International Review of Law and Economics最新文献

Prison gangs are often thought to create a “culture of violence” in U.S. prisons and jails. Yet mounting research and evidence suggests that prison gangs, in pursuit of profits from illicit market activity, also act as a check on the violent behavior of the broader prison population. This paper synthesizes existing research on prison gangs into a modeling framework that treats gangs as profit-maximizing suppliers and sources of informal governance in an illicit marketplace. The model offers broad policy implications that highlight the challenges and potential unintended consequences of correctional policies that address violence and gang activity.

This study examines whether ex ante securities litigation risk prompts firms to make more or less voluntary restatements. The litigation risk is captured by a new measure based on the dismissal rate of the district court where the firm is headquartered. We find that misreporting firms headquartered in lenient (high dismissal rate) court jurisdictions are more likely to make voluntary restatements. Using the U.S. Supreme Court’s Tellabs decision as an exogenous shock that reduces the leniency of some district courts, we find robust evidence that higher litigation risk decreases managers’ incentives to admit their misreporting. Our finding sheds new light on the litigation risk-voluntary disclosure paradox by pointing to a positive aspect of court leniency in motivating self-policing behavior such as restatement.

This research provides a comprehensive study of the linkages between institutional structures, balance of power between core and peripheries, endogenous extractive policies and inequality in the context of nineteenth century unification of Germany and Italy. To conduct this analysis, the study puts forward estimates of income inequality for pre-unification German states using social tables, compiled using primary data, some of which have thus far been unexplored in economic research. The findings suggest that the power balance between core and periphery, systems of government as well as distorted policies contributed to differences between the Italian and German experiences, specifically to the rise of inequality in the former and no marked increase in the latter.

The article examines the social acceptability of optimal deterrence policies. While there is considerable research on intuitions regarding punishment and the counter-intuitive nature of economic reasoning, the problem of whether decisions based on optimal deterrence are acceptable remains inadequately researched. Two studies examined how acceptance rates vary for different decisions implementing optimal deterrence theory. They demonstrate that (1) policies increasing punishment severity are more acceptable than those decreasing it; (2) changes at the level of penal policy are more acceptable than individual court rulings; (3) acceptance rates decrease as the magnitude of change increases; (4) strict adherence to optimal deterrence theory’s recommendations does not significantly affect the acceptability of the decisions. In addition, no optimal deterrence policies were accepted, on average, or by the majority of participants.

When considering whether to bring a lawsuit, a plaintiff may delegate the decision to her lawyer- better informed about the case’s merits- or consult with her lawyer and decide for herself. Focusing on the latter, we assess how a lawyer communicates with his client about the case’s merits if the client relies on the lawyer’s information to decide whether to bring suit. In some circumstances, the lawyer only partially reveals the case’s merits to persuade the client to bring a suit. In addition, in anticipation of the lawyer’s strategic communication, the plaintiff sometimes adjusts her questions to the lawyer about the case’s merits. Focusing on the communication between lawyers and clients, our paper explores a new consequence of misaligned incentives between the two parties.

Introducing commercial arbitration into a two-country sourcing model, this paper examines how the quality of commercial arbitration regime affects sourcing decision when production involves a relationship-specific transaction. Arbitration may be invoked when a firm shaves the investment value of a customized intermediate input or does not pay in full for investment. Under the full verifiability of an ex-post investment value by an arbitrator, firm behavior is governed by the quality of arbitration regime, measuring how fully a national arbitration regime supports the enforcement of arbitral awards. I theoretically find that a firm’s likelihood of choosing global sourcing over domestic sourcing increases with the source and destination countries’ qualities of international arbitration regimes and the source country’s quality of general arbitration regime. These impacts are magnified as the production of an intermediate input involves a greater degree of relationship-specific transaction. Results also show that as the production of an intermediate input entails a greater degree of relationship-specific transaction, a firm’s likelihood of choosing global sourcing over domestic sourcing decreases when domestic arbitration offers the better enforcement of arbitral awards compared to international arbitration.

In some legal systems, non-convicted pretrial detainees are to be compensated by the Government for the losses derived from their stay on remand. Several theoretical and empirical studies have analyzed some of the consequences of such compensation. This paper finds a result that said studies did not predict: a legal change that relaxed the requirements for compensation is correlated with a reduction in the amount of compensation awarded. We empirically analyze which factors are correlated with the amount of compensation awarded in these cases by Spanish courts from 1990 until today. Our econometrical analysis finds that (i) this amount has drastically decreased after the Supreme Court, by establishing that every non-convicted pretrial detainee is to be compensated, significantly expanded the set of cases where such compensation is due. Moreover: (ii) the longer the time spent on remand, the lower the daily compensation awarded; (iii) those who work receive higher damages than those who do not work, but there are notable (and apparently unjustifiable) differences by type of work; e.g., police officials get much higher awards than other claimants; (iv) we find no gender nor foreign bias.

Several studies provide evidence that heat is positively associated with criminal activity. However, the empirical literature does not provide conclusive evidence about the effect of high temperature on homicides. I examine 156 estimates from 20 studies on the relationship between temperature and homicide rates. In particular, in this meta-analysis I study publication bias using linear and nonlinear techniques together with Bayesian model averaging to explain the heterogeneity in the estimates. After correcting estimates from the publication bias, I cannot conclude that there is a significant effect of temperature on homicide rates. Moreover, monthly data produce larger estimates. Conversely, studies using data from Asia or the OLS estimation method lead to smaller estimates.

Ban-the-box (BTB) laws are a widely used public policy rooted in employment law related to unnecessarily exclusionary hiring practices. BTB laws are intended to improve the employment opportunities of those with criminal backgrounds by giving them a fair chance during the hiring process. Prior research on the effectiveness of these laws in meeting their objective is limited and inconclusive. In this article, we extend the prior literature in two ways: we expand the years of analysis to a period of rapid expansion of BTB laws and we examine different types of BTB laws depending on the employers affected (e.g., public sector). Results indicate that BTB laws, any type of BTB law or BTB laws covering different types of employers, have no systematic or statistically significant association with employment of low-educated men, both young and old and across racial and ethnic groups. We speculate that the lack of effectiveness of BTB laws stems from the difficulty in enforcing such laws and already high rates of employer willingness to hire those with criminal histories.

If it is disclosed to a citizen which public official handles her case, this creates accountability. If the official abuses her authority, the citizen can report this misconduct to higher authority, which can intervene. But transparency also makes it possible for a citizen to pressure an official to decide in her favor. We model this interaction as a sequential game, and define which behavioral effects are required for either effect to dominate. We test the game experimentally. Within the parameters of our experiment, transparency clearly trumps anonymity. If the abuse of sovereign authority risks going unchecked, the occasional retaliation against dutiful officials is, on balance, the smaller social cost.