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on Law and Economics |
| By: | Yeon-Koo Che; Jinwoo Kim; Konrad Mierendorff |
| Abstract: | We study law enforcement guided by data-informed predictions of "hot spots" for likely criminal offenses. Such "predictive" enforcement could lead to data being selectively and disproportionately collected from neighborhoods targeted for enforcement by the prediction. Predictive enforcement that fails to account for this endogenous "datafication" may lead to the over-policing of traditionally high-crime neighborhoods and performs poorly, in particular, in some cases as poorly as if no data were used. Endogenizing the incentives for criminal offenses identifies additional deterrence benefits from the informationally efficient use of data. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.04764&r= |
| By: | Donna, Javier; Pereira, Pedro |
| Abstract: | We discuss a subset of vertical mergers, where the exercise of market power and the efficiencies enabled by a vertical merger reduce rivals’ profits, making rivals’ exit a potentially serious concern. Rivals’ exit can fundamentally alter the welfare analysis of vertical mergers due to the reduction in product variety to consumers and the reduction in the number of competitors that would otherwise exert downward pricing pressure. An exit-inducing vertical merger might re- duce welfare even if it is a welfare-enhancing merger absent exit. We present a theoretical framework to analyze vertical mergers that focuses on the possibility and consequences of exit, discuss the antitrust implications for merger evaluation, and provide examples. We argue that the possibility of rivals’ exit should be an integral part of the analysis of vertical mergers. |
| Keywords: | Antitrust, Vertical Mergers, Rivals’ Exit, Double Marginalization, Merger Evalu- ation, Competition Policy. |
| JEL: | K21 K41 L42 L44 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:121045&r= |
| By: | Budzinski, Oliver; Stöhr, Annika |
| Abstract: | The model of perfect competition is one of the most famous, most important, and most misunderstood concepts in economics. Rather than aiming to be a full-blown model of real-world competitive markets, the perfect competition model isolates the decentralized coordination mechanism inherent in all competitive markets. Coordinating supply and demand is not the only feature of market competition, but it plays a central role regarding to its virtues, and understanding the working mechanism of this coordination is valuable for economic thinking and economic theory. However, the implications of the perfect competition model for competition law and policy are limited. Market power is a multifaceted phenomenon that consists of several distinguishable types. This contribution explains absolute market power (single-firm monopoly and dominance), collective market power, relative market power, and systemic market power. Due to the possibility of merit-driven paths to market power positions (especially disruptive innovations), market power is difficult to prohibit - despite its welfare-reducing effects within the affected markets (anticompetitive effects) and in other parts of the economy and society (rent-seeking, lobbying, distributional issues). Therefore, competition policy usually focuses on preventing non-merit paths to market power (merger control) and on combating the (anticompetitive) abuse of market power. Contestability refers to the openness of markets. More specifically, it is the ability of companies to overcome barriers to entry and exit as well as to expansion on markets. While the original economic theory of contestability defines very strict conditions for perfectly contestable markets, antitrust has employed the term contestability in broader and in varying ways, emphasizing the role of potential competition and potential market entries to discipline the behavior of powerful incumbents on monopoly or dominance markets. Recently, contestability is rising to new prominence as a major goal of the European regulation of digital ecosystems. |
| Keywords: | perfect competition, atomistic competition, coordination of supply and demand, market power, monopoly, market concentration, dominance, digital ecosystems, price setting, economic power, contestability, entry barriers, exit barriers, potential competition, open markets, Digital Markets Act (EU) |
| JEL: | A10 A20 B10 B20 D00 K21 L12 L13 L40 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:tuiedp:296473&r= |
| By: | Jimena Villanueva Kiser; Riley Wilson |
| Abstract: | Exploiting variation created by Deferred Action for Childhood Arrivals (DACA), we document the effects of immigrant legalization on mobility investments and economic outcomes. DACA increased both geographic and job mobility of young immigrants, leading them to high paying labor markets and licensed occupations. Employing these shifts, we examine whether these gains to immigrants are offset by losses among U.S.-born workers. Employment of U.S.-born workers grows in the occupations that DACA recipients shifted into after DACA is implemented, even when controlling for local demand. Spillover estimates are consistent with worker complementarities and suggest that immigrant legalization generates broader economic benefits. |
| Keywords: | legal status, DACA, immigration, geographic mobility, job mobility, occupational licensing, local labor markets |
| JEL: | J15 K37 R23 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_11106&r= |
| By: | Jordan G. Taqi-Eddin |
| Abstract: | Claims of soft-handed prosecutorial policies and increases in crime were precipitating factors in the removal of Chesa Boudin as district attorney of the city and county of San Francisco. However, little research has been conducted to empirically investigate the veracity of these indictments on the former district attorney. Using regression discontinuity design (RDD), I find that the Boudin administration led to a 36\% and 21\% reduction in monthly prosecutions and convictions respectively for all crimes. Moreover, his tenure increased monthly successful case diversions by 58\%. When only looking at violent crimes during this period, the SFDA's office saw a 36\% decrease, 7\% decrease, and 47\% increase in monthly prosecutions, convictions, and successful case diversions respectively. Although, the decrease in monthly convictions was not statistically significant for the violent crimes subset. Additionally, I did identify a potentially causal relationship between lower numbers of prosecutions and higher levels of criminal activity, however, such findings did not meet the standard for statistical significance. Finally, I conclude that using machine learning algorithms, such as neural networks and K-nearest neighbors, in place of ordinary least squares regression for the estimation of the reduced form equation possibly may decrease the size of the standard errors of the parameters in the structural equation. However, future research needs to be conducted in this space to corroborate these initially promising findings. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.11455&r= |
| By: | Berger, Helge; Neugart, Michael |
| Abstract: | Courts are an important element in the institutional framework of labor markets, often determining the degree of employment protection. German labor courts provide a vivid example in this regard. However, we know relatively little about court behavior. A unique dataset on German labor court verdicts reveals that social and other criteria like employee characteristics, the type of job, local labor market conditions and court composition influence court decisions. At least as striking is that workers’ chances to win depend on where and when their cases are filed. This generates considerable ex ante uncertainty about outcomes. |
| Date: | 2024–05–21 |
| URL: | https://d.repec.org/n?u=RePEc:dar:wpaper:145350&r= |
| By: | Peter Q. Blair; Bobby W. Chung |
| Abstract: | Licensed workers could be shielded from unemployment during recession since occupational licensing laws are asymmetric—making unlicensed workers an illegal substitute for licensed workers but not the reverse. We test our hypothesis using a difference-in-differences event study research design that exploits cross-state variation in licensing laws to compare the unemployment rate between licensed and unlicensed workers before and after the COVID-19 recession and the Great Recession. Controlling for worker ability, we find that licensing shields workers from a recession-induced increase in the unemployment rate of 0.82 p.p. during COVID-19 and 1.11 p.p. during the Great Recession. |
| JEL: | E02 E24 J08 J23 J24 J44 J64 K31 L31 M51 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32486&r= |