Legal Uncertainty A Selective Deterrent

Lang, Matthias

doi:10.2139/ssrn.2526128

Cited by 1 publication

(2 citation statements)

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“…in the context of Competition Law or the law for sectoral regulation) for which in practice authorities' objective is to maximize consumer welfare. While Kwak (2010), Lang (2012) and Strausz (2011) assume a consumer surplus substantive standard they do not recognize the different information structures discussed in this paper as sources of legal uncertainty and their analysis cannot be used to replicate our results. Katsoulacos and Ulph (2015) also assume a consumer surplus substantive standard.…”

Section: Accepted Manuscriptmentioning

confidence: 84%

“…For a review of contributions to these literature strands see alsoKatsoulacos and Ulph (K&U, 2015). 5 For example, the papers (mentioned below in the text) in the Law and Economics literature and the more recent contributions in the enforcement of regulatory law literature including:Schinkel and Tuinstra, (2006),Kwak (2010),Lang (2012), andStrausz (2011).6 We neglect here the literature on taxpayer uncertainty in the enforcement of tax laws going back in 1980s, as even less directly related to this paper than the literature we cite above.…”

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confidence: 99%

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Regulatory decision errors, Legal Uncertainty and welfare: A general treatment

Katsoulacos

Ulph

2017

International Journal of Industrial Organization

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Highlights Legal Uncertainty relates to information structures  Legal Uncertainty is not the same as decision errors  Decision errors neither necessary nor sufficient for legal uncertainty  Welfare strictly decreasing in extent of decision errors  Welfare can be higher with legal uncertainty than with no legal uncertainty AbstractWe provide a general treatment of the implications for welfare of various sources of legal uncertainty facing agents about the decisions made by a regulatory authority. We distinguish the legal uncertainty from the decision errors made by the authority. While an increase in decision errors will always reduce welfare, for any given level of decision errors, information structures involving more legal uncertainty can improve welfare. This holds always when sanctions are set at their optimal level. This transforms radically one's perception about the "costs" of legal uncertainty. We also provide general proofs for two results, previously established under restrictive assumptions.JEL: K4, L4, K21, K23 Verge. We are also most grateful to two anonymous referees for their very useful comments. Of course, all errors and ambiguities remain solely our responsibility.

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Section: Accepted Manuscriptmentioning

confidence: 84%