Business Law (Books and Journals)
1210 results for Business Law (Books and Journals)
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Asymmetric market power and wage suppression
We study a labor market in which two identical firms compete over a pool of homogeneous workers. Firms pre‐commit to their outreach to potential employees, either through their informative advertising choices, or through their screening processes, before engaging in a wage (Bertrand) competition. Although firms are homogeneous, the unique pure‐strategy equilibrium is asymmetric: one firm...
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Durable goods and consumer behavior with liquidity constraints
This paper presents an integrated model of intratemporal demand and intertemporal consumption, with allowance for durable goods and liquidity constraints. Demand equations for non‐durable and durable goods with the user cost of durable goods are jointly estimated with a consumption Euler equation incorporating liquidity constraints for Norwegian consumers from 1978 to 2018. Results show that...
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Altruistic behavior and soccer: the effect of incidental happiness on charitable giving
This study investigates the impact of incidental happiness associated with the outcome of the Dutch national soccer championship on charitable giving shortly after the decisive match. We use survey data in which participants were asked to make an anonymous donation of an earned endowment. For estimating the causal effect of happiness on charitable giving, we exploit the variation in the emotions...
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Decomposing gender wage gaps: a family economics perspective
We propose a simple way to embed family‐economics arguments for pay differences between genders into standard decomposition techniques. To account appropriately for the role of the family in the determination of wages, one has to compare men and women with similar own characteristics – and with similar partners. In US survey data, we find that our extended decomposition explains considerably more
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Competing with precision: incentives for developing predictive biomarker tests
We study the incentives of drug producers to develop predictive biomarkers, taking into account strategic interaction between drug producers and health plans. For this purpose, we develop a two‐dimensional spatial framework that allows us to capture the informational role of biomarkers and their effects on price competition and treatment choices. Although biomarkers increase the information...
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Frisch elasticities in a model of indivisible labor supply with endogenous workweek length
In this paper, I provide an extension of the classical indivisible labor supply model where a large macro Frisch elasticity is reconciled with a small micro counterpart. Households take as given state‐dependent hours per worker – shaped by a nonlinear mapping from hours worked to labor services and employment frictions – and make intertemporal labor supply decisions. In the standard indivisible...
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Welfare‐improving tax evasion
We study optimal income taxation in a two‐group framework where the private cost of misreporting income is positively correlated with productivity. If high‐wage types always reveal their income truthfully, then letting low‐wage types cheat leads to Pareto‐superior outcomes regardless of the audit costs (as compared to deterrence). With no cheating, redistribution takes place on first‐ or second‐be
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Transnational crimes: how nations should cooperate and why they don't*
Chain‐form crime partnerships and intelligence sharing by national authorities to detect cross‐border partners create multiple externalities in the combat against transnational crimes and illicit trafficking. Cooperative enforcements that minimize global harms prioritize the country with lower intelligence production and/or superior detection capability. In equilibrium, as in practice, national...
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The effect of compulsory face mask policies on community mobility in Germany*
There is an ongoing debate about face masks being made compulsory in public spaces to contain COVID‐19. A key concern is that such policies could undermine efforts to maintain social distancing and reduce mobility. We provide first evidence on the impact of compulsory face mask policies on community mobility. We exploit the staggered implementation of policies by German states during the first...
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The roots of inequality: estimating inequality of opportunity from regression trees and forests*
We propose the use of machine learning methods to estimate inequality of opportunity and to illustrate that regression trees and forests represent a substantial improvement over existing approaches: they reduce the risk of ad hoc model selection and trade off upward and downward bias in inequality of opportunity estimates. The advantages of regression trees and forests are illustrated by an...
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Unfair inequality and growth*
Fighting against economic inequality is one fundamental social goal in the agendas of most governments. However, recent studies highlight that people actually prefer unequal societies, as they accept inequality generated by an individual's effort and wish to reduce only unfair inequality (generated by factors beyond an individual's control). This distinction might help to explain the fundamental...
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Do tax subsidies for retirement saving affect total private saving? New evidence on middle‐income workers*
We exploit exogenous variation from a pension reform in Denmark to estimate the effect of tax subsidies on total private saving. We present new evidence on individuals in the middle of the income distribution and show that a reduction in tax subsidies for retirement saving reduces total private saving. The reform changed the tax incentives for saving in the pension scheme that holds the highest...
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Experienced versus decision utility: large‐scale comparison for income–leisure preferences*
Subjective well‐being (SWB) data are increasingly used to perform welfare analysis. Interpreted as “experienced utility”, it has recently been compared to “decision utility” using small‐scale experiments most often based on stated preferences. We transpose this comparison to the framework of non‐experimental and large‐scale data commonly used for policy analysis, focusing on the income–leisure...
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Hours risk and wage risk: repercussions over the life cycle*
We decompose earnings risk into contributions from hours and wage shocks. To distinguish between hours shocks, modeled as innovations to the marginal disutility of work, and labor supply reactions to wage shocks, we formulate a life‐cycle model of consumption and labor supply. For estimation, we use data on married American men from the Panel Study of Income Dynamics. Permanent wage shocks...
