We study claim resolution. A claim consists of a global fact and a local fact. The global fact is observed by the principal and the agent. The local fact is observed by the agent alone. The agent resolves the claim; the principal decides whether the agent is more likely wrong or right. The principal and agent can disagree about the weight to accord each fact or the overall evidence threshold. The agent cares whether the principal follows or ignores her advice. We characterize how the equilibrium varies with the nature of disagreement. Despite lacking commitment power, we find that the principal grants the agent decision-making authority over an interval of global facts. Further, we find that the principal can better motivate an agent who excessively weights the local fact than an agent who excessively weights the global fact. The principal strictly prefers the former to the latter even though either would make the same number of errors if granted complete autonomy. (JEL C7, K0, D7, K4, M4)
{"title":"A Theory of Claim Resolution","authors":"Scott Baker, Lewis A Kornhauser","doi":"10.1093/jleo/ewab017","DOIUrl":"https://doi.org/10.1093/jleo/ewab017","url":null,"abstract":"We study claim resolution. A claim consists of a global fact and a local fact. The global fact is observed by the principal and the agent. The local fact is observed by the agent alone. The agent resolves the claim; the principal decides whether the agent is more likely wrong or right. The principal and agent can disagree about the weight to accord each fact or the overall evidence threshold. The agent cares whether the principal follows or ignores her advice. We characterize how the equilibrium varies with the nature of disagreement. Despite lacking commitment power, we find that the principal grants the agent decision-making authority over an interval of global facts. Further, we find that the principal can better motivate an agent who excessively weights the local fact than an agent who excessively weights the global fact. The principal strictly prefers the former to the latter even though either would make the same number of errors if granted complete autonomy. (JEL C7, K0, D7, K4, M4)","PeriodicalId":501404,"journal":{"name":"The Journal of Law, Economics, and Organization","volume":"60 6","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-09-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138521579","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
What is the impact of collusion between members of criminal organizations and politicians on local public finances, in contexts in which organized crime is well-rooted? This article addresses this question by focusing on local governments of Southern Italy, over the period 1998–2016. In order to capture the presence of organized crime, we exploit the enforcement of a national law allowing the dissolution of a municipal government upon evidence of collusion between elected officials and the mafia. We measure the consequences of this infiltration of mafia groups within local governments by using data on local public finances at the municipality level. Difference-in-differences estimates reveal that captured municipalities commit on average more resources for investments in construction and waste management and are less effective in collecting taxes for waste and garbage. This indicates that organized crime groups exploit the collusion with local politicians in order to distort the allocation of public resources toward key sectors of strategic interest for the criminal business (JEL K42, H72, D72).
{"title":"Organized Crime, Captured Politicians, and the Allocation of Public Resources","authors":"Marco Di Cataldo, Nicola Mastrorocco","doi":"10.1093/jleo/ewab015","DOIUrl":"https://doi.org/10.1093/jleo/ewab015","url":null,"abstract":"What is the impact of collusion between members of criminal organizations and politicians on local public finances, in contexts in which organized crime is well-rooted? This article addresses this question by focusing on local governments of Southern Italy, over the period 1998–2016. In order to capture the presence of organized crime, we exploit the enforcement of a national law allowing the dissolution of a municipal government upon evidence of collusion between elected officials and the mafia. We measure the consequences of this infiltration of mafia groups within local governments by using data on local public finances at the municipality level. Difference-in-differences estimates reveal that captured municipalities commit on average more resources for investments in construction and waste management and are less effective in collecting taxes for waste and garbage. This indicates that organized crime groups exploit the collusion with local politicians in order to distort the allocation of public resources toward key sectors of strategic interest for the criminal business (JEL K42, H72, D72).","PeriodicalId":501404,"journal":{"name":"The Journal of Law, Economics, and Organization","volume":"62 10","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-09-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138521493","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We present the results of a randomized control trial on the effect of the introduction of formalized property rights on individuals’ moral judgments and, in particular, on utilitarian morality. We show that institutions shape morality: being exposed to private property institutions makes individuals more utilitarian when confronted with moral dilemmas. Our results shed light on a possible institutional determinant of the variation of moral judgments across the globe and its geographical patterns, and have implications for the consequences of major institutional reforms—both intended, such as land-titling programs, and unintended, such as those following from recent historical events—on moral attitudes. We discuss two possible channels stemming from the inherent features of property rights: the loosening of social ties and the commodification of rights (JEL codes: K11; O13; Z10; Z13).
