Browsing Working papers by Author "Lando, Henrik"
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Lando, Henrik; Shavell, Steven (København, 2002)[More information][Less information]
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Lando, Henrik (København, 2004)[More information][Less information]
Abstract: It is natural to suppose that delegation and incentives are complementary both in the sense that when more decisions are delegated to a lower level of an organizational hierarchy, more use should be made of incentives at that level, and in the sense that more use of incentives should be accompanied by more delegation. This issue is analyzed within a Principal-Agent framework in which there are two decisions to be made: an effort decision which can only be made by the Agent, and some other decision which can be made by either the Principal (i.e. be centralized) or by the Agent (i.e. be delegated). Within this framework it is shown that delegation and incentives are not necessarily complementary instruments; some decisions should be centralized when incentives are introduced. URI: http://hdl.handle.net/10398/6813 Files in this item: 1
lefic 2004-02.pdf (234.2Kb) -
Lando, Henrik (København, 2006)[More information][Less information]
Abstract: This article derives key variables in the analysis of standards of proof in criminal law from basic conditional probabilities. The variables derived are the probability of correct and wrongful conviction, the expected sanction and society's incarceration costs, while the basic conditional probabilities are the probability of observing (any given) evidence against individual i given that individual j committed the crime (for any j including j equal to i). The variables are derived from the conditional probabilities as a function of the standard of the proof using simple Bayesian updating. URI: http://hdl.handle.net/10398/7225 Files in this item: 1
ssrn-id874907.pdf (143.3Kb) -
A Law and Economics Perspective on Optimal ContractingLando, Henrik (København, 2005)[More information][Less information]
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Lando, Henrik (København, 2004)[More information][Less information]
Abstract: Does wrongful conviction lower deterrence and can this explain society’s aversion to sanctioning the innocent? This paper argues that for some of the most important categories of crime such as murder, assault or robbery, the answer to both questions is no. For these categories of crime, a potential offender need not fear wrongful conviction for any particular criminal act he or she chooses not to commit. For example, if a potential offender decides not to murder another person, he or she should not fear being wrongfully convicted of it, since the person will not be dead, and there will therefore be no investigation and no trial. He of she may risk being wrongfully convicted of another crime, but that risk exists independently of his or her own actions. It may be argued that wrongful conviction lowers deterrence in more indirect ways. First, the possibility of being sanctioned for a crime one does not commit may lower the threat of being sanctioned for a crime one commits, if two sanctions are not twice as threatening as one. Second, if wrongful conviction halts further investigations that may lead to the true offender, and third, if a potential offender thinks that if he or she does not take advantage of a crime opportunity, he or she may be wrongly convicted in the event that some other person grasps the same opportunity. However, it will be argued that wrongful conviction may also increase deterrence, and the three indirect effects are in any event unlikely to be quantitatively important in the real world. An implication of the present analysis is that society’s aversion to sanctioning the innocent cannot be rationalized by or reduced to a concern for deterrence. URI: http://hdl.handle.net/10398/6803 Files in this item: 1
wplefic092004rev2.pdf (163.7Kb) -
Lando, Henrik (København, 2006)[More information][Less information]
Abstract: How should a court set the negligence standard in a given area of activity when future (potential) injurers or victims are unlikely to know the standard set by the court? In particular, how should the standard be set in the oft-occurring case where one of the future parties is a professional actor who is likely to know the legal standard of negligence, while the other is an amateur, who is unlikely to know it? In this case, it may be optimal for the court to set the standards at the first-best level despite the amateur's ignorance of the law. The amateur may be able to infer the standards, either from the situation itself (from his knowledge of the costs and benefits of precautions), or from the act performed by the professional party. Moreover, the amateur may take due care because he realizes that the professional party will have an incentive to live up to the standard, and that the risk of a loss will therefore be on the amateur. However, when the ignorance of the amateur is "large," involving not only the legal standards but also the risks inherent in the activity, it may well be optimal for the court to depart from first best standards. URI: http://hdl.handle.net/10398/7239 Files in this item: 1
ssrn-id906084.pdf (150.8Kb) -
An empirical studyMøgelvang-Hansen, Peter; Lando, Henrik; Kristensen, Bo; Schützsack, Ole (København, 2006)[More information][Less information]
