Pub Date : 2023-12-07DOI: 10.1016/j.irle.2023.106179
Amy Farmer , Paul Pecorino
Under final offer arbitration (FOA), each party to the dispute submits a proposal to the arbitrator who must choose one of the two submitted proposals in the event an agreement is not reached. A long line of research on FOA has assumed that the submitted proposals to the arbitrator are the final bargaining positions of the parties to the dispute. One consequence of this assumption has been a focus on whether proposals submitted to the arbitrator converge towards one another. However, current practice implies a separation between settlement negotiations and proposals submitted to the arbitrator. We use a simple setting to show that proposal convergence can be consistent with an increase in disputes, a decrease in disputes or no effect on the dispute rate. In order to be fully evaluated, mechanisms which lead to proposal convergence must be embedded in a model in which disputes arise endogenously. Understanding FOA is important because it is a widely used procedure. These uses include labor disputes as well as pricing disputes in the telecommunications industries of the United States and Canada.
{"title":"Proposal convergence and settlement under final offer arbitration","authors":"Amy Farmer , Paul Pecorino","doi":"10.1016/j.irle.2023.106179","DOIUrl":"https://doi.org/10.1016/j.irle.2023.106179","url":null,"abstract":"<div><p><span>Under final offer arbitration (FOA), each party to the dispute submits a proposal to the arbitrator who must choose one of the two submitted proposals in the event an agreement is not reached. A long line of research on FOA has assumed that the submitted proposals to the arbitrator are the final bargaining positions of the parties to the dispute. One consequence of this assumption has been a focus on whether proposals submitted to the arbitrator converge towards one another. However, current practice implies a separation between settlement negotiations and proposals submitted to the arbitrator. We use a simple setting to show that proposal convergence can be consistent with an increase in disputes, a decrease in disputes or no effect on the dispute rate. In order to be fully evaluated, mechanisms which lead to proposal convergence must be embedded in a model in which disputes arise endogenously. Understanding FOA is important because it is a widely used procedure. These uses include labor disputes as well as pricing disputes in the </span>telecommunications industries of the United States and Canada.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"77 ","pages":"Article 106179"},"PeriodicalIF":1.1,"publicationDate":"2023-12-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138502005","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}
Pub Date : 2023-10-21DOI: 10.1016/j.irle.2023.106169
Kiefer Ahn , Antonio Trujillo , Jason Gibbons , Charles L. Bennett , Gerard Anderson
A pharmaceutical company that seeks to produce a generic version of a brand drug before patent expiration can trigger a Paragraph IV litigation. However, generic and brand companies may avoid litigation through settlement, which sometimes involves payment to the generic company to delay generic entry. This behavior would be problematic if the settlement option was used to protect patents with low social value. This study explores the relationship between Paragraph IV litigation characteristics and the probability of a Paragraph IV settlement. Examining Paragraph IV settlements from 2003 to 2020, we find that the number of patents being litigated and the years of remaining market exclusivity are the strongest predictors of settlement. Moreover, we find no statistically significant relationship between active ingredient patents and settlement. This information may be helpful to regulators intending to promote the goals of the Hatch-Waxman Act.
