Christopher P. Reinders Folmer, P. Mascini, Joost M. Leunissen
Abstract Apologies are assumed to be an effective pathway to the restoration of victims of torts. Accordingly, initiatives to facilitate their provision in legal contexts are currently being advocated. A crucial question, however, is whether the apologies that perpetrators provide in these contexts may live up to such expectations. Do perpetrators’ apologies in response to torts convey the content that victims desire, and how may this affect their remedial effectiveness? The present research examined what content victims desire, and perpetrators provide in apology in response to personal injury incidents. In two studies, we demonstrate that (a) perpetrators provide less comprehensive apologies than victims desire, and (b) their apologies thereby are less effective at restoring them. These differences were explained by their differing perception of torts, such that perpetrators regard their transgressions as less severe and intentional, and themselves as less blameworthy than victims do, and consequently offer less comprehensive apologies than victims desire. Therefore, subjectiveness in victims’ and perpetrators’ perception of torts may undermine the remedial effectiveness of legal apology.
{"title":"Rethinking Apology in Tort Litigation Deficiencies in Comprehensiveness Undermine Remedial Effectiveness","authors":"Christopher P. Reinders Folmer, P. Mascini, Joost M. Leunissen","doi":"10.1515/rle-2018-0042","DOIUrl":"https://doi.org/10.1515/rle-2018-0042","url":null,"abstract":"Abstract Apologies are assumed to be an effective pathway to the restoration of victims of torts. Accordingly, initiatives to facilitate their provision in legal contexts are currently being advocated. A crucial question, however, is whether the apologies that perpetrators provide in these contexts may live up to such expectations. Do perpetrators’ apologies in response to torts convey the content that victims desire, and how may this affect their remedial effectiveness? The present research examined what content victims desire, and perpetrators provide in apology in response to personal injury incidents. In two studies, we demonstrate that (a) perpetrators provide less comprehensive apologies than victims desire, and (b) their apologies thereby are less effective at restoring them. These differences were explained by their differing perception of torts, such that perpetrators regard their transgressions as less severe and intentional, and themselves as less blameworthy than victims do, and consequently offer less comprehensive apologies than victims desire. Therefore, subjectiveness in victims’ and perpetrators’ perception of torts may undermine the remedial effectiveness of legal apology.","PeriodicalId":44795,"journal":{"name":"Review of Law & Economics","volume":null,"pages":null},"PeriodicalIF":0.3,"publicationDate":"2019-02-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90580171","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}
Pub Date : 2019-01-01DOI: 10.5089/9781484383070.001.A001
P. Imam, Kangni Kpodar
Abstract This paper analyzes the impact of citizenship laws on economic development. We first document the evolution of citizenship laws around the world, highlighting the main features of jus soli, jus sanguinis as well as mixed regimes, and shedding light on the channels through which they could have differentiated impact on economic development. We then compile a data set of citizenship laws around the world. Using cross-country regressions, panel-data techniques, as well as the synthetic control method and subjecting the results to a battery of tests, we find robust evidence that jus soli laws—being more inclusive—lead to higher income levels than alternative citizenship rules in developing countries, though to a less extent in countries with stronger institutional environment.
{"title":"Does an Inclusive Citizenship Law Promote Economic Development?","authors":"P. Imam, Kangni Kpodar","doi":"10.5089/9781484383070.001.A001","DOIUrl":"https://doi.org/10.5089/9781484383070.001.A001","url":null,"abstract":"Abstract This paper analyzes the impact of citizenship laws on economic development. We first document the evolution of citizenship laws around the world, highlighting the main features of jus soli, jus sanguinis as well as mixed regimes, and shedding light on the channels through which they could have differentiated impact on economic development. We then compile a data set of citizenship laws around the world. Using cross-country regressions, panel-data techniques, as well as the synthetic control method and subjecting the results to a battery of tests, we find robust evidence that jus soli laws—being more inclusive—lead to higher income levels than alternative citizenship rules in developing countries, though to a less extent in countries with stronger institutional environment.","PeriodicalId":44795,"journal":{"name":"Review of Law & Economics","volume":null,"pages":null},"PeriodicalIF":0.3,"publicationDate":"2019-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80577981","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}
Abstract Actors, whether guilty or innocent, may invest in costly measures to reduce their likelihood of being audited. The value of these investments are increasing in the probability with which they expect to be found guilty conditional on being audited. Because strengthening the standard of proof reduces the probability of conviction, it also lowers the investments by actors to reduce their likelihood of being audited. Therefore, when balancing such avoidance costs and deterrence effects, it is optimal to employ a stronger standard than that which maximizes deterrence, namely stronger than preponderance of the evidence.
