We study the causal impact of trust in business elites and trust in government on preferences for taxation at the top. Using new survey data, we find that distrust causes an increase in desired taxes on the top 1 percent. For example, our distrust-in-business-elites treatment leads to an increase in desired taxes on the top 1 percent of 2.4 percentage points (it closes 27 percent of the Democrat-Republican gap in tax preferences) when trust in government is low; a similar result is obtained for our distrust-in-government treatment.
{"title":"Meet the Oligarchs: Business Legitimacy and Taxation at the Top","authors":"R. Di Tella, J. Dubra, A. Lagomarsino","doi":"10.1086/714216","DOIUrl":"https://doi.org/10.1086/714216","url":null,"abstract":"We study the causal impact of trust in business elites and trust in government on preferences for taxation at the top. Using new survey data, we find that distrust causes an increase in desired taxes on the top 1 percent. For example, our distrust-in-business-elites treatment leads to an increase in desired taxes on the top 1 percent of 2.4 percentage points (it closes 27 percent of the Democrat-Republican gap in tax preferences) when trust in government is low; a similar result is obtained for our distrust-in-government treatment.","PeriodicalId":22657,"journal":{"name":"The Journal of Law and Economics","volume":"1 1","pages":"651 - 674"},"PeriodicalIF":0.0,"publicationDate":"2021-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82222859","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Coordinated effects are merger-related harms that arise because a subset of postmerger firms modify their conduct to limit competition among themselves, particularly in ways other than explicit collusion. We provide a measure of the risk of such conduct by examining the individual rationality of participation by subsets of firms in market allocation schemes. This measure of risk for coordinated effects distinguishes markets that are at risk from those that are not and distinguishes mergers that increase risk from those that do not. A market’s risk for market allocation by a subset of firms varies with the degree of outside competition, symmetry and strength of the subset of firms, buyers’ power, and vertical integration. We make precise the widely used but rarely rigorously defined notion of a maverick firm and provide foundations for a maverick-based approach to coordinated effects. In addition, we identify previously unrecognized trade-offs between unilateral and coordinated effects.
{"title":"Coordinated Effects in Merger Review","authors":"S. Loertscher, L. Marx","doi":"10.1086/714919","DOIUrl":"https://doi.org/10.1086/714919","url":null,"abstract":"Coordinated effects are merger-related harms that arise because a subset of postmerger firms modify their conduct to limit competition among themselves, particularly in ways other than explicit collusion. We provide a measure of the risk of such conduct by examining the individual rationality of participation by subsets of firms in market allocation schemes. This measure of risk for coordinated effects distinguishes markets that are at risk from those that are not and distinguishes mergers that increase risk from those that do not. A market’s risk for market allocation by a subset of firms varies with the degree of outside competition, symmetry and strength of the subset of firms, buyers’ power, and vertical integration. We make precise the widely used but rarely rigorously defined notion of a maverick firm and provide foundations for a maverick-based approach to coordinated effects. In addition, we identify previously unrecognized trade-offs between unilateral and coordinated effects.","PeriodicalId":22657,"journal":{"name":"The Journal of Law and Economics","volume":"26 1","pages":"705 - 744"},"PeriodicalIF":0.0,"publicationDate":"2021-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82843189","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Estimates of crime’s burden inform public and private decisions about crime-prevention measures. More than counts of criminal offenses, the aggregate cost of crime conveys the scale of problems from crime and the value of deterrence. This article offers an estimate of the total annual cost of crime in the United States, including the direct costs of law enforcement, criminal justice, and victims’ losses and the indirect costs of private deterrence, fear and agony, and time lost to avoidance and recovery. The findings update crime-cost estimates of past decades while expanding the scope of coverage to include categories missing from past studies. The estimated annual cost of crime is $4.71–$5.76 trillion including transfers from victims to criminals and $2.86–$3.92 trillion net of transfers.
