How to allocate personnel is a central question in the organization of the state. We link survey data on the performance of 1,472 elite civil servants in India to their personnel records between 1975-2005 to study how home allocations affect their performance and careers. Using exogenous variation in home assignment generated by an allocation rule, we find that bureaucrats assigned to their home states are perceived to be less effective and more likely to be suspended. These negative effects are driven by states with higher levels of corruption and cohorts with greater numbers of home state officers. ∗First draft: December 2017. This paper has benefited from comments of seminar participants at the NBER Organizational Economics Meeting, the University of Houston, Northwestern Kellogg, Uppsala, Columbia GSB, Barcelona Graduate School of Economics Summer Forum, UC Berkeley, UC Davis, Chicago Harris, the BPP-GEM workshop, the Stanford Quality of Governance workshop and the ABCDE World Bank conference. We thank Oriana Bandiera, Tim Besley, Michael Callen, Arunish Chawla, Ernesto Dal Bo, Esther Duflo, Miguel Espinosa, Fred Finan, Olle Folke, Guido Friebel, Saad Gulzar, Rema Hanna, Julien Labonne, Anandi Mani, Jan Pierskalla, Andrea Prat, Johanne Rickne, John de Figueiredo, Daniel Rogger for their valuable comments. Finally, we particularly thank a group of senior IAS officers for sharing their institutional knowledge, and Lakshmi Iyer and Anandi Mani for sharing their data on empanelment outcomes. Fraser Clark, Anton Heil, Rebecca Rose, Jinling Yang and Jiemin Xu provided excellent research assistance. A previous version of this paper has been circulated under the title “Social Proximity and Bureaucrat Performance: Evidence from India.” All errors remain our own. †Guo Xu (corresponding author): guo.xu@berkeley.edu; Marianne Bertrand: marianne.bertrand@chicagobooth.edu; Robin Burgess: r.burgess@lse.ac.uk.
{"title":"Organization of the State: Home Assignment and Bureaucrat Performance","authors":"Guo Xu, Marianne Bertrand, R. Burgess","doi":"10.1093/JLEO/EWAB022","DOIUrl":"https://doi.org/10.1093/JLEO/EWAB022","url":null,"abstract":"How to allocate personnel is a central question in the organization of the state. We link survey data on the performance of 1,472 elite civil servants in India to their personnel records between 1975-2005 to study how home allocations affect their performance and careers. Using exogenous variation in home assignment generated by an allocation rule, we find that bureaucrats assigned to their home states are perceived to be less effective and more likely to be suspended. These negative effects are driven by states with higher levels of corruption and cohorts with greater numbers of home state officers. ∗First draft: December 2017. This paper has benefited from comments of seminar participants at the NBER Organizational Economics Meeting, the University of Houston, Northwestern Kellogg, Uppsala, Columbia GSB, Barcelona Graduate School of Economics Summer Forum, UC Berkeley, UC Davis, Chicago Harris, the BPP-GEM workshop, the Stanford Quality of Governance workshop and the ABCDE World Bank conference. We thank Oriana Bandiera, Tim Besley, Michael Callen, Arunish Chawla, Ernesto Dal Bo, Esther Duflo, Miguel Espinosa, Fred Finan, Olle Folke, Guido Friebel, Saad Gulzar, Rema Hanna, Julien Labonne, Anandi Mani, Jan Pierskalla, Andrea Prat, Johanne Rickne, John de Figueiredo, Daniel Rogger for their valuable comments. Finally, we particularly thank a group of senior IAS officers for sharing their institutional knowledge, and Lakshmi Iyer and Anandi Mani for sharing their data on empanelment outcomes. Fraser Clark, Anton Heil, Rebecca Rose, Jinling Yang and Jiemin Xu provided excellent research assistance. A previous version of this paper has been circulated under the title “Social Proximity and Bureaucrat Performance: Evidence from India.” All errors remain our own. †Guo Xu (corresponding author): guo.xu@berkeley.edu; Marianne Bertrand: marianne.bertrand@chicagobooth.edu; Robin Burgess: r.burgess@lse.ac.uk.","PeriodicalId":47987,"journal":{"name":"Journal of Law Economics & Organization","volume":"208 1","pages":""},"PeriodicalIF":1.1,"publicationDate":"2021-10-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79819916","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 study the relationship between employment noncompetition agreements and employee mobility patterns using novel data from the 2014 Noncompete Survey Project. Specifically, we examine how noncompetes relate to the duration and nature of employee mobility, and we leverage our detailed individual-level survey data to identify and explore the precise mechanisms underlying the relationships we observe. We find that individuals with noncompetes appear to exhibit materially longer tenures and are more likely to depart for new employers that do not “compete” with their prior employers. To account for these patterns, we investigate the role noncompetes may play at each stage of the mobility “process”: job search, employer recruitment, offer receipt, negotiation, offer acceptance, etc. We present evidence that employees bound by noncompetes substitute job search activity and receptivity to recruitment in the direction of noncompetitors and that noncompetes are a factor in the choice to turn down approximately 40 percent of the offers employees receive from competitors.
