Copyright (c) 2009 All rights reserved. http://works.bepress.com/enrico_baffi Recent documents in enrico baffi en-us Mon, 16 Nov 2009 23:25:26 PST 3600 http://works.bepress.com/enrico_baffi/4 http://works.bepress.com/enrico_baffi/4 Sun, 15 Nov 2009 21:38:17 PST This paper aims to analyze theories developed both in favor and against privacy protection according to current practices in the West. In the paper, we will examine economic justifications for privacy protection as defined by American economists and jurists, as well as the advantages to be derived by a possible elimination of said protection. Moving beyond existing economic theories, this piece develops a new economic idea, wherein privacy protection is warranted when an individual becomes interested in another's habits for a specific reason: to root out different behaviors in that person by observing a behavior that is correlated with those behaviors. Imagine the scenario of a worker who is also a soccer player, who is not competitive on the job, and is a team player, when he plays soccer, with his co-workers. The two facts, one of loving his own soccer team, and second, of not being competitive in the workplace are expressions of the same human attitude, or of a certain aspect of his personality. The employer is interested in finding out if this worker plays soccer in order to identify a lack of competitiveness on the job, and perhaps to assign him more menial tasks. The employer wishes to know the worker's interest in soccer in order to deduce therefrom a second circumstance: non-competitiveness in the workplace. Thus if regulating others' conduct is not forbidden, the worker, in order not to be found out, will no longer play soccer; he will suffer a loss in terms of his personal welfare, while the employer, on the other hand, will gain nothing, having discovered nothing. From this comes a different justification for privacy protection. In the paper, however, we note that privacy protection is a tool for encouraging equality or, in pejorative terms, egalitarianism. Behind the privacy "screen," indeed, everyone appears in shades of gray. Privacy protection makes individuals indistinguishable. In terms of inter-personal relationships, this means a "veil" of ignorance, with all its attendant costs. Therefore, it is possible that the economic justifications defined by those in favor of privacy protection should be put aside in favor of transparency among individuals. enrico baffi http://works.bepress.com/enrico_baffi/3 http://works.bepress.com/enrico_baffi/3 Mon, 26 May 2008 01:19:36 PDT enrico baffi Law and Economics http://works.bepress.com/enrico_baffi/2 http://works.bepress.com/enrico_baffi/2 Wed, 20 Feb 2008 03:45:46 PST This work examines the influence of Coasian thought on the analysis of externalities as used by economists and legal economists. Ronald Coase, a Chicago scholar, advanced a series of critiques of the Pigovian tax system; the theorem that bears his name is merely the best known. In his 1960 work, he sought to demonstrate that the internationalisation of social costs was not always socially useful. In addition, he identified other institutional solutions to which systems can - and often do - resort. One of these solutions is to simply authorise the harmful activity without introducing mechanisms to internalise social costs. Beyond the abstraction of his ideas, Coase's method of analysis has not had a great influence on economists' thinking. His theorem, as it is commonly known, looks more like an elegant, abstract reflection then a tool for identifying institutional solutions to concrete societal problems. Among legal economists, however, Coase's teachings have had a greater influence. Unfortunately, even within this group of scholars, the conviction that external costs should, optimally, be internalised often emerges almost unconsciously in their literature. The risk inherent in this attitude lies in the possibility of finding systems for internalising social costs in legal institutions which do not appear to have such an underlying logic, as for example some kinds of tort liability. enrico baffi Law and Economics http://works.bepress.com/enrico_baffi/1 http://works.bepress.com/enrico_baffi/1 Tue, 12 Feb 2008 18:55:03 PST This paper builds upon the findings of cognitive psychology to revisit the prescriptive solutions proposed in the literature with respect to efficient penalty clauses. While refraining from generalizations regarding human behavior, generalizations that might lead to positions quite removed from reality and in part ideological, as was the case with rational choice theory. Rather, the paper seeks to distinguish one situation from another in order to identify the existence of decision debiasing mechanisms capable of justifying - in the case of the set of rules in question - hypotheses in which lesser control over the penalty clause would be justified by both the Common law and Civil law systems. It may be of interest that this paper makes use of cognitive psychology to expand rather than to restrict the contractual freedom. Particular attention was paid to the decisions taken within a firm, in consideration of its hierarchical organization. In this case, the importance of the paper lies in the fact that, whereas psychologists have often underscored the overoptimism of entrepreneurs, these same authors have often demonstrated that there are mechanisms in hierarchical organizations that increase risk aversion. This paper notes that these mechanisms also have an ability to debias decisions. More specifically, the paper emphasizes the importance of the "pressure of accountability" and "personal responsibility". These two phenomena that characterize the hierarchical organization push it towards choices that are less corrupted by the biases of overoptimism and overconfidence. It is worth noting that no blanket statement can be made for all firms, because in corporations managers answer to the board of directors, whereas this is not the case with the individual businessman. Finally, it is worth noting that application of cognitive psychology without resorting to generalizations undoubtedly leads, aside for the case in question, to a more moderate paternalism than that supported by some scholars. enrico baffi Law and Economics