{"title":"The Aggregate Cost of Crime in the United States","authors":"David A. Anderson","doi":"10.1086/715713","DOIUrl":"https://doi.org/10.1086/715713","url":null,"abstract":"Estimates of crime’s burden inform public and private decisions about crime-prevention measures. More than counts of criminal offenses, the aggregate cost of crime conveys the scale of problems from crime and the value of deterrence. This article offers an estimate of the total annual cost of crime in the United States, including the direct costs of law enforcement, criminal justice, and victims’ losses and the indirect costs of private deterrence, fear and agony, and time lost to avoidance and recovery. The findings update crime-cost estimates of past decades while expanding the scope of coverage to include categories missing from past studies. The estimated annual cost of crime is $4.71–$5.76 trillion including transfers from victims to criminals and $2.86–$3.92 trillion net of transfers.","PeriodicalId":22657,"journal":{"name":"The Journal of Law and Economics","volume":"45 1","pages":"857 - 885"},"PeriodicalIF":0.0,"publicationDate":"2021-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85837314","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Joseph J. Sabia, Thanh Tam Nguyen, Taylor Mackay, Dhaval M. Dave
Ban-the-box (BTB) laws, which prevent employers from asking prospective employees about their criminal histories at initial job screenings, are intended to increase employment opportunities and reduce incentives for crime. This study is the first to comprehensively explore the relationship between BTB laws and arrests. Using data from the National Incident-Based Reporting System, we find that BTB laws are associated with a 16 percent increase in criminal incidents involving Hispanic male arrestees. This finding is supported by parallel analysis using the National Longitudinal Survey of Youth 1997 and is consistent with BTB-law-induced job loss due to employer-based statistical discrimination. We find less evidence that BTB laws increase property crime among African American men. Supplemental analyses from the American Community Survey suggest that barriers to welfare participation among Hispanic men may partially explain this result. Our estimates suggest that BTB laws generate approximately $350 million in additional annual crime costs.
{"title":"The Unintended Effects of Ban-the-Box Laws on Crime","authors":"Joseph J. Sabia, Thanh Tam Nguyen, Taylor Mackay, Dhaval M. Dave","doi":"10.1086/715187","DOIUrl":"https://doi.org/10.1086/715187","url":null,"abstract":"Ban-the-box (BTB) laws, which prevent employers from asking prospective employees about their criminal histories at initial job screenings, are intended to increase employment opportunities and reduce incentives for crime. This study is the first to comprehensively explore the relationship between BTB laws and arrests. Using data from the National Incident-Based Reporting System, we find that BTB laws are associated with a 16 percent increase in criminal incidents involving Hispanic male arrestees. This finding is supported by parallel analysis using the National Longitudinal Survey of Youth 1997 and is consistent with BTB-law-induced job loss due to employer-based statistical discrimination. We find less evidence that BTB laws increase property crime among African American men. Supplemental analyses from the American Community Survey suggest that barriers to welfare participation among Hispanic men may partially explain this result. Our estimates suggest that BTB laws generate approximately $350 million in additional annual crime costs.","PeriodicalId":22657,"journal":{"name":"The Journal of Law and Economics","volume":"72 6 1","pages":"783 - 820"},"PeriodicalIF":0.0,"publicationDate":"2021-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75567757","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Leora Friedberg, Richard M. Hynes, Nathaniel Pattison
Several US states ban employers’ use of credit reports in hiring decisions. This paper evaluates whether these bans help financially distressed individuals find employment. We use the Survey of Income and Program Participation to identify individuals likely to directly benefit: unemployed individuals with recent trouble meeting expenses. Exploiting the staggered passage of state laws, we find that banning credit checks increases the job-finding rates among financially distressed job seekers by about 28 percent. We also find an increase in the employment duration of financially distressed individuals who do find jobs, which suggests that they obtain more stable and permanent positions. Finally, we find a small and insignificant change in job-finding rates among nondistressed individuals, but we cannot rule out that this group is harmed by pooling with financially distressed individuals.
{"title":"Who Benefits from Bans on Employers’ Credit Checks?","authors":"Leora Friedberg, Richard M. Hynes, Nathaniel Pattison","doi":"10.1086/714352","DOIUrl":"https://doi.org/10.1086/714352","url":null,"abstract":"Several US states ban employers’ use of credit reports in hiring decisions. This paper evaluates whether these bans help financially distressed individuals find employment. We use the Survey of Income and Program Participation to identify individuals likely to directly benefit: unemployed individuals with recent trouble meeting expenses. Exploiting the staggered passage of state laws, we find that banning credit checks increases the job-finding rates among financially distressed job seekers by about 28 percent. We also find an increase in the employment duration of financially distressed individuals who do find jobs, which suggests that they obtain more stable and permanent positions. Finally, we find a small and insignificant change in job-finding rates among nondistressed individuals, but we cannot rule out that this group is harmed by pooling with financially distressed individuals.","PeriodicalId":22657,"journal":{"name":"The Journal of Law and Economics","volume":"19 1","pages":"675 - 703"},"PeriodicalIF":0.0,"publicationDate":"2021-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73054074","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
D. Carlton, Georgi V. Giozov, M. Israel, Allan L. Shampine
This article provides a retrospective of a litigated vertical merger: the 2018 AT&T/Time Warner merger, which was challenged by the US Department of Justice, litigated, and permitted to proceed by the court. We describe and evaluate in detail the economic model used by the government’s expert and then focus our empirical work on the accuracy of the predictions made by that model. We also discuss evidence related to the Comcast/NBC Universal merger, which involved the same theory of harm and was allowed to proceed with a remedy similar to the contractual commitment that AT&T/Time Warner unilaterally adopted. We conclude that the evidence from the time of trial showed the theory of harm to be weak and the specific empirical predictions made by the government’s expert to be wrong. Postmerger evidence confirms that conclusion, as does new evidence from the earlier Comcast/NBC Universal merger.
