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on Law and Economics |
| By: | Nikita Melnikov; Carlos Schmidt-Padilla; María Micaela Sviatschi |
| Abstract: | What are the consequences of restoring state authority in territories governed by criminal organizations? Combining household surveys and administrative records with detailed maps of former gang-controlled areas, we study how El Salvador’s 2022 State of Exception, which ended two decades of gang territorial control, reshaped Salvadoran society. We find that the removal of gang control integrated previously segmented labor markets, improving mobility, employment outcomes, household income, and financial inclusion. Areas with greater pre-2022 gang exposure also experienced larger increases in business formation and property investment. However, the legacy of criminal governance persists through residence-based discrimination: employers remain less willing to hire otherwise identical applicants from former gang-controlled neighborhoods. Finally, although overall support for the crackdowns remains high, individuals who witnessed police abuse report substantially greater distrust of the police and the national government, suggesting that abuses of state authority may undermine the political sustainability of tough-on-crime policies. |
| Keywords: | crime, crackdowns, gangs, labor mobility, development |
| JEL: | K42 O17 J42 R12 J71 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_13021 |
| By: | Melikian, Sarah |
| Abstract: | This Comment examines the Restatement of the Law, Liability Insurance’s adoption of an objective commercial reasonableness standard for an insurer’s duty to make reasonable settlement decisions and argues that the standard appropriately balances the interests of insurers and policyholders. After reviewing the origins of liability insurance, the insurer’s duties to defend and indemnify, and the development of the duty to settle, the Comment analyzes the controversy surrounding the American Law Institute’s Restatement project and the criticism directed at its treatment of settlement obligations. The Comment contends that a commercial reasonableness standard is necessary because insurers possess exclusive control over settlement decisions and may otherwise be incentivized to expose policyholders to excess judgments while risking only policy-limit liability. By requiring insurers to evaluate settlement opportunities as though they alone would bear the full financial consequences of an adverse judgment, the Restatement aligns insurer incentives with the interests of insureds and promotes fair decision-making. The Comment further argues that concerns about excessive insurer liability are overstated, as courts applying objective reasonableness standards continue to uphold insurer decisions when settlement demands are unreasonable. Ultimately, the Comment concludes that the Restatement’s approach both clarifies a historically confusing area of insurance law and provides a sound framework for protecting policyholders without unfairly burdening insurers. [This abstract was written by Microsoft Copilot, a generative artificial intelligence.] |
| Date: | 2026–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:osf:lawarc:zncb5_v1 |
| By: | Juan-Jose Ganuza (Comision Nacional de los Mercados y la Competencia (CNMC), Spain); Ivan Rendo (Toulouse School of Economics, Toulouse, France) |
| Abstract: | Piracy is central to digital markets, where identical content can be accessed legally or through unauthorized channels. While easier piracy seems likely to intensify competition and lower prices, it also reduces profitability and discourages entry. We develop a circular-city model with free entry in which consumers jointly choose content and access mode. Stronger enforcement raises prices for a fixed number of firms but also attracts competitors. Prices rise with enforcement in less competitive markets but can follow an inverted U in more competitive markets, where entry eventually pushes prices down. Extensions show that piracy can also weaken competition and raise prices by attracting consumers most willing to switch between legal providers. |
| Keywords: | competition; piracy; entry; digital markets |
| JEL: | L13 L82 K42 D43 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:net:wpaper:2602 |
| By: | Joshua S. Gans |