{"title":"Settled: Patent characteristics and litigation outcomes in the pharmaceutical industry","authors":"Kiefer Ahn , Antonio Trujillo , Jason Gibbons , Charles L. Bennett , Gerard Anderson","doi":"10.1016/j.irle.2023.106169","DOIUrl":"https://doi.org/10.1016/j.irle.2023.106169","url":null,"abstract":"<div><p>A pharmaceutical company that seeks to produce a generic version of a brand drug before patent expiration can trigger a Paragraph IV litigation. However, generic and brand companies may avoid litigation through settlement, which sometimes involves payment to the generic company to delay generic entry. This behavior would be problematic if the settlement option was used to protect patents with low social value. This study explores the relationship between Paragraph IV litigation characteristics and the probability of a Paragraph IV settlement. Examining Paragraph IV settlements from 2003 to 2020, we find that the number of patents being litigated and the years of remaining market exclusivity are the strongest predictors of settlement. Moreover, we find no statistically significant relationship between active ingredient patents and settlement. This information may be helpful to regulators intending to promote the goals of the Hatch-Waxman Act.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"76 ","pages":"Article 106169"},"PeriodicalIF":1.1,"publicationDate":"2023-10-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"91959689","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}
Pub Date : 2023-10-21DOI: 10.1016/j.irle.2023.106167
Engin Yıldırım , Mehmet Fatih Sert , Burcu Kartal , Şuayyip Çalış
The paper investigates all (971) non-executed pending leading cases of the European Court of Human Rights (ECtHR) between 2012 and 2020 through Machine Learning (ML) techniques. Drawing on the extant scholarship, our interest on compliance has centred on state level and case level variables. For the identification of important variables, four databases have been used. Each country party to the European Convention on Human Rights (ECHR) received 232 distinct factors for eight years. Since we aim to make a parameter estimation for a high-dimensional data set, Simulated Annealing (SA) is employed as feature selection method. In the state level analysis, Support Vector Regression (SVR) model has been applied yielding the coefficients of the variables, which have been found to be important in spelling out non-compliance with the ECtHR decisions. For the case level analysis, different cluster techniques have been utilized and the countries have been grouped into four different clusters. We have found that the states that have relatively high levels of equality before the law, protection of individual liberties, social class equality with regard to enjoying civil liberties, access to justice and free and autonomous election management arrangements, are less susceptible to non-compliance of the decisions of the ECtHR. For the case level analysis, type of violated rights, the existence of dissent in the decision and dissenting votes of national judges for their appointing states affect the compliance behaviour of the states. In addition, a notable result of the research is that if a national judge casts a dissenting vote against the violation judgment of the ECtHR involving the state that appointed him/her, the judgment is likely not to be executed by the respondent state.
{"title":"Non-compliance of the European Court of Human Rights decisions: A machine learning analysis","authors":"Engin Yıldırım , Mehmet Fatih Sert , Burcu Kartal , Şuayyip Çalış","doi":"10.1016/j.irle.2023.106167","DOIUrl":"https://doi.org/10.1016/j.irle.2023.106167","url":null,"abstract":"<div><p>The paper investigates all (971) non-executed pending leading cases of the European Court of Human Rights (ECtHR) between 2012 and 2020 through Machine Learning (ML) techniques. Drawing on the extant scholarship, our interest on compliance has centred on state level and case level variables. For the identification of important variables, four databases have been used. Each country party to the European Convention on Human Rights (ECHR) received 232 distinct factors for eight years. Since we aim to make a parameter estimation for a high-dimensional data set, Simulated Annealing (SA) is employed as feature selection method. In the state level analysis, Support Vector Regression (SVR) model has been applied yielding the coefficients of the variables, which have been found to be important in spelling out non-compliance with the ECtHR decisions. For the case level analysis, different cluster techniques have been utilized and the countries have been grouped into four different clusters. We have found that the states that have relatively high levels of equality before the law, protection of individual liberties, social class equality with regard to enjoying civil liberties, access to justice and free and autonomous election management arrangements, are less susceptible to non-compliance of the decisions of the ECtHR. For the case level analysis, type of violated rights, the existence of dissent in the decision and dissenting votes of national judges for their appointing states affect the compliance behaviour of the states. In addition, a notable result of the research is that if a national judge casts a dissenting vote against the violation judgment of the ECtHR involving the state that appointed him/her, the judgment is likely not to be executed by the respondent state.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"76 ","pages":"Article 106167"},"PeriodicalIF":1.1,"publicationDate":"2023-10-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49750962","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}
Pub Date : 2023-10-18DOI: 10.1016/j.irle.2023.106170
Nicolae Stef , Arvind Ashta
We analyze environmental laws and regulations enacted by 125 countries from 1990 to 2021. An examination of the legislation dynamics yields four principal observations. First, countries with a higher degree of development tend to enact more environmental legislation than less developed countries. Second, parliamentary systems are associated with a higher number of environmental regulations compared to presidential systems. Third, legal origin seems to be related to legislation dynamics. Systems of English legal origin generate less new environmental legislation than any other legal family. Fourth, our estimates point out that ruling parties have strong incentives to slow down the dynamics of environmental laws and regulations one year prior to the legislative elections. However, high levels of government effectiveness seem to favor the modernization of environmental legislation in developed countries and parliamentary systems.
