Putting a price on drugs: An economic sociological study of price formation in illegal drug markets

Prices in illegal drug markets are difficult to predict. Based on qualitative interviews with 68 incarcerated drug dealers in Norway, we explore dealers’ perspectives on fair prices and the processes that influence their pricing decisions. Synthesized through economic sociology, we draw on perspectives from traditions as different as behavioral economics and cultural analysis to demonstrate how participants in illicit drug distribution base their pricing decisions on institutional context, social networks, and drug market cultures. We find that dealers take institutional constraints into consideration and search for niches with high earnings and low risks. The use of transactions embedded in social networks promotes a trusting form of governance, which enables strategic network management and expedient distribution but also uncompetitive pricing. Finally, dealers’ pricing decisions are embedded in three different cultures narratives: business, friendship, and street cultural stories, with widely varying implications for prices. Our findings demonstrate how an economic sociology of illicit drug distribution can extend insights from behavioral economics and cultural studies into a coherent criminology of illegal drug markets.     

Excessive Prices: Using Economics to Define Administrable Legal Rules

European competition laws condemn as ‘exploitative abuses’the pricing policies of dominant firms that may result in adirect loss of consumer welfare. Article 82(a) of the EC Treaty,for example, expressly states that imposing ‘unfair’prices on consumers by dominant suppliers constitutes an abuse.Several firms have been found to abuse their dominant positionsby charging excessive prices in cases brought by the EuropeanCommission and the competition authorities of several MemberStates. Those cases show that the assessment of excessive pricingis subject to substantial conceptual and practical difficulties,and that any policy that seeks to detect and prohibit excessiveprices is likely to yield incorrect predictions in numerousinstances. In this paper, we evaluate the pros and cons of alternativelegal standards towards excessive pricing by explicitly consideringthe likelihood of false convictions/acquittals and the costsassociated with those errors. We find that the legal standardthat maximizes long-term consumer welfare, given the informationtypically available to regulators, would involve no ex postintervention on the pricing decisions of dominant firms. A possibleexception to this general rule is discussed.     

Justice by Other Means: Venue Sorting in Parole Revocation

We consider the factors that shape venue sorting, the process by which a legal case can be handled through different organizational arrangements with distinct procedures, institutional cultures, and sanctioning constraints. The empirical area for our investigation of venue sorting is California's parole revocation system, in which parolees accused of new crimes can be returned to prison by either criminal courts or the parole board. We find that seriousness of the alleged offense partially predicts the venue through which parolees are sanctioned. However, venue sorting is further explained by decision makers' perceptions of parolee threat, as well as concerns about organizational efficiency and legitimacy. We conclude by discussing how these findings may relate to the general phenomenon of venue sorting across a range of legal situations.     

中国紧急状态法的立法状况及特征

本文侧重对我国目前紧急状态法的立法现状、内容和特征进行了比较全面地分析 ,并在结合国外法治国家紧急状态法律制度建设的经验基础之上 ,提出要统一我国的紧急状态法律制度 ,特别是应当制定统一的紧急状态法来代替目前分散立法的状况 ,此外 ,还应当建立统一的应急机构来保证政府在紧急状态时期能够依法行使行政紧急权力 ,防止公民的宪法和法律权利因为实施紧急状态而受到政府紧急权力不必要的侵犯。     

Harmonization of private law on a global level

The Vienna Sales Convention (1980) follows in large measure the American Uniform Commercial Code: Article 2 on Sales. Is this to imply that the Contracting States to the Vienna Sales Convention really prefer American sales law? This paper answers this question in the negative, and argues instead that the United States’ economic leverage with other countries is the key factor influencing developments pertaining to private law on a global level.We explain why it may be useful to harmonize rules of private law on a global level and which rules should be chosen for a uniform law. We show that the choice between two legal arrangements may lead to a coordination problem. Next we argue that the coordination problem is solved in favor of the jurisdiction whose economy is less dependent upon the economies of other jurisdictions than the other way around. We use our model to discuss the harmonization of sales law on a global level in the twentieth century.     

Physician self referral arrangements: legitimate business or unethical "entrepreneurialism"

An emerging legal and ethical controversy in the health care industry centers on physician investment in health care facilities to which they make patient referrals. This Article analyzes the policy debate surrounding these physician self referral arrangements as well as the various responses to such arrangements. The Article asserts that an effective legal or ethical response to self referral arrangements must acknowledge and balance both the possible pro-competitive effects of such arrangements and the inherent potential for abuses in this type of business practice. From this perspective, the most effective form of regulation consists of extensive structural guidelines which focus on the physician's referral behavior and limit restrictions on investment procedures. Such an approach would minimize referral abuses and conflict of interest concerns but promote business and competitive freedom.     

