nep-law New Economics Papers
on Law and Economics
Issue of 2024‒05‒06
nine papers chosen by
Yves Oytana, Université de Franche-Comté

  1. Judicial Venality: A Rational Choice Analysis By Bertrand Crettez; Bruno Deffains; Olivier Musy; Ronan Tallec
  2. Small Children, Big Problems: Childbirth and Crime By Britto, Diogo; Rocha, Roberto Hsu; Pinotti, Paolo; Sampaio, Breno
  3. Regulatory compliance with limited enforceability: Evidence from privacy policies By Ganglmair, Bernhard; Krämer, Julia; Gambato, Jacopo
  4. Does nothing stop a bullet like a job? The effects of income on crime By Jens Ludwig; Kevin Schnepel
  5. Donkey business: trade, resource exploitation, crime and violence in a contestable market By Dias, Lucas Cardoso Corrêa; Cícero, Vinicius Curti
  6. Beyond Social Media Analogues By Gregory M. Dickinson
  7. Big Tech Acquisitions and Innovation: An Empirical Assessment By Laureen de Barsy; Axel Gautier
  8. Economic Freedom and Academic Freedom across Nations By Berggren, Niclas; Bjørnskov , Christian
  9. Effect of State and Local Sexual Orientation Anti-Discrimination Laws on Labor Market Differentials By Scott Delhommer; Domonkos F. Vamossy

