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Pounds That Save: The Role of Preferences for Safety in Demand for Large Vehicles
No full textThis paper provides novel evidence that consumers choose larger vehicles as an investment in their safety. I test for this purchasing behavior by isolating the quasi randomness of death in accidents involving at least one fatality. Leveraging this variation as a shock that made driving risk more salient to the victims’ acquaintances, I test whether consumers consequently infer a link between safety and vehicle weight. Using detailed information about household vehicle purchases and the locations of the purchasers’ residences, I demonstrate that households neighboring an individual who dies in an accident respond by purchasing significantly larger vehicles than comparable households neighboring someone who survives an accident. These findings capture strategic purchases of heavier vehicles for safety, behavior that can ultimately lead to the inefficiencies of a vehicle arms race
How to Communicate the Nudge: A Real-World Policy Experiment
No full textDisclosure-based nudges are increasingly utilized by governments around the world to achieve policy goals related to health, safety, employment, environmental protection, retirement savings, debt, and more. Yet a critical aspect of these nudge-type policy interventions—the mode of communication—remains unexplored. We study the effects of the communication medium on debt collection procedures, using a policy experiment conducted in cooperation with the Israeli Ministry of Justice. Debtors often lack adequate information about the debt, the judgment, and the enforcement and collection procedures. As a result, the process of debt collection is often harmful to the debtor and ineffective in securing repayment. We manipulate the choice of medium—telephone, regular mail, text message, and video message—holding fixed the content of the communication. We find that digital communication strategies, in particular, communicating via text message, were the most cost-effective, significantly improving outcomes for both debtors and creditors
The Expanding Universe of Bilateral Labor Agreements
Get PDFIn the seventy-five years since the end of World War II, pairs of countries have entered into over a thousand bilateral labor agreements (BLAs) to regulate the cross-border flow of workers. These agreements have received little public or academic attention. This is likely, in part, because there is limited data or easily available information on BLAs. This Article hopes to change that by introducing three new resources: (1) a dataset documenting the formation of over 1,200 BLAs; (2) a corpus including the texts of over 800 BLAs; and (3) a dataset coding whether over 500 BLAs mention twenty topics that the ILO has identified as best practices for these agreements. Using this data, we show that, unlike some other forms of bilateral agreements, the rate of BLAs being signed has remained relatively high during the first two decades of the twenty-first century. Additionally, we also show evidence that, although many BLAs were formed during this period, relatively few agreements include various worker protections advocated for by activists, scholars, and NGOs
Endogenous Choice of Stakes Under Common Ownership
Get PDFWe present a simple model of common ownership in which an investor chooses its stake in competing firms in light of the effects on firm behavior and firm profits. Two firms compete in Cournot duopoly, and ownership affects a firm’s objective function in the manner posited by Bresnahan & Salop (1986) and Salop & O’Brien (2000). We show that an investor with equal stakes in both firms—a so-called common concentrated owner (CCO)—places a greater value on an additional share of a firm, compared to atomistic owners. The same is true of a noncommon concentrated owner (NCO) with a stake in just one firm. Both the CCO and the NCOs thus have incentives to acquire any shares held by atomistic owners. Our model yields two testable empirical predictions. First, equilibrium ownership structure in noncompetitive industries should be systematically more concentrated than in competitive industries. Second, within the investment portfolio of institutional investors, holdings in noncompetitive industries should be systematically more concentrated than holdings in competitive industries
Remediation in Foreign Bribery Settlements: The Foundations of a New Approach
Get PDFA handful of nations spearhead the global anti-corruption regime through the transnational enforcement of foreign bribery laws. These laws prohibit corporations with a connection to the enforcing nation from paying or offering bribes to the officials of a foreign nation. Enforcement agencies construe the extraterritorial application of these laws broadly, establishing their global prominence. The most notable example is the United States Department of Justice’s enforcement of the Foreign Corrupt Practices Act of 1977 (FCPA). Enforcement agencies typically resolve investigations against corporations through deferred prosecution agreements and other consensual settlement mechanisms known generally as non-trial resolutions. Fines and penalties paid pursuant to these agreements can extend beyond the billion-dollar mark. In most cases, money paid in fines and penalties goes to the treasury of the enforcing nation. However, a movement has emerged that advocates for the sharing of proceeds of non-trial resolutions with the victims of foreign bribery, namely, citizens and governments in the developing world. This movement is complemented by a small number of instances in which non-trial resolutions have been used to provide remediation in this manner. However, these cases do not reveal a coherent approach to remediation, and enforcement agencies do not have the benefit of any kind of conceptual or practical framework to guide the provision of remediation. The extant literature also fails to consider the many political and practical difficulties of coupling transnational foreign bribery enforcement with a remedial agenda. The purpose of this Article is to address the practicalities of when and how remediation might be written into the terms of non-trial resolutions. To achieve this goal, this Article assumes two functions. First, it offers a conceptual framework to underpin remediation by defining elusive notions such as harm, victimhood, and remediation itself. Second, it presents a list of factors to guide the provision of remediation in foreign bribery cases. The shared benefit of these conceptual and practical frameworks is that they allow remediation in foreign bribery settlements to be approached with newfound precision. These frameworks are ultimately geared toward moving practice forward in this fledging field by improving the consistency of outcomes and developing a body of precedent and best practices
Stickiness and Incomplete Contracts
Get PDFBoth economic theory and legal theory assume that sophisticated parties routinely aim to write contracts that are optimal, in the sense of maximizing the parties’ joint surplus. But more recent studies analyzing corporate and government bond agreements have suggested that some contract provisions are highly path dependent, or “sticky,” with future agreements only rarely improving upon previous ones.
Analyzing half a million contracts using automated text analysis, this Article demonstrates that the stickiness hypothesis explains the striking lack of dispute resolution clauses that can be found in agreements between even the most sophisticated commercial parties. When drafting these contracts, external counsel rely heavily on templates, and whether a contract includes a dispute settlement provision is almost exclusively driven by the template that is used to supply the first draft. There is no evidence to suggest that counsel negotiate over the inclusion of dispute resolution clauses, nor that law firm templates are revised in response to changes in the costs and benefits of incomplete contracting.
Together, the findings reveal a distinct apathy toward addressing dispute resolution through contracting. From an institutional perspective, this suggests that the role of default rules in contract law is more important than is often assumed. Whereas traditional accounts hold that commercial actors would simply contract around inefficient defaults, the evidence produced in this Article highlights that defaults are significantly important for transactions between even the most sophisticated commercial actors
Stuart Hall: Reading Room
No full textStuart Hall: Reading Room 12.
University of Chicago Photographic Archive, [apf2-07918], Hanna Holborn Gray Special Collections Research Center, University of Chicago Library.
View information about rights and permissions.https://chicagounbound.uchicago.edu/joseph_henry_beale_images/1004/thumbnail.jp
James Parker Hall
No full textPhotograph courtesy of the University of Chicago Law School. For rights and permissions information for this photo, please contact [email protected]://chicagounbound.uchicago.edu/james_parker_hall_images/1000/thumbnail.jp
James Parker Hall
No full textPhotograph courtesy of the University of Chicago Law School. For rights and permissions information for this photo, please contact [email protected]://chicagounbound.uchicago.edu/james_parker_hall_images/1001/thumbnail.jp
