte Diaz, Lelys (World Bank); Egana-delSol, Pablo (Universidad Adolfo Ibañez); Martínez A., Claudia (Pontificia Universidad Catolica de Chile); Rojas A., Cindy (Inter-American Development Bank) |
| Abstract: | After-school programs (ASP) that keep youth protected while engaging them in socio-emotional learning might address school-based violent behaviors. This paper experimentally studies the socio-emotional-learning component of an ASP targeted to teenagers in public schools in the most violent neighborhoods of El Salvador, Honduras, and Guatemala. Participant schools were randomly assigned to different ASP variations, some of them including psychology-based interventions, which constitutes the ASP socio-emotional-learning component. Results indicate that including psychology-based activities as part of the ASP increases by 23 percent-age points the probability that students are well-behaved at school. The effect is driven by the most at-risk students. Using data gathered from task-based games and AI-powered emotion-detection algorithms, this paper shows that improvement in emotion regulation is likely driving the effect. When comparing a psychology-based curriculum aiming to strengthen participants' character and another based on mindfulness principles, results show that the latter improves violent behaviors while reducing school dropout. |
| Keywords: | after-school programs, psychology-based interventions, school-based violence, emotion regulation |
| JEL: | I29 K42 I25 D87 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16831&r=law |