Published by De Gruyter

Volume 11 Issue 1 -

Issue of Review of Law & Economics

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Contents
Journal Overview

Publicly Available March 4, 2015

Frontmatter

Page range: i-iii

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February 21, 2015

Comparing All-or-Nothing and Proportionate Damages: A Rent-Seeking Approach

Jef De Mot, Thomas J. Miceli

Page range: 1-17

Abstract

This paper compares the all-or-nothing and proportionate damage rules for allocating damages in tort cases under evidentiary uncertainty. The focus is on how the two rules affect litigation expenditures by plaintiffs and defendants. The results of simulation experiments show that the expected judgment at trial is higher under the all-or-nothing rule for cases where the defendant did not take adequate care, but the judgment is higher under the proportionate rule when the defendant took more than adequate care. As for litigation expenditures, assuming equal costs of litigation, overall expenditures are higher under the all-or-nothing rule, except for very weak and very strong cases.

February 19, 2015

Discounting and Criminals’ Implied Risk Preferences

Murat C. Mungan, Jonathan Klick

Page range: 19-23

Abstract

Conventional wisdom holds that potential offenders are more responsive to increases in the certainty than increases in the severity of punishment. In standard law enforcement models, this assumption implies that criminals are risk seeking. We add to the existing literature by showing that offenders who discount future monetary benefits can be more responsive to the certainty rather than the severity of punishment, even when they are risk averse, and even when their disutility from imprisonment rises proportionally (or more than proportionally) with the length of the sentence.

February 26, 2015

Documenting Legal Dissonance: Legal Pluralism in Papua New Guinea

Shaun Larcom, Timothy Swanson

Page range: 25-50

Abstract

We examine the problem suggested by the troubled history of legal transplants , the instance of legal pluralism in which an existing territory has a new legal system overlaid on the previously existing customary system. We provide a very simple model for considering the interaction between legal regimes that exist contemporaneously within a single jurisdiction. We demonstrate that, even when the fundamental relationship between such regimes is as substitutes for one another, the existence of negative externalities between enforcement technologies can result in the withdrawal of enforcement efforts. We term this phenomenon legal dissonance – the situation in which legal regimes interact negatively in their production technologies. This model is then applied to the post-colonial state of Papua New Guinea where we use survey data to identify significant negative production externalities in the enforcement of informal law. We suggest that disorder may be the outcome of too much law.

March 3, 2015

Proportionality Degree of Electoral Systems and Growth: A Panel Data Test

Maria Rosaria Alfano, Anna Laura Baraldi

Page range: 51-78

Abstract

Previous empirical studies analysing the effect of electoral systems on growth lack unanimous answers as they miss-specify mixed systems in the empirical setting, that is, they neglect to consider the proportionality degree of electoral systems. This work supplies the missing answers by properly distinguishing the electoral rules using the Gallagher proportionality index. We estimate a non-linear relationship between the Gallagher proportionality index and the per capita GDP growth using cross-country panel data. Our findings show that the proportionality degree is significant for growth; mixed systems (characterized by an intermediate level of proportionality), combining the different advantages of both proportional and plurality systems, solve the problem of the accountability–responsiveness and the political–government instability trade-offs. As a consequence, they reach relatively higher growth rates with respect to more “extreme” electoral rules.

February 28, 2015

Cui Bono, Benefit Corporation? An Experiment Inspired by Social Enterprise Legislation in Germany and the US

Sven Fischer, Sebastian J. Goerg, Hanjo Hamann

Page range: 79-110

Abstract

How do barely incentivized norms impact incentive-rich environments? We take social enterprise legislation as a case in point. It establishes rules on behalf of constituencies without institutionalized means of enforcement. By relying primarily on managers’ other-regarding concerns while leaving corporate incentive structures unaltered, how effective can such legislation be? We ran a laboratory experiment with a framing likened to German corporate law which traditionally includes social standards. Our results show that a stakeholder provision, as found in both Germany and more recent US regulation, cannot overcome material incentives. Yet even in the absence of adverse incentives the stakeholder duty does not foster other-regarding behavior. Our experiment illustrates the paramount importance of taking into account both incentives and framing effects when designing institutions. We tentatively discuss potential policy implications for social enterprise legislation and the stakeholder debate.

About this journal

Objective
The Review of Law & Economics (RLE) is published in cooperation with the European Association of Law and Economics (EALE) and De Gruyter. The Review publishes theoretical and empirical interdisciplinary research in law and economics-related subjects. The Journal explores the various understandings that economic approaches shed on legal institutions. It specializes in the application to legal issues of insights developed in economic disciplines.

Unlike traditional journals in law and economics, The Review of Law & Economics is published online, avoiding much of the delays and hassle of print publication. The electronic content in the journal appears continuously, as articles are accepted for publication.

Topics

Law
Economics
Microeconomics
Game theory
Finance
Econometrics
Decision theory
Political economy
Public choice
Behavioral economics
Social psychology
Evolutionary biology

Article formats

Theoretical and empirical interdisciplinary research articles

Announcements:

Professor Francesco Parisi (Univ. of Minnesota and Univ. of Bologna) has been awarded the 2018 EALE Award during the latest annual conference of the European Association of Law & Economics in Milan. The prize is awarded every two years for lifetime achievements and significant contributions to the field of Law and Economics, in particular to the development of this scientific movement in Europe. The winner is also given lifetime honorary membership in the Association. Professor Parisi will deliver the EALE Award Lecture at the next EALE conference (in Tel Aviv in september 2019). The lecture will then be published in the EALE official journal, the Review of Law and Economics. The prize is awarded by the Management Board of the Association following the advise of a committee composed by former EALE Award Winners and EALE Presidents.