There are good reasons to believe that consumers’ behavior is sometimes influenced by systematic misperceptions of legal norms that govern product quality. Consumers might misperceive specific rules, such as those found in food safety regulations, as well as more general standards, such as the unconscionability doctrine or limitations on waivers of default substantive or procedural rights. When demand is affected by systematic misperceptions of legal norms, lawmakers may be able to maximize welfare by deviating from the legal standard that would be optimal in the absence of misperception. We use a formal model to characterize these optimal deviations under different legal regimes (with different types and magnitudes of sanctions). In particular, should the legal standard be adjusted to counteract or confirm the misperception? For instance, if consumers underestimate the level of legal protection is it desirable to raise the legal standard to counteract the misperception? Or should lawmakers lower the legal standard to confirm the misperception?
{"title":"Mis)perceptions of Law in Consumer Markets","authors":"O. Bar‐Gill, K. Davis","doi":"10.1093/ALER/AHX009","DOIUrl":"https://doi.org/10.1093/ALER/AHX009","url":null,"abstract":"There are good reasons to believe that consumers’ behavior is sometimes influenced by systematic misperceptions of legal norms that govern product quality. Consumers might misperceive specific rules, such as those found in food safety regulations, as well as more general standards, such as the unconscionability doctrine or limitations on waivers of default substantive or procedural rights. When demand is affected by systematic misperceptions of legal norms, lawmakers may be able to maximize welfare by deviating from the legal standard that would be optimal in the absence of misperception. We use a formal model to characterize these optimal deviations under different legal regimes (with different types and magnitudes of sanctions). In particular, should the legal standard be adjusted to counteract or confirm the misperception? For instance, if consumers underestimate the level of legal protection is it desirable to raise the legal standard to counteract the misperception? Or should lawmakers lower the legal standard to confirm the misperception?","PeriodicalId":46133,"journal":{"name":"American Law and Economics Review","volume":"19 1","pages":"245-286"},"PeriodicalIF":1.5,"publicationDate":"2017-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/ALER/AHX009","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44093376","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Punishment severity and crime rates vary across jurisdictions. Some countries have punitive sanctions and nevertheless experience relatively high crime rates. This article explores potential sources of the interjurisdictional heterogeneity in the optimal law enforcement model, paying particular attention to the possibility that the high crime despite high sanctions outcome can be socially optimal. The key conceptual issue is the interaction between detection efforts of enforcers and avoidance efforts of offenders.
{"title":"On Punishment Severity and Crime Rates","authors":"Tim Friehe, Thomas J. Miceli","doi":"10.1093/ALER/AHX017","DOIUrl":"https://doi.org/10.1093/ALER/AHX017","url":null,"abstract":"Punishment severity and crime rates vary across jurisdictions. Some countries have punitive sanctions and nevertheless experience relatively high crime rates. This article explores potential sources of the interjurisdictional heterogeneity in the optimal law enforcement model, paying particular attention to the possibility that the high crime despite high sanctions outcome can be socially optimal. The key conceptual issue is the interaction between detection efforts of enforcers and avoidance efforts of offenders.","PeriodicalId":46133,"journal":{"name":"American Law and Economics Review","volume":"19 1","pages":"464-485"},"PeriodicalIF":1.5,"publicationDate":"2017-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/ALER/AHX017","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46128369","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article investigates the implications of uncertainty aversion on optimal liability law. Of special interest is the case in which the causal link between conduct and harm is not known with certainty, as is frequently the case with toxic torts. Under negligence, uncertainty aversion calls for a higher standard of care if, and only if, the safest prevention measures are also the most reliable ones (i.e., they reduce the uncertainty perceived by the victim). Strict liability dominates negligence when the injurer has lower degrees of uncertainty aversion than the victim and can formulate more precise estimates of the probability of harm. When harm is dispersed on a very large number of victims, however, negligence dominates independently of their degree of uncertainty aversion.