{"title":"The Optimal Standard of Proof with Adjudication Avoidance","authors":"Murat C. Mungan","doi":"10.2139/ssrn.3295365","DOIUrl":"https://doi.org/10.2139/ssrn.3295365","url":null,"abstract":"Abstract Actors, whether guilty or innocent, may invest in costly measures to reduce their likelihood of being audited. The value of these investments are increasing in the probability with which they expect to be found guilty conditional on being audited. Because strengthening the standard of proof reduces the probability of conviction, it also lowers the investments by actors to reduce their likelihood of being audited. Therefore, when balancing such avoidance costs and deterrence effects, it is optimal to employ a stronger standard than that which maximizes deterrence, namely stronger than preponderance of the evidence.","PeriodicalId":44795,"journal":{"name":"Review of Law & Economics","volume":null,"pages":null},"PeriodicalIF":0.3,"publicationDate":"2018-12-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73146949","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}
Abstract This paper deals with the enforcement of merger control in the presence of remedies, and studies how merger remedies affect the deterrence accomplished by controlling mergers. We determine the optimal frequency of investigations launched by the agency, and find that when conditional approvals are possible, it may be harder to deter the most welfare-detrimental mergers, and the agency might have to investigate mergers more often. Furthermore, we find that remedies may very well decrease welfare. Finally, we show that our theoretical results help to understand some of the empirical findings in the literature.
{"title":"Enforcement and Deterrence in Merger Control: The Case of Merger Remedies","authors":"Andreea Cosnita‐Langlais, Lars Sørgard","doi":"10.1515/rle-2015-0014","DOIUrl":"https://doi.org/10.1515/rle-2015-0014","url":null,"abstract":"Abstract This paper deals with the enforcement of merger control in the presence of remedies, and studies how merger remedies affect the deterrence accomplished by controlling mergers. We determine the optimal frequency of investigations launched by the agency, and find that when conditional approvals are possible, it may be harder to deter the most welfare-detrimental mergers, and the agency might have to investigate mergers more often. Furthermore, we find that remedies may very well decrease welfare. Finally, we show that our theoretical results help to understand some of the empirical findings in the literature.","PeriodicalId":44795,"journal":{"name":"Review of Law & Economics","volume":null,"pages":null},"PeriodicalIF":0.3,"publicationDate":"2018-11-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84704857","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}
Abstract When choosing between two goods, consumers anticipate the utility they expect to derive from each product. However, such anticipations are subject to several sources of error, such as quality or price misperception and overoptimism about one’s capacity to use a product. The present paper studies the effect of inaccurate utility anticipations on consumer choice and ultimately on the market outcome in a vertically differentiated duopoly. I come to the conclusion that utility misperception can lead consumers to make suboptimal decisions ex post, although the choice seemed rational at the time of purchase. I show that in a vertically differentiated duopoly, firms are subject to two opposite incentives regarding consumer education. Moreover, the firms’ incentives to educate consumers are not necessarily aligned with the socially efficient outcome. Therefore, this paper also explores several policies aimed at mitigating the negative consequences of consumer misperception.
{"title":"Utility Misperception in a Vertically Differentiated Duopoly","authors":"Sophie Bienenstock","doi":"10.1515/rle-2015-0047","DOIUrl":"https://doi.org/10.1515/rle-2015-0047","url":null,"abstract":"Abstract When choosing between two goods, consumers anticipate the utility they expect to derive from each product. However, such anticipations are subject to several sources of error, such as quality or price misperception and overoptimism about one’s capacity to use a product. The present paper studies the effect of inaccurate utility anticipations on consumer choice and ultimately on the market outcome in a vertically differentiated duopoly. I come to the conclusion that utility misperception can lead consumers to make suboptimal decisions ex post, although the choice seemed rational at the time of purchase. I show that in a vertically differentiated duopoly, firms are subject to two opposite incentives regarding consumer education. Moreover, the firms’ incentives to educate consumers are not necessarily aligned with the socially efficient outcome. Therefore, this paper also explores several policies aimed at mitigating the negative consequences of consumer misperception.","PeriodicalId":44795,"journal":{"name":"Review of Law & Economics","volume":null,"pages":null},"PeriodicalIF":0.3,"publicationDate":"2018-11-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90375857","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}
Abstract Although controversial, local and state governments draw on broad interpretations of the Fifth Amendment takings clause to justify using eminent domain for economic development. Previous studies examine such uses from the perspective of property rights and the scope and size of government. This paper addresses the fundamental question: Do states that grant local governments liberal eminent domain powers actually enjoy greater economic growth? This paper estimates how liberal eminent domain laws affect private sector employment growth across states while controlling for national trend and industry mix effects. The results clearly show that allowing local governments to use eminent domain for economic development does not lead to more private sector jobs.
