International Review of Law and Economics最新文献

Federal and state law enforcement interceptions of communications, as authorized by the Electronic Communications Privacy Act and analogous state laws, are contingent on obtaining a court order. We investigate how wiretap orders have been utilized in narcotics cases across the federal and state court systems. We characterize a sorting mechanism that is consistent with our data and empirical findings, whereby federal wiretap orders trade off prosecution outcomes and crime deterrence more quickly than state wiretap orders. We also find that the intensity of surveillance in most states and years is at the lower end of the enforcement-deterrence trade-off, reflecting the high cost of running wiretap operations.

With surges in U.S. corporate political spending following the Supreme Court’s decision on Citizens United v. FEC, this paper studies the transparency of corporate political spending. We argue that shareholder engagements aimed at improving such transparency are more successful than previously documented in the literature. Some “voluntary” disclosures by firms are the result of settled engagements. Firms with political action committees, weaker political transparency, more politically connected directors, and higher sensitivity to political uncertainty are more likely to be targeted by activist shareholders. Institutional investors, especially socially responsible investment funds, are more likely to succeed after initiating engagements. Using hand-collected public announcements of engagement outcomes, we find that the stock market reacts positively (negatively) to successful (unsuccessful) engagements in politically active firms. Moreover, increased transparency facilitates the investors’ assessment of firms’ exposure to external political risks, the monitoring of firms’ political expenditure, and tacit coordination among industry peers. Collectively, our results suggest that investors value corporate political transparency, especially in the case of politically active firms.

We investigate how the lockdown enforcement by French authorities is associated with the resolution of corporate insolvency. In this sense, we make a distinction between four legal procedures, namely the amicable liquidation (out-of-court exit), the judicial liquidation (court-driven exit), the restructuring procedure available to non-defaulted firms, and the restructuring procedure available to defaulted firms. Using a sample of 3488 non-listed and non-financial French firms, our estimates yield three major findings. First, the likelihood of judicial liquidation increased after the lifting of the quarantines compared to the pre-pandemic period. Second, the non-defaulted firms had a higher likelihood to reorganize in court during the second lockdown. Third, the lifting of the first lockdown led to a decrease in the probability of restructuring the assets of defaulted firms. Although the main objective of the lockdown was to limit spread of the virus, its enforcement has not encouraged the use of the out-of-court exit path.

A 2003 police organization reform in South Korea led to the consolidation of many local police boxes into fewer but larger patrol stations. The expectation was that such consolidation would allow police to utilize its limited resources in a more flexible and efficient way. In this study, we investigate the impact of this reform on crime by exploiting the variation in the extent of police box consolidation across South Korea. Our estimation results indicate that the areas more strongly affected by the consolidation have experienced a notable increase in crime, especially sexual assault and assault. Moreover, we find evidence that the police box consolidation has had a disproportionately higher impact on crime in rural areas, where the distribution of police boxes was sparser than in urban areas. These findings suggest that varying allocations of police resources can have an important impact on crime, even without a significant change in the overall level of police resources.

We model a market for professional services such as those offered by lawyers, auditors or conveyancers. Initially the market is served by a single profession with a self-regulatory organization that sets the quality standard for all the members of the profession. We then introduce a second competing profession (e.g. solicitors vs. licensed conveyancers in England) and compare the market outcomes. It is demonstrated that with two professions the prices of the services fall and so does the quality offered by an average supplier. On the other hand, the total supply of quality might actually rise. When the market is served by two professional groups, then the quality of services offered by the higher-tier profession and the total supply of quality are increasing in the size and in the quality of the lower-tier profession.

We present a model of the interaction between firms agreeing on a degree of collusion and a competition authority that simultaneously determines the allocation of resources to enforcement of anti-trust legislation. An increase in demand is associated with tougher enforcement and a lower degree of collusion. A stronger competitive pressure first decreases the degree of collusion and increases the level of enforcement, then increases both the degree of collusion and the level of enforcement, and eventually increases the degree of collusion and decreases the level of enforcement. Simulation results indicate that a move from the EU penalty regime to the tougher US standard with treble damages would mainly impact on the enforcement intensity and to a much lesser extent affect the degree of collusion.

Fine reductions for self-reported offenses entail a potential trade-off. On the one hand, inducing offenders to self-report allows the social planner to save on enforcement costs and reduce harm through early detection. On the other hand, fine reductions may also reduce deterrence: offenders anticipate that if their detection probability turns out to be higher than initially expected, they can exploit the possibility of a more lenient sanction. We analyze how this trade-off is affected by the potential offender’s utility function, contrasting standard neoclassical preferences with loss aversion. For loss aversion, we apply the approach by Koszegi and Rabin (2006, 2007), in which reference points are determined by the ex ante expectations of equilibrium strategies. Assuming that the private benefit from crime is lost in case of detection, we distinguish between loss aversion in the fine dimension and in the benefit dimension. Intuitively, one might assume that loss aversion facilitates law enforcement because losses loom larger than gains, which sets incentives to refrain from crime. We show that a sufficient condition for this intuition to hold is that the degree of loss aversion in the fine dimension is weakly above the degree in the benefit dimension.

Intellectual property (IP) is gaining increasing attention in various fields. However, its proper function relies on an effective judicial system. Thus, we compared the results of patent infringement litigations in China between specialized IP courts and general courts. We found that patent holders sue for higher damages at IP courts than in general courts, and IP courts grant higher damages. However, when we controlled the impacts of certain factors, we found that the IP courts do not demonstrate a pro-patent propensity in their judgments. Furthermore, IP courts have not shown significant advantages in their judgments in aspects of speed, the rate of appeals, and the avoidance of mistakes. We also found that litigious plaintiffs are, to some degree, disliked by the courts. This work provides an empirical understanding of the latest situation about patent protection in China and discusses its practical implications.

Sander (2019) attempts to revive the claim that “mismatch” between the credentials of students that receive racial preferences in law school admissions and the average observable academic credentials of their peers leads to fewer black lawyers. This article examines Sander’s study and explains the reasons why second-choice analyses, and Bar Passage Study data in particular, are poor sources for causal inferences about academic mismatch. Sander’s paper makes indefensibly strong assumptions about the inferences that can be drawn between evidence on distinct types of mismatch, overclaims results that lack robustness across different subsamples of the underlying data, and misinterprets other results that in fact cut against the article’s claim. Ultimately, as originally reported in Ayres & Brooks (2005), the data do not provide evidence that affirmative action reduces the number of black lawyers.

What is the subjective value of voting rights? This article presents an empirical demonstration of people’s loss aversion for the value of voting rights. By way of vignette experiments using scenarios of the 2020 U.S. presidential election (Studies 1 and 2, with U.S. citizens) and a fictitious direct premier election in Japan (Study 3, with Japanese citizens), the present research measured the willingness-to-accept compensation (WTA) and the willingness-to-pay price (WTP) for a ballot(s) in political elections. A great disparity between WTA and WTP was found regardless of the electoral setting, the proportion and width of ballot alteration, and the initial status. Specifically, the observed WTA/WTP ratios for a ballot(s) were within the range of 5.00–27.36, which is much larger than the ratios for ordinary market goods (about 1.5–2.5) and which is comparable to the ratios for other non-market goods. In addition, WTA for a mere 10% dilution of voting rights is still higher than WTP for full voting rights; the powerful effect of loss aversion might help explain universal barriers against suffrage extension.