| Abstract: | How much liability should AI providers bear when their services enable both attack and defence? Liability can improve welfare while increasing harm. Providers sell a common input to productive users, attackers and defenders. Within a defended contest, a higher common price reduces effort without changing attack success or attacker profits, saving resources and improving the target's security payoff. Compensation weakens defence and raises attacker profits. Optimal liability balances these effects against productive exclusion. Greater competition can lower optimal liability; every such decline must end at an outcome retaining defence. With cybersecurity access fixed, monopoly can warrant partial liability but never full liability when provision is worthwhile. When guardrails preserving productive uses are available, strong competition favours universal guarding socially but encourages unilateral removal at insufficient liability. At a fixed provider count, sufficiently many productive users ensure a pure equilibrium with universal guarding under high liability. A universal-guarding requirement makes liability redundant. Under monopoly, adoption follows a unique liability threshold, while zero liability remains uniquely optimal for a range of parameters with sufficiently many productive users. |
| JEL: | D62 K13 L13 L51 L86 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35828 |
| By: | Jens Ludwig (The University of Chicago Harris School of Public Policy and NBER) |
| Abstract: | What caused the historically unique volatility in American homicides since 2019, driven by gun homicides? While there is no shortage of candidate explanations, a coherent understanding has been elusive because of the widely held view that gun violence, like other crimes, stems from a rational weighing of benefits and costs as in Becker (1968). This model does a generally poor job of explaining recent trends in homicide. Behavioral economics helps explain what the Becker model cannot. This view starts with the fact that most shootings don’t further some larger goal like robbery or gang wars over drug turf (“instrumental violence†); they’re arguments settled with guns (“expressive violence†). Why do arguments start or escalate? The behavioral model points to automatic cognition that is fast, effortless but sometimes prone to error. The pandemic increased automaticity by increasing distress – a cognitive “bandwidth tax.†Recent homicide trends, driven by changes in expressive violence, are mirrored by similar trends for deaths from drug overdose, car crashes, and suicide (especially for Black Americans, the group most affected by violence) – “deaths of decision-making.†Also relevant is a large rise and fall in gun carrying, which might partially stem from Becker-like mechanisms: Large changes in handgun sales and police stops, both of which may also have been affected by the killing of George Floyd. Since American gun violence is mostly arguments with guns, no wonder homicide trends are due mostly to changes in the number of arguments and the odds a given argument had a gun present. |
| JEL: | H0 I0 K0 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:bfi:wpaper:2026-125 |
| By: | Françoise Delmez; Ilan Tojerow; Magali Verdonck |
| Abstract: | This policy brief, the third in a three-part series on Intimate Partner Violence (IPV), reviews institutional and societalresponses to IPV, focusing on Belgium’s legal system, healthcare and mental health services, social work, and materialsupport. It shows that Belgium has built a comprehensive legal framework since the 1990s, yet reporting to police remainslow and enforcement of protection orders is limited, while IPV victims face multidimensional legal needs that extend wellbeyond criminal prosecution. Healthcare and mental health services are frequent points of contact but under-identifyvictims due to screening gaps, even though trauma-informed and advocacy-based interventions show measurablebenefits. Social work and coordinated community responses improve outcomes when timely and empowerment-based, and material support, particularly shelter and housing, remains structurally insufficient relative to need. The briefconcludes that legal aid, healthcare, and material support are complementary and that no single intervention is sufficient:sustainable exit from abusive relationships depends on their coordination, with substantial costs to society when servicesare inadequate, fragmented, or inaccessible to marginalised survivors. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:dul:bpaper:2013/414041 |
| By: | Herbert Dawid; Ali Kashefi; Gerd Muehlheusser |
| Abstract: | Should platforms be held legally responsible for harm caused by products or services offered by third-party sellers? We address this question in a novel setting in which product safety (the likelihood of accidents) is determined by third-party sellers, while the consumer price is set by a monopolistic platform that pays sellers a commission. Relevant examples include platforms providing ride-hailing services (e.g. Uber and Lyft) or health care services (e.g. Teladoc). Sellers decide whether or not to become active on the platform, and consumers' willingness to pay for the platform good increases with the number of active sellers (platform externality). When an accident occurs, the harm is divided between the platform and the respective seller according to a liability rule set ex ante by a welfare-maximizing policymaker. Sellers' incentive to provide high product safety is driven by market demand, which in turn is determined by the platform's pricing scheme, balancing the trade-off between market revenue and expected liability costs. The platform may optimally set a price below the monopoly level to boost demand, thereby triggering active sellers to provide high product safety (market channel). The socially optimal liability rule is dichotomous: it either assigns no liability to the platform, or the maximum liability share for which the platform exploits the market channel to induce high product safety from the sellers. Holding the platform liable is socially desirable only when it induces lower consumer prices. |