{"title":"The Behavioral Effects of (Unenforceable) Contracts†","authors":"Evan Starr, J. Prescott, Norman D. Bishara","doi":"10.1093/JLEO/EWAA018","DOIUrl":"https://doi.org/10.1093/JLEO/EWAA018","url":null,"abstract":"We study the relationship between employment noncompetition agreements and employee mobility patterns using novel data from the 2014 Noncompete Survey Project. Specifically, we examine how noncompetes relate to the duration and nature of employee mobility, and we leverage our detailed individual-level survey data to identify and explore the precise mechanisms underlying the relationships we observe. We find that individuals with noncompetes appear to exhibit materially longer tenures and are more likely to depart for new employers that do not “compete” with their prior employers. To account for these patterns, we investigate the role noncompetes may play at each stage of the mobility “process”: job search, employer recruitment, offer receipt, negotiation, offer acceptance, etc. We present evidence that employees bound by noncompetes substitute job search activity and receptivity to recruitment in the direction of noncompetitors and that noncompetes are a factor in the choice to turn down approximately 40 percent of the offers employees receive from competitors.","PeriodicalId":47987,"journal":{"name":"Journal of Law Economics & Organization","volume":"1 1","pages":"633-687"},"PeriodicalIF":1.1,"publicationDate":"2021-04-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72529002","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}
Eric A. Helland, D. Lakdawalla, A. Malani, S. Seabury
In a complex economy, production is vertical and crosses jurisdictional lines. Goods are often produced by an upstream national or global firm and improved or distributed by local firms downstream. In this context, heightened products liability may have unintended consequences on product sales and consumer safety. Conventional wisdom holds that an increase in tort liability on the upstream firm will cause that firm to (weakly) increase investment in safety or disclosure. However, this may fail in the real-world, where upstream firms operate in many jurisdictions, so that the actions of a single jurisdiction may not be significant enough to influence upstream firm behavior. Even worse, if liability is shared between upstream and downstream firms, higher upstream liability may mechanically decrease liability of the downstream distributor and encourage more reckless behavior by the downstream firm. In this manner, higher upstream liability may perversely increase the sales of a risky good. We demonstrate this phenomenon in the context of the pharmaceutical market. We show that higher products liability on upstream pharmaceutical manufacturers reduces the liability faced by downstream doctors, who respond by prescribing more drugs than before. Eric Helland Claremont McKenna College Department of Economics Claremont, CA 91711 eric.helland@claremontmckenna.edu Darius Lakdawalla Schaeffer Center for Health Policy and Economics University of Southern California 3335 S. Figueroa St, Unit A Los Angeles, CA 90089-7273 and NBER dlakdawa@healthpolicy.usc.edu Anup Malani University of Chicago Law School 1111 E. 60th Street Chicago, IL 60637 and NBER amalani@uchicago.edu Seth A. Seabury Schaeffer Center for Health Policy and Economics University of Southern California 3335 S. Figueroa St, Unit A Los Angeles, CA 90089-7273 seabury@usc.edu A common feature of modern, complex economies is vertical production that crosses jurisdictional lines. Technological development and specialization is associated with vertical