We provide empirical insight into the consequences of the Covid19 pandemic for the administration of justice. Drawing on a comprehensive monthly panel of Brazilian labor courts and using a difference-in-difference approach, we show that the pandemic has had a large and persistent deleterious effect on adjudicatory efficacy, leading to a massive decrease in the clearance rate and an increase in court

This work provides a descriptive assessment of regulated occupations in Italy and examines the impact of regulation on the labour market over the past fifteen years. First, we construct, on the basis of the applicable legal provisions, a set of novel indicators measuring whether and to what extent each occupation is regulated. We then provide a long-run descriptive assessment of the extent of regulated

This study explores the link between the individual profiles of French commercial judges and the bankruptcy cases they supervised between 2006 and 2012. A “Curriculum Vitae effect” prevails: the chance to reorganize after filing for bankruptcy varies with the composition of the chambers. We also confirm the existence of a limited (but not marginal) appointment bias, suggesting that bankruptcy cases

Based on a trade-off model of capital structure with immediate liquidation, and infinite debt maturity, we analyze the impact of prior-to-acquisition leverage levels on the optimal payment method used in an acquisition. Consistent with existing empirical studies, our model optimally yields three payment methods: Full cash, full equity, and a mix of cash and equity. The optimal level of cash in the

This paper analyzes how judicially-determined liability assignments affect valuations and prices. On two occasions in 2007, a railway company caused a fire to break out in the State of Washington. The two fires burned down some of the neighboring properties’ timber. These two incidents led to two companion court cases that made it all the way to the Washington Supreme Court. The court rulings, both

With the procedural tools of discovery and disclosure available, why would a plaintiff and a defendant fail to both understand the merits of the case and settle it out of court? I analyze a model in which initially the defendant has complete information about the case whereas the plaintiff knows nothing but can learn any fraction of the information, at no cost to himself, through discovery, after which

This paper provides a law enforcement framework through which to consider principal-agent relations among citizens, an elected official, and a law enforcer. This paper investigates how citizens’ interests are reflected in political competitions in terms of the use of financial incentives, e.g., the allocation of fine revenues, to control the intrinsically motivated law enforcer. This paper points out

This paper studies markets plagued with asymmetric information on the quality of traded goods. In Akerlof's setting, sellers are better informed than buyers. In contrast, we examine cases where buyers are better informed than sellers. This creates an inverse adverse selection problem: the market tends to disappear from the bottom rather than from the top. In contrast to the traditional model, it is

Concerns over arbitrator impartiality and independence in ICSID arbitration have led to reform proposals geared towards a multilateral investment court. Due to the ad hoc nature of appointments, it has been suggested that arbitrators may strategically render decisions in biased ways with the goal of encouraging reappointments. Although criticism against arbitrator bias has attracted significant attention

In real life situations, potential offenders may only have a vague idea of their own probability of getting caught and possibly, convicted. As they have beliefs regarding this probability, they may exhibit optimism or pessimism. Thus there exists a discrepancy between the objective expected fine and the subjective expected fine. In this context, we investigate how the fact that the choice whether or

The Covid-19 crisis has recently rekindled discussions about debt relief, leading official lenders to grant a moratorium on low-income countries’ external public debt service. Private creditors, which had massively invested in LICs (especially in Africa), have been so far relatively spared. But would they keep lending to these countries if a new wave of debt write-offs were to occur? Building on the

For many years, most scholars have assumed that the strength of reputational incentives is positively correlated with firm size. Firms that sell more products or services were thought more likely to be trustworthy than those that sell less because larger firms have more to lose if consumers decide they have behaved badly. That assumption has been called into question by recent work that shows that

This study examines the impact of staggered boards, poison pills and unequal voting rights on corporate innovation intensity using a sample of listed firms in six Asian countries from 2010 to 2017. We analyze the differential effects of antitakeover provisions using the high order fixed effects panel data model that controls for firm fixed effects, industry-year fixed effects and country-year fixed

Expungement mechanisms allow first-time offenders to seal their criminal record. Theory predicts that the stigma of a criminal record can hinder the reintegration of criminals for whom legal activities are less lucrative. In theory, expungements priced at the reservation level can facilitate the reintegration of criminals without making first-time crime more attractive. This paper considers a behavioral

The deterrence effect of police on crime has been well established using modern quasi-experimental micro-econometric methods. Although the results from these studies uniformly suggest that police spending is cost justified, it is worth exploring whether police-like alternatives can deter crime even more cheaply. Unarmed private security personnel that conspicuously patrol a neighborhood have the potential

