This paper discusses the Fedon case law of the European Court of Justice (ECJ), which involved a claim for compensation by Fedon (an Italian producer of eye glass cases) from the EU for the imposition of WTO-authorized retaliatory trade barriers by the United States following the failure by the...

An arbiter can decide a case on the basis of his priors or he can ask for further evidence from the two parties to the conflict. The parties may misrepresent evidence in their favour at a cost. The arbiter is concerned about accuracy and low procedural costs. When both parties testify, each of...

First we show that for wealth-constrained agents who may commit an act twice, the optimal sanctions are the offender's entire wealth for the first crime, and zero for the second. Then we ask whether this decreasing sanction scheme is subgame perfect (time consistent), i.e., does a rent-seeking...

An arbiter can decide a case on the basis of his priors, or the two parties to the conflict may present further evidence. The parties may misrepresent evidence in their favor at a cost. At equilibrium the two parties never testify together. When the evidence is much in favor of one party, this...

An arbiter can decide a case on the basis of his priors or he can ask for further evidence from the two parties to the conflict. The parties may misrepresent evidence in their favour at a cost. The arbiter is concerned about accuracy and low procedural costs. When both parties testify, each of...

Two firms produce a product with a horizontal and a vertical characteristic. We call the vertical characteristic quality. The difference in the quality levels determines how the firms share the market. Firms know the quality levels, consumers do not. Under non-comparative advertising a firm may...

Agents may commit a crime twice. The act is inefficient so that the agents are to be deterred. Even if an agent is law abiding, they may still commit the act accidentally. The agents are wealth constrained. The government seeks to minimize the probability of apprehension. If the benefit from the...

We study the impact of the announcement of enforcement of financial and securities regulation by the UK’s Financial Services Authority and London Stock Exchange on the market price of penalized firms. Since these agencies do not announce enforcement until a penalty is levied, their actions...

This paper presents a political economy model where there is mutual feedback between investor protection and stock market development. Better investor protection induces companies to issue more equity and thereby leads to a broader stock market. In turn, equity issuance expands the shareholder...

We analyze how the law and its enforcement affect equity market equilibrium. Improvements in the legal system, while invariably associated with broader equity markets, have different effects on equity returns depending on the institutional change considered and on the degree of international...