Abstract: The project described in this report was carried out with support from The Ministry of Justice’s Research Pool. The aim of the project is to examine the effects of Amending Act no. 213/2002, amending the rules on consumer sales in the Danish Sale of Goods Act. The amendments were part of Denmark’s implementation of Directive 1999/44/EC of the European Parliament and of the Council on certain aspects of the sale of consumer goods and associated guarantees. The Amending Act came into force on 24 April 2002, having effect on consumer sales made on and after 1 January 2002. At the time of completion of this report, the Amending Act had been in force for more than two and a half years. In the planning of this project, we assumed that at this point in time sufficient experience with the new rules would be available, enabling us to get an impression of its practical consequences for businesses. Also, we assumed that the respondents could still recall the prior state of the law, making it possible for us to gather sufficient information to compare the situation before and after the Amending Act entered into force. The Amending Act involved a number of amendments to the Danish Sale of Goods Act. Certain amendments, such as those concerning the rules on lack of conformity, were mainly clarifications of the current state of the law. As these in fact did not change the state of the law, they were not intended to change practice either. As this study is empirically oriented, these amendments fall outside its scope. Consequently, in this study we have chosen to focus on the consequences of the following amendments: Under the new provisions in s. 77a(3), any lack of conformity with the contract is assumed to have existed at the time of delivery if such lack of conformity becomes apparent within six months of the time of delivery. Where there is a lack of conformity, the consumer in general has a right to choose between replacement and repair under s. 78. Replacement is no longer contingent on the lack of conformity constituting a fundamental breach. Furthermore, it is no longer possible for the seller to decline a request for replacement by offering to repair. If the consumer’s request for replacement or repair would impose disproportionate costs on the seller, or if this remedy is impossible, the seller can, however, decline the request. In s. 83, the limitation period for complaints has been extended from one to two years from the time of delivery to the consumer. In s. 54, the corresponding limitation period on other sales than consumer sales has been extended from one to two years to avoid sellers in the retail trade from being caught in between their consumers and their suppliers. As before, s. 83 cannot be derogated from to the detriment of the consumer. It is, however, still possible for the parties to derogate from s. 54 concerning other sales than consumer sales. The fundamental question of this study is whether the mentioned alteration to the state of the law has resulted in a notable change in the behaviour of the relevant players. Of the relevant players, our principal focus is the retail trade, whose situation we have examined by way of a questionnaire survey. To a limited extent we have also looked into any changes in the behaviour of wholesalers/producers, mainly by way of interviews with trade organisations. Finally, we have examined the application of the new rules, mainly by looking at the Danish Consumer Complaints Board. URI: http://hdl.handle.net/10398/7386 Files in this item: 1
wp 2006-4.pdf (613.8Kb) -
Lando, Henrik (København, 2000)[More information][Less information]
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Rose, Caspar; Lando, Henrik (København, 2000)[More information][Less information]
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Lando, Henrik (København, 2004)[More information][Less information]
Abstract: This article compares a set of often used simple contracts or mechanisms in terms of how well they allocate decision rights between two agents over time. A basic assumption is that agents incur a fixed cost each time they renegotiate. The contracts or mechanisms studied are: individual ownership and authority, the first-come first-serve rule, the alternating rule and the sign-up rule. One trade-off that arises is the following: when usage of the asset is flexible in the sense that it does not matter in which period it occurs, agents may rely on obtaining the asset through arriving first at some point, while when an agent needs to time and plan the use of the asset, he or she may wish to hold stronger rights or to use the sign-up rule as a simple form of contracting. (JEL:D10, D23, L22); Keywords: Incomplete contracts, individual ownership,first-come first-serve rule, costly renegotiation. URI: http://hdl.handle.net/10398/6815 Files in this item: 1
wplefic012004.pdf (658.9Kb) -
Drewsen, Merete; Lando, Henrik; Cummins, Tim (København, 2006)[More information][Less information]
Abstract: This is not a theoretical paper but an application of existing law and economic contract theory to the issue of how to draft a specific kind of contract. It is addressed to practitioners and is intended for practical use. It will be part of a Wiki (as in Wikipedia) for contract drafting, which IACCM (International Association for Contract and Commercial Management) has initiated. The main theoretical aspect of the article concerns the application of the value maximization principle (the Coase theorem) to the drafting of confidentiality agreements. While the article is not theoretical, its prescriptions are open to theoretical dispute; this may especially be the case for the section on the size of damages. URI: http://hdl.handle.net/10398/7250 Files in this item: 1
ssrn-id917927.pdf (114.9Kb) -
Lando, Henrik; Rose, Caspar (København, 2003)[More information][Less information]