{"title":"Liability Law under Scientific Uncertainty","authors":"L. Franzoni","doi":"10.1093/ALER/AHX016","DOIUrl":"https://doi.org/10.1093/ALER/AHX016","url":null,"abstract":"This article investigates the implications of uncertainty aversion on optimal liability law. Of special interest is the case in which the causal link between conduct and harm is not known with certainty, as is frequently the case with toxic torts. Under negligence, uncertainty aversion calls for a higher standard of care if, and only if, the safest prevention measures are also the most reliable ones (i.e., they reduce the uncertainty perceived by the victim). Strict liability dominates negligence when the injurer has lower degrees of uncertainty aversion than the victim and can formulate more precise estimates of the probability of harm. When harm is dispersed on a very large number of victims, however, negligence dominates independently of their degree of uncertainty aversion.","PeriodicalId":46133,"journal":{"name":"American Law and Economics Review","volume":"19 1","pages":"327-360"},"PeriodicalIF":1.5,"publicationDate":"2017-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/ALER/AHX016","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49161407","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Immediate Consequences of Pretrial Detention: Evidence from Federal Criminal Cases","authors":"S. Didwania","doi":"10.2139/ssrn.2809818","DOIUrl":"https://doi.org/10.2139/ssrn.2809818","url":null,"abstract":"","PeriodicalId":46133,"journal":{"name":"American Law and Economics Review","volume":"1 1","pages":""},"PeriodicalIF":1.5,"publicationDate":"2017-04-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68342592","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article formally models the virtues of Edmund Burke’s conservatism, characterizes the optimal level of conservatism, and applies the model to management, law, and policy. I begin by introducing “switcher’s curse,” a trap in which a decision maker systematically switches too often. Decision makers suffer from switcher’s curse if they forget the reason that they maintained incumbent policies in the past and if they naively compare rival and incumbent policies with no bias for incumbent policies. Conservatism emerges as a heuristic to avoid switcher’s curse. The longer a process or policy has been in place, the more conservative one should be. On the other hand, the more conservative were past decision makers, the more progressive one should be today.
{"title":"Conservatism and Switcher’s Curse","authors":"A. Edlin","doi":"10.1093/ALER/AHW022","DOIUrl":"https://doi.org/10.1093/ALER/AHW022","url":null,"abstract":"This article formally models the virtues of Edmund Burke’s conservatism, characterizes the optimal level of conservatism, and applies the model to management, law, and policy. I begin by introducing “switcher’s curse,” a trap in which a decision maker systematically switches too often. Decision makers suffer from switcher’s curse if they forget the reason that they maintained incumbent policies in the past and if they naively compare rival and incumbent policies with no bias for incumbent policies. Conservatism emerges as a heuristic to avoid switcher’s curse. The longer a process or policy has been in place, the more conservative one should be. On the other hand, the more conservative were past decision makers, the more progressive one should be today.","PeriodicalId":46133,"journal":{"name":"American Law and Economics Review","volume":"19 1","pages":"49-95"},"PeriodicalIF":1.5,"publicationDate":"2017-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/ALER/AHW022","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47159938","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study adds to the literature on how both plaintiffs' beliefs and legal precedent affect access to justice. It also studies how actual accesses to the judiciary result, in turn, in the establishment of further precedent that is able to affect the behavior of new prospective plaintiffs. The analysis is based on a micro-founded Bayesian learning model. The dynamic model shows that precedent, indeed, can rectify biased beliefs. However, the rectification power significantly depends upon both the merit of the case and the stickiness of subjective beliefs. The results highlight that although plaintiffs learn from precedent, under some circumstances meritorious causes of action hardly proceed through the court, or can even disappear from the court after an initial positive trend; on the other hand, frivolous claims can continue to flourish.