chains of production, where upstream firms supply inputs for downstream firms who add value and sell to consumers. Moreover, firms at all levels have grown in scale and scope, and they now often serve many markets across a range of different jurisdictions. This geographic expansion is perhaps even more pronounced for upstream firms, because downstream firms, such as distributors and retailers, tend to be local or at least retain a well-defined local presence. To remain relevant and effective, tort rules and other legal structures need to account for the interactions among firms in a vertical chain of production. To some extent, tort law has successfully incorporated the reality of vertical production. In the 1800s, a doctrine called “privity” prevented individuals from suing upstream firms for injuries from products of downstream firms. Cases such as MacPherson v. Buick Motor Company (N.Y. 1916) and Smith v. Peerless Glass Co (N.Y. 1932) abandoned the do
在一个复杂的经济体中，生产是垂直的，并且跨越了管辖范围。商品通常由上游的国家或全球公司生产，并由下游的当地公司改进或分销。在这种情况下，提高产品责任可能会对产品销售和消费者安全产生意想不到的后果。传统观点认为，上游企业侵权责任的增加将导致该企业(弱地)增加安全或信息披露方面的投资。然而，这在现实世界中可能会失败，因为上游公司在许多司法管辖区经营，因此单一司法管辖区的行为可能不足以影响上游公司的行为。更糟糕的是，如果责任由上游和下游企业共同承担，较高的上游责任可能会机械地减少下游经销商的责任，并鼓励下游企业采取更鲁莽的行为。在这种情况下，较高的上游负债可能会相反地增加风险商品的销售。我们在医药市场的背景下证明了这一现象。我们表明，上游制药商较高的产品责任降低了下游医生面临的责任，他们通过开出比以前更多的药物来应对。Eric Helland Claremont McKenna学院经济系Claremont, CA 91711 eric.helland@claremontmckenna.edu Darius Lakdawalla schaeffa卫生政策和经济中心南加州大学3335 S. Figueroa St, la Unit A, CA 90089-7273和NBER dlakdawa@healthpolicy.usc.edu Anup Malani芝加哥大学法学院1111 E. 60 Street芝加哥，IL 60637和NBER amalani@uchicago.edu Seth A. Seabury Schaeffer健康政策和经济中心南加州大学3335 S. Figueroa St, Unit A Los Angeles, CA 90089-7273 seabury@usc.edu现代复杂经济的一个共同特征是跨越司法管辖区的垂直生产。技术发展和专业化与垂直生产链有关，上游公司为下游公司提供投入，下游公司增加价值并向消费者销售。此外，所有级别的公司在规模和范围上都有所增长，它们现在经常服务于一系列不同司法管辖区的许多市场。这种地理扩张对于上游公司来说可能更为明显，因为下游公司，如分销商和零售商，往往是本地的，或者至少保留了一个明确的本地存在。为了保持相关性和有效性，侵权规则和其他法律结构需要考虑到垂直生产链中公司之间的相互作用。侵权法在一定程度上成功地融入了垂直生产的现实。在19世纪，一种被称为“特权”的原则阻止个人起诉上游公司，因为下游公司的产品造成了伤害。麦克弗森诉别克汽车公司(1916年纽约州)和史密斯诉无双玻璃公司(1932年纽约州)等案例放弃了隐私原则，允许消费者起诉更上游的公司(普罗瑟，1960年)。事实上，当代产品诉讼现在的特点是对垂直生产链上的几家公司提起诉讼，并且在数量上已经变得重要在1930年至1994年间，总体侵权责任的增长速度比总体经济增长率快四倍(斯特吉斯，1995年)。到2009年，仅产品责任诉讼的支付总额就达到了2481亿美元，占美国GDP的1.74%(韬睿惠悦，2010)。在医疗保健领域，针对医生的诉讼占医生支出的1-2% (Mello, Chandra, Gawande， & Studdert, 2010)，针对制药公司的诉讼占所有药品支出的2.26%然而，侵权法落后于现代经济的一个重要方面是地方性的侵权规则，而不是全国性或全球性的侵权规则。即使公司可能为国内甚至全球市场生产产品，各州也会制定侵权规则。这鼓励了各州采取以邻为壑的政策，这些国家可能有动机将责任从当地下游被告转移到缺乏当地存在的上游国家被告(Krauss, 2002)。例如，22个州减少了当地零售商面临的产品责任，但没有减少上游制造商面临的责任(Shepherd, 2012)。近30个州对医生在医疗事故中面临的总损失或非经济损失设置了上限。例如，原告既起诉轮胎爆裂的汽车制造商，也起诉轮胎制造商(例如，2003年，普利司通/凡士通公司)，使用受污染材料的房屋建筑商和这些材料的制造商(例如，2010年，中国制造的石膏板产品，E.D. La)。使用变质食品的杂货商和向杂货商提供变质食品的公司(例如，2006年大肠杆菌爆发中涉及的零售商和农民的案件)，开处方的医生以及生产该药物的公司(例如。
{"title":"Unintended Consequences of Products Liability: Evidence from the Pharmaceutical Market*","authors":"Eric A. Helland, D. Lakdawalla, A. Malani, S. Seabury","doi":"10.1093/jleo/ewaa017","DOIUrl":"https://doi.org/10.1093/jleo/ewaa017","url":null,"abstract":"In a complex economy, production is vertical and crosses jurisdictional lines. Goods are often produced by an upstream national or global firm and improved or distributed by local firms downstream. In this context, heightened products liability may have unintended consequences on product sales and consumer safety. Conventional wisdom holds that an increase in tort liability on the upstream firm will cause that firm to (weakly) increase investment in safety or disclosure. However, this may fail in the real-world, where upstream firms operate in many jurisdictions, so that the actions of a single jurisdiction may not be significant enough to influence