“Brenno Galli” award

The 2023 Prize in memory of Brenno Galli was divided equally between:

MS Francesca Leucci (University of Bologna; European Doctorate in Law and Economics) for her paper “Climate Change? L’Addition, s’il vous plaît!”

Motivation: Francesca Leucci’s article is motivated by the rising number of climate change lawsuits, with most seeking monetary compensation for the damages caused by global warming. The paper presents a systematic and rigorous examination of cases worldwide, illustrating a variety of heads of damages for climate change and the corresponding methods of quantification that have emerged, ranging from costs of climate adaptation to costs associated with re-establishing carbon sinks. The author contends that tort-based climate lawsuits may not be effective in deterring polluters because damages are not assessed with optimal deterrence incentives in mind.

Hence, we believe it can make a significant contribution to the Law and Economics approach and is well-qualified for the award.

MR Gabriele Paolini (University of Hamburg; European Doctorate in Law and Economics) for his paper “The Adverse Effects of Trial Duration on the Use of Plea Bargaining and Penal Orders in Italy”

Motivation: Gabriele Paolini’s article analyzes the use of plea bargaining and penal orders in Italy. The paper is characterized by an excellent research question setup, a detailed dataset, a rigorous application of descriptive statistics, and a robust methodological approach. The study tests and demonstrates that the expectation of longer trials diminishes defendants’ incentives for plea bargaining, particularly in monocratic-judge trials. Reduced use of alternative procedures, in turn, extends average disposition times, further exacerbating the issue of trial duration in Italy. The author thus provides noteworthy potential policy recommendations.

Hence, we believe it can make a significant contribution to the Law and Economics approach and is well-qualified for the award.

Committee: Elena Verdolini (Università degli Studi di Brescia), Massimiliano Granieri (Università degli Studi di Brescia), and Massimiliano Vatiero (Università della Svizzera italiana, and Università degli Studi di Trento)

The 2022 Prize in memory of Brenno Galli goes to:

MR Karol Zdybel (University of Hamburg) for his paper titled Spontaneous norms in law and economics: a sketch typology

Motivation: The paper provides an enlightening examination on spontaneous norms, such as customs, social norms, private or informal orderings, extralegal rules, etc. The author identifies (and has convinced us that there are) three main dimensions that characterize each ideal-type of a spontaneous norm: (i) an implicit rule-making process, (ii) a social mechanism of sanctions, and (iii) a non-public interpretation or validation of norms. The paper, exploiting these three dimensions, proposes a concise (but comprehensive) taxonomy and map of spontaneous norms. Beyond the theoretical formulation, which also makes proper use of notions and tools from game theory, the author develops his study with a rich analysis of real-world examples drawn from legal history, institutional economics and anthropology.

Hence, we believe that this paper may be useful to legal scholars, economists, anthropologists, and historians, among others, and may provide a substantial contribution to the topical, growing, and complex literature on spontaneous norms.

Palermo, December 16, 2022

Committee: Roberta Lombardi (Università del Piemonte Orientale), Giovanni B. Ramello (Università di Torino), and Massimiliano Vatiero (Università della Svizzera italiana, and Università degli Studi di Trento).

The video of the award is available in the videos section

The 2021 Prize in memory of Brenno Galli goes to:

MS Maria Grigoropoulou (University of Hamburg) for her paper titled Independence in the era of shareholder activism

Motivation: We were confronted by a short list of exceptional quality, and the judging process was therefore a very stimulating one. Grigoropoulou’s paper stood out for several reasons. First, the role of shareholder activism in Germany (notably by hedge funds) is a new feature of the last two decades or so, significantly changing traditional views; but it is complex, and if the relevant hedge funds are largely US-based, not widely understood: Grigoropoulou’s exposition is first-class in its clarity and depth of understanding. Second, she shows a high level of legal expertise with integrated mastery of the complex economic arguments. Third, she makes sensible and subtle policy recommendations about the vexed issue of independence of both Vorstand and Aufsichtsrat members and shareholders. Finally, while not quantitatively based it represents much empirical work on a range of cases. It is a hugely relevant contribution as we entering an era where long-termism is understood to be as important as ever, but so too in particular cases the need to pressure over-protected erstwhile managements to change strategy.

Hence, we believe that it provides a substantial contribution and is well qualified for the award.

Committee: Maria Rosaria Maugeri (University of Catania), David Soskice (London School of Economics), Massimiliano Vatiero (Università della Svizzera italiana, and University of Trento)

The 2019 Prize in memory of Brenno Galli goes to:

MR Pietro Guarnieri (University of Pisa) for his paper titled Networks of commitment: Conformism and principlism in collective action (written jointly with Tiziano Distefano)

Motivation: The field of law and economics tends to focus on individual action and the incentive structure that guides individual agents. In this path breaking paper, Distefano and Guarnieri explore the propensity of individuals to participate in collective action, without which social groups simply cannot function. The authors develop a theoretical model that shows the importance of the social ecology, including institutions, for determining individuals’ commitment to act collectively. This work is of particular relevance today as humanity confronts a challenge that urgently requires collective action to avoid disaster, namely climate change.