Despite a growing consensus that host country institutions affect the spatial distribution of foreign direct investment, there is a debate about which institutions drive this relationship. This study contributes to this debate by examining the relationship between foreign direct investment net inflows and three judicial institutions of property rights protection: judicial contract enforcement, judicial

We replicate two treatments of an experimental theory test (Fehr et al., 2011) studying Hart and Moore (2008)’s idea that contracts serve as reference points in trading relationships. In contrast to rigid contracts, flexible contract terms may be perceived in a self-serving manner and, therefore, the contract parties might form subjective entitlements. This reference-dependent perception of flexible

A 2006 U.S. Supreme Court decision encouraged district courts to rely more on license fees and less on injunctions as a remedy for patent infringement. This paper provides a simple model in which a patent-owning "patent assertion entity" (PAE) and an infringing firm engage in Nash bargaining over a possible license fee after the PAE initiates an infringement lawsuit. We compare a fee-based regime in

In 1989, Barry Harris & Joseph Simons developed a quantitative method to implement the Horizontal Merger Guidelines’ hypothetical monopolist test with a market-level “critical loss” analysis. The appeal of Harris & Simons’ framework is that it created a simple, intuitive approach to delineating markets—with relatively parsimonious data requirements. After over a decade of use, however, economists began

The protracted political dispute between South Korea and Japan over the wartime brothels called "comfort stations" obscures the contractual dynamics involved. These dynamics reflected the straightforward logic of the "credible commitments" so basic to elementary game theory. The brothel owners and potential prostitutes faced a problem: the brothel needed credibly to commit to a contractual structure

In 2005, International Financial Reporting Standards (IFRS) have been legally adopted by listed firms to facilitate the harmonization of accounting practices. However, IFRS remain an option for non-listed firms in some countries. We investigate whether European privately held firms can raise more debt when they voluntarily report their consolidated financial information according to IFRS rather than

This article studies whether fee-shifting rules can affect plaintiffs’ win rates. Beyond theoretical modeling, this study goes a step further and provides empirical evidence on this issue, thanks to the study of a real change in Spanish legislation. Spain applied the so-called English rule in 2011 in the administrative jurisdiction. This study explores whether plaintiffs were more or less successful

Banks rely on information to assess the creditworthiness of borrowers. They can secure this information in two ways: on the one hand, they can access public information on the firm from credit databases. On the other hand, they can build a relationship with the firm and secure private, more precise, information on the firm’s prospects. In this paper, we investigate what happens to the collection of

When shareholders of a target firm expect a value improving takeover to be successful, they are individually better off not tendering their shares to the buyer and the takeover potentially fails. Squeeze-out procedures can overcome this free-riding dilemma by allowing a buyer to enforce a payout of minority shareholders and seize complete control of the target firm. However, it is often argued that

This article explores the controversial subject of Eurobonds, by analyzing their economic consequences in an asymmetric monetary union like the Eurozone, where countries differ in size and policy preferences. We thus build a two-country monetary union DSGE model to compare three scenarios of government debt issuance: i) countries issue their own sovereign bonds (the baseline scenario is given the label

Improving judicial performance in order to enhance the business environment has been a policy goal for many governments in the last decades. Following the suggestions of several international organizations, most countries have tried to speed up their case resolution systems by streamlining judicial procedure. However, not as much attention has been devoted to test the potential drawbacks of similar

This paper proposes an empirical analysis to study if the quality of judicial decisions is influenced by the number and type of judges working in the court. A set of econometric models will be estimated in order to explain the differences existing in the confirmation rate of the sentences dictated by the 339 Spanish Labour Courts taken as a sample, over the period 2004–2017. The acting of other judges

While judicial independence is often considered to be a foundation for the rule of law and economic prosperity, there is overwhelming evidence suggesting that judges and court decision-making are sensitive to the political environment. In this paper, we explore one channel through which political alignment of the judges can manifest itself and verify whether political party support, expressed as a

The paper analyses how peer effects affect judicial decisions over dismissal disputes in Australian labour courts. Using a panel of judges and data over 2000 unfair dismissal decisions we first test for selection effects and for randomized matching of judges to cases. We then use spatial econometrics methods to test whether individual judges’ decisions depend on the behaviour and/or characteristics

Private enforcement through courts has been put forward as a possible substitute to public enforcement of federal and international trade regimes. In this article, we seek to advance the empirical literature on private enforcement in the EU context by overcoming the limitations of existing datasets. We present a new dataset measuring referral activity at subnational level and argue that EU trademark

