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on Law and Economics |
| By: | Babina, Tania (Columbia University - Columbia Business School, Finance; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)); Barkai, Simcha (Boston College); Jeffers, Jessica (HEC Paris); Karger, Ezra (Federal Reserve Bank of Chicago); Volkova, Ekaterina (University of Melbourne - Faculty of Business and Economics) |
| 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: | E24 J21 K21 L40 |
| Date: | 2023–10–02 |
| URL: | https://d.repec.org/n?u=RePEc:ebg:heccah:1488 |
| 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:ces:ceswps:_11218 |
| By: | Ananyev, Maxim (University of Melbourne); Poyker, Mikhail (University of Texas at Austin) |
| Abstract: | Inmates' informal code often ascribes low status to persons perceived as passive homosexuals. We use longitudinal data to investigate whether prison experience contributes to anti-gay beliefs. We find that prison experience prompts a higher level of anti-gay sentiments among males and their families, while no discernible difference exists before incarceration. We find no effect for female ex-prisoners. We confirm that the results are not driven by pre-incarceration trends, changes in trust and social capital, socioeconomic status, mental health, masculinity norms, and other potential alternative explanations. Our study sheds light on the overlooked role of prisons as a significant contributor to the propagation of anti-gay attitudes. |
| Keywords: | tolerance, homosexuals, incarceration, Australia |
| JEL: | J15 M14 H76 K42 P00 R29 Z13 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17137 |
| By: | Keith Finlay; Elizabeth Luh; Michael G. Mueller-Smith |
| Abstract: | The United States criminal justice system is characterized by substantial disparities in outcomes across racial and ethnic groups. Understanding these disparities requires accurate measures of race and ethnicity of people involved in the justice system. We document how race and ethnicity are recorded by administrative agents and how operational concerns limit corrections to misreported race and ethnicity. To understand the impacts of these administrative processes, this paper uses novel linkages between person-level microdata from the Criminal Justice Administrative Records System (CJARS) and race and ethnicity composites from U.S. Census Bureau census and administrative records, mostly composed of self-reported or family-reported race/ethnicity, to quantify mismeasurement of race and ethnicity in the justice system. We find that 17 percent of misdemeanor and felony defendants and 10 percent of prison inmates have an agency-recorded label that does not concord with the composite measure, largely driven by justice agencies poorly measuring people identified in Census Bureau data as Hispanic, Asian, Pacific Islander, or American Indian and Alaska Native (AIAN). Using estimated correspondences between agency-recorded and the composite race and ethnicity, we reweight federal series on imprisonment rates and show that those series, which currently rely on small survey samples to impute racial and ethnic population shares, have substantially underestimated the incarceration rates of Whites, Blacks, and AIANs. |
| JEL: | J15 K42 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32657 |
| By: | Riggsby, Andrew |
| Abstract: | Several recent arguments have claimed that various features of Roman law (unavailability of an executory contract of barter; regimes of protection against latent defects and for land title; rules for generic sale) take the shapes they do so as to produce a variety of economic efficiencies. This paper offers two critiques of these accounts. (1) They lack an adequate account of the bounded rationality and motivations of the law-makers. (2) In many cases they misstate the legal rules in question in ways that exaggerate the resulting efficiencies. |
| Date: | 2024–08–02 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:3vcmp |
| By: | Basedow, Robert |
| Abstract: | In the last thirty years, international commercial courts (ICCs) have emerged around the world. ICCs offer adjudication in international commercial disputes. They are not creatures of international law – as their name may suggest – but specialized domestic courts embedded in national legal orders. The rise of ICCs is remarkable in that scholars expected commercial arbitration to gradually displace litigation in the twenty first century. What drives the creation of ICCs? Legal research suggests that ICCs are a manifestation of a new era of assertive unilateralism in global governance. Scholars point to states’ geopolitical motives, backlashes against private authority in the form of arbitration, and economic statecraft. Drawing on the New Interdependence Approach, this study argues that most ICCs are the result of policy entrepreneurship of elite law firms in the pursuit of growing the global market for commercial litigation. Depending on the legal-political context, they forge coalitions with domestic judiciaries or political leaders to advance ICC projects. The study highlights deep-rooted changes in the global dispute resolution landscape, the important role of commercial law in International Political Economy (IPE), and points to the mostly overlooked significance of law firms and judiciaries as architects of global economic governance. |
