{"title":"A model of competitive self-regulation","authors":"Krzysztof Szczygielski","doi":"10.1016/j.irle.2022.106045","DOIUrl":"10.1016/j.irle.2022.106045","url":null,"abstract":"<div><p>We model a market for professional services such as those offered by lawyers, auditors or conveyancers. Initially the market is served by a single profession with a self-regulatory organization that sets the quality standard for all the members of the profession. We then introduce a second competing profession (e.g. solicitors vs. licensed conveyancers in England) and compare the market outcomes. It is demonstrated that with two professions the prices of the services fall and so does the quality offered by an average supplier. On the other hand, the total supply of quality might actually rise. When the market is served by two professional groups, then the quality of services offered by the higher-tier profession and the total supply of quality are increasing in the size and in the quality of the lower-tier profession.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":null,"pages":null},"PeriodicalIF":1.1,"publicationDate":"2022-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45434561","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}
{"title":"The strategic interaction between cartels and anti-trust authorities","authors":"Jonas Häckner, Mathias Herzing","doi":"10.1016/j.irle.2022.106066","DOIUrl":"10.1016/j.irle.2022.106066","url":null,"abstract":"<div><p>We present a model of the interaction between firms agreeing on a degree of collusion and a competition authority that simultaneously determines the allocation of resources to enforcement of anti-trust legislation. An increase in demand is associated with tougher enforcement and a lower degree of collusion. A stronger competitive pressure first decreases the degree of collusion and increases the level of enforcement, then increases both the degree of collusion and the level of enforcement, and eventually increases the degree of collusion and decreases the level of enforcement. Simulation results indicate that a move from the EU penalty regime to the tougher US standard with treble damages would mainly impact on the enforcement intensity and to a much lesser extent affect the degree of collusion.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":null,"pages":null},"PeriodicalIF":1.1,"publicationDate":"2022-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S0144818822000229/pdfft?md5=767ed41272d3cb744e09cc8749f5c706&pid=1-s2.0-S0144818822000229-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43984957","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Optimal fine reductions for self-reporting: The impact of loss aversion","authors":"Eberhard Feess , Roee Sarel","doi":"10.1016/j.irle.2022.106067","DOIUrl":"https://doi.org/10.1016/j.irle.2022.106067","url":null,"abstract":"<div><p>Fine reductions for self-reported offenses entail a potential trade-off. On the one hand, inducing offenders to self-report allows the social planner to save on enforcement costs and reduce harm through early detection. On the other hand, fine reductions may also reduce deterrence: offenders anticipate that if their detection probability turns out to be higher than initially expected, they can exploit the possibility of a more lenient sanction. We analyze how this trade-off is affected by the potential offender’s utility function, contrasting standard neoclassical preferences with loss aversion. For loss aversion, we apply the approach by <span>Koszegi and Rabin (2006</span>, <span>2007)</span><span>, in which reference points are determined by the ex ante expectations of equilibrium strategies. Assuming that the private benefit from crime is lost in case of detection, we distinguish between loss aversion in the fine dimension and in the benefit dimension. Intuitively, one might assume that loss aversion facilitates law enforcement because losses loom larger than gains, which sets incentives to refrain from crime. We show that a sufficient condition for this intuition to hold is that the degree of loss aversion in the fine dimension is weakly above the degree in the benefit dimension.</span></p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":null,"pages":null},"PeriodicalIF":1.1,"publicationDate":"2022-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"137179288","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}
{"title":"Do specialized intellectual property courts show a pro-patent propensity? Evidence from China","authors":"Ya-Feng Zhang , Li-Ming Li , Ke Xu","doi":"10.1016/j.irle.2022.106065","DOIUrl":"10.1016/j.irle.2022.106065","url":null,"abstract":"<div><p>Intellectual property (IP) is gaining increasing attention in various fields. However, its proper function relies on an effective judicial system. Thus, we compared the results of patent infringement litigations in China between specialized IP courts and general courts. We found that patent holders sue for higher damages at IP courts than in general courts, and IP courts grant higher damages. However, when we controlled the impacts of certain factors, we found that the IP courts do not demonstrate a pro-patent propensity in their judgments. Furthermore, IP courts have not shown significant advantages in their judgments in aspects of speed, the rate of appeals, and the avoidance of mistakes. We also found that litigious plaintiffs are, to some degree, disliked by the courts. This work provides an empirical understanding of the latest situation about patent protection in China and discusses its practical implications.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":null,"pages":null},"PeriodicalIF":1.1,"publicationDate":"2022-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49302631","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}
{"title":"Affirmative action still hasn’t been shown to reduce the number of black lawyers: A response to Sander","authors":"Ian Ayres , Richard Brooks , Zachary Shelley","doi":"10.1016/j.irle.2021.106032","DOIUrl":"10.1016/j.irle.2021.106032","url":null,"abstract":"<div><p>Sander (2019) attempts to revive the claim that “mismatch” between the credentials of students that receive racial preferences in law school admissions and the average observable academic credentials of their peers leads to fewer black lawyers. This article examines Sander’s study and explains the reasons why second-choice analyses, and Bar Passage Study data in particular, are poor sources for causal inferences about academic mismatch. Sander’s paper makes indefensibly strong assumptions about the inferences that can be drawn between evidence on distinct types of mismatch, overclaims results that lack robustness across different subsamples of the underlying data, and misinterprets other results that in fact cut against the article’s claim. Ultimately, as originally reported in Ayres & Brooks (2005), the data do not provide evidence that affirmative action reduces the number of black lawyers.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":null,"pages":null},"PeriodicalIF":1.1,"publicationDate":"2022-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44108423","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}
