International Review of Law and Economics最新文献

We analyze the optimal business model of a firm facing piracy. The firm either sells a premium version of its product, or also offers a free version along with the premium version. The firm can in turn impose restrictions on the use of the free version. Consumers can choose between the free and the premium version, but can also get an illegal digital copy. We show that freemium offers can reduce digital piracy by fighting free with free and that firms choose their optimal business model depending on the strength of copyright protection. Therefore, the strength of copyright protection can lead firms to choose a traditional business model rather than the new freemium model, impacting significantly the legal usage of the good.

This study examines the effectiveness of Germany's reformed asset recovery regime, which was implemented in 2017, in terms of its ability to confiscate proceeds of crime and whether it qualifies as illicit enrichment legislation. The research utilizes Dornbierer's (2021) definition of illicit enrichment to evaluate the reformed asset recovery law and analyses trends in asset recovery by reviewing data on assets seized and confiscated since 2017. Additionally, the study compares the reformed asset recovery regime to its predecessor to determine whether weaknesses that reduced the effectiveness of the previous framework to confiscate PoC have been addressed, while also evaluating the reformed regime for any potential weaknesses that may hinder its ability to confiscate proceeds of crime. The study concludes that while the reformed regime introduces some elements of illicit enrichment, it does not satisfy the criteria for illicit enrichment legislation. Nonetheless, the reformed regime is more effective in confiscating proceeds of crime, as evidenced by the high value of assets seized since the reform was implemented. Additionally, most of the weaknesses that existed in the previous system have been resolved. However, the research highlights the remaining challenges regarding the confiscation of proceeds implicated in ML, fraud, and corruption, as well as profits from non-criminal offenses. Future studies could explore whether the increased confiscation of assets leads to a decrease in profit-driven crime.

The "law and finance" paradigm posits that legal institutions play a crucial role in financial development; however, China has long been considered an exception. This study challenges that assumption by examining how improvements in the judiciary affect financial development in China. Using a quasi-natural experiment (i.e., staggered difference-in-difference estimation) over a twenty-year period, we find that the establishment of specialized financial adjudication institutions (i.e., financial courts and tribunals) in certain prefecture-level cities significantly reduces financing constraints for local listed companies. Further heterogeneity tests show that these effects are more pronounced among private enterprises, small and medium-sized enterprises, and companies in the central and western regions. Through the analysis of representative practices and interviews with relevant judges and enterprises, we find that China's financial judiciary demonstrates efficiency and proactiveness. Additionally, political considerations enable courts to regulate finance and maintain stability, improving the local financial legal environments and reducing transaction costs for market participants. By investigating the causal relationship between judicial reforms and financial development, our findings provide new insights into the "law and finance" theory and offer policy implications for addressing financial development gaps and promoting financial inclusion in emerging markets.

Legal rights impose concomitant legal burdens. This paper considers the valuation and disposition of legal rights, and legal burdens, when courts cannot be relied upon to perfectly enforce rights. Because courts do not perfectly enforce rights, victims suffer some loss in the value of their rights depending on the degree of underenforcement. The welfare implications of trading away and abandoning rights are examined. Victims do not necessarily trade away rights when and only when such trade is socially desirable. Relatively pessimistic victims (who believe their rights are weaker than injurers do) trade away rights too cheaply. Extremely pessimistic victims abandon their rights. Implications for the enforceability of waivers, discrimination in courts, and legal ethics are discussed.

This paper analyses the technical efficiency of first-instance courts and investigates the existence of scale and scope economies. To assess the technical efficiency of specialized and non-specialized court benches, we use Data Envelopment Analysis (DEA). This study uses data from 2015 to 2021, encompassing every bench within the Portuguese first-instance courts, totalling 3249 observations.

Our findings reveal diseconomies of scale, with more than half of the benches experiencing increasing returns to scale, indicating that their performance would benefit from increased scale. The scale diseconomies varied by bench type: benches primarily handling civil cases and generic benches faced mostly increasing returns to scale. In contrast, those dealing predominantly with criminal cases experienced decreasing returns to scale.

Additionally, we observe diseconomies of scope, indicating that generic and non-specialized benches were less efficient than specialized ones. Overall, this paper provides empirical evidence supporting the notion that the specialization of benches enhances their efficiency.

This paper econometrically tests the possible existence of a War of Courts when the Spanish Constitutional Court (CC) decides on constitutional complaints (recursos de amparo), filed by citizens against the violation of a fundamental right or freedom by the Supreme Court. Exploiting a unique database comprising 404 amparo appeals rulings issued by the Spanish CC for the period 2015–2019, we have carried out various estimates whose results do not confirm the hypothesis of the existence of such a War of Courts, despite the fears expressed in the legal doctrine on this subject. On the contrary, the results suggest that the CC maintains a favourable attitude towards the Supreme Court, specifically when the ruling is issued by the Plenary of the CC. However, the estimates do not allow us to conclusively reject the existence of such a conflict between the CC and other bodies of the Judiciary besides the Supreme Court.

This paper studies the role of environmental liability in shaping firms’ product differentiation choices, both horizontally (product design) and vertically (safety), and the ensuing welfare implications. We use a spatial Cournot duopoly where firms’ activity may entail accidental environmental harm. We show that for low levels of harm, both strict liability and negligence lead to a fully symmetric equilibrium with no differentiation: strict liability provides less output and more safety (thus, lower expected environmental harm) than negligence. Nevertheless, negligence affords higher welfare. For higher environmental harm, only strict liability yields an equilibrium where firms differentiate both horizontally and vertically: each firm becomes dominant (dominated) on a subset of local markets, where it delivers more (less) output and much more (less) safety than in the no-differentiation equilibrium under negligence. In this case, strict liability provides higher welfare.

This paper examines how governments can optimally audit to discourage tax avoidance. We assume that an accounting firm designs and promotes strategies for tax avoidance. This firm adapts the quality and diversity of these strategies in response to shifts in government policies. We investigate when it is more effective to approve some methods while cracking down on others, rather than targeting all tax-avoidance activities uniformly. We find that selectively enforcing against specific methods can be optimal. This approach not only reduces the quality but also limits the variety of tax avoidance activities in the market and positively impacts the government’s tax revenue collection. Our analysis provides practical insights, linking the costs of auditing with the interaction between enforcement, the quality of tax avoidance methods, and tax revenue outcomes.