| Keywords: | international commercial courts; commercial law; neoliberalism; new interdependence approach; global economic governance |
| JEL: | J1 |
| Date: | 2024–04–14 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:123505 |
| By: | Jens-Uwe Franck |
| Abstract: | The EU has set itself an ambitious agenda to tackle climate change. Competition policy, including merger review, is called upon to play its part. Based on an analysis of the Commission’s practice, this paper identifies the key framework issues for the consideration of climate change concerns in merger control and the parameters for addressing them under the EU Merger Regulation and in the light of the European Treaties. One focus is on the implications of the differentiated allocation of regulatory powers. It is argued that a distinction must be made between scenarios in which the climate change argument is used to justify stricter or conceptually extended merger control and those in which it is argued that merger control should need to be relaxed for climate change reasons. With regard to the first scenario, shifts of a normative nature can be observed and are indeed called for, but these take place within the consumer welfare paradigm and it remains the case that the protection of competition is the sole overriding principle of the EU Merger Regulation. In contrast, in the second scenario, merger-specific positive effects on climate concerns need to be considered even if they are not captured by the consumer welfare paradigm. |
| Keywords: | antitrust law, merger control, climate change, environmental sustainability |
| JEL: | K21 K32 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_576 |
| By: | Dasgupta, Kabir; Diegmann, André; Kirchmaier, Tom; Plum, Alexander |
| Abstract: | Based on New Zealand's administrative court charges data, we document child gender-specific differences in future criminal behavior of young fathers. The deterrent impact of having a son on the future likelihood of receiving convictions persists for as long as ten years post-childbirth. Utilizing population-wide monthly tax registers and Census data, we provide key insights into the role model hypothesis. We show that young fathers with a son have (i) a higher likelihood of being in employment, (ii) higher wages & salaries, (iii) lower benefit dependency, (iv) better qualification, and (v) a higher likelihood of being in a partnered relationship. |
| Keywords: | child gender preference; criminal behavior; labor market performance; young fatherhood |
| JEL: | K42 J16 J13 J31 J64 |
| Date: | 2022–10–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:115926 |
| By: | Andrew Garin; Dmitri K. Koustas; Carl McPherson; Samuel Norris; Matthew Pecenco; Evan K. Rose; Yotam Shem-Tov; Jeffrey Weaver |
| Abstract: | We study the effect of incarceration on wages, self-employment, and taxes and transfers in North Carolina and Ohio using two quasi-experimental research designs: discontinuities in sentencing guidelines and random assignment to judges. Across both states, incarceration generates short-term drops in economic activity while individuals remain in prison. As a result, a year-long sentence decreases cumulative earnings over five years by 13%. Beyond five years, however, there is no evidence of lower employment, wage earnings, or self-employment in either state, as well as among defendants with no prior incarceration history. These results suggest that upstream factors, such as other types of criminal justice interactions or pre-existing labor market detachment, are more likely to be the cause of low earnings among the previously incarcerated, who we estimate would earn just $5, 000 per year on average if spared a prison sentence. |
| JEL: | H2 J01 J20 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32747 |
| By: | Susan T. Parker; Matthew B. Ross; Stephen Ross |
| Abstract: | We examine a statewide program that identifies police departments with large racial disparities in traffic stops and works with identified departments to reduce disparities. The intervention caused large (23.56%) and persistent (at least 12 months) reductions in the number of minorities involved in traffic stops, with no impact on stops of white drivers. Reductions in traffic stops involving minority drivers primarily result from fewer pretextual stops (85%) for lighting violations and non-moving violations. We find relative declines of approximately 30% for stops resulting in a warning or an arrest. Using data on crime and vehicle crashes, we find no evidence that crashes increase after traffic stops fall, but we do find moderate declines in the clearance rates for property crime. |
| JEL: | H7 I3 J7 K4 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32692 |
| By: | Marcelo Corrales Compagnucci; Toshiyuki Kono; Shinto Teramoto |