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Penalty lottery*
To control sequential public bad productions under imperfect monitoring, this paper proposes a penalty lottery: a violator passes the responsibility of the fine to the next potential violator with some probability and pays all the accumulated fines with the complementary probability. The penalty lottery does not merely impose extreme fines because an absorbing state is practically unreachable. It
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Banks and financial crises: contributions of Ben Bernanke, Douglas Diamond, and Philip Dybvig*
The 2022 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel was awarded to Ben S. Bernanke, Douglas W. Diamond, and Philip H. Dybvig “for research on banks and financial crises”. This article surveys the contributions of the three laureates and discusses how their insights have changed the way that academics and policymakers understand banks and their roles in financial crises.
- The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, 2022
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The dynamic effects of monsoon rainfall shocks on agricultural yield, wages, and food prices in India*
This paper shows that, first, the effects of monsoon rainfall shocks on agricultural yield in India are highly asymmetric: yield falls strongly after droughts, whereas excessive rainfall has only little effects. Second, our key novel finding is that the short‐lived yield loss after a widespread drought elicits a persistent decline (increase) in wages (food prices), which lasts for up to five...
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Public pension policy and the equity–efficiency trade‐off∗
This paper illustrates that the equity–efficiency trade‐off between a redistributive, Beveridgean, pension system and an earnings‐based, Bismarckian, scheme can collapse when accounting for labor supply effects on the extensive margins. I introduce a general equilibrium overlapping generations model with endogenous savings, human capital formation, and labor supply. The model is calibrated to an...
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Price dispersion and the stability of trade*
Research on trade relationships has documented a high rate of relationship breakup and churning. We use data on Norwegian exports to document two stylized facts about the stability of trade relationships. First, the probability of relationship breakup increases in the deviation of the relationship‐specific price from a reference price. Second, relationship hazards follow Zipf's law. We propose a...
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Micro‐responses to shocks: pricing, promotion, and entry*
We study the market response to firm‐specific demand shocks in a natural experiment setting. In 2006, a boycott of Danish products in several Arab countries was devastating for Danish cheese products firms. In Saudi Arabia, their market share collapsed from 16.5 percent in January to below 1 percent in March, and never fully recovered; by 2009, it was 6.3 percent. By analyzing micro‐level (scanner
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Firm creation, entry costs, and house‐price volatility∗
Amid growing work on the link between firm creation and cyclical housing‐market dynamics, we document a significant, positive, and robust cross‐country relationship between the level of new firm creation and the cyclical volatility of house prices. Using a business‐cycle model with endogenous firm entry, housing, and housing‐finance constraints and shocks, we show that, via general equilibrium...
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Marketed tax avoidance: an economic analysis∗
Recent years have witnessed the growth of mass‐marketed tax avoidance schemes aimed at the middle (not top) of the income distribution, with significant implications for tax revenue. We examine the consequences for the structure of income tax, and for tax authority anti‐avoidance efforts, of tax avoidance of this type. In a model that allows for both demand‐ and supply‐side considerations, we...
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The Carbon Bubble: climate policy in a fire‐sale model of deleveraging∗
Credible implementation of climate change policy, consistent with the 2 °C limit, requires a large proportion of current fossil‐fuel reserves to remain unused. This issue, named the Carbon Bubble, is usually presented as a required asset write‐off, with implications for investors. We embed the Carbon Bubble in a macroeconomic model exhibiting a financial accelerator: if investors are leveraged,...
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Do employers avoid hiring workers from poor neighborhoods? Experimental evidence from the real labor market*
We investigate whether employers avoid hiring workers who live in neighborhoods with low socio‐economic status and/or with long commuting times. In a large‐scale field experiment in the Swedish labor market, we sent more than 4,000 fictitious résumés, with randomly assigned information about the applicants' residential locations, to firms with advertised vacancies. Our findings show that...
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Monetary transmission with income risk*
In periods of distress, observed and perceived income risk tends to rise. Does this heightened income risk affect monetary transmission? This paper first shows that in partial equilibrium, heightened income risk dampens the substitution effect of interest rate changes but amplifies the indirect income effect of wage changes. The effects are sizable in partial equilibrium. An increase in income...
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Wage bargaining and employment revisited: separability and efficiency in collective bargaining*
We analyse the two‐dimensional Nash bargaining solution (NBS) by deploying the standard labour market negotiations model of McDonald and Solow. We show that the two‐dimensional bargaining problem can be decomposed into two one‐dimensional problems, such that the two solutions together replicate the solution of the two‐dimensional problem if the NBS is applied. The axiom of “independence of...
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Kant and Lindahl*
In 1896 and 1919, respectively, Wicksell and Lindahl analyzed the public provision of public goods through parliamentary negotiation. Later, Roemer applied Kant's 1785 imperatives to the private provision of public goods by voluntary contributions. Our focal equilibrium notions are the balanced linear cost‐share equilibrium for the Wicksell–Lindahl approach and the multiplicative Kantian...
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Commitment and discretion in contracts: theory and evidence from retirement plans*
We consider a firm's problem of incentivizing its workforce through relational contracts, when workers effectively face a shorter time horizon due to possible separation shocks. Commitment issues then generate a trade‐off between efficiency and distribution, which affects both performance and profits. Profits under relational contracting can exceed those under formal contracting, despite lower...
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Side effects of labor market policies*
Labor market policies, such as training and sanctions, are commonly used to bring workers back to work. By analogy to medical treatments, exposure to these tools can have side effects. We study the effects on health using individual‐level population registers on labor market outcomes, drug prescriptions, and sickness absence, comparing outcomes before and after exposure to training and sanctions.