The effect of type-1 error on deterrence

Lando, Henrik; Mungan, Murat C.

doi:10.1016/j.irle.2017.08.001

Cited by 32 publications

(13 citation statements)

References 15 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…In summary, the court may err in both directions, forcing compensation payment when it should not, as well as not ruling in favor of compensation payments even though it should. The latter feature shares similarities with Lando and Mungan () who discuss the role of type‐1 and type‐2 errors for deterrence of bad acts in a theory of legal procedure.…”

Section: Court Challenges and Regulatory Chillsupporting

confidence: 58%

“…For example, Landeo, Nikitin, and Baker () examine the effects of small court errors in the size of the award on the likelihood of filing and trial, as well as the deterrence effect of punitive damages. Lando and Mungan () evaluate the effects of type‐1 errors by courts (wrongful conviction) and type‐2 errors (wrongful acquittal) and show that type‐1 errors can lead to over‐deterrence and the chilling of socially benign acts. In the present paper I go beyond court errors by combining them with a hold‐up problem, which is common in the context of foreign direct investment.…”

Section: Related Literaturementioning

confidence: 99%

See 1 more Smart Citation

Regulatory chill and the effect of investor state dispute settlements

Janeba

2019

Rev International Economics

View full text Add to dashboard Cite

Legal conflicts between multinational firms and host governments are often decided by international arbitration panels-as opposed to courts in the host country-because of provisions in international investment agreements known as investor state dispute settlements (ISDS). Critics fear that investor protection such as ISDS make governments reluctant to adopt appropriate policies (regulatory chill). In this paper I develop a theoretical model in which the outcome of cases brought to court is uncertain owing to the vagueness of the law protecting investors and a court's inability to correctly identify a state of nature with certainty. I show that from a world welfare perspective there is no underregulation, only an overregulation problem. However, from a national welfare perspective "frivolous" lawsuits may lead to regulatory chill. I also identify conditions under which ISDS can lead to a Pareto improvement that involves simultaneous changes in compensation payments and protection rights relative to a national court.

show abstract

Section: Court Challenges and Regulatory Chillsupporting

confidence: 58%

Section: Related Literaturementioning

confidence: 99%

Regulatory chill and the effect of investor state dispute settlements

Janeba

2019

Rev International Economics

View full text Add to dashboard Cite

show abstract

“…For example, Landeo et al (2006) examine the eects of small court errors in the size of the award on the likelihood of ling and trial, as well as the deterrence eect of punitive damages. Lando and Mungan (2018) evaluate the eects of type-1 errors by courts (wrongful conviction) and type-2 errors (wrongful acquittal) and show that type-1 errors can lead to over-deterrence and the chilling of socially benign acts. In the present paper I ago beyond court errors by combining it with a hold up problem, which is common in the context of foreign direct investment.…”

Section: Related Literaturementioning

confidence: 99%

Regulatory Chill and the Effect of Investor State Dispute Settlements

Janeba

2019

SSRN Journal

View full text Add to dashboard Cite

“…Punishing such an individual is socially wasteful, and, therefore, in the perfect information case, it would be optimal to refrain from punishing him. 10 Thus, the answer to this question relies on the court's ability to distinguish between people who have valid justi…cations and excuses and those who do not. Structured a¢ rmative defenses typically require proof of some concrete element which is, statistically, a good proxy for the person's likelihood of being unresponsiveness to enforcement schemes (e.g.…”

Section: Introductionmentioning

confidence: 99%

“…See, e.g.,Malik (1990),Langlais (2008), and Sanchirico (2010) 9. The exact impact of these types of type-1 errors on deterrence is unclear (seeLando and Mungan (2018)). The analysis presented here relies on type-1 errors reducing deterrence only to some degree, and is not a¤ected by type-1 errors having a smaller e¤ect on deterrence than type-2 errors due to reasons explored inLando and Mungan (2018).…”

mentioning

confidence: 99%