{"title":"Patent law reform and innovation: An empirical assessment of the last 20 years","authors":"Christian Helmers , Brian J. Love","doi":"10.1016/j.irle.2024.106210","DOIUrl":"https://doi.org/10.1016/j.irle.2024.106210","url":null,"abstract":"<div><p>We ask whether four of the most important U.S. patent system reforms of the last 20 years—elimination of presumptive injunctive relief for victorious patent enforcers in <em>eBay Inc. v. MercExchange, LLC</em>, 547 U.S. 388 (2006); creation of the Patent Trial and Appeal Board (PTAB) in the America Invents Act; restriction of software’s eligibility for patent protection in <em>Alice Corp. v. CLS Bank Int’l</em>, 573 U.S. 208 (2014); and limitation of patent enforcers’ choice of forum in <em>TC Heartland, LLC v. Kraft Foods Grp. Brands, LLC</em>, 137 S. Ct. 1514 (2017)—had a measurable impact on innovation in the U.S. Specifically, we use a sample of publicly traded firms to construct firm-level measures of innovation and exposure to each reform and adopt a variety of difference-in-differences approaches that assesses how innovation-related activities changed post-reform at relatively exposed versus relatively unexposed firms. We find: a positive association between <em>eBay</em> and R&D spending by firms that were relatively more exposed to patent litigation prior to the Court’s decision; a positive association between the introduction of PTAB proceedings and R&D expenditures by firms that innovate in tech classes where PTAB has been most active; a positive association between <em>Alice</em> and R&D spending by software firms; and a positive association between <em>TC Heartland</em> and R&D spending by firms that thereafter could not be sued in the Eastern District of Texas, a court long associated with opportunistic forum shopping.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"79 ","pages":"Article 106210"},"PeriodicalIF":0.9,"publicationDate":"2024-07-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141594618","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":"Artificial intelligence, inattention and liability rules","authors":"Marie Obidzinski , Yves Oytana","doi":"10.1016/j.irle.2024.106211","DOIUrl":"https://doi.org/10.1016/j.irle.2024.106211","url":null,"abstract":"<div><p>We characterize the socially optimal liability sharing rule in a situation where a manufacturer develops an artificial intelligence (AI) system that is then used by a human operator (or user). First, the manufacturer invests to increase the autonomy of the AI (<em>i.e</em>, the set of situations that the AI can handle without human intervention) and sets a selling price. The user then decides whether or not to buy the AI. Since the autonomy of the AI remains limited, the human operator must sometimes intervene even when the AI is in use. Our main assumptions relate to behavioral inattention. Behavioral inattention reduces the effectiveness of user intervention and increases the expected harm. Only some users are aware of their own attentional limits. Under the assumption that AI outperforms users, we show that policymakers may face a trade-off when choosing how to allocate liability between the manufacturer and the user. Indeed, the manufacturer may underinvest in the autonomy of the AI. If this is the case, the policymaker can incentivize the latter to invest more by increasing his share of liability. On the other hand, increasing the liability of the manufacturer may come at the cost of slowing down the diffusion of AI technology.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"79 ","pages":"Article 106211"},"PeriodicalIF":0.9,"publicationDate":"2024-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141605406","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":"An economic rationale for the different methods of feeding enslaved people in the antebellum South and British West Indies","authors":"Eleanor Brown , Ian Ayres","doi":"10.1016/j.irle.2024.106206","DOIUrl":"https://doi.org/10.1016/j.irle.2024.106206","url":null,"abstract":"<div><p>This article focuses on two different systems of feeding enslaved people. In the first system, primarily associated with the cotton, tobacco, and rice plantations of antebellum South and the <em>early</em> sugar plantations of the British West Indies, the obligation to feed enslaved people was executed by the plantation. In contrast, under a second system known as provisioning associated with the <em>later</em> British West Indian colonies, the master allocated land to enslaved people on which they would grow their own food. Over time, this land was understood, in the wider community of both those enslaved and the planters, to be the “property” of the enslaved person. This article offers potential explanations both for why provisioning was adopted in the West Indies, and why provisioning did not take hold in southern U.S. plantations. Following Ronald Coase’s <em>Nature of the Firm</em>, we should expect to see provisioning when doing so economizes on transaction and agency costs. As it became more difficult to purchase imported food, plantations had to provide their own food. Provisioning sacrificed the plantations’ claims to surplus food, but in the West Indies such decentralized production could enhance incentives for enslaved people to produce their own food while economizing on the need for supervision.