Regulating Contingency Fees: A Consumer Welfare Perspective

2017 ◽  
Author(s):  
Noel Semple
Keyword(s):  
Consumer Welfare ◽  
Contingency Fees

The Micro and Macro of Managerial Beliefs

2020 ◽  
Author(s):  
Jose Maria Barrero
Keyword(s):  
Rational Expectations ◽  
Asset Price ◽  
Heterogeneous Firms ◽  
Adjustment Costs ◽  
Consumer Welfare ◽  
Sales Growth ◽  
Firm Level ◽  
Managerial Decisions ◽  
Managerial Beliefs ◽  
Growth Volatility

This paper studies how biases in managerial beliefs affect managerial decisions, firm performance, and the macroeconomy. Using a new survey of US managers I establish three facts. (1) Managers are not over-optimistic: sales growth forecasts on average do not exceed realizations. (2) Managers are overprecise (overconfident): they underestimate future sales growth volatility. (3) Managers overextrapolate: their forecasts are too optimistic after positive shocks and too pessimistic after negative shocks. To quantify the implications of these facts, I estimate a dynamic general equilibrium model in which managers of heterogeneous firms use a subjective beliefs process to make forward-looking hiring decisions. Overprecision and overextrapolation lead managers to overreact to firm-level shocks and overspend on adjustment costs, destroying 2.1 percent of the typical firm’s value. Pervasive overreaction leads to excess volatility and reallocation, lowering consumer welfare by 0.5 to 2.3 percent relative to the rational expectations equilibrium. These findings suggest overreaction may amplify asset-price and business cycle fluctuations.

Mergers, Entry, and Consumer Welfare

2020 ◽  
Author(s):  
Peter Caradonna ◽  
Nathan Miller ◽  
Gloria Sheu
Keyword(s):  
Consumer Welfare

The Consumer Welfare Cost of Cable 'Build-out' Rules

2005 ◽  
Author(s):  
George S. Ford ◽  
Thomas M. Koutsky ◽  
Lawrence J. Spiwak
Keyword(s):  
Consumer Welfare ◽  
Welfare Cost

scholarly journals Optimal Incentives for Patent Challenges in the Pharmaceutical Industry

2021 ◽  
Author(s):  
Enrico Böhme ◽  
Jonas Severin Frank ◽  
Wolfgang Kerber
Keyword(s):  
Pharmaceutical Industry ◽  
Market Entry ◽  
Consumer Welfare ◽  
Antitrust Law ◽  
Patent Litigation ◽  
Weak Patents ◽  
Optimal Incentives

AbstractIn this paper, we show that a provision in antitrust law to allow patent settlements with a later market entry of generics than the date that is expected under patent litigation can increase consumer welfare. We introduce a policy parameter for determining the optimal additional period for collusion that would incentivize the challenging of weak patents and maximize consumer welfare. While in principle, later market entry leads to higher profits and lower consumer welfare, this can be more than compensated for if more patents are challenged as a result.

Interrelationship Among Competition, Diversification and Liquidity Creation: Evidence from Indian Banks

2021 ◽  
Vol 15 (2) ◽  
pp. 183-204
Author(s):  
Pankaj Sinha ◽  
Naina Grover
Keyword(s):  
Inverse Relationship ◽  
Consumer Welfare ◽  
Adverse Impact ◽  
Public And Private ◽  
Jel Codes ◽  
Trade Off ◽  
Private Banks ◽  
Indian Banks ◽  
The Impact

This study analyses the impact of competition on liquidity creation by banks and investigates the dynamics between diversification, liquidity creation and competition for banks operating in India during the period from 2005 to 2018. Using the broad and narrow measures of liquidity creation, an inverse relationship is determined between liquidity creation and competition. The study also indicates a trade-off between pro-competitive policies to improve consumer welfare and the liquidity-destroying effects of competition, and it highlights how diversification affects liquidity creation. Highly diversified banks in India create less liquidity compared with less-diversified banks, both public and private. The liquidity-destroying effects of competition is intensified among highly diversified private banks, which suggest that diversification has not moderated the adverse impact of competition. JEL Codes: G01, G18, G21, G28

scholarly journals A Law and Economics Perspective on the EU Directive on Representative Actions

2021 ◽  
Author(s):  
L. Visscher ◽  
M. Faure
Keyword(s):  
Law And Economics ◽  
Class Action ◽  
Third Party ◽  
Collective Actions ◽  
Member States ◽  
Eu Directive ◽  
Opt Out ◽  
Contingency Fees ◽  
Party Funding ◽  
The Eu

AbstractThis article provides an analysis of the Directive on representative actions for the protection of the collective interests of consumers of 25 November 2020. The Directive enables qualified entities to bring representative actions on behalf of the consumer. The article uses a Law and Economics approach to stress the advantages of collective actions as a tool to remedy rational apathy and free-rider behaviour. The article therefore in principle welcomes the fact that this Directive will lead to all Member States having some form of collective redress. However, it is rather difficult to fit this Directive into the economic criteria for centralization as there is no obvious danger of cross-border externalities or a race-to-the-bottom. The article is critical of the fact that the Directive only provides for a representative action and does not mention the alternative of a group action (sometimes referred to as a class action). This is especially problematic if there are very few qualified entities that could bring the representative action. Furthermore, the fact that Member States may choose an opt-in procedure instead of an opt-out procedure is critically evaluated. The most problematic aspect of the Directive is the funding of the representative action. Punitive damages and contingency fees are rejected, and the possibility of third-party funding is restricted. It is therefore to be feared that this Directive, notwithstanding the good intentions, may not lead to much application in practice, since the question of how the representative action is to be financed is not resolved in any satisfactory manner.

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