{"title":"A Retrospective Analysis of the AT&T/Time Warner Merger","authors":"D. Carlton, Georgi V. Giozov, M. Israel, Allan L. Shampine","doi":"10.1086/721268","DOIUrl":"https://doi.org/10.1086/721268","url":null,"abstract":"This article provides a retrospective of a litigated vertical merger: the 2018 AT&T/Time Warner merger, which was challenged by the US Department of Justice, litigated, and permitted to proceed by the court. We describe and evaluate in detail the economic model used by the government’s expert and then focus our empirical work on the accuracy of the predictions made by that model. We also discuss evidence related to the Comcast/NBC Universal merger, which involved the same theory of harm and was allowed to proceed with a remedy similar to the contractual commitment that AT&T/Time Warner unilaterally adopted. We conclude that the evidence from the time of trial showed the theory of harm to be weak and the specific empirical predictions made by the government’s expert to be wrong. Postmerger evidence confirms that conclusion, as does new evidence from the earlier Comcast/NBC Universal merger.","PeriodicalId":22657,"journal":{"name":"The Journal of Law and Economics","volume":"39 1","pages":"S461 - S498"},"PeriodicalIF":0.0,"publicationDate":"2021-08-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88404878","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Since its founding, Amazon has established a reputation for being consumer friendly by consistently offering lower prices than its market position would seem to allow. However, recent antitrust concerns about dominant online platforms have revived questions about whether Amazon’s growing market share threatens consumer welfare. Given its reputation, regulators have proposed a new focus on conduct unrelated to prices. We ask whether such a move is premature. Using the sudden and unanticipated US exit of Toys“R”Us as a natural experiment, we find that Amazon’s toy prices on its US site increased by almost 5 percent in the wake of the exit relative to similar products and to toys on its Canadian site. Thus, despite Amazon’s long-standing reputation, it may exploit increases in market power in traditional ways as competing retailers cease operating.
{"title":"Does Amazon Exercise Its Market Power? Evidence from Toys“R”Us","authors":"Leshui He, Imke Reimers, Benjamin Shiller","doi":"10.1086/720824","DOIUrl":"https://doi.org/10.1086/720824","url":null,"abstract":"Since its founding, Amazon has established a reputation for being consumer friendly by consistently offering lower prices than its market position would seem to allow. However, recent antitrust concerns about dominant online platforms have revived questions about whether Amazon’s growing market share threatens consumer welfare. Given its reputation, regulators have proposed a new focus on conduct unrelated to prices. We ask whether such a move is premature. Using the sudden and unanticipated US exit of Toys“R”Us as a natural experiment, we find that Amazon’s toy prices on its US site increased by almost 5 percent in the wake of the exit relative to similar products and to toys on its Canadian site. Thus, despite Amazon’s long-standing reputation, it may exploit increases in market power in traditional ways as competing retailers cease operating.","PeriodicalId":22657,"journal":{"name":"The Journal of Law and Economics","volume":"30 1","pages":"665 - 685"},"PeriodicalIF":0.0,"publicationDate":"2021-08-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82781301","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The United States is experiencing an epidemic of opioid abuse. In response, states have implemented policies including increased access to naloxone, a drug that can save lives when administered during an overdose. There is a concern that widespread naloxone access may unintentionally lead to increased or riskier opioid use by reducing the risk of death from overdose, however. In this paper, we use the staggered timing of state-level naloxone access laws as a natural experiment to measure the effects of broadening access to this lifesaving drug. We find that broadened access led to more opioid-related emergency room visits and more opioid-related theft, with no net measurable reduction in opioid-related mortality. We conclude that naloxone has a clear and important role in harm reduction, yet its ability to combat the opioid epidemic’s death toll may be limited without complementary efforts.