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"79 ","pages":"Article 106206"},"PeriodicalIF":1.1,"publicationDate":"2024-06-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141312758","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":"Strategic anarchy; a model of prison violence as a means to informal governance and rent extraction","authors":"Jonathan Kurzfeld","doi":"10.1016/j.irle.2024.106205","DOIUrl":"https://doi.org/10.1016/j.irle.2024.106205","url":null,"abstract":"<div><p>Prison gangs are often thought to create a “culture of violence” in U.S. prisons and jails. Yet mounting research and evidence suggests that prison gangs, in pursuit of profits from illicit market activity, also act as a check on the violent behavior of the broader prison population. This paper synthesizes existing research on prison gangs into a modeling framework that treats gangs as profit-maximizing suppliers and sources of informal governance in an illicit marketplace. The model offers broad policy implications that highlight the challenges and potential unintended consequences of correctional policies that address violence and gang activity.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"79 ","pages":"Article 106205"},"PeriodicalIF":1.1,"publicationDate":"2024-05-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141240602","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}
C.S. Agnes Cheng , Henry He Huang , Zhen Lei , Haitian Lu
{"title":"Ex ante litigation risk and firm restatement decisions: Evidence from district courts","authors":"C.S. Agnes Cheng , Henry He Huang , Zhen Lei , Haitian Lu","doi":"10.1016/j.irle.2024.106198","DOIUrl":"10.1016/j.irle.2024.106198","url":null,"abstract":"<div><p>This study examines whether ex ante securities litigation risk prompts firms to make more or less voluntary restatements. The litigation risk is captured by a new measure based on the dismissal rate of the district court where the firm is headquartered. We find that misreporting firms headquartered in lenient (high dismissal rate) court jurisdictions are more likely to make voluntary restatements. Using the U.S. Supreme Court’s <em>Tellabs</em> decision as an exogenous shock that reduces the leniency of some district courts, we find robust evidence that higher litigation risk decreases managers’ incentives to admit their misreporting. Our finding sheds new light on the litigation risk-voluntary disclosure paradox by pointing to a positive aspect of court leniency in motivating self-policing behavior such as restatement.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"79 ","pages":"Article 106198"},"PeriodicalIF":1.1,"publicationDate":"2024-05-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141133914","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":"Unequal unification? Income inequality and unification in nineteenth century Italy and Germany","authors":"Philipp Erfurth","doi":"10.1016/j.irle.2024.106197","DOIUrl":"https://doi.org/10.1016/j.irle.2024.106197","url":null,"abstract":"<div><p>This research provides a comprehensive study of the linkages between institutional structures, balance of power between core and peripheries, endogenous extractive policies and inequality in the context of nineteenth century unification of Germany and Italy. To conduct this analysis, the study puts forward estimates of income inequality for pre-unification German states using social tables, compiled using primary data, some of which have thus far been unexplored in economic research. The findings suggest that the power balance between core and periphery, systems of government as well as distorted policies contributed to differences between the Italian and German experiences, specifically to the rise of inequality in the former and no marked increase in the latter.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"78 ","pages":"Article 106197"},"PeriodicalIF":1.1,"publicationDate":"2024-04-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140824347","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":"How acceptable is optimal deterrence?","authors":"Michał Kłusek","doi":"10.1016/j.irle.2024.106194","DOIUrl":"https://doi.org/10.1016/j.irle.2024.106194","url":null,"abstract":"<div><p>The article examines the social acceptability of optimal deterrence policies. While there is considerable research on intuitions regarding punishment and the counter-intuitive nature of economic reasoning, the problem of whether decisions based on optimal deterrence are acceptable remains inadequately researched. Two studies examined how acceptance rates vary for different decisions implementing optimal deterrence theory. They demonstrate that (1) policies increasing punishment severity are more acceptable than those decreasing it; (2) changes at the level of penal policy are more acceptable than individual court rulings; (3) acceptance rates decrease as the magnitude of change increases; (4) strict adherence to optimal deterrence theory’s recommendations does not significantly affect the acceptability of the decisions. In addition, no optimal deterrence policies were accepted, on average, or by the majority of participants.