To ensure the safety and soundness of the global financial system as well as individual financial institutions and to reduce systemic risk, numerous policy measures and regulatory reforms have been brought forward as a reaction to the Global Financial Crisis and the European Sovereign Debt Crisis. Simultaneously, numerous academic works have critically reviewed these developments. Therefore, based

This paper uses the rank-dependent expected utility (RDEU) model to capture the effects of optimism and pessimism on the choice between a pre-trial settlement and a trial (or more generally, between a private settlement and a litigation). These two legal procedures are described as a bargaining game and a contest game, respectively. My models predict that a contest occurs if the aggregate optimism

We model how risk-neutral firms’ ability to obtain substantial private returns on marginal new technologies causes them to “reach for mediocrity” by investing in socially suboptimal projects, even in the presence of competition and new entrants. Focusing primarily on pharmaceutical innovation, we analyze various policy interventions to solve this underinvestment problem. In particular, we describe

Techniques of time series analysis are used to examine 30 year government bond yields in Germany, France, Italy and Spain. The empirical evidence reported here seems to imply that fixed income markets have reacted to the recent economic and financial crisis in Europe by starting to price in a significant possibility of government debt defaults – which means that all of a sudden sovereign credit risk

Recent research in experimental law and economics shows that the imposition of a fine, intended to deter some harmful behavior, may crowd out moral motivation: the behavior occurs more frequently even though a payment is charged to discourage it. In A Fine is a Price, Gneezy and Rustichini (2000) suggest that the payment may induce subjects to frame the intended prohibition as a permission in exchange

The political situation in Italy had and still has implications for sovereign credit and redenomination risk. The current political environment is discussed from an economic and legal perspective focusing strongly on the funding situation of Italian banks. Some empirical evidence is reported. The findings depicted here are compatible with the point of view that the political development in Rome has

This study develops a framework for the strategic interaction of firms that have to decide between adhering to and violating legislation. Depending on how deterring enforcement is various degrees of compliance with the law will arise in equilibrium. For an agency that targets a certain compliance rate more resources per firm should be allocated to industries with strong demand and high costs for adhering

Law and economics suggests that liability for intentional torts is motivated by deterrence. The tortfeasor’s investments in undertaking the intentional act and the victim’s investments in precautions against the harm arising from the act are likely to be socially wasteful. Further, especially in the case of battery, the benefit of committing the intentional act will generally fall short of the loss

Burglar alarms are the single most effective deterring and detecting measure for burglary. On net, alarms provide benefits to communities, but 94–99 percent of police responses to alarms are to false activations. Solving the false alarm problem could free up the resources equivalent to 35,000 U.S police officers. Response to false alarms is a private good while response to an actual crime is a public

Can fines lead to more of an undesirable behavior, rather than deterring it? This was the surprising finding in Uri Gneezy and Aldo Rustichini, “A Fine is a Price” published in the Journal of Legal Studies in 2000. In this field experiment at Israeli daycares, the introduction of fines caused an increase in late pick-ups by parents. The study has been frequently cited, especially for its suggestion

This paper explores litigants’ use of the possibility to contractually re-allocate legal fees, that is, to (potentially partially) opt out of the American rule. In our screening framework with two defendant types, the plaintiff prefers offering contract proposals with fee-shifting to settling with only the defendant with a weak case when the share of that defendant type is high. In the contract, the

In this article, we examine whether and to what extent the gender composition of a panel of three judges may have an impact on its decision in a civil law system characterized by a very large representation of females among judges. From a database of 2000 decisions from French Courts of Appeal, we show that the gender composition of panels of judges have a significant effect on the amounts of child

When dissents are allowed, judges must decide whether or when to write them. While the main insights of rational dissent theory have been documented and corroborated in several empirical studies, there has been much less evidence testing on how different types of dissent may affect the likelihood of dissent. Particularly, dissents in more salient cases, or more forceful dissents, may have stronger

The likelihood of being a potential deceased organ donor is higher for individuals who have been exposed to situations typically characterized by a severe head trauma or stroke that result in brain death. Employing count data models that account for overdispersion and/or excessive counts of zeros, this paper assesses the unintended consequences of enforcing stricter gun control laws and the effects

In American legal discourse, many commentators believe that the best way to deter securities fraud is the class action, despite its serious side effect: frivolous litigation. A comparative study of securities fraud in Japan, which had an identical securities code addressing securities fraud with the U.S. before the adoption of class action, however, presents a different story. This article demonstrates

Brady, Evans, and Wehrly (2019) have conducted an important and persuasive replication. Future work should explore possible reputational penalties for firms that cater to socially conscious consumers but are caught harming the environment. Conversely, it is possible that, for some firms, environmental violations cause reputational benefits.

