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on Law and Economics |
| By: | Eric Langlais; Nanxi Li |
| Abstract: | This paper studies how the combination of Product Liability and Tort Law shapes a monopoly' incentives to invest in R&D for developing risky AI-based technologies ("robots") that may accidentally induce harm to third-party victims. We assume that at the engineering stage, robots are designed to have two alternative modes of motion (fully autonomous vs human-driven), corresponding to optimized performances in predefined circumstances. In the autonomous mode, the monopoly (i.e. AI designer) faces Product Liability and undertakes maintenance expenditures to mitigate victims' expected harm. In the human-driven mode, AI users face Tort Law and exert a level of care to reduce victims' expected harm. In this set-up, efficient maintenance by the AI designer and efficient care by AI users result whatever the liability rule enforced in each area of law (strict liability, or negligence). However, overinvestment as well as underinvestment in R&D may occur at equilibrium, whether liability laws rely on strict liability or negligence, and whether the monopoly uses or does not use price discrimination. The first best level of R&D investments is reached at equilibrium only if simultaneously the monopoly uses (perfect) price discrimination, a regulator sets the output at the socially optimal level, and Courts implement strict liability in Tort Law and Product Liability. |
| Keywords: | Artificial Intelligence, Algorithms, Tort Law, Product Liability, Strict Liability, Negligence |
| JEL: | K13 K2 L1 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:drm:wpaper:2024-22 |
| By: | OECD |
| Abstract: | This paper covers the interactions between competition authorities and sector regulators, formally and in practice, in the most frequent situation when the competition authority is a stand-alone body that enforces competition law in all sectors. In addition, it focuses on enforcement cases, describing procedural set-ups and the interplay of competition and regulation in these cases. It was prepared as background material for a discussion on the topic held during the 2022 OECD Global Forum on Competition. |
| Date: | 2022–10–25 |
| URL: | https://d.repec.org/n?u=RePEc:oec:dafaac:285-en |
| By: | Jolly, Nicholas A.; Propp, Margaret H. |
| Abstract: | This paper uses data from the Panel Study of Income Dynamics to study the relationship between job displacement and the probability of arrest and incarceration among young adults. Results show that displacement is associated with increases in the probability of arrest and incarceration. The increase in arrest probabilities is associated with crimes related to robbery and alcohol and traffic violations. Access to financial resources from the government to cope with earnings losses associated with displacement does not mitigate the effect of job loss on the probability of arrest. Finally, we find that the increased probability of arrest is concentrated among male and non-white job losers. Results are robust to different sample selection criteria. |
| Keywords: | job displacement, young adults, criminal behavior |
| JEL: | J63 J65 K42 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1460 |
| By: | Hashimoto, Barry; Park, Sanghoon; Wu, Victor Y. |
| Abstract: | We computationally reproduce the central findings in Mehmood (2022), which studied the effect of a 2010 reform in Pakistan replacing the presidential appointment of high-court judges with peer appointments. Mehmood leveraged judicial records interpreted and coded by lawyers in Pakistan at the levels of cases, districts, benches, and individual judges. We successfully execute all Stata code in the author's replication archive without any errors, then translate and execute that code in R, again finding no serious errors. Consequently, we reproduce the article's main findings from regressions in Tables 2-4. Additionally, we successfully reconstruct the primary treatment variables of these regressions, after corresponding with the author to clarify precisely how to do so. We then replicate the main findings from regressions in Tables 2-10. Finally, we identify several minor errors which left the article's findings intact. Overall, this report reveals no serious defects in Mehmood (2022). We publicly archive our replication code and a spreadsheet of our results. |
| Keywords: | comparative politics, judicial politics, rule of law, constitutions, replication, computational social science, Pakistan |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:i4rdps:135 |
| By: | Javier Donna (University of Florida); Pedro Pereira (Autoridade da Concorrência, Lisbon) |
| Abstract: | The 2023 Merger Guidelines (MGs) change the Agencies’ narrative regarding non-horizontal mergers. They follow a four-pronged approach: (1) They blend horizontal and non-horizontal mergers. (2) They simplify the narrative about non-horizontal mergers. (3) They consolidate and broaden the theories of harm in non-horizontal mergers. (4) They blend economics and law analysis. In this article, we elaborate on these points. We discuss how the MGs’ anticompetitive presumptions apply to non-horizontal mergers, relate them to the economics literature, and provide examples. We finish discussing the economic rationale of the structural presumption involving rivals’ exit concerns due to the exercise of market power and propose a path forward. |