{"title":"Beliefs, Precedent, and the Dynamics of Access to Justice: A Bayesian Microfounded Model","authors":"Giorgio Rampa, Margherita Saraceno","doi":"10.1093/ALER/AHW010","DOIUrl":"https://doi.org/10.1093/ALER/AHW010","url":null,"abstract":"This study adds to the literature on how both plaintiffs' beliefs and legal precedent affect access to justice. It also studies how actual accesses to the judiciary result, in turn, in the establishment of further precedent that is able to affect the behavior of new prospective plaintiffs. The analysis is based on a micro-founded Bayesian learning model. The dynamic model shows that precedent, indeed, can rectify biased beliefs. However, the rectification power significantly depends upon both the merit of the case and the stickiness of subjective beliefs. The results highlight that although plaintiffs learn from precedent, under some circumstances meritorious causes of action hardly proceed through the court, or can even disappear from the court after an initial positive trend; on the other hand, frivolous claims can continue to flourish.","PeriodicalId":46133,"journal":{"name":"American Law and Economics Review","volume":"18 1","pages":"272-301"},"PeriodicalIF":1.5,"publicationDate":"2016-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/ALER/AHW010","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"60727384","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In major legal orders such as the United Kingdom, the United States, and France, bribers and recipients face equally severe criminal sanctions. In contrast, countries like China, Russia, and Japan treat the briber more mildly. Asymmetric punishment has been shown to help deter harassment bribery. However, we conjecture that asymmetry is ineffective when applied to collusive bribes. Instead of deterring bribes, asymmetry might enable the briber to enforce the corrupt deal. To test this hypothesis, we design and run a lab experiment in Bonn (Germany) and Shanghai (China) with exactly the same design. The results show that, in both countries, with symmetric punishment bribers are less likely to report to the authorities. Officials are less likely to grant the favor. In Shanghai, corrupt offers are then also less likely. If we frame the experiment as collusive corruption, effects are less pronounced, but we can replicate all of them.
{"title":"Symmetric vs. Asymmetric Punishment Regimes for Collusive Bribery","authors":"C. Engel, Sebastian J. Goerg, Gaoneng Yu","doi":"10.1093/ALER/AHW005","DOIUrl":"https://doi.org/10.1093/ALER/AHW005","url":null,"abstract":"In major legal orders such as the United Kingdom, the United States, and France, bribers and recipients face equally severe criminal sanctions. In contrast, countries like China, Russia, and Japan treat the briber more mildly. Asymmetric punishment has been shown to help deter harassment bribery. However, we conjecture that asymmetry is ineffective when applied to collusive bribes. Instead of deterring bribes, asymmetry might enable the briber to enforce the corrupt deal. To test this hypothesis, we design and run a lab experiment in Bonn (Germany) and Shanghai (China) with exactly the same design. The results show that, in both countries, with symmetric punishment bribers are less likely to report to the authorities. Officials are less likely to grant the favor. In Shanghai, corrupt offers are then also less likely. If we frame the experiment as collusive corruption, effects are less pronounced, but we can replicate all of them.","PeriodicalId":46133,"journal":{"name":"American Law and Economics Review","volume":"18 1","pages":"506-556"},"PeriodicalIF":1.5,"publicationDate":"2016-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/ALER/AHW005","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"60727306","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Though police strikes have been well studied, there are almost no articles written on the public safety consequences of police work slowdowns—labor actions where police officers reduce their ticket-writing and/or arrest productivity for a temporary period. This article fills the current void by presenting evidence on the 1997 New York City Police Department work slowdown, to my knowledge the longest documented police slowdown in U.S. history. Drawing on several, originally collected data sources from the NYPD and other city agencies, the article assesses the impact of the slowdown on ticket enforcement, arrest enforcement, and crime. The findings indicate that, at least in the context of contract-motivated slowdowns where the union may be motivated to garner public support for pay increases, the effects on public safety may be limited. Specifically, in the case of the 1997 slowdown, ticket-writing for all categories of tickets fell dramatically but arrest enforcement for all types of serious crime stayed the same or increased. Accordingly, the crime effects were mostly concentrated in the area of minor criminal disorder (misdemeanors and violations). Only two categories of serious crime (larcenies and assaults) were affected and those crime increases were minimal.