| Keywords: | platform liability, consumer pricing, product safety, product liability |
| JEL: | K13 L13 L15 L86 D42 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_13033 |
| By: | Joan Calzada (Universitat de Barcelona, Spain); Néstor Duch-Brown (Joint Research Centre (JRC)); Xavier Fageda (Universitat de Barcelona, Spain); Nicandro Quirós (Universitat de Barcelona, Spain) |
| Abstract: | This paper examines the impact of Google’s Search Engine Results Page (SERP) redesign on web traffic to airline and flight comparison websites. Google implemented the redesign on March 6, 2024, in response to the Digital Markets Act (DMA). The reform removed the Google Flights module from the main results page and introduced two new sections — “Airline Options” and “Flight Sites”— aimed at reducing self-preferencing and increasing the visibility of third-party services. Using a Synthetic Difference-in-Differences (SDiD) approach and domain-level data for four EU countries, with the United Kingdom and the United States as control markets, we estimate the causal effects of the redesign from November 2023 to December 2024. We find that the reform reallocated organic search traffic toward airline and comparison websites with smaller market shares. On desktop devices, organic traffic to low-cost and network airlines increased by 15 percent and 5.5 percent, respectively, while no significant effects are detected on mobile. Traffic to flight comparison websites increased by 20 percent on desktop and 19 percent on mobile, with gains concentrated among smaller platforms. By contrast, we find no detectable effects for large incumbents such as Skyscanner, Booking.com, and Expedia. Overall, the redesign relaxed visibility constraints for smaller market participants, suggesting that digital market regulation can increase contestability at the margin without necessarily altering the position of large incumbents. |
| Keywords: | Digital Markets Act; Self-preferencing; Google, SERP; Air Travel Market |
| JEL: | D40 L41 L86 L93 K21 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:net:wpaper:2604 |
| By: | Ismail, Nasrul |
| Abstract: | Compliance with judgments of the European Court of Human Rights is conventionally recorded as a terminal status: a case is open or closed, a judgment executed or pending, an obligation met or unmet. These measures enable scholarly comparison, but they cannot show how a state engages with the supervision of a judgment or whether reform of prison conditions endures. As such, this article treats compliance as conduct and asks whether the closure of supervision reflects durable improvement in the conditions a judgment addressed. Drawing on the documentary record of Committee of Ministers supervision in three pilot-judgment jurisdictions (i.e., Italy, Romania, and Hungary), with two contextual comparators (i.e., Spain and England and Wales), it codes state disclosures for opacity and stance and reconstructs responsiveness descriptively from the dated supervisory sequence. Two independent coders reached strong agreement (Krippendorff’s alpha of 0.88 for stance and 0.90 for opacity, on small, well-specified eligible data sets). The cases did not form a single compliance scale but displayed distinct configurations. Specifically, Italy was transparent but shifted in its stated position before closure in 2016; Romania combined continuing engagement with capacity explanations; and Hungary combined formal but insubstantial engagement with selective disclosure. Set against current prison occupancy, the state that had completed supervision was the most overcrowded: Italy recorded 120.7 occupants per 100 places, exceeding Hungary's 114.5 and Romania's 111.2. Because the occupancy snapshot postdated Italy's closure, it could not reveal whether closure caused the later overcrowding, but it did manifest that closure did not secure lasting improvement in reforms. The article frames this durability gap as a problem of means-ends decoupling and offers a reproducible method for distinguishing compliance conduct from the substantive conditions oversight exists to change. |
| Date: | 2026–10–02 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:fdbma_v1 |