The author systematically examines one of the important issues of information — establishing the market price. He introduces the concept of «search» — where a buyer wanting to get a better price, is forced to question sellers. The article deals with various aspects of finding the necessary information.

Economics of Information

My friend Pradeep Mehta has been a pioneer in the field of consumer rights and protection, a sound and balanced voice on trade policy and matters relating to competition law and regulatory regimes. He is also an institution builder and has created a formidable one in CUts and is in the process of repeating the exercise in the newly established CUts institute for Regulation & Competition (CiRC). His many contributions to the policy discourse have one common characteristic—they deal quite directly with the interface between law and economics. Hence, this contribution to commemorate his 65th birthday focuses on some conceptual issues relating to this link.

Law and Economics

Fascinating and provocative, Ariely's The Truth About Dishonesty is an insightful and brilliantly researched take on cheating, deception and willpower. Internationally bestselling author Ariely pulls no punches when it comes to home truths. Previous titles PREDICTABLY IRRATIONAL and THE UPSIDE OF IRRATIONALITY have becomes classics in their field, revealing unexpected and astonishing traits that run through modern humankind. Now acclaimed behavioural economist Dan Ariely delves deeper into the dark and murky recesses of contemporary psychology, daring to ask the big questions: What makes us cheat? How and why do we rationalise deception of ourselves and other people, and make ourselves 'wishfully blind' to the blindingly obvious? What affects our infuriatingly intangible willpower and how can we 'catch' the cheating bug from other bad apples? If you've ever wondered how a whole company can turn a blind eye to evident misdemeanours within their ranks, whether people are born dishonest and whether you can really be successful by being totally, brutally honest, then Dan has the answers, and many more.

The (honest) truth about dishonesty : how we lie to everyone--especially ourselves

The primary goal of this article is to bring empirical evidence to bear on the largely theoretical law and economics debate about insider trading. The article first summarizes various agency cost and market theories of insider trading propounded over the course of this perennial debate. The article then proposes three testable hypotheses regarding the relationship between insider trading laws and several measures of stock market performance. Using international data, the paper finds that more stringent insider trading laws are generally associated with more dispersed equity ownership, greater stock price accuracy and greater stock market liquidity. These results suggest the appropriate locus of academic and policy inquiries about the efficiency implications of insider trading.

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Insider Trading Laws and Stock Markets Around the World (Former title: Do Insider Trading Laws Matter? Some Preliminary Comparative Evidence)

Complying with Europe - EU Harmonisation and Soft Law in the Member States

This Article suggests that in addressing problems of environmental degradation in developing countries, policymakers and scholars have neglected the important question of regulatory design. While a country’s long-term improvement in environmental conditions almost certainly depends on improving its economic position, in the short to medium term, the quality and type of environmental regulation can play a significant role in determining regulatory effectiveness. Much of the research into the failures of environmental regulation has focused on implementation and enforcement problems, but we argue that one of the primary reasons for such regulatory failure is that policymakers have not paid enough attention to designing regulation appropriate to the legal, economic, political, and social situations in which they must function. After providing background on the historical approach to environmental regulation in developing countries and offering our thoughts on why such efforts have not succeeded, we consider what lessons we can draw from the fields of law and economics and law and development in attempting to formulate a new, more particularized approach. We conclude by recommending a set of concrete indicators for how best to construct effective environmental regulation in developing countries.

Bucking the Kuznets Curve: Designing Effective Environmental Regulation in Developing Countries

The interplay between public and private enforcement in European private law: law and economics perspective

The European legislator has adopted a Directive on alternative dispute resolution (ADR) which sets out minimum requirements for ADR entities throughout the European Union (EU). From a law and economics point of view, law enforcement is crucial to induce compliance. ADR can be viewed as a means of strengthening consumer law enforcement, leading to compliance at lower costs. Certain conditions, however, have to be fulfilled to exploit the benefits of an ADR mechanism successfully. The goal of this paper is to look into these conditions more specifically and critically assess the ADR Directive in light of these requirements. It is divided into a theoretical section and the analysis of the EU Directive. The main concern results to be the fact that ADR boards with very strong links to traders are allowed under the Directive. When looking at the composition of the bodies, a complicated compromise was enacted that is able to impede the working of such ADR bodies. Given that the Directive aims at minimum harmonization, Member States have the opportunity to provide for a better design in their respective countries responding to this main concern and other critical points identified in the paper.

Is ADR the Superior Mechanism for Consumer Contractual Disputes?—an Assessment of the Incentivizing Effects of the ADR Directive

The interplay of various legal systems in the European Union (EU) has long triggered a debate on the tension between uniformity and diversity of Member States’ (MS) laws. This debate takes place among European legal scholars and is also paralleled by economic scholars, e.g. in the ambit of the ‘theory of federalism’. This paper takes an innovative perspective on the discrepancy between ‘centralized’ and ‘decentralized’ law-making in the EU by assessing it with the help of the rules versus standards debate. When should the EU legislator grant the national legislator leeway in the formulation of new laws and when should all be fixed ex ante at European level? The literature on the ‘optimal shape of legal norms’ shall be revisited in the light of law-making in the EU, centrally dealing with the question how much discretion shall be given to the national legislator; and under which circumstances. This paper enhances the established decisive factors for the choice of a rule or a standard in a national setting (complexity, volatility, judges’ specialization and frequency of application) by two new crucial factors (switching costs and the benefit of uniformity in terms of information costs) in order to assess law-making policies at EU level.

Franziska Weber

Papers

Bucking the Kuznets Curve: Designing Effective Environmental Regulation in Developing Countries

The interplay between public and private enforcement in European private law: law and economics perspective

Bucking the Kuznets Curve: Designing Effective Environmental Regulation in Developing Countries

Is ADR the Superior Mechanism for Consumer Contractual Disputes?—an Assessment of the Incentivizing Effects of the ADR Directive

European Integration Assessed in the Light of the ‘Rules vs. Standards Debate’