| Abstract: | The sharing economy is sprawling across almost every sector and activity around the world. About a decade ago, there were only a handful of platform driven companies operating on the market. Zipcar, BlaBlaCar and Couchsurfing among them. Then Airbnb and Uber revolutionized the transportation and hospitality industries with a presence in virtually every major city. Access over ownership is the paradigm shift from the traditional business model that grants individuals the use of products or services without the necessity of buying them. Digital platforms, data and algorithm-driven companies as well as decentralized blockchain technologies have tremendous potential. But they are also changing the rules of the game. One of such technologies challenging the legal system are AI systems that will also reshape the current legal framework concerning the liability of operators, users and manufacturers. Therefore, this introductory chapter deals with explaining and describing the legal issues of some of these disruptive technologies. The chapter argues for a more forward-thinking and flexible regulatory structure. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2407.20301 |
| By: | Louis-Daniel Pape; Michelangelo Rossi |
| Abstract: | This paper examines the impact of the Digital Markets Act (DMA) on consumer behavior, focusing on changes in Google’s search result presentation in the European Union (EU). Specifically, it investigates the effects of Google’s removal of clickable maps in search results, a modification implemented in January 2024. This change forces users to perform additional searches to access Google Maps or alternative mapping services, thus increasing search costs. Using a difference-in-differences approach, we compare Google search volumes from EU to non-EU countries before and after the implementation of the DMA. By eliminating Google Maps’ advantage of being only one click away from Google Search users, we find that EU consumers search significantly more for online mapping services. We measure a 25% and 18% increase in Google’s search volume for the query terms maps and google maps, resulting in an excess of 34, 407, 000 and 8, 901, 000 searches over six months, respectively. This search increase suggests potential exposure to alternative mapping services. However, searches for services like apple maps and bing maps also rose, but not as significantly. Moreover, traffic data shows a non-significant decrease in visits to Google Maps, suggesting minimal migration to alternative services. These findings indicate that removing Google’s one-click advantage can lead to higher search costs for users without significantly boosting the discovery or adoption of alternative mapping services in the short run. |
| Keywords: | self-preferencing, online mapping services, Google Maps, Google Search, Digital Markets Act |
| JEL: | L41 L86 K21 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11226 |
| By: | Farrell, Graham (University of Leeds); Lovelace, Robin; O'Hern, Steve |
| Abstract: | This study uses data from Operation Snap (OpSnap), the UK police’s national system to receive road users’ video evidence of road traffic offences. Data from one police force area for 39 months (January 2021 to March 2024) (N = 20, 364 records) is analysed. Half were submitted by vehicle drivers (49.8%), a third by cyclists (34.7%), 7.2% by pedestrians, 2.2% by horse riders, 0.2% by motorcyclists, and 5.8% were unknown. We estimate that, relative to road distance travelled, cyclists were 20 times more likely to submit video evidence than vehicle drivers. The most common offences overall were driving ‘without reasonable consideration to others’ or ‘without due care and attention’. Half (53.5%) of reported cases resulted in the recommended disposal of an educational course, % no further action 12.6% conditional offer, and 1.6% resulted in court appearance. A research agenda using OpSnap data is outlined that could emerge if national datasets are compiled and responsibly opened-up and made available for research and policy-making: data-driven research should identify hotspot locations and other correlates of dangerous and antisocial road use at regional, and local levels; research projects should investigate disposal-related decision-making, video quality, and the role of supporting evidence; offence concentration (recidivism, repeat submitters of evidence, spatial hotspots) and case progression including court cases should be explored with reference to new video evidence. We conclude that datasets derived from publicly-uploaded video submission portals have the potential to transform evidence-based policy and practice locally, nationally and internationally. |
| Date: | 2024–07–27 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:cgjmr |
| By: | Joshua S. Gans |
| Abstract: | This paper examines the regulation of technological innovation direction under uncertainty about potential harms. We develop a model with two competing technological paths and analyze various regulatory interventions. Our findings show that market forces tend to inefficiently concentrate research on leading paths. We demonstrate that ex post regulatory instruments, particularly liability regimes, outperform ex ante restrictions in most scenarios. The optimal regulatory approach depends critically on the magnitude of potential harm relative to technological benefits. Our analysis reveals subtle insurance motives in resource allocation across research paths, challenging common intuitions about diversification. These insights have important implications for regulating emerging technologies like artificial intelligence, suggesting the need for flexible, adaptive regulatory frameworks. |
| JEL: | L51 O33 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32741 |