商业银行的公共性理论——兼论商业银行收费法律问题

长期以来,人们大多只看到了商业银行的商业性,其公共性往往被忽略。其实,商业银行也具有一定的公共性。这来源于商业银行的特殊性,商业银行是一个受到特殊保护的行业,商业银行具有特许权价值,这是一种法律特权。由于我国商业银行受到的保护比较多,商业银行准入比较困难,其特许权价值较大,再加之我国的金融发展水平不高,银行管理水平和能力不高,弱势群体数量庞大,承受能力有限,因此,我国商业银行提供的免费服务应该多些,而不能完全照搬发达国家和地区商业银行的定价机制。商业银行完全定价权的获得则取决于其市场准入的开放程度和特许权价值的大小。     

Are bar associations anticompetitive? An empirical analysis of recommended prices for legal services in Spain

The European Commission Report on Competition in Professional Services found that recommended prices by professional bodies have a significant negative effect on competition since they may facilitate the coordination of prices between service providers and/or mislead consumers about reasonable price levels. Professional associations argue, first, that a fee schedule may help their members to properly calculate the cost of services avoiding excessive charges and reducing consumers’ searching costs and, second, that recommended prices are very useful for cost appraisal if a litigant is condemned to pay the legal expenses of the opposing party. Thus, recommended fee schedules could be justified to some extent if they represented the cost of providing the services. We test this hypothesis using cross-section data on a subset of recommended prices by 83 Spanish bar associations and cost data on their territorial jurisdictions. Our empirical results indicate that prices recommended by bar associations are unrelated to the cost of legal services. Therefore, we conclude that fee schedules are not playing the role of providing useful cost information to practitioners and therefore this efficiency justification is weak.     

Transnational constitutionalism – conflicts-law constitutionalism – economic constitutionalism: the exemplary case of the European Union

Transnational constitutionalism is both a sociological given and a legal challenge. We observe the emergence of ever more legally framed transnational arrangements with ever more power and impact. Do such arrangements deserve to be called legitimate rule in Habermasian terms? Is it at all conceivable that the proprium of law can be defended against the rise of its informal competitors? This article opts for a third way that listens to neither the siren songs on law beyond the state nor to the defences of nation-state constitutionalism as the monopolist of legitimate rule. The proposed alternative suggests that transnational legal ordering of the European Union should build on its reconceptualization as a ‘three-dimensional conflicts law’ with a democracy-enhancing potential. This reconceptualization operationalizes the ‘united in diversity’ motto of the Draft Constitutional Treaty of 2004, preserves the essential accomplishments of Europe's constitutional democracies, provides for co-operative problem solving of transnational regulatory tasks, and retains supervisory powers over national and transnational arrangements of private governance.     

Migration and the household: Urban living arrangements in late 19th- to early 20th-century Russia

Examining population census data for the late 19th and early 20th century, this article examines the impact of rural–urban migration during the first wave of Russia's industrialization on urban living arrangements. The author finds effects that echo the experience of other industrializing nations, notably the proliferation of board and lodging arrangements, and phenomena that are more peculiar to the Russian situation. Notably, the system of landholding and associated legal and fiscal constraints complicated migrants' separation from the village and put a premium on cyclical and return migration rather than outright urbanization. These conditions were conducive to the formation of collective non-family households of labour migrants, artely, which were an important mechanism for cutting living expenses and increasing the share of earnings remitted to the village and the family household back home.     

Old master paintings,export veto and price formation: an empirical study

In this paper, we focus on the institutional setting where Old Masters’Paintings (OMP) markets transactions are carried. We develop a preliminary attempt to embody legal provisions in econometric, hedonic pricing models. We consider a particular regulation applicable only in Italy, the “export veto” for art objects that are particularly relevant for the national cultural patrimony. We proxy such legal provision in order to include it in the statistical analysis and to check whether it affects the OMP price differentials between pre-auction estimated price and post-auction hammer price. Preliminary results show that the price differential is affected by the legal variable, therefore suggesting that the country’s institutional framework plays an important role in price dynamics.     

WHEN DOES AN OPTIONAL TARIFF NOT LEAD TO A PARETO IMPROVEMENT? THE AMBIGUOUS EFFECTS OF SELF-SELECTING NONLINEAR PRICING WHEN DEMAND IS INTERDEPENDENT OR FIRMS DO NOT MAXIMIZE PROFIT