upstream firm behavior. Even worse, if liability is shared between upstream and downstream firms, higher upstream liability may mechanically decrease liability of the downstream distributor and encourage more reckless behavior by the downstream firm. In this manner, higher upstream liability may perversely increase the sales of a risky good. We demonstrate this phenomenon in the context of the pharmaceutical market. We show that higher products liability on upstream pharmaceutical manufacturers reduces the liability faced by downstream doctors, who respond by prescribing more drugs than before. Eric Helland Claremont McKenna College Department of Economics Claremont, CA 91711 eric.helland@claremontmckenna.edu Darius Lakdawalla Schaeffer Center for Health Policy and Economics University of Southern California 3335 S. Figueroa St, Unit A Los Angeles, CA 90089-7273 and NBER dlakdawa@healthpolicy.usc.edu Anup Malani University of Chicago Law School 1111 E. 60th Street Chicago, IL 60637 and NBER amalani@uchicago.edu Seth A. Seabury Schaeffer Center for Health Policy and Economics University of Southern California 3335 S. Figueroa St, Unit A Los Angeles, CA 90089-7273 seabury@usc.edu A common feature of modern, complex economies is vertical production that crosses jurisdictional lines. Technological development and specialization is associated with vertical chains of production, where upstream firms supply inputs for downstream firms who add value and sell to consumers. Moreover, firms at all levels have grown in scale and scope, and they now often serve many markets across a range of different jurisdictions. This geographic expansion is perhaps even more pronounced for upstream firms, because downstream firms, such as distributors and retailers, tend to be local or at least retain a well-defined local presence. To remain relevant and effective, tort rules and other legal structures need to account for the interactions among firms in a vertical chain of production. To some extent, tort law has successfully incorporated the reality of vertical production. In the 1800s, a doctrine called “privity” prevented individuals from suing upstream firms for injuries from products of downstream firms. Cases such as MacPherson v. Buick Motor Company (N.Y. 1916) and Smith v. Peerless Glass Co (N.Y. 1932) abandoned the do","PeriodicalId":47987,"journal":{"name":"Journal of Law Economics & Organization","volume":"21 1","pages":""},"PeriodicalIF":1.1,"publicationDate":"2020-11-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83070957","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}
Using data on mayoral elections in large Italian cities during the 2000s, we investigate whether and how voter turnout affects city performance across a number of dimensions. To address the issue of voter turnout endogeneity and identify the transmission mechanism, we exploit exogenous variation in participation rates in mayoral elections due to anticipated shocks (concurrence of local and national elections) and unanticipated shocks (bad weather on the day of the election) to the cost of voting. The results consistently point to a negative impact of voter turnout rates on indicators of urban environmental performance, life quality, and administrative efficiency. Interestingly, though, we find that only anticipated shocks to turnout affect the quality of elected mayors measured on a number of competence dimensions, compatibly with the hypothesis of a selection mechanism whereby parties choose candidates to maximize their chances of winning the elections based on their expectations on voter turnout rates (JEL D72, H72, C26).