{"title":"The Effects of Naloxone Access Laws on Opioid Abuse, Mortality, and Crime","authors":"Jennifer L. Doleac, Anit Mukherjee","doi":"10.1086/719588","DOIUrl":"https://doi.org/10.1086/719588","url":null,"abstract":"The United States is experiencing an epidemic of opioid abuse. In response, states have implemented policies including increased access to naloxone, a drug that can save lives when administered during an overdose. There is a concern that widespread naloxone access may unintentionally lead to increased or riskier opioid use by reducing the risk of death from overdose, however. In this paper, we use the staggered timing of state-level naloxone access laws as a natural experiment to measure the effects of broadening access to this lifesaving drug. We find that broadened access led to more opioid-related emergency room visits and more opioid-related theft, with no net measurable reduction in opioid-related mortality. We conclude that naloxone has a clear and important role in harm reduction, yet its ability to combat the opioid epidemic’s death toll may be limited without complementary efforts.","PeriodicalId":22657,"journal":{"name":"The Journal of Law and Economics","volume":"70 46","pages":"211 - 238"},"PeriodicalIF":0.0,"publicationDate":"2021-08-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"91514625","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Maurizio Conti, Leandro Elia, A. Ferrara, Massimiliano Ferraresi
Outstanding payments in commercial transactions, if delayed beyond the agreed period of time, can engender a range of negative externalities and expose firms to severe liquidity risks. In this study we examine to what extent stricter regulations addressing payment backlogs, brought about by the EU directive on late payments, have affected firms’ performance. We focus on government-to-business activities and on the firms’ responses to the introduction of these regulations. Our evidence suggests that firms’ exit rates fall relatively more in sectors that sell a larger fraction of their output to the government. We document more pronounced effects in sectors with a large share of small firms, for countries characterized by longer payment delays, and for countries with high levels of perceived corruption. Taken together, our findings indicate that more discipline in governments’ payment terms can have considerable effects on economic activity.
{"title":"Governments’ Late Payments and Firms’ Survival: Evidence from the European Union","authors":"Maurizio Conti, Leandro Elia, A. Ferrara, Massimiliano Ferraresi","doi":"10.1086/713502","DOIUrl":"https://doi.org/10.1086/713502","url":null,"abstract":"Outstanding payments in commercial transactions, if delayed beyond the agreed period of time, can engender a range of negative externalities and expose firms to severe liquidity risks. In this study we examine to what extent stricter regulations addressing payment backlogs, brought about by the EU directive on late payments, have affected firms’ performance. We focus on government-to-business activities and on the firms’ responses to the introduction of these regulations. Our evidence suggests that firms’ exit rates fall relatively more in sectors that sell a larger fraction of their output to the government. We document more pronounced effects in sectors with a large share of small firms, for countries characterized by longer payment delays, and for countries with high levels of perceived corruption. Taken together, our findings indicate that more discipline in governments’ payment terms can have considerable effects on economic activity.","PeriodicalId":22657,"journal":{"name":"The Journal of Law and Economics","volume":"100 1","pages":"603 - 627"},"PeriodicalIF":0.0,"publicationDate":"2021-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76260713","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper analyzes merchants’ price coherence in two-sided markets with vertically differentiated platforms. When merchants are unable to charge different prices to consumers who purchase their products using different platforms, fee competition among platforms becomes more intense on both sides of the market. We show that with unrestricted prices, platforms compete for market share, while with price coherence, they compete for the entire sales of a merchant. As a consequence, price coherence can reduce total platform fees, increase consumer surplus, and raise total welfare. We also compare private and social incentives of a platform-merchant pair to impose price coherence, and we explore the effects of price coherence on investment incentives.
{"title":"Platform Competition, Vertical Differentiation, and Price Coherence","authors":"H. Gerlach, Junqian Li","doi":"10.1086/713453","DOIUrl":"https://doi.org/10.1086/713453","url":null,"abstract":"This paper analyzes merchants’ price coherence in two-sided markets with vertically differentiated platforms. When merchants are unable to charge different prices to consumers who purchase their products using different platforms, fee competition among platforms becomes more intense on both sides of the market. We show that with unrestricted prices, platforms compete for market share, while with price coherence, they compete for the entire sales of a merchant. As a consequence, price coherence can reduce total platform fees, increase consumer surplus, and raise total welfare. We also compare private and social incentives of a platform-merchant pair to impose price coherence, and we explore the effects of price coherence on investment incentives.","PeriodicalId":22657,"journal":{"name":"The Journal of Law and Economics","volume":"11 1","pages":"439 - 477"},"PeriodicalIF":0.0,"publicationDate":"2021-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74668202","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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