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on Law and Economics |
| By: | Eric Langlais; Ken Yahagi |
| Abstract: | This paper presents a theoretical framework for analyzing agency problems in the law enforcement process and governance of law enforcement organizations. Self-interested law enforcement agents, motivated by the desire to lower crime rates, may engage in inappropriate investigations to secure more convictions, often harming individuals in the process (e.g., through aggressive policing or unlawful practices). Meanwhile, a government driven by rent-seeking motives such as maximizing fine revenues may fail to implement effective liability rules to properly discipline these agents. As a result, law enforcement policies may become distorted, leading to enforcement levels that are excessive when dealing with minor harms and insufficient when addressing more serious offenses. |
| Keywords: | police officers' liability, misconduct, rent-seeking government. |
| JEL: | K42 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:drm:wpaper:2025-21 |
| By: | Marein, Brian (Wake Forest University, Economics Department) |
| Abstract: | Most of the world’s highest homicide rates are found in the Caribbean basin. Common explanations for the region’s violence—such as inequality and long-standing culture—fail to explain the explosive growth of violence in recent decades. This paper examines the role of drug trafficking, a leading explanation among law enforcement but one that is difficult to establish causally due to the illicit and covert nature of the trade. I leverage an exogenous shock to drug trafficking: the 1973 Chilean coup, which abruptly redirected trafficking routes northward to Colombia and through the Caribbean. Using Puerto Rico, the Caribbean territory with the best data coverage, and a synthetic control constructed from US states—which share federal gun laws and other policies affecting violence—I estimate that the shock caused a 50% increase in homicides. Evidence from other parts of the region supports drug trafficking as the key driver of the Caribbean’s extraordinarily high levels of violence. |
| Keywords: | homicide; crime; Latin America; Caribbean |
| JEL: | K42 N96 |
| Date: | 2025–04–21 |
| URL: | https://d.repec.org/n?u=RePEc:ris:wfuewp:0126 |
| By: | Gustafsson Kurki, Pär (Swedish Defence Research Agency - FOI) |
| Abstract: | This is a response to Kathryn Hendley and Peter Murrell’s criticism of “The emergence of the rule of law in Russia”, Global Crime, Vol.14, No.1, 2013. In that paper, I challenge the main claim in Kathryn Hendley, Peter Murrell, and Randi Ryterman’s “Law, Relationships, and Private Enforcement: Transactional Strategies of Russian Enterprises” in Europe-Asia Studies, Vol.52, No.4, 2000. Hendley, Murrell, and Ryterman claim that economic actors in Russia relied on the law and commercial courts because the latter were relatively effective. I argue that, in the late 1990s, economic actors trusted the commercial courts because they believed that they could influence the judicial outcome with bribes. In their reply, Hendley and Murrell (2014) conclude that Gustafsson (2013) cannot teach us anything about Russia or about their own work. In this paper: I defend my assessment of the commercial courts and discuss the influence of widespread corruption in the Russia of the 1990s. I also argue that their favourable view of Russian law and legal institutions is based on a sample that is marked by a serious error. This means that their conclusion about my work is an opinion rather than a verified fact. |
| Date: | 2025–04–14 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:juq7g_v1 |
| By: | Wei Lu (Baruch College [CUNY] - CUNY - City University of New York [New York]); Daniel L. Chen (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) |
| Abstract: | This study explores politically motivated reasoning among U.S. Circuit Court judges over the past 120 years, examining their writing style and use of previous case citations in judicial opinions. Employing natural language processing and supervised machine learn- ing, we scrutinize how judges' language choices and legal citations reflect partisan slant. Our findings reveal a consistent, albeit modest, polarization in citation practices. More notably, there is a significant increase in polarization within the textual content of opin-ions, indicating a stronger presence of motivated reasoning in their prose. We also exam-ine the impact of heightened scrutiny on judicial reasoning. On divided panels and as midterm elections draw near, judges show an increase in dissent votes while decreas-ing in polarization in both writing and citation practices. Furthermore, our study explores polarization dynamics among judges who are potential candidates for Supreme Court promotion. We observe that judges on the shortlist for Supreme Court vacancies demonstrate greater polarization in their selection of precedents |
| Date: | 2025–03–03 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05012949 |
| By: | Patrice Bougette (UniCA - Université Côte d'Azur, GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - CNRS - Centre National de la Recherche Scientifique - UniCA - Université Côte d'Azur); Frédéric Marty (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - CNRS - Centre National de la Recherche Scientifique - UniCA - Université Côte d'Azur) |