{"title":"Voter Turnout and City Performance: Evidence from Italian Municipalities","authors":"A. Prete, F. Revelli","doi":"10.1093/jleo/ewaa012","DOIUrl":"https://doi.org/10.1093/jleo/ewaa012","url":null,"abstract":"\u0000 Using data on mayoral elections in large Italian cities during the 2000s, we investigate whether and how voter turnout affects city performance across a number of dimensions. To address the issue of voter turnout endogeneity and identify the transmission mechanism, we exploit exogenous variation in participation rates in mayoral elections due to anticipated shocks (concurrence of local and national elections) and unanticipated shocks (bad weather on the day of the election) to the cost of voting. The results consistently point to a negative impact of voter turnout rates on indicators of urban environmental performance, life quality, and administrative efficiency. Interestingly, though, we find that only anticipated shocks to turnout affect the quality of elected mayors measured on a number of competence dimensions, compatibly with the hypothesis of a selection mechanism whereby parties choose candidates to maximize their chances of winning the elections based on their expectations on voter turnout rates (JEL D72, H72, C26).","PeriodicalId":47987,"journal":{"name":"Journal of Law Economics & Organization","volume":"49 1","pages":""},"PeriodicalIF":1.1,"publicationDate":"2020-09-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"91298665","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 study the impact of anticorruption efforts on firm performance, exploiting an unanticipated corruption crackdown in China’s Heilongjiang province in 2004. We compare firms in the affected regions with those in other inland regions before and after the crackdown. Our main finding is an overall negative impact of the crackdown on firm productivity and entry rates. Furthermore, these negative impacts are mainly experienced by private and foreign firms, while state-owned firms are mostly unaffected. We present evidence concerning two potential explanations for our findings. First, the corruption crackdown may have limited bribery opportunities that helped private firms operate. Second, the corruption crackdown may have interfered with personal connections between private firms and government officials to a greater extent than institutional connections between state-owned firms and the government. Overall, our findings suggest that corruption crackdowns may not restore efficiency in the economy, but instead lead to worse economic outcomes, at least in the short run (JEL L2, M1, O1).
{"title":"Is a Corruption Crackdown Really Good for the Economy? Firm-Level Evidence from China","authors":"Zhiyuan Chen, Xin Jin, Xu Xu","doi":"10.1093/jleo/ewaa014","DOIUrl":"https://doi.org/10.1093/jleo/ewaa014","url":null,"abstract":"We study the impact of anticorruption efforts on firm performance, exploiting an unanticipated corruption crackdown in China’s Heilongjiang province in 2004. We compare firms in the affected regions with those in other inland regions before and after the crackdown. Our main finding is an overall negative impact of the crackdown on firm productivity and entry rates. Furthermore, these negative impacts are mainly experienced by private and foreign firms, while state-owned firms are mostly unaffected. We present evidence concerning two potential explanations for our findings. First, the corruption crackdown may have limited bribery opportunities that helped private firms operate. Second, the corruption crackdown may have interfered with personal connections between private firms and government officials to a greater extent than institutional connections between state-owned firms and the government. Overall, our findings suggest that corruption crackdowns may not restore efficiency in the economy, but instead lead to worse economic outcomes, at least in the short run (JEL L2, M1, O1).","PeriodicalId":47987,"journal":{"name":"Journal of Law Economics & Organization","volume":"37 1","pages":""},"PeriodicalIF":1.1,"publicationDate":"2020-09-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85629401","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}
To reduce the expected harm its product causes to consumers, a firm can invest in a product’s safety before sale or mitigate harm after sale in the event product risks materialize. After-sale harm mitigation interferes with consumers’ product use and reduces consumption benefits. We describe a firm’s incentives for safety investments and harm mitigation as a function of the level of the firm’s liability. Whereas post-sale mitigation incentives are scaled up by liability, pre-sale product safety is a U-shaped function of liability, making the two harm reduction instruments substitutes at low levels of liability and complements at high levels. To induce efficient harm mitigation, liability must be less than full. Further reducing the level of liability improves product safety at the cost of the firm’s profits. (JEL K13, D42).