| Keywords: | Antitrust, 2023 Merger Guidelines, Vertical Mergers, Rivals’ Exit, Double Marginalization, Merger Evaluation, Competition Policy |
| JEL: | K21 K41 L42 L44 L52 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:aoz:wpaper:331 |
| By: | Tomaso Duso; Lea Bernhardt; Joanna Piechucka |
| Abstract: | We discuss the main Theories of Harm in EU merger control and their evolution since the 1990s. We present stylised facts and trends using data extracted from EU merger decisions by natural language processing tools. EU merger policy has adapted over time, both in terms of legislation and theories of harm, as well as in terms of the investigative tools and evidence used. The introduction of the new Merger Regulation in 2004, which led to a change in the substantive test, also brought about significant changes in the use of Theories of Harm. Unilateral theories are now used more frequently and have developed further, in particular in relation to the assessment of closeness of competition. Non-horizontal conglomerate and vertical Theories of Harm focusing on foreclosure issues are now much more common and are a standard tool in most in-depth investigations. More novel Theories of Harm related to innovation and digital markets have been developed and implemented since the 2010’s. While market shares remain a central tool for merger assessment, the use of internal documents has increased, accompanied by the use of quantitative tools. With respect to Commission interventions, structural remedies are used more frequently, although behavioural remedies are also increasingly deployed, especially in Phase II. |
| Keywords: | Merger control, theories of harm, unilateral effects, coordinated effects, non-horizontal effects, foreclosure, innovation, ecosystem, digital, market shares, internal documents, structural remedies, behavioural remedies |
| JEL: | K21 L40 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwwpp:dp2090 |
| By: | Stiansen, Øyvind; Naurin, Daniel; Michailidou, Asimina; Riganova, Adriana |
| Abstract: | How does the European Union's enforcement of democracy and rule-of-law standards infuence the domestic public's attitudes toward backsliding governments? On the one hand, enforcement actions by international organizations may increase the costs of supporting backsliding governments and provide informational cues about non-compliance with international norms. On the other hand, scholars and practitionersworry that enforcement actions create “rally-around-the-flag” effects that inadvertently increase support for backsliding regimes. We report descriptive, experimental, and quasi-experimental results from a survey designed to assess the public-opinion effects of EU action in response to rule-of-law backsliding in Poland. The survey results suggest both that Polish citizens perceive the EU as a main critic of measures undermining judicial independence and that these perceptions are correlated with opposing the targeted measures. We find no evidence that additional information about EU actions turns public opinion against the targeted measures but there is also no evidence of any rally-around-the-flag effect. In diagnosing the null findings from our experimental and quasi-experimental designs, we also highlight important challenges associated with using survey-experimental methods to assess the effectiveness of EU interventions in ongoing and salient public debates. |
| Keywords: | Social and Behavioral Sciences, rule of law, European Union, international norms, public opinion, democratic backsliding |
| Date: | 2023–11–28 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:globco:qt2jz3g89m |
| By: | Sean Dougherty; Tatiana Mota |
| Abstract: | This paper examines intergovernmental fiscal disputes and co-operation mechanisms across federal and decentralised countries. Employing a case study approach and AI tools, the research analyses constitutional court rulings and their influence on the development of fiscal federalism in seven countries: Australia, Belgium, Brazil, Canada, Germany, India and the United States, with additional insights from Spain, the Netherlands and the European Union. The findings reveal significant variations in the nature and frequency of disputes and judicial interventions, highlighting the crucial role of court decisions in shaping fiscal federalism, most notably in the area of taxation. While conflicts are inherent to decentralised systems, their nature and frequency vary based on each country’s unique constitutional, political, and economic context. The paper recommends strategies for managing disputes and fostering co-operation, including clearly defining powers and responsibilities, enhancing the role of courts in providing fiscal guidance, strengthening intergovernmental institutions and ensuring adaptability to changing conditions. The study concludes that a proactive, collaborative approach involving all tiers of government is crucial to navigate the complexities of fiscal federalism and promote effective governance. |
| Keywords: | arbitration, constitutional courts, decentralisation, fiscal relations, intergovernmental co-operation, intergovernmental fiscal disputes, subnational governments, tax disputes |