Hence, we believe that it provides a substantial contribution and is well qualified for the award.

Committee: Katharina Pistor (Columbia Law School), Lorenzo Sacconi (University of Milan), Massimiliano Vatiero (Università della Svizzera italiana, and University of Trento)

The 2018 Prize in memory of Brenno Galli goes to:

MS Francesca Papa (University of Pennsylvania) for her paper titled A Network Model of the US Supreme Court

Motivation: The submissions for the 2018 Brenno Galli Prize put the broad and deep excellence of economically inflected legal scholarship supported by the Italian Society of Law and Economics vividly on display. The pool of papers included first-rate submissions ranging across economic sociology, the production of original data, and sophisticated modelling. Choosing a winner was commensurately difficulty.

This year’s prize paper—Francesca Papa’s “A Network Model of the US Supreme Court”—stands out for its elegant managing of a complex spatial model of judicial behaviour and its sensitive treatment of the empirics of agreement and disagreement among the Justices of the United States Supreme Court.

Ever since Enelow and Hinich developed the spatial theory of voting in the mid-1980s, researchers have sought accurate and interpretable multi-dimensional models of voting, which combine major and minor axes of ideological dispersion in intuitively compelling ways. Papa’s work on the Supreme Court, building on models by Jacobi and Fischman, shows that supplementing the familiar left-right ideological account of judicial voting with a second dimension concerning the allocation of institutional authority materially increases the explanatory power of models of judicial behaviour. Papa also—and elegantly—shows that the two-dimensional approach captures and explains otherwise surprising patterns of agreement and disagreement among Justices.

These virtues make us delighted to award Papa the 2018 Galli Prize.

Committee: Daniel Markovits (Yale Law School), Donatella Porrini (Università del Salento) and Massimiliano Vatiero (Università della Svizzera italiana).

The 2017 Prize in memory of Brenno Galli goes to:

MR Israel Klein (Hebrew University of Jerusalem) for his paper The cost of self-reporting.

Motivation: The paper provides empirical evidence of significant costs in lost tax revenues when tax is collected through self-reporting and suggests the means available for reducing such costs.

Historically, countries relied on an administrative-assessment regime for tax collection. With global expansion, the relative cheapness of allowing taxpayers to gather the information for calculating their liability through self-assessment was the crucial factor for OECD countries moving to a self-reporting regime. Yet there are also a number of agency costs associated with self-reporting. In the main, self-reporting regimes can allow taxpayers to adopt a position that may not correspond to the tax code. To be sure, there are a number of different types of positions taken by taxpayers in a self-reporting regime.

The author’s analysis sheds light on two main positions, namely the conformant and opportunistic positions (with the tax code). It shows that the effect of using classic tax parameters reveals information about a company’s conformant positions, but leaves opportunistic positions obscure. This observation explains the basic fact of the growing increase in opportunistic positions of S&P companies. Indeed, the data leave no doubt that R&D expenses are the dominant factor in the opportunistic behavior of disclosure decisions. In this case, the author concludes that a simple change in regulation could presumably curb this type of opportunistic tax reporting of excessive R&D expenses.

It is a very good paper, well structured, well written and supported by evidence. Moreover, the paper can significantly contribute to the debate on tax incentives for R&D investment. Finally, we also think it is of interest to a wide audience of regulators and policymakers in OECD countries.

Hence, we believe that it provides a substantial contribution and is well qualified for the award.

Commitee: Joseph Mc Cahery (Tillburg University), Nicoletta Rangone (LUMSA University) and Massimiliano Vatiero (Università della Svizzera italiana).

The 2016 Prize in memory of Brenno Galli goes to:

MR Suren Gomtsian (University of Leeds) for his paper Between the green pitch and the red tape: The private legal order of FIFA.

Motivation: The paper argues that private orderings may succeed in governing the behaviour of the involved actors by keeping them away from regular Courts. Essentially, the paper uses FIFA as a case study to make the point. According to the Author, FIFA, as a transnational private authority, offers what other public orderings could not: Harmonized institutions that apply across national borders and in many cases are better accustomed to the needs of the involved parties than their state-made alternatives, which often are based on one-size-fits-all approach and lack certainty of application. Although the interests of some other involved parties, less known players in particular, might have been better served by the application of formal state laws, the established equilibrium discourages deviation.