{"title":"Product Safety and Harm-Mitigation Incentives When Mitigation Lowers Consumption Benefits","authors":"F. Baumann, Tim Friehe","doi":"10.1093/jleo/ewaa011","DOIUrl":"https://doi.org/10.1093/jleo/ewaa011","url":null,"abstract":"\u0000 To reduce the expected harm its product causes to consumers, a firm can invest in a product’s safety before sale or mitigate harm after sale in the event product risks materialize. After-sale harm mitigation interferes with consumers’ product use and reduces consumption benefits. We describe a firm’s incentives for safety investments and harm mitigation as a function of the level of the firm’s liability. Whereas post-sale mitigation incentives are scaled up by liability, pre-sale product safety is a U-shaped function of liability, making the two harm reduction instruments substitutes at low levels of liability and complements at high levels. To induce efficient harm mitigation, liability must be less than full. Further reducing the level of liability improves product safety at the cost of the firm’s profits. (JEL K13, D42).","PeriodicalId":47987,"journal":{"name":"Journal of Law Economics & Organization","volume":"11 1","pages":""},"PeriodicalIF":1.1,"publicationDate":"2020-09-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74214916","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}
Civil disputes feature parties with biased incentives acquiring evidence with costly effort. Evidence may then be revealed at trial or concealed to persuade a judge or jury. Using a persuasion game, we examine how a litigant’s risk preferences influence evidence acquisition incentives. We find that high risk aversion depresses equilibrium evidence acquisition. We then study the problem of designing legal rules to balance good decision making against the costs of acquisition. We characterize the optimal design, which differs from equilibrium decision rules. Notably, for very risk-averse litigants, the design is “over-incentivized” with stronger rewards and punishments than in equilibrium. We find similar results for various common legal rules, including admissibility of evidence and maximum awards. These results have implications for how rules could differentiate between high risk aversion types (e.g., individuals) and low risk aversion types (e.g., corporations) to improve evidence acquisition efficiency.
{"title":"Risk Preferences and Incentives for Evidence Acquisition and Disclosure","authors":"Erin C. Giffin, E. Lillethun","doi":"10.1093/jleo/ewaa002","DOIUrl":"https://doi.org/10.1093/jleo/ewaa002","url":null,"abstract":"\u0000 Civil disputes feature parties with biased incentives acquiring evidence with costly effort. Evidence may then be revealed at trial or concealed to persuade a judge or jury. Using a persuasion game, we examine how a litigant’s risk preferences influence evidence acquisition incentives. We find that high risk aversion depresses equilibrium evidence acquisition. We then study the problem of designing legal rules to balance good decision making against the costs of acquisition. We characterize the optimal design, which differs from equilibrium decision rules. Notably, for very risk-averse litigants, the design is “over-incentivized” with stronger rewards and punishments than in equilibrium. We find similar results for various common legal rules, including admissibility of evidence and maximum awards. These results have implications for how rules could differentiate between high risk aversion types (e.g., individuals) and low risk aversion types (e.g., corporations) to improve evidence acquisition efficiency.","PeriodicalId":47987,"journal":{"name":"Journal of Law Economics & Organization","volume":"14 1","pages":"314-342"},"PeriodicalIF":1.1,"publicationDate":"2020-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74466678","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 develop a dynamic model of a criminal case, from arrest through plea bargaining and (possibly) trial, allowing for the potential discovery of exculpatory evidence by prosecutors (who choose whether to disclose it) and defendants. We consider three regimes: (1) no disclosure required; (2) disclosure only required before trial; and (3) early disclosure required from arrest onward. These regimes have complex distributional consequences for the defendants. We find that innocent defendants ex ante prefer early disclosure whereas guilty defendants prefer disclosure only before trial. We also explore some of the social costs attributable to the regimes (JEL K4, D82, D73).
