Law and Economics of Regulation (Economic Analysis of Law in European Legal Scholarship, 11)

✍ Scribed by Klaus Mathis (editor), Avishalom Tor (editor)

• Publisher: Springer
• Year: 2021
• Tongue: English
• Leaves: 327
• Category: Library

✦ Synopsis

This book explores current issues regarding the regulation of various economic sectors, theoretically and empirically, discussing both neoclassical and behavioural economics approaches to regulation. Regulation has become one of the main determinants of modern economies, and virtually every sector is subject to general laws and regulations as well as specific rules and standards. A traditional argument to justify regulatory interventions is the promotion of public interests. Fixing markets that lack competition, balancing information asymmetries, internalising externalities, mitigating systemic risks, and protecting consumers from irrational behaviour are frequently invoked to complement the invisible hand of the market with the visible hand of the state.However, regulations can lead to unintended consequences, and serve the interests of powerful private interest groups rather than the public interest and social welfare. In addition, new insights from behavioural economics question the traditional regulatory approaches, most prominently in attitudes towards consumers. Furthermore, digitalisation and technological innovation in general present new challenges in terms of both the type of regulation and the regulatory process.Part I of this book discusses various theoretical approaches to the economic analysis of regulations, while Part II looks at specific applications of the law and economics of regulation.

