A proposal to help make credit ratings as accurate as possible

Incentives for credit agencies could be improved with a tailored strict liability rule, write Alessio M. Pacces and Alessandro Roman

Horizontal Shareholding and Network Theory

This paper uses network theory to argue that the consequences of horizontal ownership by large investment institutions are more complicated than, and sometimes the complete opposite of, what conventional economic theory predicts. Horizontal ownership occurs when a large investment institution, such as Vanguard or BlackRock, simultaneously holds large stakes in many different companies in the same industry. Legal scholars and economists have argued that these large investors have little incentive to encourage competition in the industries in which they have horizontal ownership because the investors are just as likely to hold shares in companies that might lose from competition as they are to hold shares in companies that might gain. Against this background, this paper advances two claims. First, it shows that the policy proposals that have been advanced to address the alleged anticompetitive effects of horizontal shareholding could backfire and further reduce the level of competition in the affected markets. Second, it highlights that the consequences of horizontal shareholding are nuanced because things that happen in one industry inevitably affect other industries. For instance, increased ticket prices among airlines might be good for airlines but bad for their suppliers. Therefore, determining whether reduced competition in a given industry would benefit an investor requires us to compare the gains it would generate in the relevant market with the losses it would impose on other firms in the investor’s portfolio

A study of tourism dynamics in three italian regions using a nonautonomous integrable lotka-volterra model

This article is a first application of an integrable nonautonomous Lotka-Volterra (LV) model to the study of tourism dynamics. In particular, we analyze the interaction in terms of touristic flows among three Italian regions. Confirming an hypothesis advanced by recent theoretical works, we find that these regions not only compete against each other, but at times they also proceed in mutualism. Moreover, the kind and the intensity of the interaction changes over time, suggesting that dynamic models can play a vital role in the study of touristic flows

Quantum tort law: the law of torts in a probabilistic world

Despite the findings of natural scientists and philosophers, the law of torts is still clinging on a strictly deterministic (in the Laplacian sense) idea of the world. Probabilistic considerations are not alien to the legal world, yet they are generally regarded as ad hoc exceptions to handle particularly complex cases. From this perspective, this thesis advocates the need for a theoretical shift. A probabilistic approach to reality should become the norm, whereas determinism should only be considered a heuristic tool when confronted with prima facie deterministic cases. In Chapter II it is shown that a strictly deterministic concept of causation is inadequate to face the intricacies characterizing modern litigation. In fact, the deterministic version of the ‘but for’ test necessarily creates frictions with the kind of evidence produced by modern science. The introduction of a purely probabilistic concept of causality is advocated and a distinction is drawn between the ex-ante and the ex-post probabilistic approach to causation. The former seems to be a better approach for lagged torts, whereas the latter is more appropriate to handle instant torts. Also, it is shown that in a probabilistic world the very concept of harm assumes a different meaning. Building on the new definition of harm introduced in Chapter II, in Chapter III it is suggested that the debate on the goals of tort law should be reconsidered. In a probabilistic world welfare maximization and corrective justice are not mutually exclusive, but must be regarded as necessary complements. In Chapter IV, it is argued that the problems created by a deterministic mindset stretch way beyond the analysis of causation. In fact, a Laplacian (deterministic) view of the world often prevents us from contemplating probabilistic solutions even when deterministic options have failed. From this perspective, Credit Rating Agencies (CRAs) are a perfect example. Both the legal and the economic literature have advanced solutions to improve CRAs incentives to issue accurate ratings. Yet, in most cases, the proposed solutions did not exploit the probabilistic nature of ratings, thus they were not framed exclusively in probabilistic terms. To the contrary, by designing a simple and legally workable strict liability rule it is possible to tie CRAs profits to the quality of their probabilistic predictions. In Chapter V, it is investigated whether the law and economics movement can be considered the answer to the indeterminacy of predictions haunting other sciences. Not surprisingly, the answer to this question is no. Even the extremely simplified world of tort law and economics is dominated by an indeterminacy principle