Optional or self-selecting tariffs allow customers to choosebetween an established tariff and an alternative outlay schedule.The possibility of making the vendor and at least one consumerbetter off, without making any other consumer worse off, makesoptional tariffs appealing to both economists and regulators.In economic terms, the introduction of optional tariffs makespossible a Pareto improvement in the allocation of resources.Unfortunately, the presumed desirability of such tariffs dependscrucially on assumptions that may not be fulfilled in the caseof a state-owned enterprise—in particular, profit-seekingbehavior on the part of the monopoly vendor and independenceof consumer demand functions. We analyze the economic implicationsand potential consequences, in general, of introducing negotiatedrate and service terms available to a sole user into a preexistingregulatory regime of uniform tariff rates and conditions ofservice. We identify the conditions under which it is economicallydesirable to introduce declining-block rates or other rate structuresthat discriminate among users of the affected services, withor without any basis in identifiable cost differences. We addressthe specific economic implications and potential consequencesof introducing negotiated rate and service terms available toa sole user where the affected service is provided under a monopolyestablished by federal statute, taking into account that suchnegotiated arrangements may include preferential pricing terms;that access to the negotiated terms may be limited to a smallnumber of users for administrative or other reasons; and thatcompetition may exist among users of the affected service orservices. Finally, we identify and describe regulatory measuresthat might be taken to accommodate potential concerns regardingthe impact of such negotiated rate and service arrangementson fairness in regulation and competition. We conclude thatit is not possible to derive sweeping propositions about theefficiency of optional tariff offerings. Instead, the welfareeffects of such pricing plans must be evaluated empiricallyon an individual basis. Our analysis has practical significancefor pricing policies in network industries, particularly thoseindustries served by state-owned enterprises that enjoy statutorymonopolies.     

Paradoxical effects of law enforcement policies: the case of the illicit drug market

This paper presents a model of a vertically organized distribution network of illicit drugs. The key assumptions are costs imposed by law enforcement on drug sellers and the vertical relationship between trackers and retailers. We study the effects of a tougher drug law enforcement policy on wholesale and retail prices of drugs according to the identity of the pursued member of the distribution network, trafficker or retailer. We show that these effects are different according to the used law enforcement tool (probability of detection or sanction) and according to the seller who undergoes the law enforcement (retailer or trafficker). Moreover, results of tougher law enforcement can be opposite to a usual objective of the drug policy, namely, the decrease of the number of consumers. This model could partially explain the failure of the “war on drugs” in the United States in the 1980s.     

Reducing the cost of resolving intellectual property disputes

An important reason why intellectual property is far less effective for generating innovation than it could be is the excessively high cost of resolving disputes. This largely reflects the use of ordinary court arrangements to determine what are essentially technical issues. Compulsory expert arbitration, with legal aid for the party that doesnot appeal to the court from a ruling, is proposed as an alternative. A full-scale working model of such a system is shown to exist in the interference procedure of the United States Patent and Trademark Office. That no more than 4 percent of court appeals from decisions in this are even partially successful augurs well for the potential value of the arrangements proposed.     

USING RETAIL DATA FOR UPSTREAM MERGER ANALYSIS

The typical situation that antitrust authorities face is toanalyze a proposed manufacturer merger using scanner data atretail level. I start with a benchmark model of manufacturers'and retailers' sequential pricing behavior. Then I perform counterfactualexperiments to explore the relationship between downstream retailerpricing models and the resulting estimates of upstream mergers,in the absence of wholesale prices. Looking at scanner datafor the ground coffee category sold at several retail chainsin Germany, I find that not considering retail pricing explicitlywhen analyzing the potential consequences of an upstream mergerresults in simulated changes in welfare that are significantlydifferent given the underlying model of retail pricing behavior.These findings are relevant for competition policy, and authoritiesshould consider incorporating the role of retailers in upstreammerger analyses, especially in the presence of increasinglyconsolidated retail food markets.     