{"title":"Dynamics in environmental legislation","authors":"Nicolae Stef , Arvind Ashta","doi":"10.1016/j.irle.2023.106170","DOIUrl":"https://doi.org/10.1016/j.irle.2023.106170","url":null,"abstract":"<div><p>We analyze environmental laws and regulations enacted by 125 countries from 1990 to 2021. An examination of the legislation dynamics yields four principal observations. First, countries with a higher degree of development tend to enact more environmental legislation than less developed countries. Second, parliamentary systems are associated with a higher number of environmental regulations compared to presidential systems. Third, legal origin seems to be related to legislation dynamics. Systems of English legal origin generate less new environmental legislation than any other legal family. Fourth, our estimates point out that ruling parties have strong incentives to slow down the dynamics of environmental laws and regulations one year prior to the legislative elections. However, high levels of government effectiveness seem to favor the modernization of environmental legislation in developed countries and parliamentary systems.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"76 ","pages":"Article 106170"},"PeriodicalIF":1.1,"publicationDate":"2023-10-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49759492","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}
Whether a plaintiff is awarded more simply because she has asked for more is a fascinating question. The existing studies are predominantly experimental, as the “control group” in the experiments hardly exists in reality. Using Taiwan’s transaction data on land sales and leases to control for case differences, and matching them with adjudications in the court data, we show that the plaintiff’s claim, even if not based on market evidence, increases the judge’s award. Simultaneous equations model allows us to control for the unobsevables that affect both claims and awards. We also show that the release of public information weakens this effect.
{"title":"Ask more, awarded more: Evidence from Taiwan’s courts","authors":"Yun-chien Chang , Kong-Pin Chen , Jen-Che Liao , Chang-Ching Lin","doi":"10.1016/j.irle.2023.106171","DOIUrl":"https://doi.org/10.1016/j.irle.2023.106171","url":null,"abstract":"<div><p>Whether a plaintiff is awarded more simply because she has asked for more is a fascinating question. The existing studies are predominantly experimental, as the “control group” in the experiments hardly exists in reality. Using Taiwan’s transaction data on land sales and leases to control for case differences, and matching them with adjudications in the court data, we show that the plaintiff’s claim, even if not based on market evidence, increases the judge’s award. Simultaneous equations model allows us to control for the unobsevables that affect both claims and awards. We also show that the release of public information weakens this effect.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"76 ","pages":"Article 106171"},"PeriodicalIF":1.1,"publicationDate":"2023-10-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"91959690","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}
Pub Date : 2023-10-11DOI: 10.1016/j.irle.2023.106168
Till Requate , Tim Friehe , Aditi Sengupta
We analyze an injurer’s incentives to improve her information about accident risk. In contrast to the preceding literature, injurers can continuously improve their understanding of the expected harm their activity will impose on others. Regarding social incentives, the marginal benefit from improved risk information is increasing, possibly making either no or a perfect understanding of risk socially optimal. Turning to private incentives when the injurer’s asset constraint is non-binding, strict liability induces the first-best outcome, whereas the negligence rule induces excessive information acquisition. By contrast, when the injurer’s asset constraint is binding, under both liability rules, the injurer’s incentives to acquire information about risk is too small in many circumstances but can also be excessive in other circumstances.
{"title":"Liability and the incentive to improve information about risk when injurers may be judgment-proof","authors":"Till Requate , Tim Friehe , Aditi Sengupta","doi":"10.1016/j.irle.2023.106168","DOIUrl":"https://doi.org/10.1016/j.irle.2023.106168","url":null,"abstract":"<div><p>We analyze an injurer’s incentives to improve her information about accident risk. In contrast to the preceding literature, injurers can continuously improve their understanding of the expected harm their activity will impose on others. Regarding social incentives, the marginal benefit from improved risk information is increasing, possibly making either no or a perfect understanding of risk socially optimal. Turning to private incentives when the injurer’s asset constraint is non-binding, strict liability induces the first-best outcome, whereas the negligence rule induces excessive information acquisition. By contrast, when the injurer’s asset constraint is binding, under both liability rules, the injurer’s incentives to acquire information about risk is too small in many circumstances but can also be excessive in other circumstances.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"76 ","pages":"Article 106168"},"PeriodicalIF":1.1,"publicationDate":"2023-10-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49751662","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}
Pub Date : 2023-10-06DOI: 10.1016/j.irle.2023.106166
James Si Zeng
Despite years of economic reform, government-owned enterprises (GOEs) continue to be prevalent in certain sectors of China’s economy. Drawing on empirical evidence from China’s public-private partnership (PPP) market, this article empirically tests whether the theory of the ownership of enterprise can explain the distribution of GOEs in China. It first conducts an empirical study on the disclosed judgments of Chinese courts to show that the enforcement of PPP contracts remains relatively weak in China, which gives rise to the concern of government opportunism. It then presents empirical evidence that the level of government ownership in each project correlates with the chances of government opportunism, which can be measured by project duration, project sector, and renegotiation terms in the contract. These findings show that the level of government ownership is affected by two competing forces—ownership costs and transaction costs. While GOEs incur relatively high ownership costs, they generally incur lower transaction costs because they can curb government opportunism and thus can outcompete private firms in some projects.