Abstract: Abstract: Proponents of specific performance as a remedy for breach of contract have found support in the alleged use of the remedy in Civil Law countries. However, we provide evidence that specific performance is in fact a rare remedy in Denmark, Germany and France, and under CISG, when performance requires actions to be undertaken, and we relate this to costs of enforcement. We argue that it is administratively costly to run a system of enforcement that renders specific performance attractive to the aggrieved party, and that the Civil Law countries have (like Common Law countries) chosen not to incur these costs of enforcement. This is especially clear in the case of Denmark, where specific performance of actions has been abandoned as a legal remedy. At the normative level, we argue that enforcement costs provides an additional rationale, over and above the rationales of the theory of efficient breach, for damages and against specific performance as the general remedy. URI: http://hdl.handle.net/10398/6823 Files in this item: 1
wplefic142003new2.pdf (270.4Kb) -
Lando, Henrik (København, 2005)[More information][Less information]
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Lando, Henrik (København, 1998)[More information][Less information]
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Lando, Henrik (København, 2000)[More information][Less information]
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Lando, Henrik (København, 2008)[More information][Less information]
Abstract: When a court sets standards of due care in a tort or contract case with a view to how the standards will affect future behavior of parties similar to the litigants, it should sometimes realize that only one of the two future parties is likely to become informed of the standards. The standards can then only have a direct effect on the behavior of the informed party, and it may be thought that the court should hold the informed party strictly liable, which maximizes this effect. However, this ignores that the informed party may, although strictly liable, lower her level of care in order to induce the uninformed party to take greater care. In this situation, the negligence rule may do better than strict liability, since the discontinuity of the negligence rule can prevent the informed party from strategically lowering her level of care. Under the negligence rule, optimal standards are sensitive to whether the informed party acts first and to whether she is the injurer or the victim. For both the informed and the uninformed, there are circumstances in which the standard should be higher than first best and other circumstances where it should be lower. URI: http://hdl.handle.net/10398/7221 Files in this item: 1
wp01-2008.pdf (121.8Kb) -
Lando, Henrik (København, 2003)[More information][Less information]
Abstract: The standard of proof in criminal law a®ects retributive justice through the number of wrong convictions and wrong acquittals. It also a®ects the level of crime, since a higher standard of proof implies less deterrence and less incapacitation. This article derives an expression for the optimal standard from a trade-o® between these e®ects, and applies the expression to the crime of sexual violation against women. For this crime, social preferences for justice versus prevention of crime are elicited through a survey and inserted into the expression for the optimal standard. The result indicates that the concern for prevention of crime may have a signi¯cant e®ect on the optimal standard of proof. URI: http://hdl.handle.net/10398/6785 Files in this item: 1
wplefic042003.pdf (634.2Kb) -
Lando, Henrik (København, 2007)[More information][Less information]
Abstract: This article suggests a rationale for statutes of limitations in sales law, i.e. for the practice of cutting off buyers’ remedies after the expiration of a limitation period. The rationale is based on the notion of wear and tear, which carries two implications: First, a good that breaks down after several periods of use is likely to be of nearly optimal quality, and in this case little is gained by allowing a claim. Second, the number of dysfunctions is likely to increase over time, which implies that the pool of potential claims, and in particular the pool of unjustified claims, is likely to increase over time. It will be shown theoretically that these implications can provide a rationale for cutting off claims. The rationale will be supported with empirical evidence stemming from a recent extension of the limitation period from one to two years in Denmark. URI: http://hdl.handle.net/10398/7237 Files in this item: 1
wp06-2007.pdf (237.2Kb) -
Lando, Henrik (København, 2005)[More information][Less information]
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Lando, Henrik (København, 2004)[More information][Less information]
Abstract: The paper argues that society should vary the sanction applied to a criminal defendant with the weight of the evidence against him or her. This is optimal when it is costly for society to apply sanctions, since it can yield the same degree of deterrence while requiring fewer resources to be spent on sanctioning. Furthermore, when the unfairness of convicting an innocent defendant increases with the size of the sanction, this provides a further rationale for graduating sanctions with the probability of guilt. Some objections are briefly discussed, mainly that it is inherently unfair to apply different sanctions on people, who have committed the same offense, and that the legal system will lose legitimacy if it allows sanctions to vary in the way suggested. URI: http://hdl.handle.net/10398/6820 Files in this item: 1
wplefic082004.pdf (289.7Kb)
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