| JEL: | H11 H77 K10 K41 |
| Date: | 2024–07–22 |
| URL: | https://d.repec.org/n?u=RePEc:oec:ctpaab:48-en |
| By: | Davide Fortin (Sciences Economiques et Sociales de la Santé and Traitement de l'Ínformation Médicale) |
| Abstract: | This presentation examines how sales at medical marijuana centers in Colorado were affected by the opening of recreational marijuana stores in 2014, where any adult can purchase without the necessity of a doctor's recommendation. I exploit differences across counties in the availability of medical and recreational marijuana to examine whether the sales growth of recreational marijuana was at the expense of sales of medical marijuana or acted by expanding the overall legal market. My |
| Date: | 2024–06–29 |
| URL: | https://d.repec.org/n?u=RePEc:boc:fsug24:03 |
| By: | Alexander Mechanick; Jacob P. Weber |
| Abstract: | Legal academics, journalists, and senior executive branch officials alike have assumed that the cost of imposing new regulatory requirements is higher in severe recessions that drive the central bank’s policy rate to zero than in other times. This is not correct; the aggregate output costs of regulatory requirements decrease, not increase, in such recessions. This article is the first to analyze how this effect arises, drawing on both conventional macroeconomic models and empirical findings from the econometrics literature. Scholars and policymakers have likely missed the countercyclical benefits of regulatory costs because of informal, ad hoc macroeconomic assumptions embedded in regulatory analysis. |
| Keywords: | law and economics; law and macroeconomics; zero lower bound; zero lower bound (ZLB) |
| JEL: | E02 E6 K2 K3 |
| Date: | 2024–07–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednsr:98568 |
| By: | Chaudhry, Suparna; Comstock, Audrey L.; Heiss, Andrew (Georgia State University) |
| Abstract: | Did states misuse international legal emergency provisions during the COVID-19 pandemic to justify human rights abuse or did they follow international human rights law? Many governments restricted citizens’ freedom of movement, association, and assembly during the crisis, raising questions about states’ commitments to international human rights law. Some states used derogations to communicate temporary suspension of international legal provisions in a proportional and non-discriminatory manner, while others did not. We explore the dynamics of democratic backsliding and derogation use during the pandemic. We find that backsliding states were more likely to issue human rights treaty derogations. These derogations had mitigating effects once issued. Backsliding states that issued derogations were more likely to communicate restrictions and were less likely to issue abusive and discriminatory policy during the pandemic. Derogations helped temper abuse in states not experiencing backsliding. However, derogations did not always protect against abuse and media transparency in backsliding states. These results lend support to the use of flexibility mechanisms in international law and find that most states did not use emergency derogations to heighten human rights violations. The study contributes to the understanding of how international legal measures may help mitigate elements of democratic backsliding during times of crisis. |
| Date: | 2024–07–25 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:g3z6n |
| By: | Hannes Ullrich; Jonas Hannane; Christian Peukert; Luis Aguiar; Tomaso Duso |
| Abstract: | Tracking online user behavior is essential for targeted advertising and is at the heart of the business model of major online platforms. We analyze tracker-specific web browsing data to show how the prediction quality of consumer profiles varies with data size and scope. We find decreasing returns to the number of observed users and tracked websites. However, prediction quality increases considerably when web browsing data can be combined with demographic data. We show that Google, Facebook, and Amazon, which can combine such data at scale via their digital ecosystems, may thus attenuate the impact of regulatory interventions such as the GDPR. In this light, even with decreasing returns to data small firms can be prevented from catching up with these large incumbents. We document that proposed data-sharing provisions may level the playing field concerning the prediction quality of consumer profiles. |
| Keywords: | Prediction quality, Web Tracking, Cookies, Data protection, Competition Policy, Internet Regulation, GDPR |
| JEL: | C53 D22 D43 K21 L13 L4 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwwpp:dp2091 |
| By: | Heng-fu Zou (The World Bank) |
| Abstract: | By integrating Michael Mann's sources of social power into Ronald Coase's analysis, we can achieve a more nuanced understanding of how firms, markets, and the law operate within broader social contexts. Ideological, economic, military, and political powers intersect with economic transactions, influencing the formation, operation, and regulation of firms and markets. This synthesis highlights the multifaceted nature of economic activities and the importance of considering power dynamics in economic theories. |
| Date: | 2023–03 |
| URL: | https://d.repec.org/n?u=RePEc:cuf:wpaper:633 |