{"title":"Competing with Leviathan: Law and government ownership in China’s public-private partnership market","authors":"James Si Zeng","doi":"10.1016/j.irle.2023.106166","DOIUrl":"https://doi.org/10.1016/j.irle.2023.106166","url":null,"abstract":"<div><p>Despite years of economic reform, government-owned enterprises (GOEs) continue to be prevalent in certain sectors of China’s economy. Drawing on empirical evidence from China’s public-private partnership (PPP) market, this article empirically tests whether the theory of the ownership of enterprise can explain the distribution of GOEs in China. It first conducts an empirical study on the disclosed judgments of Chinese courts to show that the enforcement of PPP contracts remains relatively weak in China, which gives rise to the concern of government opportunism. It then presents empirical evidence that the level of government ownership in each project correlates with the chances of government opportunism, which can be measured by project duration, project sector, and renegotiation terms in the contract. These findings show that the level of government ownership is affected by two competing forces—ownership costs and transaction costs. While GOEs incur relatively high ownership costs, they generally incur lower transaction costs because they can curb government opportunism and thus can outcompete private firms in some projects.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"76 ","pages":"Article 106166"},"PeriodicalIF":1.1,"publicationDate":"2023-10-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49750990","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}
Pub Date : 2023-10-05DOI: 10.1016/j.irle.2023.106165
Jun Wang
Is the evolution of China’s patent litigation courts from a scattered expansion to a shrinking concentration spontaneous or is it a rational construction? Understanding the motivation for the adjustment of China’s patent court system is important for judging whether the system change is appropriate and for choosing the optimal patent litigation system. After addressing the endogeneity between the number of patents and the adjustment of the patent court system using patent incentives as an instrumental variable for the number of patents, responding to the need to protect the growing number of patents appears to be the underlying reason for the expansion of the number of patent courts in China until 2014. The number of patents directly contributed to the growth of the number of patent courts as patent cases proliferated. The downsizing of the patent court after 2014 was, in contrast, a targeted reform initiative in response to the decline in the quality of cases heard due to the increase in the number of patent courts. The adjustment of China’s patent court system thus appears to be the result of rational constructions in response to a changing reality.
{"title":"Motivations for the restructuring of China’s patent court system","authors":"Jun Wang","doi":"10.1016/j.irle.2023.106165","DOIUrl":"https://doi.org/10.1016/j.irle.2023.106165","url":null,"abstract":"<div><p><span>Is the evolution of China’s patent litigation courts from a scattered expansion to a shrinking concentration spontaneous or is it a rational construction? Understanding the motivation for the adjustment of China’s patent court system is important for judging whether the system change is appropriate and for choosing the optimal patent litigation system. After addressing the endogeneity between the number of patents and the adjustment of the patent court system using patent incentives as an </span>instrumental variable for the number of patents, responding to the need to protect the growing number of patents appears to be the underlying reason for the expansion of the number of patent courts in China until 2014. The number of patents directly contributed to the growth of the number of patent courts as patent cases proliferated. The downsizing of the patent court after 2014 was, in contrast, a targeted reform initiative in response to the decline in the quality of cases heard due to the increase in the number of patent courts. The adjustment of China’s patent court system thus appears to be the result of rational constructions in response to a changing reality.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"76 ","pages":"Article 106165"},"PeriodicalIF":1.1,"publicationDate":"2023-10-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49751661","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}
Pub Date : 2023-09-01DOI: 10.1016/j.irle.2023.106153
Bertrand Chopard, Olivier Musy
We study the market for AI systems that are used to help to diagnose and treat diseases, reducing the risk of medical error. Based on a two-firm vertical product differentiation model, we examine how, in the event of patient harm, the amount of the compensation payment, and the division of this compensation between physicians and AI system producers affects both price competition between firms, and the accuracy (quality) of AI systems. One producer sells products with the best-available accuracy. The other sells a system with strictly lower accuracy at a lower price. Specifically, we show that both producers enjoy a positive market share, so long as some patients are diagnosed by physicians who do not use an AI system. Any transfer in compensation payment from the physician to the AI producer in the case of a diagnostic error will be passed on in full to the physician via the price of the AI system. The quality of the AI diagnosis system is independent of how any compensation payment to the patient is divided between physicians and producers. However, the magnitude of the compensation payment matters. An increase in compensation increases demand for both AI systems. In addition, the higher the compensation paid to the harmed patient, the higher the quality of the low-quality AI system. As the other firm continues to offer the highest accuracy level, any increase in compensation will decrease vertical differentiation, thereby increasing price competition between firms.