{"title":"Loss aversion for the value of voting rights: WTA/WTP ratios for a ballot","authors":"Hiroharu Saito","doi":"10.1016/j.irle.2021.106041","DOIUrl":"10.1016/j.irle.2021.106041","url":null,"abstract":"<div><p>What is the subjective value of voting rights? This article presents an empirical demonstration of people’s loss aversion for the value of voting rights. By way of vignette experiments using scenarios of the 2020 U.S. presidential election (Studies 1 and 2, with U.S. citizens) and a fictitious direct premier election in Japan (Study 3, with Japanese citizens), the present research measured the willingness-to-accept compensation (WTA) and the willingness-to-pay price (WTP) for a ballot(s) in political elections. A great disparity between WTA and WTP was found regardless of the electoral setting, the proportion and width of ballot alteration, and the initial status. Specifically, the observed WTA/WTP ratios for a ballot(s) were within the range of 5.00–27.36, which is much larger than the ratios for ordinary market goods (about 1.5–2.5) and which is comparable to the ratios for other non-market goods. In addition, WTA for a mere 10% dilution of voting rights is still higher than WTP for full voting rights; the powerful effect of loss aversion might help explain universal barriers against suffrage extension.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":null,"pages":null},"PeriodicalIF":1.1,"publicationDate":"2022-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46484412","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}
{"title":"Courts as monitoring agents: The case of China","authors":"Xiaoge Dong , Stefan Voigt","doi":"10.1016/j.irle.2022.106046","DOIUrl":"https://doi.org/10.1016/j.irle.2022.106046","url":null,"abstract":"<div><p>This paper shows that courts are not only a crucial part of the rule of law in the conventional sense, but that they can also serve an important function in revealing information to the central government about the performance of lower level governments. When courts function in this informative way, the central government is able to improve the performance of lower level governments. After developing a general argument in that vein, the recent reforms to the Chinese court system are partially interpreted as an attempt to make the courts monitoring agents for the central government. Based on primary data from more than 1000 Chinese local courts, the argument is tested empirically and its hypotheses are largely confirmed.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":null,"pages":null},"PeriodicalIF":1.1,"publicationDate":"2022-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136512806","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}
{"title":"Litigation with adversarial efforts","authors":"Roy Baharad , Chen Cohen , Shmuel Nitzan","doi":"10.1016/j.irle.2021.106042","DOIUrl":"10.1016/j.irle.2021.106042","url":null,"abstract":"<div><p>We consider a simple model of litigation contests in which each party dedicates both “case-advancing” efforts that directly increase her probability of winning, as well as “adversarial” efforts, which harm her opponent’s strategy and decrease his likelihood of prevailing. Our model characterizes adversarial litigation efforts and the equilibrium investment in such efforts by both parties, subject to the value of winning and the costs of adversarial efforts vis-à-vis case-advancing ones. We find that litigation will always involve adversarial efforts if awards are sufficiently high, and that litigation in which most efforts are adversarial is a plausible scenario. Furthermore, in a relatively symmetric litigation that involves high awards, adversarial efforts increase the parties' likelihood of reaching a settlement agreement. In asymmetric cases, however, the existence of adversarial efforts inhibits settlement irrespective of the awards at stake.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":null,"pages":null},"PeriodicalIF":1.1,"publicationDate":"2022-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43308854","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}
{"title":"The internet echo chamber and the misinformation of judges: The case of judges’ perception of public support for the death penalty in China","authors":"Zhuang Liu","doi":"10.1016/j.irle.2021.106028","DOIUrl":"10.1016/j.irle.2021.106028","url":null,"abstract":"<div><p>In authoritarian regimes, without voting as a channel to gather public preferences, online public expression may become a major type of public opinion the government collects. However, online information can be biased and thereby mislead decision-makers. Combining data from a survey of judges and a national population survey, this article provides evidence that i) Chinese judges rely on online public opinion to infer public attitudes toward the death penalty, ii) online information is biased – online opinion is more punitive than the general public opinion, and, iii) biased online information seems to have a strong influence on judges’ perception of strong public support for the death penalty, and this may explain why Chinese scholars, lawyers, and other practitioners have persistently overestimated public punitiveness. The findings reveal a less discussed peril of the internet echo chamber: its misleading effect on the information collection process of the government, especially in autocracies.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":null,"pages":null},"PeriodicalIF":1.1,"publicationDate":"2022-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44241386","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}
{"title":"Entrepreneurs’ legal infractions and hidden information: Evidence from small business bankruptcies","authors":"Stefan Sundgren, Irina Alexeyeva","doi":"10.1016/j.irle.2021.106044","DOIUrl":"10.1016/j.irle.2021.106044","url":null,"abstract":"<div><p>We study how entrepreneurs’ attitudes toward risk, as measured by their personal legal infractions, are related to information asymmetry and agency problems prior to bankruptcy, using a sample of 260 small Swedish firms. We find that auditor resignations are more likely in firms where entrepreneurs have legal infractions. Furthermore, we find that legal infractions are negatively related to the likelihood of a firm disclosing its annual report and the quality of the bookkeeping, suggesting that information asymmetry problems are more severe when the entrepreneurs have legal infractions. We also find that creditors’ recovery rates in bankruptcy are lower if the entrepreneurs have legal infractions related to serious traffic offences, such as driving under the influence of alcohol or without a license.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":null,"pages":null},"PeriodicalIF":1.1,"publicationDate":"2022-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S0144818821000685/pdfft?md5=bd25f9703bf0cfef35d1988eb8a419a0&pid=1-s2.0-S0144818821000685-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47423260","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}