{"title":"How Institutions Shape Morality","authors":"Giuseppe Dari-Mattiacci, Marco Fabbri","doi":"10.1093/jleo/ewab016","DOIUrl":"https://doi.org/10.1093/jleo/ewab016","url":null,"abstract":"We present the results of a randomized control trial on the effect of the introduction of formalized property rights on individuals’ moral judgments and, in particular, on utilitarian morality. We show that institutions shape morality: being exposed to private property institutions makes individuals more utilitarian when confronted with moral dilemmas. Our results shed light on a possible institutional determinant of the variation of moral judgments across the globe and its geographical patterns, and have implications for the consequences of major institutional reforms—both intended, such as land-titling programs, and unintended, such as those following from recent historical events—on moral attitudes. We discuss two possible channels stemming from the inherent features of property rights: the loosening of social ties and the commodification of rights (JEL codes: K11; O13; Z10; Z13).","PeriodicalId":501404,"journal":{"name":"The Journal of Law, Economics, and Organization","volume":"60 10","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-09-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138521578","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Dhammika Dharmapala, Richard H. McAdams, John Rappaport
Dhammika Dharmapala, Richard H. McAdams, John Rappaport
{"title":"Corrigendum to: Collective Bargaining Rights and Police Misconduct: Evidence from Florida","authors":"","doi":"10.1093/jleo/ewab009","DOIUrl":"https://doi.org/10.1093/jleo/ewab009","url":null,"abstract":"<span>Dhammika Dharmapala, Richard H. McAdams, John Rappaport </span>","PeriodicalId":501404,"journal":{"name":"The Journal of Law, Economics, and Organization","volume":"58 7","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-08-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138521584","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Class actions feature severe agency problems, resulting from the divergence of interests between class members and the class attorney. This article proposes a novel mechanism for selecting the class attorney and aligning her interests with those of the represented class. The mechanism applies a combined percentage and hourly litigation fee structure, suggested by Polinsky, Mitchell A., and Daniel L. Rubinfeld. 2003. “Aligning the Interests of Lawyers and Clients,” 5 Am Law Econ Rev 165, in which lawyers earn a percentage of the class’ common fund, and bear the same percentage over their time investment. To maximize the expected payoff for the class, we supplement this fee structure with a preliminary two stages auction, in which the role of the lawyer is tendered using competitive bidding. We prove that the proposed auction approximates the highest possible net payoff for the class as the number of lawyers who compete for the right to represent the class increases. The percentage taken by the lawyer would be the lowest possible, and the winning lawyer would be the one who produces the highest expected net payoff for the class. We then extend the model to cases where the attorney files the class action is compensated for her pre-filing investment, and to settlements (JEL K41, K22)
集体诉讼具有严重的代理问题，这是由集体诉讼成员和集体诉讼代理人之间的利益分歧造成的。本文提出了一种新的选择集体律师的机制，使其与被代表阶级的利益保持一致。该机制采用Polinsky, Mitchell a .和Daniel L. Rubinfeld. 2003建议的百分比和小时诉讼费用结构。“调整律师和客户的利益”，上午5点《法律经济学》第165期，其中律师从集体共同基金中获得一定比例的收入，并在他们的时间投入中承担相同的比例。为了使班级的预期收益最大化，我们用初步的两阶段拍卖来补充这种收费结构，其中律师的角色是通过竞争性招标进行投标的。我们证明，随着争夺代表该群体权利的律师数量的增加，拟议的拍卖接近于该群体可能获得的最高净收益。律师获得的百分比将是最低的，获胜的律师将是为班级带来最高预期净收益的律师。然后，我们将模型扩展到律师提起集体诉讼并因其提交前的投资而获得补偿的情况，以及和解(JEL K41, K22)。
