Fall 2018 Workshops
September 24, 2018 (Monday) 4:20 - 6:10 PM
Michael Frakes
Professor of Law, Duke Law School
Location
Case Lounge (Jerome Greene Hall room 701).
Paper
Defensive Medicine: Evidence from Military Immunity
Abstract
We estimate the extent of defensive medicine by physicians, embracing the no-liability counterfactual made possible by the structure of liability rules in the Military Heath System. Active-duty patients seeking treatment from military facilities cannot sue for harms resulting from negligent care, while protections are provided to dependents treated at military facilities and to all patients—active-duty or not—that receive care from civilian facilities. Drawing on this variation and exploiting exogenous shocks to care location choices stemming from base-hospital closures, we find suggestive evidence that liability immunity reduces inpatient spending by 5% with no measurable negative effect on patient outcomes.
October 8, 2018 (Monday) 4:20 - 6:10 PM
Jonathan Klick
Professor of Law, Penn Law School
Location
Case Lounge (Jerome Greene Hall room 701).
Paper
The Ineffectiveness of ‘Observe and Report’ Patrols on Crime
Abstract
The deterrence effect of police on crime has been well established using modern quasi-experimental micro‐econometric methods. Although the results from these studies uniformly suggest that police spending is cost justified, it is worth exploring whether police‐like alternatives can deter crime even more cheaply. Unarmed private security personnel that conspicuously patrol a neighborhood have the potential to cheaply leverage the ability of police to be informed of crimes while also providing direct deterrence on their own. In the Fall of 2013, a neighborhood in Oakland, CA mounted a campaign to provide observe and report security patrols to augment the publicly provided policing in the area. While the initial effect of the additional security was a drop in crime, it quickly evaporated, calling into question the value of security forces that do not have the ability to apprehend criminals directly.
October 22, 2018 (Monday) 4:20 - 6:10 PM
Tess Wilkinson-Ryan
Professor of Law and Psychology & Deputy Dean, Penn Law School
Location
Case Lounge (Jerome Greene Hall room 701).
Paper
The Sucker Norm
(Decision-Making Under Fear of Being Suckered)
Introduction
It sucks to be a sucker. In order for one person to be a sucker, someone else must behave badly: suckers are the victims of cheaters, scoundrels, and other selfish agents. Nonetheless, as a victim, a sucker gets as much scorn as pity. This is partly because suckers are somewhat to blame, inasmuch as they were naïve or stupid enough to agree to a bad deal. Therefore, feeling suckered is unusually aversive, compounding a material loss with blame from oneself and others.
In this paper, we will review the theoretical and empirical scholarship bearing on the notion of being a sucker. We will ultimately suggest that there is a social norm against being a sucker, and that a number of experimental results from economics and psychology could be reconsidered in light of this “sucker norm.” First, we establish, at least for the purposes of this analysis, the basic parameters of what it means to be a sucker. Second, we consider when the fear of being a sucker is helpful or normative, and when it seems to be misapplied to cases in which it might actually lead to sub-optimal outcomes. We suggest that the fear of being a sucker is especially potent because it defies a social norm. Third, we review research on situations in which people might try (and succeed) to avoid invoking the sucker norm so that they can accept a disadvantageously inequitable allocation when there is no chance for a higher payoff. We discuss how certain forms of retaliation and punishment might be explained as ways to alleviate the uncomfortable feeling of being a sucker. Finally, we offer some preliminary data on the effect of the sucker norm on behavior in experimental games.
November 5, 2018 (Monday) 4:20 - 6:10 PM
A. Mitchell Polinsky
Josephine Scott Crocker Professor of Law & Economics, Stanford Law School
Director, John M. Olin Program in Law and Economics, Stanford Law School
Professor (by courtesy) of Economics
Senior Fellow (by courtesy), Stanford Institute for Economic Policy Research
Location
Case Lounge (Jerome Greene Hall room 701).
Paper
Deterrence and the Optimal Use of Prison, Parole, and Probation
Abstract
In this article we derive the mix of criminal sanctions—choosing among prison, parole, and probation—that achieves any target level of deterrence at least cost. We assume that prison has higher disutility and higher cost per unit time than parole and probation and that potential offenders discount the future disutility of sanctions at a higher rate than the state discounts the future costs of sanctions. Our primary insight is that there is a “front-loading advantage” of imprisonment due to these differential discount rates. This advantage implies that (a) whenever a sentence includes both a prison term and a parole term, the prison term should be imposed first; and (b) it may be optimal to employ a prison term even if prison has higher cost per unit of disutility than parole and probation and even if prison is not needed to achieve the target level of deterrence.
November 19, 2018 (Monday) 4:20 - 6:10 PM
Adriana Robertson
Assistant Professor of Law, University of Toronto: Faculty of Law
Location
Case Lounge (Jerome Greene Hall room 701).
Paper
Passive In Name Only: Delegated Management and "Index" Investing
Abstract
This paper provides the first detailed empirical analysis of the landscape of US stock market indices. These indices are used both as benchmarks for US mutual funds and in the creation of “passive” index funds. I collect novel data that allows me to explore both of these functions. First, I hand collect detailed information about the universe of indices used as benchmarks for US mutual funds. I document substantial diversity across indices and find that the overwhelming majority of indices in my sample are used as a primary benchmark for only a single fund. I then turn to ETFs, a subset of the mutual fund industry, and hand collect detailed information about the index that each US ETF seeks to track. I find that a substantial fraction of these funds track indices that they, or their affiliates, create. Even controlling for other factors, I find that these funds have, on average, higher expense ratios. My findings shed light on a previously understudied part of the financial markets and have substantial implications for investor protection. ion is unlikely to hold.
December 3, 2018 (Monday) 4:20 - 6:10 PM
Jacob Goldin
Assistant Professor of Law, Stanford Law School
Location
Case Lounge (Jerome Greene Hall room 701).
Paper
Sharp Lines and Sliding Scales in Tax Law
(paper to be distributed to students & faculty)
Summary
The law is full of sharp lines, where small changes in one’s circumstances lead to significant changes in legal treatment. In many cases, a sharp line can be smoothed out by replacing it with a sliding scale. Under a sliding scale, small changes in one’s circumstances lead to small changes in legal treatment. In this paper, we study the policy choice between sharp lines and sliding scales in the tax law, focusing particularly on concerns related
to efficiency, complexity, and administration. Sliding scales are common for tax provisions that depend on income, but relatively uncommon for provisions that depend on non-income factors. We argue that sliding scales merit more consideration than they typically receive, and set out several principles for choosing between the two designs.