It is a very good paper, well written, well structured, very well documented. Moreover, the paper shows a great maturity of the Author. The paper can significantly contribute to the debate on private vs. public orderings throughout a detailed Law and Economics description of a particular private ordering, i.e. FIFA, and, therefore, we think is of interest to a wide audience.

Hence, we believe that it provides a substantial contribution and is well-qualified for the award.

Commitee: Alain Marciano (Université de Montpellier), John Szmer (University of North Carolina at Charlotte) and Massimiliano Vatiero (Università della Svizzera italiana).

The 2015 Prize in memory of Brenno Galli goes to:

MR Sven Hoeppner (Ghent University Law School) and MS Laura Lyhs (Max Planck Institute for Research on Collective Goods) for their paper Effects of Standard Vagueness: Legal Uncertainty in the Lab.

Motivation: The paper tests in a laboratory experiment the (often conflicting!) perspectives on legal uncertainty of traditional legal scholarship and of research in law and economics. The analysis is proficiently executed and explained, and the paper impacts various legal areas.

MR Hoeppner and MS Lyhs find a U-shaped relationship between increases in legal uncertainty and average chosen activity levels. Low levels of legal uncertainty on average induce over-compliance. After a threshold, further increasing legal uncertainty reduces average over-compliance and seems to promote under-compliance. An intriguing and unexplored result is provided: with increasing vagueness individual behaviour becomes more erratic, i.e. the law looses its coordination function, though no effect of uncertainty may emerge on average. Lastly, the section on examples and applications where the paper results may matter is interesting and well organized. Overall, the paper is very professional and technically competent.

Hence, we believe that it provides a substantial contribution and is well-qualified for the award.

Commitee: Fernando Gómez (Universitat Pompeu Fabra), Antonio Acconcia Università degli Studi di Napoli “Federico II”), and Massimiliano Vatiero (Università della Svizzera italiana).

The 2014 Prize in memory of Brenno Galli was divided equally between:

MR HENRI DE BELSUNCE (Max Planck Institute for Innovation and Competition) for his paper Do more patents mean less entry? (Patenting strategies in cumulative innovation under the threat of litigation).

Motivation: The paper investigates the role of treble damages in discouraging raising rivals’ costs strategy of incumbent by means of excessive patenting. De Belsunce’s paper is technically first-rate.

A certain limitation is the underlying comparative statics (and not a dynamic model), but the paper is coherent and rich for that kind of analysis. It combines strong investigation with a clearly defined policy case (pros and cons of treble damages). The paper proves an astonishing maturity of the Author.

Hence, we believe that this paper provides a substantial contribution and qualities for the award.

MR ALESSANDRO MELCARNE (University of Torino & Collegio Carlo Alberto) for his paper To review or not to review, that is the question! The dilemma of a self-interested judge.

Melcarne’s paper is not a mere extension of the literature, but identifies a problem “out there”, namely the behavior of members of the Italian Constitutional Court (ICC), and analyzes such a behavior theoretically and practically. The paper identifies the interest in post-ICC-appointments as an important driver of judicial behavior.

Results are unexpected and well-illustrated. The paper offers fascinating and very relevant policy implications concerning incentives of judges. The Author shows an outstanding maturity.

Hence, we believe that it provides a substantial contribution and qualities for the award.

Commitee: Peter Lewisch (Universität Wien), Angelo Castaldo (“Sapienza” University, Rome), and Massimiliano Vatiero (Università della Svizzera italiana).

The 2013 Prize in memory of Brenno Galli was divided equally between:

MR. MARCO FABBRI (University of Bologna) for his paper Shaping Tax Norms Through Lotteries.

Motivation: The paper analyses tax compliance based on rewards rather than on punishment. The paper is based on a clear, relevant and well posed research question (why – and under what conditions – lottery based rewards against tax evasion were successful).

The analysis is based on a sound theoretical methodology which makes use of various strands of relevant literature (e.g., insights of prospect theory). It provides interesting and relevant policy implications (concerning the conditions under which the policy is optimal).

Hence we believe that it provides a substantial contribution and qualifies for the award.

MR. NICOLAE STEF (University of Strasbourg, LaRGE)for his paper Voting Rules in Bankruptcy Law.

Motivation: The paper analyses the mechanics of voting rules in bankruptcy. It is based on a clear, relevant and well posed research question (how to evaluate the severity of voting rules in bankruptcy and how do they affect recovery rates).

The analysis is based on the definition of a conceptual and empirical framework and the collection of a new dataset on voting rules for 90 countries. It provides interesting and relevant policy implications (concerning the impact of different voting rules on the possibility of recovery in bankruptcy).

Hence we believe that it provides a substantial contribution and qualifies for the award.

Commitee: Hans-Bernd Schäfer (Bucerius Law School), Magda Bianco (Bank of Italy), and Massimiliano Vatiero (Università della Svizzera italiana).