Deterrence and Compliance in a Demerit Point System

This paper attempts to outline the virtues and the perverse effects of a Demerit Point System (DPS). Under a DPS, once overcome a given threshold of demerit points, infringers are punished by severe non-monetary sanctions (such as the temporarily suspension of driving license in traffic enforcement). Surprisingly, no comprehensive economic theory has been provided to support the widespread implementation of DPS. This paper tries to fill this gap. We show that the impact of a DPS depends on the distribution of preferences of the population of potential infringers. For some agents a DPS far from increasing deterrence may actually reinforce deviant behavior. Only for some group of agents, once a given threshold of accumulated penalties has been reached compliance may occur. Thus compliance is obtained only after some level of under-deterrence is tolerated. We then provide some policy suggestions in order to improve general deterrence under a DPS for any given level of detection policy. Our results seem to be consistent with available evidence.Demerit Point System, Deterrence, Compliance, Recidivism, Public Law Enforcement, Traffic Law Enforcement

Deterrence, Incapacitation and Enforcement Design. Evidence from Traffic Enforcement in Italy

We investigate the deterrent effect on driving behavior due to the introduction of Demerit Point System in Italy. In addition, we measure the incapacitation effect on fatal accidents. Our findings highlight the high potential of the penalty system in reducing road fatalities through deterrence and incapacitation. Despite this, its aggregate effectiveness in Italy ultimately depended on the consistency of the enforcement design. We then suggest several policy options to increase road safety through a credible enforcement.deterrence, incapacitation, law enforcement, road safety

Incomplete Contracts, Property Rights and Endogenous Outside Options

This paper extends the framework provided by the so-called GHM approach to a context of endogenous outside options, showing how the optimality of property rights assignment might be reversed. In some cases, non-owners could over-invest in specific assets while having mere access to property rights might not prevent hold-up. Our conclusions suggest that in order to reach the desired optimality features, the design of ownership structure should take into account the dynamics of outside options.outside options, property rights allocation, hold-up problem

Virtual vs. Standard Strike: An Experiment

In this paper we compare - in the laboratory - stoppage and virtual strike. Our experiment confirms that higher wages offered by an employer lead to considerably more costly effort provision. The number of strikes, the level of efforts and average total payoffs are higher under virtual strike than under standard strike. However, when standard strike is associated with reciprocal externalities, it induces higher effort levels, higher payoffs and an extremely reduced number of strikes than virtual strike. It is unclear whether this behavior re?ects reciprocity or other forms of social preferences. However our results might explain why standard strikes rather than virtual ones are generally adopted by workers.virtual strike, cooperation, reciprocity, fairness, experiments

Partisan Liberalizations. A New Puzzle from OECD Network Industries?

We investigate the political determinants of liberalization in OECD network industries, performing a panel estimation over thirty years, through the largest and most updated sample available. Contrary to traditional ideological cleavages, we find that right-wing governments liberalize less than left-wing ones. This result is confirmed when controlling for the existing regulatory conditions that executives find when elected. Furthermore, governments’ heterogeneity, proportional electoral rules, and European Union membership all show positive and statistically significant effects on liberalization. Our findings suggest that, despite the conventional wisdom, the political-economic rationale behind liberalization paths in network industries is far from being assessedLiberalization – Network Industries – Government heterogeneity and Partisanship – Electoral systems - Panel data

Optimal Contract Design with Unilateral Market Option

Contrary to previous literature, we show that the assignment of authority decision matters in optimal contract design with bilateral specific self-investments. This is the case when we enlarge the set of the states of nature, to explicitly consider the event that a party's market option turns out to be binding ex-post. We show that, under this setting, simple contracts protected by specific performance remedies may generate hold-up and thus parties' incentives to under-invest. However, investment efficiency is enhanced when authority is assigned to the party with ex-post binding market option. Our results suggest a neglected rationale for vertical integration as a remedy against hold-upincomplete contracts, outside options, mechanism design

Partisan Liberalizations. A New Puzzle from OECD Network Industries?.

We investigate the political determinants of liberalization in OECD network industries, performing a panel estimation over thirty years, through the largest and most updated sample available. Contrary to traditional ideological cleavages, we find that right-wing governments liberalize less than left-wing ones. This result is confirmed when controlling for the existing regulatory conditions that executives find when elected. Furthermore, governments' heterogeneity, proportional electoral rules, and European Union membership all show positive and statistically significant effects on liberalization. Our findings suggest that, despite the conventional wisdom, the political-economic rationale behind liberalization paths in network industries is far from being assessed.Liberalization - Network Industries - Government heterogeneity and Partisanship - Electoral systems - Panel data . JEL Classification D72, L50, P16, C23.

Access to Audio-visual Contents, Exclusivity and Anticommons in New Media Markets

Media markets are characterized by strong peculiarities that often call for longterm exclusivity contracts between content providers and distributors or for vertical or horizontal integration. This paper analyzes and compares the economic effects of existing alternative systems of access to valuable content for new media platforms, under the lens of technological convergence and 'network neutrality'. The analysis suggests the increasing need for a coordinated regulatory framework aimed at balancing costs and benefits of the different models in order to ensure that the development of new markets and new technologies in the age of media convergence is not hindered by "anticommons" tragedies.contents, new media, anticommons, antitrust.