| Abstract: | Self-preferencing is widely perceived as a threat to competition. Within the European Union, it has led to prohibition decisions, such as the Google Shopping case in 2017, commitment-based decisions, such as the Amazon case in 2022, and regulatory initiatives, notably the Digital Markets Act (DMA). Self-preferencing can be understood as a form of discrimination and manifests in two primary ways. First, a dual-role platform may prioritize its own services, potentially foreclosing rivals or entrenching its dominance. Second, a non-vertically integrated platform may favor a specific downstream player to maximize fee-based revenues, thereby distorting competition. This contribution emphasizes four key points. First, economic literature suggests that the competitive impact of self-preferencing is highly context-dependent. Second, a case-by-case approach is crucial for effective competition law enforcement. Third, shifting the burden of proof onto the accused firm could enhance enforcement efficiency. Fourth, outright prohibiting platforms from operating as dual-role entities may generate excessive welfare costs; instead, compliance obligations – such as transparent access rules – could mitigate litigation risks while preserving competitive dynamics. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:halshs-04982587 |
| By: | Rodríguez-Planas, Núria (Queens College, CUNY); Secor, Alan (City University of New York) |
| Abstract: | Have the recent changes in reproductive rights changed women’s perceptions of discrimination and fair treatment relative to men’s perceptions? To address this question, we collected online survey data (N=1, 374) during spring 2023 using a randomized design that provided information about the enactment of State antiabortion laws and the overturning of Roe v. Wade by the U.S. Supreme Court to a treatment group but no information to an untreated control group. This exogenous variation in information dissemination was used to analyze perceived fairness and discrimination of treated individuals, by sex. We find that treatment increases women’s overall perception of discrimination and unfair treatment in the US by 11.5 percent of a standard deviation and their perception relative to men by 21.8 percent of a standard deviation, widening an already existing gender gap. These results support the notion that the recent state and federal abortion restrictions can impact individuals’ perceptions of fairness and discrimination in the U.S. and do so differentially by gender. |
| Keywords: | perceived discrimination and fairness, gender, state and federal abortion restrictions, rights protection, randomized information treatment. |
| JEL: | J15 J16 I K36 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17807 |
| By: | Lisa Scheckenhofer; Feodora A. Teti; Joschka Wanner; Feodora Teti; Feodora Teti |
| Abstract: | The Russian invasion of Ukraine in 2022 led to unprecedented sanctions aimed at denying Russia access to critical technologies essential for sustaining its war efforts. This paper examines whether trade sanctions targeting military goods were undermined by evasion, specifically through transshipment through Russia-friendly countries. We find that Russia-friendly countries are 20 pp more likely to export military goods to Russia relative to neutral countries after the war began, while exports of military goods from Western allies to these countries also increased. Our results show that weak enforcement significantly undermines the effectiveness of sanctions. |
| Keywords: | trade sanctions, sanction evasion, military goods trade |
| JEL: | F14 F51 K42 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11743 |
| By: | Gergely Bicz\'ok; Sasha Romanosky; Mingyan Liu |
| Abstract: | In this paper, we ask the question of why the quality of commercial software, in terms of security and safety, does not measure up to that of other (durable) consumer goods we have come to expect. We examine this question through the lens of incentives. We argue that the challenge around better quality software is due in no small part to a sequence of misaligned incentives, the most critical of which being that the harm caused by software problems is by and large shouldered by consumers, not developers. This lack of liability means software vendors have every incentive to rush low-quality software onto the market and no incentive to enhance quality control. Within this context, this paper outlines a holistic technical and policy framework we believe is needed to incentivize better and more secure software development. At the heart of the incentive realignment is the concept of software liability. This framework touches on various components, including legal, technical, and financial, that are needed for software liability to work in practice; some currently exist, some will need to be re-imagined or established. This is primarily a market-driven approach that emphasizes voluntary participation but highlights the role appropriate regulation can play. We connect and contrast this with the EU legal environment and discuss what this framework means for open-source software (OSS) development and emerging AI risks. Moreover, we present a CrowdStrike case study complete with a what-if analysis had our proposed framework been in effect. Our intention is very much to stimulate a robust conversation among both researchers and practitioners. |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2504.07766 |
| By: | Gadi Barlevy; Inês Xavier |
| Abstract: | We develop a model of Ponzi schemes with asymmetric information to study Ponzi frauds. A long-lived agent offers to save on behalf of short-lived agents at a higher rate than they can earn themselves. The long-lived agent may genuinely have a superior savings technology, but may be an imposter trying to steal from short-lived agents. The model identifies when a Ponzi fraud can occur and what interventions can prevent it. A key feature of Ponzi frauds is that the long-lived agent builds trust over time and improves their reputation by keeping the scheme going. |
| Keywords: | Ponzi scheme; Asymmetric information; Reputation; Fraud |
| JEL: | C73 D82 G51 K42 L14 |
| Date: | 2025–03–25 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfe:2025-20 |