A CONSUMER-WELFARE APPROACH TO NETWORK NEUTRALITY REGULATION OF THE INTERNET

"Network neutrality" is the shorthand for a proposed regimeof economic regulation for the Internet. Because of the trendto deliver traditional telecommunications services, as wellas new forms of content and applications, by Internet protocol(IP), a regime of network neutrality regulation would displaceor subordinate a substantial portion of existing telecommunicationsregulation. If the United States adopts network neutrality regulation,other industrialized nations probably will soon follow. As aresult of their investment to create next-generation broadbandnetworks, network operators have the ability to innovate insidethe network by offering both senders and receivers of informationgreater bandwidth and prioritization of delivery. Network neutralityregulation would, among other things, prevent providers of broadbandInternet access service (such as digital subscriber line (DSL)or cable modem service) from offering a guaranteed, expediteddelivery speed in return for the payment of a fee. The practicaleffect of banning such differential pricing (called "accesstiering" by its critics) would be to prevent the pricing ofaccess to content or applications providers according to priorityof delivery. To the extent that an advertiser of a good or servicewould be willing to contract with a network operator for advertisingspace on the network operator's affiliated content, anotherpractical effect of network neutrality regulation would be toerect a barrier to vertical integration of network operatorsinto advertising-based business models that could supplementor replace revenues earned from their existing usage-based businessmodels. Moreover, by making end-users pay for the full costof broadband access, network neutrality regulation would denybroadband access to the large number of consumers who wouldnot be able to afford, or who would not have a willingness topay for, what would otherwise be less expensive access. Forexample, Google is planning to offer broadband access to end-usersfor free in San Francisco by charging other content providersfor advertising. This product offering is evidently predicatedon the belief that many end-users demand discounted or freebroadband access that is paid for by parties other than themselves.Proponents of network neutrality regulation argue that suchrestrictions on the pricing policies of network operators arenecessary to preserve innovation on the edges of the network,as opposed to innovation within the network. However, recognizingthat network congestion and real-time applications demand somedifferential pricing according to bandwidth or priority, proponentsof network neutrality regulation would allow broadband Internetaccess providers to charge higher prices to end-users (but notcontent or applications providers) who consume more bandwidthor who seek priority delivery of certain traffic. Thus, thedebate over network neutrality is essentially a debate overhow best to finance the construction and maintenance of a broadbandnetwork in a two-sided market in which senders and receivershave additive demand for the delivery of a given piece of information—andhence additive willingness to pay. Well-established tools ofRamsey pricing from regulatory economics can shed light on whethernetwork congestion and recovery of sunk investment in infrastructureare best addressed by charging providers of content and applications,broadband users, or both for expedited delivery. Apart fromthis pricing problem, an analytically simpler component of proposednetwork neutrality regulation would prohibit a network operatorfrom denying its users access to certain websites and Internetapplications, such as voice over Internet protocol (VoIP). Althoughsome instances of blocking of VoIP have been reported, suchconduct is not a serious risk to competition. To address thisconcern, I analyze whether market forces (that is, competitionamong access providers) and existing regulatory structures aresufficient to protect broadband users. I conclude that economicwelfare would be maximized by allowing access providers to differentiateservices vis-à-vis providers of content and applicationsin value-enhancing ways and by relying on existing legal regimesto protect consumers against the exercise of market power, shouldit exist.     

法律职业与法律人才培养

法律职业与法学教育之间制度性联系的缺乏 ,一方面导致了法学教育主要局限于高等院校内部法学学科体系的自我完善、自我发展 ,另一方面致使法律职业未能走上职业化的发展轨道 ,存在泛政治化、行政化和大众化的倾向。从事法律职业的人员应当掌握法学学科体系的基本知识 ,具备法律职业的基本素养 ,具备从事这一职业的基本技能。为了使法律人才的培养符合法律职业的基本要求 ,必须从法律职业与法学教育的整体出发 ,结合统一司法考试制度 ,重构法律人才宏观模式。     

Attheraces v British Horseracing Board: What price abuse of dominance?

Legal context: This article concerns the interplay between the competitionrules (abuse of dominance) and intellectual property; the extentto which dominant companies are free to set the price for accessto their IP; and excessive and discriminatory pricing. Key points: The Court of Appeal of England and Wales held that the BritishHorseracing Board (BHB) had not breached the competition rules.It overturned the High Court's decision that the BHB had chargedexcessive prices for access to its database of information.The Court of Appeal found that in determining whether a priceis excessive (and therefore a breach of competition law), itis not sufficient to look only at the level of the dominantcompany's return on its costs. This ‘cost +’ assessmentis only one element of the analysis which must be carried out. Practical significance: This case is apparently good news for IP owners, as it suggeststhat the legal test for showing excessive pricing is very high.However, the case also suggests that bringing a private actionto enforce the competition rules will remain extremely difficult.This may have a chilling effect on the development of the lawand in some cases may be to the public's detriment.     

Migration and the household: Urban living arrangements in late 19th- to early 20th-century Russia

Examining population census data for the late 19th and early 20th century, this article examines the impact of rural–urban migration during the first wave of Russia's industrialization on urban living arrangements. The author finds effects that echo the experience of other industrializing nations, notably the proliferation of board and lodging arrangements, and phenomena that are more peculiar to the Russian situation. Notably, the system of landholding and associated legal and fiscal constraints complicated migrants' separation from the village and put a premium on cyclical and return migration rather than outright urbanization. These conditions were conducive to the formation of collective non-family households of labour migrants, artely, which were an important mechanism for cutting living expenses and increasing the share of earnings remitted to the village and the family household back home.     

Industry self-regulation,subversion of public institutions,and social control of torts

We characterize the comparative efficiency of industry self-regulation as means of social control of torts. Unlike liability, which is imposed by courts ex post, industry self-regulation, much like government regulation, acts before the harm is done. As compared to government regulators, however, the industry regulates with superior information. Furthermore, a pro-industry bias inherent to self-regulation also arises under alternative institutional arrangements when adjudicators are vulnerable to pressure by industry members. We show when industry self-regulation is socially desirable and feasible, and clarify when it could be an attractive institutional arrangement for developing and transition countries.