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on Law and Economics |
| By: | Radhika Bansal (University of California Riverside); Ugo Antonio Troiano (Department of Economics, University of California Riverside) |
| Abstract: | Increasing the penalties for a serious non-fatal crime can cost lives if the surviving victims serve as witnesses to secure the perpetrator’s conviction. In this article, we consider the case of laws against rape. We present a theoretical model to examine how increasing the penalty for one crime may lead the perpetrator to commit a collateral crime, thereby reducing the probability of conviction for the first crime. We then consider the cases of spousal rape laws and the mandatory minimum 25-year sentence for sex crimes against a child. Both treatments were introduced in the United States in a staggered fashion and increased the penalties for rape. Using difference-in-differences designs, we find that abolishing spousal rape exemptions increased wife homicides by approximately 5 victims per state-year (27 percent), while mandatory 25-year minimum sentences for child sexual abuse increased child homicides by approximately 11 victims per state-year (80 percent). |
| Keywords: | rape, homicide, intimate partner violence, children, spousal. |
| JEL: | K14 K42 J12 J16 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:ucr:wpaper:202516 |
| By: | Valentina Chiariello; Oguzhan C. Dincer |
| Abstract: | We investigate the long-run relationship between organized crime and corruption using data from 20 Italian regions over 30 years. As Rose-Ackerman and Palifka (2018) argue, corruption and organized crime often go together. Our study contributes to the literature in several ways in terms of empirical methodology and specification. We account for integration and cointegration properties of the data and estimate the cointegrating relationship between organized crime and corruption using Fully Modified Ordinary Least Squares (FMOLS), following Pedroni (2000). Our findings are twofold. First, according to our FMOLS estimates, organized crime increases corruption, and this effect becomes stronger as government spending increases. Second, there is bidirectional Granger causality between corruption and organized crime. Our results are robust to alternative specifications and different estimation methods. Overall, our findings point to a persistent and mutually reinforcing relationship between organized crime and corruption, which has significant consequences for implementing anti-corruption policies. |
| Keywords: | corruption, organized crime, Italian regions, panel cointegration, FMOLS, Granger causality |
| JEL: | K42 D72 D73 H11 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12474 |
| By: | Gunes Asik; Bilge Erten; Erdal Tekin; Semih Tumen; Hakan Ulucan |
| Abstract: | Intimate partner violence remains one of the most serious threats to women's safety worldwide, yet existing evidence on the effectiveness of large-scale institutional protection systems is limited and mixed. This paper evaluates the impact of Violence Prevention and Monitoring Centers on intimate partner violence (IPV) against women in Türkiye. Exploiting the staggered rollout of centers across provinces, we find that the opening of a center reduces female homicides, particularly those perpetrated by intimate partners, by approximately 20 percent. Complementary survey evidence shows that the opening of a center also reduces women's self-reported exposure to physical IPV by 20 percent, with larger effects among younger and less-educated women. Exploring potential mechanisms, we find that centers primarily reduce violence by lowering barriers to help-seeking and improving coordination across police, legal, and social services: following the opening of a center, women become more likely to seek support from women's organizations and social services, while direct applications to prosecutors decline. We find no evidence of effects on gender attitudes, labor market outcomes, relationship status, marriage market outcomes, or mental health, suggesting violence reductions operate through improved access to protection rather than changes in norms or economic independence. The estimated effects are stronger in provinces with more gender-progressive norms and stronger institutional capacity, highlighting the importance of complementary social and institutional environments. |
| JEL: | I18 J12 J16 K42 O15 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34886 |
| By: | Lancieri, Filippo Maria; Pereira Neto, Caio Mário da Silva; Karolczak, Rodrigo Moura; De Assis, Barbara Marchiori |
| Abstract: | On July 30, 2025, President Trump imposed 50% tariffs on imports from Brazil and sanctioned a sitting Brazilian Supreme Court Justice, both partially because of Brazil's online content moderation decisions. This is an extreme, but not an isolated event: worldwide, legislators and regulators struggle to craft public policies that address problems of disinformation and online harassment while protecting the freedom of expression - leading to increasing international confrontations. One key question in content moderation is content adjudication - or who is responsible for deciding what type of speech violates the law and should be taken down. This article presents the results of a six-year, large empirical and qualitative project on the adjudication of fake news disputes by Brazilian Courts from 2018 onwards. It examines what led Brazilian judges to order the takedown of online content, which social networks and types of content were most affected by judicial decisions, and whether there is evidence that incumbent politicians abused the system, among other factors. It also critically analyzes the evolution of this novel courtdriven content moderation regime - one in which Courts play an increasingly active role in policing online discourse - with significant implications for the Brazilian information ecosystem, democratic institutions, and judicial reputation. Ultimately, the Brazilian experience teaches/reinforces five lessons to jurisdictions rethinking their online content moderation regulatory regimes: (i) content moderation systems must articulate clear end goals to work properly; (ii) experimentation in content moderation regulation is possible and desirable, allowing for incremental learning and adaptation; (iii) a content moderation system must have strict protection against the slippery slope that may lead it to censorship and arbitrariness; (iv) contentbased moderation systems become part of the information environment - claims about neutrality in adjudication cannot, by themselves, support long-term systemic legitimacy; (v) increasing regulatory fragmentation impose new urgency on the development of international guidelines for limits on the extraterritoriality of online decisions. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cbscwp:336739 |
| By: | Fisman, Raymond; Leder-Luis, Jetson; O'Donnell, Catherine; Vannutelli, Silvia |