{"title":"Market for artificial intelligence in health care and compensation for medical errors","authors":"Bertrand Chopard, Olivier Musy","doi":"10.1016/j.irle.2023.106153","DOIUrl":"https://doi.org/10.1016/j.irle.2023.106153","url":null,"abstract":"<div><p>We study the market for AI systems that are used to help to diagnose and treat diseases, reducing the risk of medical error. Based on a two-firm vertical product differentiation model, we examine how, in the event of patient harm, the amount of the compensation payment, and the division of this compensation between physicians and AI system producers affects both price competition between firms, and the accuracy (quality) of AI systems. One producer sells products with the best-available accuracy. The other sells a system with strictly lower accuracy at a lower price. Specifically, we show that both producers enjoy a positive market share, so long as some patients are diagnosed by physicians who do not use an AI system. Any transfer in compensation payment from the physician to the AI producer in the case of a diagnostic error will be passed on in full to the physician via the price of the AI system. The quality of the AI diagnosis system is independent of how any compensation payment to the patient is divided between physicians and producers. However, the magnitude of the compensation payment matters. An increase in compensation increases demand for both AI systems. In addition, the higher the compensation paid to the harmed patient, the higher the quality of the low-quality AI system. As the other firm continues to offer the highest accuracy level, any increase in compensation will decrease vertical differentiation, thereby increasing price competition between firms.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"75 ","pages":"Article 106153"},"PeriodicalIF":1.1,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49764924","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}
Pub Date : 2023-09-01DOI: 10.1016/j.irle.2023.106140
Mario Menegatti
This work studies for the first time the effect on crime deterrence of variability in punishment under different assumptions on criminals risk preferences. We show that when criminals are risk averse, greater variability in punishment reduces the incentive to commit crimes, and that the opposite holds in the case of risk loving. The linkages between certainty of punishment, initial wealth and the incentive to commit crimes are also analyzed. We then analyze the effects of greater variability in punishment on deterrence policies founded on punishment severity, showing that this effect is positive if criminals are prudent and negative if they are imprudent. Lastly, we analyze for the first time variability in punishment as an instrument of deterrence policy. This analysis determines the optimal level of variability in the two cases of homogeneity and heterogeneity in risk preference.
{"title":"Variability in punishment, risk preferences and crime deterrence","authors":"Mario Menegatti","doi":"10.1016/j.irle.2023.106140","DOIUrl":"10.1016/j.irle.2023.106140","url":null,"abstract":"<div><p>This work studies for the first time the effect on crime deterrence of variability in punishment under different assumptions on criminals risk preferences. We show that when criminals are risk averse, greater variability in punishment reduces the incentive to commit crimes, and that the opposite holds in the case of risk loving. The linkages between certainty of punishment, initial wealth and the incentive to commit crimes are also analyzed. We then analyze the effects of greater variability in punishment on deterrence policies founded on punishment severity, showing that this effect is positive if criminals are prudent and negative if they are imprudent. Lastly, we analyze for the first time variability in punishment as an instrument of deterrence policy. This analysis determines the optimal level of variability in the two cases of homogeneity and heterogeneity in risk preference.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"75 ","pages":"Article 106140"},"PeriodicalIF":1.1,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45532244","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}