{"title":"Reducing Unjust Convictions: Plea Bargaining, Trial, and Evidence Disclosure","authors":"A. Daughety, Jennifer F. Reinganum","doi":"10.1093/jleo/ewaa001","DOIUrl":"https://doi.org/10.1093/jleo/ewaa001","url":null,"abstract":"\u0000 We develop a dynamic model of a criminal case, from arrest through plea bargaining and (possibly) trial, allowing for the potential discovery of exculpatory evidence by prosecutors (who choose whether to disclose it) and defendants. We consider three regimes: (1) no disclosure required; (2) disclosure only required before trial; and (3) early disclosure required from arrest onward. These regimes have complex distributional consequences for the defendants. We find that innocent defendants ex ante prefer early disclosure whereas guilty defendants prefer disclosure only before trial. We also explore some of the social costs attributable to the regimes (JEL K4, D82, D73).","PeriodicalId":47987,"journal":{"name":"Journal of Law Economics & Organization","volume":"13 1","pages":"378-414"},"PeriodicalIF":1.1,"publicationDate":"2020-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87322312","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}
Heidi Gjertsen, Theodore Groves, David A. Miller, E. Niesten, D. Squires, Joel Watson
Author(s): Gjertsen, Heidi; Groves, Theodore; Miller, David A; Niesten, Eduard; Squires, Dale; Watson, Joel | Abstract: Abstract This article examines the structure and performance of conservation agreements, which are relational contracts used across the world to protect natural resources. Key elements of these agreements are (1) they are ongoing arrangements between a local community and an outside party, typically a nongovernmental organization (NGO); (2) they feature payments in exchange for conservation services; (3) the prospects for success depend on the NGO engaging in costly monitoring to detect whether the community is foregoing short-term gains to protect the resource; (4) lacking a strong external enforcement system, they rely on self-enforcement; and (5) the parties have the opportunity to renegotiate at any time. A repeated-game model is developed and utilized to organize an evaluation of real conservation agreements, using three case studies as representative examples. (JEL D74, D86, Q20, Q56)
{"title":"Conservation Agreements: Relational Contracts with Endogenous Monitoring","authors":"Heidi Gjertsen, Theodore Groves, David A. Miller, E. Niesten, D. Squires, Joel Watson","doi":"10.1093/jleo/ewaa006","DOIUrl":"https://doi.org/10.1093/jleo/ewaa006","url":null,"abstract":"Author(s): Gjertsen, Heidi; Groves, Theodore; Miller, David A; Niesten, Eduard; Squires, Dale; Watson, Joel | Abstract: Abstract This article examines the structure and performance of conservation agreements, which are relational contracts used across the world to protect natural resources. Key elements of these agreements are (1) they are ongoing arrangements between a local community and an outside party, typically a nongovernmental organization (NGO); (2) they feature payments in exchange for conservation services; (3) the prospects for success depend on the NGO engaging in costly monitoring to detect whether the community is foregoing short-term gains to protect the resource; (4) lacking a strong external enforcement system, they rely on self-enforcement; and (5) the parties have the opportunity to renegotiate at any time. A repeated-game model is developed and utilized to organize an evaluation of real conservation agreements, using three case studies as representative examples. (JEL D74, D86, Q20, Q56)","PeriodicalId":47987,"journal":{"name":"Journal of Law Economics & Organization","volume":"183 1","pages":""},"PeriodicalIF":1.1,"publicationDate":"2020-06-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81582171","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}
Using a unique employee–establishment survey, we find a causal relationship between an individual employee’s trust of management and their decision-making rights (delegation). We utilize both fixed effects (FE) and instrumental variables to control for unobserved factors: establishment-level FE control for management quality, practices, culture, and other characteristics; our instruments of inherited trust in management, and trust of equivalent workers in a different but similar country address the possible endogeneity of employee trust. Across all specifications, we find that delegation to a worker is more likely if that employee trusts management. In our preferred model, which includes establishment FE and accounts for endogeneity, we find a 1 standard deviation (SD) increase in employee trust increases delegation by approximately 0.6 of 1 SD. Our results are robust to the inclusion of worker preferences for individualism (which favors delegation), incentives/bonuses, and alternative measures of decision authority. (JEL D23, L22, L23).
{"title":"Worker Trust in Management and Delegation in Organizations","authors":"Kieron J. Meagher, A. Wait","doi":"10.1093/jleo/ewaa008","DOIUrl":"https://doi.org/10.1093/jleo/ewaa008","url":null,"abstract":"\u0000 Using a unique employee–establishment survey, we find a causal relationship between an individual employee’s trust of management and their decision-making rights (delegation). We utilize both fixed effects (FE) and instrumental variables to control for unobserved factors: establishment-level FE control for management quality, practices, culture, and other characteristics; our instruments of inherited trust in management, and trust of equivalent workers in a different but similar country address the possible endogeneity of employee trust. Across all specifications, we find that delegation to a worker is more likely if that employee trusts management. In our preferred model, which includes establishment FE and accounts for endogeneity, we find a 1 standard deviation (SD) increase in employee trust increases delegation by approximately 0.6 of 1 SD. Our results are robust to the inclusion of worker preferences for individualism (which favors delegation), incentives/bonuses, and alternative measures of decision authority. (JEL D23, L22, L23).","PeriodicalId":47987,"journal":{"name":"Journal of Law Economics & Organization","volume":"4 1","pages":""},"PeriodicalIF":1.1,"publicationDate":"2020-06-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82451762","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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