- Commercial Development of University Research: The Role of Patents, Contributions to Economic Analysis and Policy 5 (1), Article 19, 2006.
- Due-Care Standards in a Market Setting with Legal Error, International Review of Law and Economics 27, 2007, 154-169.
- The Joint Use of Regulation and Strict Liability with Multidimensional Care and Uncertain Conviction (with Jeffrey Wagner), International Review of Law and Economics 28(2), 2008, 123-132.
- On the Consideration of Potential Harm in the Award of Punitive Damages (with Jeffrey Wagner), Economics Bulletin 29(2), 2009, 1108-1112.
- An Analytical Framework for Interpreting Appellate Court Data (with Bríd Gleeson Hanna), Economics Bulletin 29(2), 2009, 1176-1187.
- Group Lending and Individual Lending with Strategic Default (with Sean Ogden), Journal of Development Economics 91(2), 2010, 348-363.
- Punitive Damages and Recklessness Requirement with Uninformed Injurers (with Jeffrey Wagner), International Review of Law and Economics 30(3), 2010, 253-264.
- Electricity Prices and the Commitment to Energy Efficiency (with Sunita Surana), Energy Efficiency 4(1), 2011, 9-16.
- Do Higher Defendant Reversal Rates Imply Appellate Court Plaintiphobia? (with Bríd Gleeson Hanna), Applied Economics Research Bulletin, Forthcoming.
This paper analyzes how university patents encourage university-firm collaboration for technology transfer. Focusing on factors other than competition, I find that the two may not collaborate either because the firm finds in-house development cheaper, or because of a disagreement about the potential product's profitability. In both cases, university patents can encourage collaboration by increasing the invention's diffusion time, and therefore play a role even in the absence of any competition. The model also suggests instances in which we can expect to see a greater impact of university patents on collaboration. Even when patents increase collaboration, they do not necessarily increase welfare. The findings are relevant for the debates on the Bayh-Dole Act, which gave universities a blanket right to patent and license inventions resulting from federally funded research.
I consider a monopoly market setup with legal error, where social welfare is negatively related to a firm's expected liability costs. In this context, I investigate the optimal location of the due-care standard vis-a-vis any given desired care level. It is found that when both the due-care standard and the penalty multiplier are choice variables, setting the due-care equal to the desired care is unlikely to be optimal and conditions under which it should be made relatively lenient or stringent are obtained. Exogenous restrictions on the penalty multiplier may restrict the extent to which the due-care can be manipulated to improve welfare.
The purpose of this paper is to explore the joint use of regulation and strict liability when firms can take care in both observable and unobservable dimensions and when the firm's conviction for damages is uncertain. Much of the literature concerning joint use regards management of the judgment-proof problem; the take-home result of our paper is that if the harming party can take both observable and unobservable care, then joint use can improve welfare even in the absence of judgment-proofness. This is true even when penalty multipliers are allowed, provided social welfare is negatively related to the firm's expected liability costs. In fact, use of penalty multipliers further strengthens the case for joint use.
Multiple empirical studies find that juries/courts take account of potential harm in the determination of punitive damages. The received view in economic theory, however, is that punitive damages should not depend on potential harm. The purpose of this note is to provide an efficiency rationale for the courts'' behavior. Our particular result is that when the punitive damage multiplier decreases as the actual harm increases, the optimal multiplier does depend on the potential harm.
The objective of this paper is to present a simple but flexible theoretical model of the adjudication process that can be used to derive implications of various hypotheses about the adjudicators and litigants for the trial win rates, appeal rates and the reversal rates. Such a model can serve as a helpful tool for guiding empirical work on attitudes and competency of adjudicators and litigants. We use the model to study how the appeal and reversal rates are affected by the litigants'' perception that the trial court has a pro-plaintiff bias. We find that such a perception can result in higher appeal and reversal rates for the defendants relative to the plaintiffs, a pattern that is observed in the data.
Papers that compare group lending and individual lending in the presence of strategic default suggest that unless group members can impose costly social sanctions on one another, or unless the bank uses cross-reporting mechanisms group lending may do worse than individual lending. In this paper, we show that if, (1) the amount that a successful borrower owes for his defaulting partner is optimally determined, and (2) the penalty is allowed to vary across group members, then even in the absence of any social sanctions or cross-reporting, (1) expected borrower welfare is strictly higher with group lending when both group lending and individual lending are feasible and (2) group lending is feasible for a greater range of opportunity cost of capital. These results are robust to collusion between borrowers.
Juries/courts sometimes award large punitive damages when the probability of detecting harm is high and take the recklessness of actions into account. However, economic theory suggests punitive damages should generally be low in such contexts. We argue that juries may be acting wisely. In particular, we show that: (a) even if the probability of conviction is one, punitive damages can raise welfare by aligning an injurer's perceived and actual benefit of care; and (b) a recklessness requirement for awarding punitive damages can be welfare-enhancing when there is uncertainty about the court's view of appropriate care.
This paper studies the effect of electricity prices on state commitment to energy efficiency in the USA. Using panel data we find that electricity prices have a significant positive effect on state energy efficiency expenditures. Moreover, we find that this effect is particularly pronounced beyond a certain threshold level of prices. The rationale for these findings is that higher prices increase the cost-effectiveness of energy efficiency programs. These findings have important implications for state expenditures on energy efficiency if electricity prices rise in response to carbon and other stringent environmental regulations.
The objective of this paper is to show that, contrary to what Eisenberg and Heise (2009) claim, a pro-defendant case-mix at the trial level (due to, for example, higher defendant stakes) is consistent with the higher plaintiff trial win rate, and the higher defendant appeal and reversal rates that are observed in the Supplemental Survey of Civil Appeals (2001). This is true even when (i) the defendants are not more selective about which cases they push on appeal, and (ii) neither the trial court nor the appellate court is biased. Thus, the conclusion of appellate court “plaintiphobia” drawn by Eisenberg and Heise (2009) does not necessarily follow from the data.
- Regulation and Development, Jean-Jacques Laffont, Cambridge University Press, March 2005. American Journal of Agricultural Economics(2007), 89(1), 217-219.