Quantum tort law: the law of torts in a probabilistic world

Despite the findings of natural scientists and philosophers, the law of torts is still clinging on a strictly deterministic (in the Laplacian sense) idea of the world. Probabilistic considerations are not alien to the legal world, yet they are generally regarded as ad hoc exceptions to handle particularly complex cases. From this perspective, this thesis advocates the need for a theoretical shift. A probabilistic approach to reality should become the norm, whereas determinism should only be considered a heuristic tool when confronted with prima facie deterministic cases. In Chapter II it is shown that a strictly deterministic concept of causation is inadequate to face the intricacies characterizing modern litigation. In fact, the deterministic version of the \u2018but for\u2019 test necessarily creates frictions with the kind of evidence produced by modern science. The introduction of a purely probabilistic concept of causality is advocated and a distinction is drawn between the ex-ante and the ex-post probabilistic approach to causation. The former seems to be a better approach for lagged torts, whereas the latter is more appropriate to handle instant torts. Also, it is shown that in a probabilistic world the very concept of harm assumes a different meaning. Building on the new definition of harm introduced in Chapter II, in Chapter III it is suggested that the debate on the goals of tort law should be reconsidered. In a probabilistic world welfare maximization and corrective justice are not mutually exclusive, but must be regarded as necessary complements. In Chapter IV, it is argued that the problems created by a deterministic mindset stretch way beyond the analysis of causation. In fact, a Laplacian (deterministic) view of the world often prevents us from contemplating probabilistic solutions even when deterministic options have failed. From this perspective, Credit Rating Agencies (CRAs) are a perfect example. Both the legal and the economic literature have advanced solutions to improve CRAs incentives to issue accurate ratings. Yet, in most cases, the proposed solutions did not exploit the probabilistic nature of ratings, thus they were not framed exclusively in probabilistic terms. To the contrary, by designing a simple and legally workable strict liability rule it is possible to tie CRAs profits to the quality of their probabilistic predictions. In Chapter V, it is investigated whether the law and economics movement can be considered the answer to the indeterminacy of predictions haunting other sciences. Not surprisingly, the answer to this question is no. Even the extremely simplified world of tort law and economics is dominated by an indeterminacy principle

Micro-\u3cem\u3eMeso\u3c/em\u3e-Macro Comparative Law: An Essay on the Methodology of Comparative Law

There are strong analogies between the quest for a methodology of comparative law and the broader debate on the epistemology of social and natural sciences. In this vein, after having explored the dispute between holists and reductionists, I argue that the dichotomy between micro and macro comparative law ought to be abandoned. Building on the insights of social theory, I introduce a specific framework to bridge the two levels of enquiry through a meso analysis. This framework is applied to investigate the robustness of the findings of the legal origin theory

3D numerical simulation of hydro-acoustic waves registered during the 2012 negros-cebu earthquake

The paper investigates on the hydro-acoustic waves propagation caused by the underwater earthquake, occurred on 6 February 2012, between the Negros and Cebu islands, in the Philippines. Hydro-acoustic waves are pressure waves that propagate at the sound celerity in water. These waves can be triggered by the sudden vertical sea-bed movement, due to underwater earthquakes. The results of three dimensional numerical simulations, which solve the wave equation in a weakly compressible sea water domain are presented. The hydro-acoustic signal is compared to an underwater acoustic signal recorded during the event by a scuba diver, who was about 12 km far from the earthquake epicenter

Arts vs Engineering: The Choice among Consumption of and Investment in Education

In this paper we develop a model in which students choose their university coursework based on both investment and consumption incentives. We show that these education decisions are socially inefficient. This result is driven by the fact that students do not consider an externality in the working environment of acquiring education for investment purposes. We show when and how it is possible to design tuition fees in such a way that students acquire the socially optimal level of education

Arts vs Engineering: The Choice among Consumption and Investment in Education

In this paper we develop a model in which students choose their university courses according to both investment and consumption incentives. We show that in the private problem, the education decisions are inefficient compared to the social optimum. The result is driven by the fact that students do not consider an externality of acquiring education for investment purposes in the working environment. We show that it is possible to design tuition fees in such a way that students acquire the socially optimal level of education