{"title":"Auctioning Class Action Representation","authors":"Alon Klement, Zvika Neeman, Moran Ofir","doi":"10.1093/jleo/ewab014","DOIUrl":"https://doi.org/10.1093/jleo/ewab014","url":null,"abstract":"Class actions feature severe agency problems, resulting from the divergence of interests between class members and the class attorney. This article proposes a novel mechanism for selecting the class attorney and aligning her interests with those of the represented class. The mechanism applies a combined percentage and hourly litigation fee structure, suggested by Polinsky, Mitchell A., and Daniel L. Rubinfeld. 2003. “Aligning the Interests of Lawyers and Clients,” 5 Am Law Econ Rev 165, in which lawyers earn a percentage of the class’ common fund, and bear the same percentage over their time investment. To maximize the expected payoff for the class, we supplement this fee structure with a preliminary two stages auction, in which the role of the lawyer is tendered using competitive bidding. We prove that the proposed auction approximates the highest possible net payoff for the class as the number of lawyers who compete for the right to represent the class increases. The percentage taken by the lawyer would be the lowest possible, and the winning lawyer would be the one who produces the highest expected net payoff for the class. We then extend the model to cases where the attorney files the class action is compensated for her pre-filing investment, and to settlements (JEL K41, K22)","PeriodicalId":501404,"journal":{"name":"The Journal of Law, Economics, and Organization","volume":"56 2","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-07-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138521589","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Bernhard Ganglmair, Christian Helmers, Brian J Love
We analyze the extent to which private defensive litigation insurance deters patent assertion by non-practicing entities (NPEs). We study the effect that a patent-specific defensive insurance product, offered by a leading litigation insurer, had on the litigation behavior of insured patents’ owners, all of which are NPEs. We first model the impact of defensive litigation insurance on the behavior of patent enforcers and accused infringers. We show that the availability of defensive litigation insurance can have an effect on how often patent enforcers will assert their patents. We confirm this result empirically showing that the insurance policy had a large, negative effect on the likelihood that a patent included in the policy was subsequently asserted relative to other patents held by the same NPEs and relative to patents held by other NPEs with portfolios that were entirely excluded from the insurance product. Our findings suggest that market-based mechanisms can deter so-called “patent trolling.” (JEL: G22, K41, O34)
{"title":"The Effect of Patent Litigation Insurance: Theory and Evidence from NPEs","authors":"Bernhard Ganglmair, Christian Helmers, Brian J Love","doi":"10.1093/jleo/ewab012","DOIUrl":"https://doi.org/10.1093/jleo/ewab012","url":null,"abstract":"We analyze the extent to which private defensive litigation insurance deters patent assertion by non-practicing entities (NPEs). We study the effect that a patent-specific defensive insurance product, offered by a leading litigation insurer, had on the litigation behavior of insured patents’ owners, all of which are NPEs. We first model the impact of defensive litigation insurance on the behavior of patent enforcers and accused infringers. We show that the availability of defensive litigation insurance can have an effect on how often patent enforcers will assert their patents. We confirm this result empirically showing that the insurance policy had a large, negative effect on the likelihood that a patent included in the policy was subsequently asserted relative to other patents held by the same NPEs and relative to patents held by other NPEs with portfolios that were entirely excluded from the insurance product. Our findings suggest that market-based mechanisms can deter so-called “patent trolling.” (JEL: G22, K41, O34)","PeriodicalId":501404,"journal":{"name":"The Journal of Law, Economics, and Organization","volume":"61 4","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-07-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138521576","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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