{"title":"The Effect of Police Slowdowns on Crime","authors":"A. Chandrasekher","doi":"10.1093/ALER/AHW008","DOIUrl":"https://doi.org/10.1093/ALER/AHW008","url":null,"abstract":"Though police strikes have been well studied, there are almost no articles written on the public safety consequences of police work slowdowns—labor actions where police officers reduce their ticket-writing and/or arrest productivity for a temporary period. This article fills the current void by presenting evidence on the 1997 New York City Police Department work slowdown, to my knowledge the longest documented police slowdown in U.S. history. Drawing on several, originally collected data sources from the NYPD and other city agencies, the article assesses the impact of the slowdown on ticket enforcement, arrest enforcement, and crime. The findings indicate that, at least in the context of contract-motivated slowdowns where the union may be motivated to garner public support for pay increases, the effects on public safety may be limited. Specifically, in the case of the 1997 slowdown, ticket-writing for all categories of tickets fell dramatically but arrest enforcement for all types of serious crime stayed the same or increased. Accordingly, the crime effects were mostly concentrated in the area of minor criminal disorder (misdemeanors and violations). Only two categories of serious crime (larcenies and assaults) were affected and those crime increases were minimal.","PeriodicalId":46133,"journal":{"name":"American Law and Economics Review","volume":"18 1","pages":"385-437"},"PeriodicalIF":1.5,"publicationDate":"2016-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/ALER/AHW008","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"60727362","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We explore how government officials’ behavior varies with their ethnicity, gender, and political orientation. Specifically, we analyze criminal sentencing decisions in Texas state district courts using data on approximately half a million criminal cases from 2004 to 2013. We exploit randomized case assignments within counties and obtain precisely estimated effects of judges’ ethnicity, gender, and political orientation that are near zero, conditional on geographic factors. However, we find substantial cross-judge heterogeneity in sentencing. Exploiting a unique overlapping structure of Texas state district courts, we find no evidence that this heterogeneity is driven by judges pandering to voters.
{"title":"Do Judges’ Characteristics Matter? Ethnicity, Gender, and Partisanship in Texas State Trial Courts","authors":"C. Lim, Bernardo S. Silveira, J. Snyder","doi":"10.1093/ALER/AHW006","DOIUrl":"https://doi.org/10.1093/ALER/AHW006","url":null,"abstract":"We explore how government officials’ behavior varies with their ethnicity, gender, and political orientation. Specifically, we analyze criminal sentencing decisions in Texas state district courts using data on approximately half a million criminal cases from 2004 to 2013. We exploit randomized case assignments within counties and obtain precisely estimated effects of judges’ ethnicity, gender, and political orientation that are near zero, conditional on geographic factors. However, we find substantial cross-judge heterogeneity in sentencing. Exploiting a unique overlapping structure of Texas state district courts, we find no evidence that this heterogeneity is driven by judges pandering to voters.","PeriodicalId":46133,"journal":{"name":"American Law and Economics Review","volume":"18 1","pages":"302-357"},"PeriodicalIF":1.5,"publicationDate":"2016-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/ALER/AHW006","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"60727318","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this article, we analyze how political competition affects the design of public law enforcement policies. The article arrives at two main conclusions (assuming that the cost of enforcement is linear, criminal’s type is uniformly distributed, and the society is wealthy enough): (1) electoral competition entails no loss of efficiency at equilibrium for both minor and major offenses (e.g., minor offenses are not enforced, while major ones are fully deterred); (2) distortions arises at equilibrium only in the range of intermediate offenses: enforcement expenditure for small offenses is lower than at optimal level, such that the issue of under-deterrence is exacerbated; in contrast, for more serious offenses, enforcement measures are higher, and there is more (possibly, over) deterrence as compared to what efficiency requires. We show that these results also generalize under more general assumptions, except that full deterrence of major offenses is no longer achievable (a less wealthy society), or enforcement expenditure is bounded above (under convex enforcement costs).
{"title":"Law Enforcement with a Democratic Government","authors":"Éric Langlais, Marie Obidzinski","doi":"10.1093/ALER/AHW015","DOIUrl":"https://doi.org/10.1093/ALER/AHW015","url":null,"abstract":"In this article, we analyze how political competition affects the design of public law enforcement policies. The article arrives at two main conclusions (assuming that the cost of enforcement is linear, criminal’s type is uniformly distributed, and the society is wealthy enough): (1) electoral competition entails no loss of efficiency at equilibrium for both minor and major offenses (e.g., minor offenses are not enforced, while major ones are fully deterred); (2) distortions arises at equilibrium only in the range of intermediate offenses: enforcement expenditure for small offenses is lower than at optimal level, such that the issue of under-deterrence is exacerbated; in contrast, for more serious offenses, enforcement measures are higher, and there is more (possibly, over) deterrence as compared to what efficiency requires. We show that these results also generalize under more general assumptions, except that full deterrence of major offenses is no longer achievable (a less wealthy society), or enforcement expenditure is bounded above (under convex enforcement costs).","PeriodicalId":46133,"journal":{"name":"American Law and Economics Review","volume":"19 1","pages":"162-201"},"PeriodicalIF":1.5,"publicationDate":"2016-09-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/ALER/AHW015","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"60727232","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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