| Abstract: | Revolving door laws restrict public officials from representing private interests before government after leaving office. While these laws mitigate potential conflicts of interest, they also may affect the pool of candidates for public positions by lowering the financial benefits of holding office. We study the consequences of revolving door laws for political selection in U.S. state legislatures, exploiting the staggered roll-out of laws across states over time. We find that fewer new candidates enter politics in treated states and that incumbent legislators are less likely to leave office, leading to an increase in uncontested elections. The decline in entry is particularly strong for independent and more moderate candidates, which may increase polarization. We provide a model of politician career incentives to interpret the results. |
| JEL: | D72 D73 K16 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cbscwp:336735 |
| By: | Egbert Amoncio; Alexander Cuntz; Carsten Fink |
| Abstract: | The paper examines how legal certainty shapes protection and appropriation of digital designs such as icons, animations, and layouts. Leveraging the 2012 Apple v. Samsung verdict as a decisive clarification of their protectability and enforceability, we analyze USPTO design patents from 2009–2015 using a matched difference-in-differences approach. We show that legal certainty reduces due diligence costs far more than monitoring costs. This asymmetry lowers the threshold for securing protection, leading to a 9 percent increase in digital design patents. At the same time, appropriation shifted away from licensing toward transfers, with the effect strongest in dense design spaces where monitoring costs remain high despite increased legal certainty. These findings extend transaction cost theory by showing that legal certainty unevenly reduces transaction costs, which in turn alters protection thresholds and shifts appropriation strategies. They also demonstrate how policy changes influence innovation when value is created “under the glass.†|
| Keywords: | Digital designs, Design patents, Appropriation, Transaction costs |
| JEL: | O31 O34 K11 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:wip:wpaper:97 |
| By: | Koenig, Carsten |
| Abstract: | Legislators and regulators around the globe are increasingly seeking to hold multinational companies accountable for human rights and environmental abuses in their supply chains, even when the harm is primarily caused by a subsidiary or business partner. This paper examines such supply chain liability from an economic perspective. It argues that it can be justified when suppliers cannot be expected to respond sufficiently to due diligence incentives, e.g. due to wealth restrictions, information asymmetries or enforcement deficits. However, this requires that the entity to which liability is extended does not suffer from the same problems and that it is able to control the behavior of the entity that is primarily responsible for causing the harm. This is often the case with subsidiaries, but more difficult with independent business partners. Thus, this paper suggests that liability for harm by subsidiaries should be strict, while liability for independent business partners should be based on negligence, i.e. the breach of a duty of supervision or control. However, policymakers should be cautious not to incentivize an inefficient multiplication of due diligence measures without significant benefits in terms of harm prevention. In principle, liability should be extended to other entities only where it can be reasonably assumed that the primarily responsible entity is not responding appropriately to due diligence incentives. In addition, liability should be designed in such a way that it does not invite circumvention, or at least makes it as difficult as possible. Finally, policymakers should seek to ensure that supply chain liability does not have undesirable effects on the global division of labor, which could result in inefficiencies. |
| Keywords: | supply chain liability, due diligence, human rights, environmental liability, vicariousliability, subsidiaries, parent companies, independent contractors, corporate groups |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cbscwp:336741 |
| By: | Alexander Dyck; Freda Fang; Camille Hebert; Ting Xu |
| Abstract: | We assemble the first comprehensive sample of venture fraud cases involving 614 U.S. venture capital (VC)-backed startups founded since 2000. We find that VC-backed firms are 54% more likely to face fraud charges than comparable non-VC-backed firms within a subsample of newly public firms where detection likelihood is high and homogeneous. We then examine the role of governance in explaining venture fraud, focusing on two features that have risen in recent years—founder-friendly structures and cap table complexity. In a panel prediction model examining all venture fraud cases, we find that fraud is more likely in startups with stronger founder control rights, more convex founder cash flow rights, more investors, and greater participation of non-traditional investors. Founder-controlled boards are 88% more likely to commit fraud than VC-controlled or shared-control boards, even within the same firm. Governance variables matter much more than founder characteristics in predicting fraud. Hot funding conditions at the initial round, which weaken governance incentives, predict future fraud. Fraudulent entrepreneurs continue to found new VC-backed startups unharmed relative to non-fraudulent entrepreneurs, suggesting a lack of market discipline. Overall, our results highlight rising agency costs in VC-backed firms that could lead to misallocation and broader social costs. |
| JEL: | G24 G3 G38 K22 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34868 |
| By: | Paolo Pellizzari (Ca’ Foscari University of Venice); Francesca Parpinel (Ca’ Foscari University of Venice) |
| Abstract: | We describe an Agent-Based Model of a Ponzi scheme following the Madoff's case. Agents have an initial propensity to invest in the scam, as the wealth is perceived to grow, whereas it is not invested in any way, and is dissipated by the fraudster. We emphasize that the widening gap between the perceived wealth and the true total money in the hands of the impostor is the key feature of such schemes. If trust evaporates due to the absorption of bad news on the economy, the propensity gradually reverses and an increasing number of agents withdraw their capital (and made up profits). We examine the time needed to reveal the scam and reach a bankruptcy, as a function of the amount of news that hits the market. We also investigate how a special agent named Markopolos (inspired to a real personage) affects the time to bankruptcy, due to his ability to abruptly "convince" to dis-invest the agents he run across. The Markopolos effect appears to be statistically significant, but is quite weak with respect to the outcome generated by a flow of news and the ensuing widespread loss of trust and redemptions. |
| Keywords: | Agent-Based Model, Ponzi Schemes, NetLogo |
| JEL: | C63 K42 G11 D83 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ven:wpaper:2026:04 |