{"title":"Using Eminent Domain for Economic Development: Does it Increase Private Sector Employment?","authors":"G. Turnbull, Robert F. Salvino, Michael T. Tasto","doi":"10.1515/rle-2016-0020","DOIUrl":"https://doi.org/10.1515/rle-2016-0020","url":null,"abstract":"Abstract Although controversial, local and state governments draw on broad interpretations of the Fifth Amendment takings clause to justify using eminent domain for economic development. Previous studies examine such uses from the perspective of property rights and the scope and size of government. This paper addresses the fundamental question: Do states that grant local governments liberal eminent domain powers actually enjoy greater economic growth? This paper estimates how liberal eminent domain laws affect private sector employment growth across states while controlling for national trend and industry mix effects. The results clearly show that allowing local governments to use eminent domain for economic development does not lead to more private sector jobs.","PeriodicalId":44795,"journal":{"name":"Review of Law & Economics","volume":null,"pages":null},"PeriodicalIF":0.3,"publicationDate":"2018-11-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/rle-2016-0020","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72494121","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}
Abstract Chinese judicial opinions were, for a long time, not readily accessible even by the courts. But an emerging norm of judicial transparency, coupled with the technological advances of the last decade, has resulted in the accumulation of vast bodies of cases available for consultation by both the lay and the learned. These recent developments in the Chinese legal landscape allow judges to influence and be influenced by the decisions of judges sitting in other courts. This project is the first to adopt an experimental approach to evaluating the influence of prior judicial decisions on Chinese judges. We find that citation of a case out of a sister court had a substantial and statistically significant effect on judges’ interpretation of a vague, permissive, legal standard. This effect was not, however, accompanied by a reduction in the length of sentences awarded by judges. An additional study suggests that prior judicial decisions have an indistinguishable influence on judges and law students, indicating that role and environment are unlikely to be the explanation for the main result.
{"title":"The Foundations of Judicial Diffusion in China: Evidence from an Experiment","authors":"B. Chen, Zhiyu Li","doi":"10.1515/rle-2017-0008","DOIUrl":"https://doi.org/10.1515/rle-2017-0008","url":null,"abstract":"Abstract Chinese judicial opinions were, for a long time, not readily accessible even by the courts. But an emerging norm of judicial transparency, coupled with the technological advances of the last decade, has resulted in the accumulation of vast bodies of cases available for consultation by both the lay and the learned. These recent developments in the Chinese legal landscape allow judges to influence and be influenced by the decisions of judges sitting in other courts. This project is the first to adopt an experimental approach to evaluating the influence of prior judicial decisions on Chinese judges. We find that citation of a case out of a sister court had a substantial and statistically significant effect on judges’ interpretation of a vague, permissive, legal standard. This effect was not, however, accompanied by a reduction in the length of sentences awarded by judges. An additional study suggests that prior judicial decisions have an indistinguishable influence on judges and law students, indicating that role and environment are unlikely to be the explanation for the main result.","PeriodicalId":44795,"journal":{"name":"Review of Law & Economics","volume":null,"pages":null},"PeriodicalIF":0.3,"publicationDate":"2018-11-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78716410","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}
Abstract We study the effectiveness of licenses in environments with corruption. We expand the standard model so that bribery is feasible not only when licenses are granted but also when enforced or verified. This modification alters many prior results on bribery and licensing significantly. Specifically, we show that in some cases penalties for bribery at the license-granting stage complement penalties for bribery at the permit-enforcement stage. In other cases, they act as substitutes for each other. These results are especially important for often used regulatory policies in which licenses are used in conjunction with some form of subsequent license verification. Thus, our model suggests that studying the impact of bribery at the license-granting stage should not be conducted without simultaneously studying bribery at the permit verification stage.
{"title":"A Note on Licenses in the Presence of Corruption","authors":"A. Farmer, Fabio Méndez, A. Samuel","doi":"10.1515/rle-2015-0056","DOIUrl":"https://doi.org/10.1515/rle-2015-0056","url":null,"abstract":"Abstract We study the effectiveness of licenses in environments with corruption. We expand the standard model so that bribery is feasible not only when licenses are granted but also when enforced or verified. This modification alters many prior results on bribery and licensing significantly. Specifically, we show that in some cases penalties for bribery at the license-granting stage complement penalties for bribery at the permit-enforcement stage. In other cases, they act as substitutes for each other. These results are especially important for often used regulatory policies in which licenses are used in conjunction with some form of subsequent license verification. Thus, our model suggests that studying the impact of bribery at the license-granting stage should not be conducted without simultaneously studying bribery at the permit verification stage.","PeriodicalId":44795,"journal":{"name":"Review of Law & Economics","volume":null,"pages":null},"PeriodicalIF":0.3,"publicationDate":"2018-11-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75886072","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}
Abstract This paper proposes a quantitative approach to study two methodological problems arising when a costly redistribution of resources is implemented through public policies or legal rules: (a) aggregating individual into social preferences and (b) choosing the object of maximization. We consider a redistribution intervention that reduces inequality but diminishes total wealth and we specify a set of social welfare functions combining different preferences aggregation methods and maximands. For each social welfare function, we calculate its “price of equity”, defined as the maximum fraction of total wealth that a society is willing to sacrifice in order to implement the redistribution. Comparing the prices for equity across different social welfare function specifications, we identify systematic relationships and we rank them according to the efficiency-equity orientation. Results show that social welfare functions characterized by aggregation methods conventionally considered equity-oriented may reject redistribution interventions that are evaluated as welfare-improving by social welfare functions using efficiency-oriented aggregation methods. Similarly, social welfare functions considered equity-oriented because using utility as object of maximization may reject distributive policies that are evaluated as welfare-improving by social welfare functions using wealth as maximand. We argue that the quantitative approach proposed, by expounding the trade-off between equity and efficiency connected to different social welfare functions, may prove useful in areas of public law where policy-makers have to engage in the choice of a normative criterion for the evaluation of social welfare. Additionally, our results may inform rule-makers interested in comparing the distributive effects of alternative legal rules in special circumstances where private remedies can efficiently achieve redistribution goals.