We assess the impact of announcements corresponding to different fiscal and monetary policy measures on 10-year sovereign bond yield spreads (relative to Germany) of 10 EMU countries during the period 01:1999-07:2016. Implementing country-fixed effects OLS regressions, we find that the European Commission’s (EC) releases of the excessive deficit procedure significantly affect yield spreads. The EC

This study explores the roles of enforcement in explaining management choices tied to regulatory compliance. Within this exploration, the study pursues two research objectives. First, it discerns the separate effects of punishment certainty and punishment severity on compliance decisions; this task is generally difficult especially since it requires constructing measures of the beliefs held by individuals

When adjudication is not perfectly accurate, litigants with unmeritorious cases may benefit from court errors, which in turn may result in a dilution of incentives for primary behavior and frivolous litigation. We study how shifting the court fees to the loser may improve the accuracy of adjudication. If litigation costs are high, the American rule performs better than the English rule, and vice versa

We estimate the time-varying long-run correlations of European sovereign bond markets to identify specific effects that are attributed to changing European regulatory and political dynamics over the last twenty years. Our empirical results from using the DCC-MIDAS methodology indicate that regulatory changes in Europe have created significant and negative impact on the long-run correlations within

The aim of the present study is to determine the relationship between Child Access Prevention (CAP) laws and state-level youth firearm suicide rates. This paper differs from prior research in several ways. First, this is one of the few studies to focus exclusively on youth firearm suicide rates. Second, this study uses one of the largest and most recent data sets of any study on this topic. Third,

What are the effects of corporate self-reporting schemes on deterrence of corporate crime? This paper presents a model to analyze this question for the case in which a firm's manager, who has stock-based compensation, commits a corporate crime and the firm conducts self-policing and self-reporting. Corporate self-reporting schemes may enhance deterrence if the level of corporate leniency is within

Comparative studies tend to attribute observed differences in judicial dissent to different legal tradition. Divergent dissent behavior of constitutional courts in Slovenia and Croatia, which emerged from a shared legal tradition, casts doubt on the validity of this view. We first clarify the countries’ common legal-historical legacy and identify salient post-Yugoslav between-country differences in

Labour law can be established both by statutory law and by collective bargaining. How much value does the latter effectively add? In this paper we propose a methodology to address this question: we compare the specific contents of collective agreements (except minimum wages) to their equivalent norms set by statutory law (if any). We illustrate this approach by analysing in detail over 400 norms from

This paper draws on machine learning methods for text classification to predict the ideological direction of decisions from the associated text. Using a 5% hand-coded sample of cases from U.S. Circuit Courts, we explore and evaluate a variety of machine classifiers to predict “conservative decision” or “liberal decision” in held-out data. Our best classifier is highly predictive (F1 = .65) and allows

Conducting a randomized controlled trial (RCT) can be an ideal way to avoid omitted variable and selection biases that complicate other research designs. However, the way that the data from an RCT are collected and analyzed can unintentionally reintroduce those biases. In this study we replicate and extend the analyses of data from three RCTs related to prisoner reentry, to more cleanly identify the

Two standard results in the litigation literature are that an informed party will not make a costly voluntary disclosure in a screening game and that the uninformed party will not engage in costly discovery in the signaling game. Both of these results rely on the assumption that the party making the offer can extract the entire surplus of settlement from the party receiving the offer. If the recipient

This paper uses lab-in-the-field experiments and theory to explore why people give money to governments. We assume that giving is motivated by outcome–oriented or consequentialist norms, and conditional on (a) others’ behavior and (b) beliefs about how competent the government is. The evidence from a lab experiment in Peru is in line with this. On the other hand, we analyze the potential effects of

Court delay frustrates economic behavior. This paper examines the nexus between the case disposition time and the availability of prior court decisions for the civil law. We model litigation as a rent-seeking game, and find that prior court decisions curb strategic behavior in similar cases. Thus, the excessive use of party resources in litigation, such as time, is reduced if prior decisions clarify

When it is impossible to identify ex post the producer of a product causing harm, or the damage caused is indivisible although caused by multiple injurers, courts must apportion the total damage among tortfeasors. In this model we examine how such liability sharing rules affect the likelihood of tacit collusion. For this we use a standard Cournot oligopoly model where firms are collectively held liable