✦ Table of Contents

Preface
About This Book
Contents
Contributors
Part I: Law and Economics of Regulation Theory
Public Services as a Strategy of Regulation
1 Introduction
2 Public Service as a Type of Regulation
2.1 Public Service as a Type of Command and Control Regulation
2.2 The Specificity of Public Service as a Type of Command and Control Regulation, the Existence of Compensation Mechanisms
3 Reconsidering the Efficiency of Public Service as a Type of Regulation
3.1 Inquiring Into the Relative Efficiency of Setting Obligation and Compensating for Them vs Other Modes of Regulation
3.2 Reconsidering the Reach of Public Services as a Regulatory Strategy
4 Conclusion
References
Sectoral Self-Regulation as Viable Tool
1 Introduction
2 From Hard Law to Soft Law
2.1 Overcoming the Hard/Soft Law Dichotomy
2.2 Historical Developments of Theoretical Approaches
2.3 Reconciling Benefits and Risks of Soft Law
2.4 Overlap of Regulatory Models
3 From Self-regulation to Co-regulation
3.1 Broadening Self-regulation
3.2 Increasing Importance of Co-regulation
3.3 Improving Regulatory Quality
4 Distributed Ledger Technology as an Example
4.1 Regulatory Initiatives and Private Standardisation
4.2 Merits and Chances of the Applied Regulatory Approaches
5 Outlook
References
Ethical Blind Spots and Regulatory Traps: On Distorted Regulatory Incentives, Behavioral Ethics and Legal Design
1 Introduction
2 Three Perspectives
2.1 A Behavioral Ethics Approach to Wrongdoing
2.2 Legal Design: Rules v. Standards
2.3 The Incentives of Regulators
3 The Distortion in Regulatory Incentives
3.1 Enforcing Vague Standards
3.2 Enforcing Clear-Cut Rules
4 Possible Solutions and Additional Challenges
4.1 Self-Correction and Displacement
4.2 Goal-Based Incentives
5 Conclusions
References
Law and Economics in Russian Law
1 Development in Soviet Law
2 Early Development in Post-Soviet Law
3 Actual Development (from 2000 on)
4 Theoretical and Practical Problems with Application
5 Conclusion
References
Part II: Specific Applications of Law and Economics of Regulation
Key Lessons for the Design of Consumer Protection Legislation
1 Introduction
2 Consumer Protection Legislation
3 The Problem of Unintended Consequences
3.1 Lending, Credit Regulation, and Price Caps
3.2 Information Disclosures
3.3 Unhealthy Foods and Addictive Substances
3.4 Small Claims Courts
3.5 Cooling-off Periods and the Right to Exit
4 An Alternative Model of Legislation
4.1 Gradual and Moderate Legislative Steps
4.2 Interdisciplinary, Empirical Approach
4.3 Temporary Consumer Protection Laws
4.4 Diffusing and Delegating Legislative Responsibilities
5 Conclusion
References
Regulation of Information About Unfolding Events in Securities Markets: A Behavioral Economics Perspective
1 Introduction
2 The Regulatory Architecture in the United States
2.1 Definition of Materiality
2.2 Voluntary Disclosure
3 The Regulatory Architecture in the European Union
3.1 Definition of Materiality
3.2 Mandatory Disclosure and the Option of Delayed Disclosure
4 A Comparative Economic Analysis of the Different Regimes
5 Insights from Behavioral Law and Economics
5.1 Corporate Decision Makers
5.1.1 Optimism Bias and Overconfidence
5.1.2 Status Quo Bias
5.1.3 Fechner´s Law
5.2 Investors
5.2.1 Conservatism Bias
5.2.2 Overoptimism, the Ostrich Effect, and the Ability to Assess Probabilities
5.2.3 Availability Cascades
5.3 The Impossibility of Forecasting Price Movements
6 Conclusion
References
Data Flows versus Data Protection: Mapping Existing Reconciliation Models in Global Trade Law
1 Introduction: Trade and Privacy Protection in the Data-Driven Economy
2 Legal Frameworks for the Protection of Privacy
2.1 International Rules for the Protection of Privacy
2.2 Transnational Rules for the Protection of Privacy: The OECD and the APEC Frameworks
2.3 National Approaches for Data Protection: The European Union versus the United States
2.3.1 Data Protection in the EU
2.3.2 Data Protection in the US
2.3.3 Bridging the EU-US Differences: From Safe Harbor to the Privacy Shield
3 Privacy under the WTO Framework
4 Developments in Free Trade Agreements
4.1 Overview of Data-Related Rules in FTAs
4.2 Rules on Data Flows and Data Localization
4.3 Rules on Data Protection
5 Pros and Cons of the Different Reconciliation Models
References
The Concept of Regulatory Arbitrage
1 Introduction
2 Conceptual Elements
2.1 Space
2.2 Object
2.3 Price
2.4 Risk
3 Implications
3.1 Dynamics
3.2 Strategies
3.3 Evaluation
4 Conclusion: Regulatory Arbitrage and its Paradox
References
(Un)intended Consequences of Macroprudential Regulation
1 Introduction
2 Behavioral Analysis of Mortgage Decision-Making
3 Anchoring and Adjustment
4 The Israeli Housing Market
5 The Dataset
5.1 Data Construction: Loan-to-Value Ratio (LTV)
5.2 Data Construction: Adjusted Rate Mortgages (ARM) and Fixed Rate Mortgages (FRM)
5.3 Data Construction: Time to Maturity
5.4 Data Construction: Payment-to-Income Ratio (PTI)
5.5 Control Variables
6 Research Design
7 Results
8 Conclusions
References
Precautionary Antitrust: A Precautionary Tale in European Competition Policy
1 Introduction: The Precautionary Principle in a Nutshell
2 Precautionary Antitrust in Europe
2.1 Two Explicit Illustrations of Precautionary Antitrust
2.1.1 Ex Ante Antitrust Enforcement: Interim Measures Resurrected
2.1.2 Shifted Burden of Proof: Antitrust Enforcement Without Evidence
2.2 Two Implicit Illustrations of Precautionary Antitrust
2.2.1 Choice over Welfare: The Precautionary Theory of No Harm
2.2.2 Regulation Over Disruption: The Precautionary Approach to Digital Ecosystems
3 Conclusion
References
Regulation and Deregulation of Financial Markets from the Perspective of Law and Economics
1 Introduction
2 The Rise and Fall of the Regulatory State on Financial Markets
3 Judicial Governance in Case of Market Failure, Radical Change and Uncertainty
4 Judicial Governance and the Polish Toxic Options Case
5 The Court as an Impartial Spectator: Towards a Normative Model of Judicial Governance
6 Conclusion
References
Privatizing Income Security for Disabled Workers: Unintended Consequences and Labour Market Imbalances
1 Introduction
2 Privatizing Income Security: Classification and Meaning from a Law and Economics Perspective
3 The Public Scheme of Income Security: Benefits and Shortcomings in General
4 Privatizing Income Security for Disabled Workers: The Case of the Netherlands
5 The Privatization Policy in the Netherlands: Advantages and Disadvantages
6 Who Should Bear the Risk That the Work Contracted for Is Not Performed? No Work, No Pay´ orNo Work, Yet Pay´?
6.1 Risk Allocation for Work Not Performed: An Economic Analysis
6.2 Risk Allocation Under the First Dutch Law of the Employment Contract (1907)
6.3 An Expansion of the Scope of `No Work, Yet Pay´ and the Attractiveness of Permanent Employment
7 Conclusions
References
Regulating Innovation
1 Introduction
2 The Rationale Behind the Regulation of Innovation
2.1 Overview
2.2 Market Failure
2.2.1 Introduction
2.2.2 Externalities
2.2.3 Monopolies
2.2.4 Information Deficits
2.2.5 Other Rationales
2.3 Legitimacy
2.3.1 Introduction
2.3.2 Democratic Legitimacy
2.3.3 Legitimacy Through Standardized Processes
3 Legal Options and Limits
3.1 Introduction
3.2 Functions of the Law
3.2.1 Overview
3.2.2 Enabling Function
3.2.3 Stimulating Function
3.2.4 Enforcement Function
3.2.5 Limiting Function
3.2.6 Blocking Function
3.2.7 Conflict Resolution Function
3.3 Legal Instruments
3.3.1 Introduction
3.3.2 Enabling Instruments
3.3.3 Stimulating Instruments
3.3.4 Enforcement Instruments
3.3.5 Limiting and Blocking Instruments
3.3.6 Conflict Resolution Instruments
3.4 Legal Constraints
4 Common Problems
4.1 Lack of Knowledge
4.2 Unintended Consequences
4.3 Inefficiency
4.4 Legal Uncertainty
4.5 Regulatory Lock-In
5 Best Practices: An Attempt
5.1 Introduction
5.2 Proper Focus on the Innovation Process
5.3 Analysis of the Existing Legal Framework
5.4 Technological Openness
5.5 Technological Neutrality
5.6 Flexibility
5.7 Deregulation Versus Regulation
5.8 Protection of Existing Interests
6 Conclusion
References
Matching Commitments: A New Approach to Regulation of the Commons
1 Introduction
2 Why the Current Approach Is Not Working
3 How Environmental Matching Commitments May Address Social Dilemma of Climate Change
4 Conclusion
References
Index