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"78 ","pages":"Article 106194"},"PeriodicalIF":1.1,"publicationDate":"2024-04-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140807079","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":"Bayesian persuasion in lawyer–client communication","authors":"Mehdi Ayouni , Tim Friehe , Yannick Gabuthy","doi":"10.1016/j.irle.2024.106196","DOIUrl":"https://doi.org/10.1016/j.irle.2024.106196","url":null,"abstract":"<div><p>When considering whether to bring a lawsuit, a plaintiff may delegate the decision to her lawyer- better informed about the case’s merits- or consult with her lawyer and decide for herself. Focusing on the latter, we assess how a lawyer communicates with his client about the case’s merits if the client relies on the lawyer’s information to decide whether to bring suit. In some circumstances, the lawyer only partially reveals the case’s merits to <em>persuade</em> the client to bring a suit. In addition, in anticipation of the lawyer’s <em>strategic</em> communication, the plaintiff sometimes adjusts her questions to the lawyer about the case’s merits. Focusing on the communication between lawyers and clients, our paper explores a new consequence of misaligned incentives between the two parties.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"78 ","pages":"Article 106196"},"PeriodicalIF":1.1,"publicationDate":"2024-04-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S0144818824000164/pdfft?md5=a047e43c3cda9ecdabf9156ee27a2985&pid=1-s2.0-S0144818824000164-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140633211","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":"Commercial arbitration regime and sourcing decision","authors":"Se Mi Park","doi":"10.1016/j.irle.2024.106195","DOIUrl":"10.1016/j.irle.2024.106195","url":null,"abstract":"<div><p>Introducing commercial arbitration into a two-country sourcing model, this paper examines how the quality of commercial arbitration regime affects sourcing decision when production involves a relationship-specific transaction. Arbitration may be invoked when a firm shaves the investment value of a customized intermediate input or does not pay in full for investment. Under the full verifiability of an ex-post investment value by an arbitrator, firm behavior is governed by the quality of arbitration regime, measuring how fully a national arbitration regime supports the enforcement of arbitral awards. I theoretically find that a firm’s likelihood of choosing global sourcing over domestic sourcing increases with the source and destination countries’ qualities of international arbitration regimes and the source country’s quality of general arbitration regime. These impacts are magnified as the production of an intermediate input involves a greater degree of relationship-specific transaction. Results also show that as the production of an intermediate input entails a greater degree of relationship-specific transaction, a firm’s likelihood of choosing global sourcing over domestic sourcing decreases when domestic arbitration offers the better enforcement of arbitral awards compared to international arbitration.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"78 ","pages":"Article 106195"},"PeriodicalIF":1.1,"publicationDate":"2024-04-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140775379","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":"Changes in damages when liability rules change: an empirical study on compensation for the time spent in pretrial detention","authors":"Gabriel Doménech-Pascual , Juan Luis Jiménez","doi":"10.1016/j.irle.2024.106193","DOIUrl":"https://doi.org/10.1016/j.irle.2024.106193","url":null,"abstract":"<div><p>In some legal systems, non-convicted pretrial detainees are to be compensated by the Government for the losses derived from their stay on remand. Several theoretical and empirical studies have analyzed some of the consequences of such compensation. This paper finds a result that said studies did not predict: a legal change that relaxed the requirements for compensation is correlated with a reduction in the amount of compensation awarded. We empirically analyze which factors are correlated with the amount of compensation awarded in these cases by Spanish courts from 1990 until today. Our econometrical analysis finds that (i) this amount has drastically decreased after the Supreme Court, by establishing that every non-convicted pretrial detainee is to be compensated, significantly expanded the set of cases where such compensation is due. Moreover: (ii) the longer the time spent on remand, the lower the daily compensation awarded; (iii) those who work receive higher damages than those who do not work, but there are notable (and apparently unjustifiable) differences by type of work; e.g., police officials get much higher awards than other claimants; (iv) we find no gender nor foreign bias.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"78 ","pages":"Article 106193"},"PeriodicalIF":1.1,"publicationDate":"2024-04-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S0144818824000139/pdfft?md5=3fc641f3b82d0b8784f761c440a4b49b&pid=1-s2.0-S0144818824000139-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140350066","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}