{"title":"Distributive Justice, Public Policies and the Comparison of Legal Rules: Quantify the “Price of Equity”","authors":"M. Fabbri, Diogo G.C. Britto","doi":"10.1515/rle-2016-0005","DOIUrl":"https://doi.org/10.1515/rle-2016-0005","url":null,"abstract":"Abstract This paper proposes a quantitative approach to study two methodological problems arising when a costly redistribution of resources is implemented through public policies or legal rules: (a) aggregating individual into social preferences and (b) choosing the object of maximization. We consider a redistribution intervention that reduces inequality but diminishes total wealth and we specify a set of social welfare functions combining different preferences aggregation methods and maximands. For each social welfare function, we calculate its “price of equity”, defined as the maximum fraction of total wealth that a society is willing to sacrifice in order to implement the redistribution. Comparing the prices for equity across different social welfare function specifications, we identify systematic relationships and we rank them according to the efficiency-equity orientation. Results show that social welfare functions characterized by aggregation methods conventionally considered equity-oriented may reject redistribution interventions that are evaluated as welfare-improving by social welfare functions using efficiency-oriented aggregation methods. Similarly, social welfare functions considered equity-oriented because using utility as object of maximization may reject distributive policies that are evaluated as welfare-improving by social welfare functions using wealth as maximand. We argue that the quantitative approach proposed, by expounding the trade-off between equity and efficiency connected to different social welfare functions, may prove useful in areas of public law where policy-makers have to engage in the choice of a normative criterion for the evaluation of social welfare. Additionally, our results may inform rule-makers interested in comparing the distributive effects of alternative legal rules in special circumstances where private remedies can efficiently achieve redistribution goals.","PeriodicalId":44795,"journal":{"name":"Review of Law & Economics","volume":null,"pages":null},"PeriodicalIF":0.3,"publicationDate":"2018-11-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76965974","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}
Abstract Tort and civil liability reform has been a hotly debated issue across US states. This has spawned a large theoretical and empirical academic literature that evaluates the implications of such reform and the impact that it can have on various aspects of an economy. This study adds to that literature by considering how various tort reforms affect entrepreneurial activity across states. The study employs the Database of State Tort Law Reforms (6th Edition) and utilizes the Kauffman Index – an index of entrepreneurial startup activity – between 1996 and 2016, finding that liability reform is generally positively associated with increased entrepreneurial activity. These results are largely driven by joint and several liability, caps on noneconomic damages, limits on contingency fees, and collateral source rules though this latter result is somewhat less robust, while the effects of joint and several liability do not persist through time.
{"title":"US State Tort Liability Reform and Entrepreneurship","authors":"John A. Dove, Laura Dove","doi":"10.1515/rle-2018-0067","DOIUrl":"https://doi.org/10.1515/rle-2018-0067","url":null,"abstract":"Abstract Tort and civil liability reform has been a hotly debated issue across US states. This has spawned a large theoretical and empirical academic literature that evaluates the implications of such reform and the impact that it can have on various aspects of an economy. This study adds to that literature by considering how various tort reforms affect entrepreneurial activity across states. The study employs the Database of State Tort Law Reforms (6th Edition) and utilizes the Kauffman Index – an index of entrepreneurial startup activity – between 1996 and 2016, finding that liability reform is generally positively associated with increased entrepreneurial activity. These results are largely driven by joint and several liability, caps on noneconomic damages, limits on contingency fees, and collateral source rules though this latter result is somewhat less robust, while the effects of joint and several liability do not persist through time.","PeriodicalId":44795,"journal":{"name":"Review of Law & Economics","volume":null,"pages":null},"PeriodicalIF":0.3,"publicationDate":"2018-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79260563","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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