  1. By: Bertrand Crettez (Université Paris-Panthéon-Assas, CRED, EA 7321 - 75005 Paris.); Bruno Deffains (Université Paris-Panthéon-Assas, CRED, EA 7321 - 75005 Paris.); Olivier Musy (Université Paris Cité, LIRAES, F-75006 Paris, France.); Ronan Tallec (Université Paris Cité, LIRAES, F-75006 Paris, France.)
    Abstract: Venality, i.e., the sale of public positions, was widely used in the judicial sector in France between the 16th and 18th centuries. In a venal system, litigants finance the justice system by paying the judges directly. In France, moreover, the right to judge was sold by the ruler, who indirectly levied part of the legal costs. Here, instead of the state funding justice, justice funds the state. The cost to the King was a loss of control over the judiciary and biased legal decisions. We develop a model of judicial venality and build on this model to provide an analytical narrative of the rise and decline of judicial venality in Old Regime France. Historically, judicial venality enhanced legal capacity whereas the kings faced with limited opportunities to raise taxes and to borrow. Lack of control over the judiciary, however, led to overly costly and time-consuming trials, resulting in its final demise.
    Keywords: Law and Economics; Judicial Venality; Private Justice; Institutional and Legal Design; Economic Analysis of the History of Law; French Old Regime
    JEL: H1 K0 K40 K41 N40 N43 P48
    Date: 2024–04
  2. By: Britto, Diogo (University of Milan Bicocca); Rocha, Roberto Hsu (University of California at Berkeley); Pinotti, Paolo (Bocconi University); Sampaio, Breno (Universidade Federal de Pernambuco)
    Abstract: We investigate the effect of having a child on parents' criminal behavior using rich administrative data from Brazil. Fathers' criminal activity sharply increases by up to 10% during the pregnancy period, and by up to 30% two years after birth, while mothers experience only a transitory decline in criminal activity around childbirth. The effect on fathers lasts for at least six years and can explain at least 5% of the overall male crime rate. Domestic violence within the family also increases after childbirth, reflecting both increases in actual violence and women's propensity to report. The generalized increase in fathers' crime stands in sharp contrast with previous evidence from developed countries, where childbirth is associated with significant and enduring declines in criminal behavior by both parents. Our findings can be explained by the costs of parenthood and the pervasiveness of poverty among newly formed Brazilian families. Consistent with this explanation, we provide novel evidence that access to maternity benefits largely offsets the increase in crime by fathers after childbirth.
    Keywords: crime, parenthood, maternity benefits
    JEL: D10 J13 K42 H55
    Date: 2024–04
  3. By: Ganglmair, Bernhard; Krämer, Julia; Gambato, Jacopo
    Abstract: The EU General Data Protection Regulation (GDPR) of 2018 introduced stringent transparency rules compelling firms to disclose, in accessible language, details of their data collection, processing, and use. The specifics of the disclosure requirement are objective, and its compliance is easily verifiable; readability, however, is subjective and difficult to enforce. We use a simple inspection model to show how this asymmetric enforceability of regulatory rules and the corresponding firm compliance are linked. We then examine this link empirically using a large sample of privacy policies from German firms. We use text-as-data techniques to construct measures of disclosure and readability and show that firms increased the disclosure volume, but the readability of their privacy policies did not improve. Larger firms in concentrated industries demonstrated a stronger response in readability compliance, potentially due to heightened regulatory scrutiny. Moreover, data protection authorities with larger budgets induce better readability compliance without effects on disclosure.
    Keywords: data protection, disclosure, GDPR, privacy policies, readability, regulation, text-as-data, topic models
    JEL: C81 D23 K12 K20 L51 M15
    Date: 2024
  4. By: Jens Ludwig; Kevin Schnepel
    Abstract: Do jobs and income-transfer programs affect crime? The answer depends on why one is asking the question, which shapes what one means by “crime.” Many studies focus on understanding why overall crime rates vary across people, places, and time; since 80% of all crimes are property offenses, that’s what this type of research typically explains. But if the goal is to understand what to do about the crime problem, the focus will instead be on serious violent crimes, which account for the majority of the social costs of crime. The best available evidence suggests that policies that reduce economic desperation reduce property crime (and hence overall crime rates) but have little systematic relationship to violent crime. The difference in impacts surely stems in large part from the fact that most violent crimes, including murder, are not crimes of profit but rather crimes of passion – including rage. Policies to alleviate material hardship, as important and useful as those are for improving people’s lives and well-being, are not by themselves sufficient to also substantially alleviate the burden of crime on society.
    JEL: H0 I39 K40
    Date: 2024–04
  5. By: Dias, Lucas Cardoso Corrêa; Cícero, Vinicius Curti
    Abstract: The growing demand for ejiao, a traditional Chinese medicine product derived from donkey hides, has sparked a global trade that profoundly impacts donkey populations and local economies in low and middle-income countries. In response to the pressing issue of burgeoning populations of stray and abandoned donkeys, Brazil implemented regulatory measures governing the export of these animals to China in 2017. This paper examines the intricate relationship between regulation of a natural resource-based contestable market -- in which property rights are not well-defined -- and local crime rates, focusing on the donkey hide trade in Brazil. Employing a quasi-experimental research design, we leverage the timing of the regulatory measures alongside variations in donkey occurrences per inhabitant across Brazilian municipalities to provide compelling evidence that the surge in ejiao demand has led to an increase in crime and violence within Brazil. These findings underscore the critical importance of nuanced market regulation to mitigate potential social costs in markets lacking well-defined property rights. Furthermore, they highlight the urgent need for robust monitoring and enforcement frameworks to address pressing issues such as the predatory exploitation of donkey populations on a global scale.
    Date: 2024–03–30
  6. By: Gregory M. Dickinson
    Abstract: The steady flow of social-media cases toward the Supreme Court shows a nation reworking its fundamental relationship with technology. The cases raise a host of questions ranging from difficult to impossible: how to nurture a vibrant public square when a few tech giants dominate the flow of information, how social media can be at the same time free from conformist groupthink and also protected against harmful disinformation campaigns, and how government and industry can cooperate on such problems without devolving toward censorship. To such profound questions, this Essay offers a comparatively modest contribution -- what not to do. Always the lawyer's instinct is toward analogy, considering what has come before and how it reveals what should come next. Almost invariably, that is the right choice. The law's cautious evolution protects society from disruptive change. But almost is not always, and, with social media, disruptive change is already upon us. Using social-media laws from Texas and Florida as a case study, this Essay shows how social-media's distinct features render it poorly suited to analysis by analogy and argues that courts should instead shift their attention toward crafting legal doctrines targeted to address social media's unique ills.
    Date: 2024–04
  7. By: Laureen de Barsy; Axel Gautier
    Abstract: In the past 20 years, large digital platforms have made many acquisitions, mainly young and innovative startups. Few of them have been reviewed by competition authorities and little is known on their evolution after acquisition. This paper intends to fill in this gap by looking at the development of the technologies owned by the acquired firms. We focus on technologies protected by a patent and we investigate whether an acquisition by a big tech contributes to their development. For this analysis, we use patent citations as a proxy for the innovation effort by the acquirer. Our main result is to show that acquisition increases the innovation effort of the acquirer but only temporarily. After 1.5 year, there is no longer a significant impact of the acquisition on the acquirer’s innovation effort. This decline is relatively larger when the acquired patent belongs to a core technology field of the acquiring firm or to a large patent portfolio. On the contrary, citations by the rest of the industry are not negatively affected by acquisition, which does not corroborate the idea that the acquired technology has reached its maturity.
    Keywords: mergers, digital, big techs, innovation, patents, killer acquisitions
    JEL: D43 G34 K21 L40 L86
    Date: 2024
  8. By: Berggren, Niclas (Research Institute of Industrial Economics (IFN)); Bjørnskov , Christian (Aarhus University, Denmark, and)
    Abstract: Academic freedom is a cornerstone of modern academic life. It is not only implied by basic liberal principles but also contributes to scientific progress and economic growth. It is therefore important to better understand what affects how free scholarly pursuits are, and to that end, we ask whether economic freedom can help explain variation in academic freedom across countries. In our case, relating the Economic Freedom of the World index and its five areas to V-Dem’s index of academic freedom and its five areas reveals that the rule of law is positively and robustly related to academic freedom in all its forms. This suggests that the rule of law, in its general and broad sense, can arguably serve as a guarantor of academic freedom. Where the rule of law is weakened, academic freedom can be at risk. There are some indications that regulatory freedom is similarly related to academic freedom, but less robustly so, maybe indicating that interventionism in one policy area (economics) can breed interventionism in another (academia).
    Keywords: Freedom; Markets; Rule of law; Legal system; Academic freedom
    JEL: D72 I23 K40
    Date: 2024–04–15
  9. By: Scott Delhommer; Domonkos F. Vamossy
    Abstract: This paper presents the first quasi-experimental research examining the effect of both local and state anti-discrimination laws on sexual orientation on the labor supply and wages of lesbian, gay, and bisexual (LGB) workers. To do so, we use the American Community Survey data on household composition to infer sexual orientation and combine this with a unique panel dataset on local anti-discrimination laws. Using variation in law implementation across localities over time and between same-sex and different-sex couples, we find that anti-discrimination laws significantly reduce gaps in labor force participation rate, employment, and the wage gap for gay men relative to straight men. These laws also significantly reduce the labor force participation rate, employment, and wage premium for lesbian women relative to straight women. One explanation for the reduced labor supply and wage premium is that lesbian couples begin to have more children in response to the laws. Finally, we present evidence that state anti-discrimination laws significantly and persistently increased support for same-sex marriage. This research shows that anti-discrimination laws can be an effective policy tool for reducing labor market inequalities across sexual orientation and improving sentiment toward LGB Americans.
    Date: 2024–04

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