Evan W. Osborne

Culture, Development, and Government: Reservations in India

This study provides some insights into the nature of Indian governance and society and the nature of pressure groups in developing societies. Overall results suggest that rent seeking based on preexisting criteria will be difficult to dislodge once ensconced. This is independent of changes over time in the relative wealth of the recipients of rewards of reservations and of whether it is based on caste ethnicity language or something else. There are important lessons to be learned both from India and elsewhere. Section I provides an introduction into the literature and the study. Section II presents a theory of the determinants of pressure-group formation and Section III provides the necessary Indian historical priors. Section IV describes the phenomenon that traditional factions in India are becoming increasingly important in politics even as they become less important in economic life. Section V outlines why existing social science theory cannot explain this disparity section VI explores the ability of pressure-group theory to explain Indian political behavior and section VII lays out empirical predictions for Indias future based on the theory presented. Finally section VIII presents a conclusion to the study.

Who should be worried about asymmetric information in litigation

What is the appropriate informational structure when modeling the lawsuit? In numerous papers stretching back almost 30 years litigation has been portrayed as a game involving incomplete, sometimes asymmetric information. That information is incomplete is beyond question. Clients, in conjunction with their attorneys, must make decisions on filing and settlement in the presence of uncertainty about how courts will interpret evidence, litigants’ settlement reservation values, and a host of other factors. However, the direction of informational asymmetry, if any, is a subject of disagreement in the theoretical literature. Various models have depicted the lawsuit as exercises in which plaintiffs [Farmer and Pecorino (1994); Reinganum and Wilde (1986); Shavell (1989)] or defendants [Bebchuk (1984); Nalebuff (1987); Png (1983, 1987); Spier (1992)] uniquely know key information such as the level of fault or damage. In other work both sides either each possess private information [Daughety and Reinganum (1994); Hay (1995); Schweizer (1989)] or contend with symmetric incomplete information [Priest and Klein (1984)]. Often these assumptions have significant implications for the predictions of these models. Given the large range of informational stipulations in the theory, it is surprising that so little empirical analysis of the informational structure of the lawsuit exists. This paper will examine that structure by testing litigants’ ability to predict court decisions. The paper has three findings. The first is that asymmetric information (AI) does exist in cases that proceed to a decision. This finding is in contrast to recent work by Waldfogel (1998), who finds that theories based on random optimism (RO), as in the Priest/Klein model and its descendants, explain trial data better than AI. The second finding is that this asymmetry is substantially in favor of defendants. The third is that the asymmetry is largely associated with the use of contingent fees by plaintiffs. The paper proceeds as follows: Section 2 presents evidence for AI, Section 3 investigates the direction of the asymmetry, and Section 4 examines the relation between attorneys’ fees and information.

The Sources of Growth at Different Stages of Development

Cross-country growth regressions have become an increasingly common tool in empirical development research. But these regressions typically do not attempt to distinguish among countries in different stages of development. Two empirical methods are used to test for such differences. Several of the factors known to affect economic growth are shown to operate differently for countries in different portions of the global income distribution. The results have implications for the role of financial markets, openness and human capital in promoting growth.

What's Yours is Mine: Rent-Seeking and the Common Law

The paper develops a rent-seeking theory of the common law.The general finding is that the laws form depends on thecomparative advantage each group has in production versusappropriation generally, and appropriation via litigation inparticular. The model generates new interpretations ofdevelopments in United States common law, and is used both tosupplement and to criticize two dominant theories of such law,the efficiency theory associated with the law and economicsmovement and that generated by critical legal studiesscholars.

Efficient Markets? Don't Bet on It

This article tests the efficient-markets hypothesis by looking at profits in National Football League (NFL) betting markets. The author tests whether successful betting strategies exist when points scored and allowed earlier in a season can outperform the betting line in predicting the margin of victory in NFL games and finds that profitable strategies exist. In addition, the author finds that over the course of a season, bettors do imperfectly incorporate information about team strength and that NFL victory margins are a highly variable process.

Diversity, Multiculturalism, and Ethnic Conflict: A Rent-Seeking Perspective

Many societies must confront the possibility that greater ethnic diversity will result in more ethnic tensions. Most approaches to ethnic identification either ignore the role of the state or treat it as either a leader or a pawn of the ruling ethnic group(s). This paper employs a rent-seeking approach to ethnic conflict. It leads to several testable determinants of ethnic conflict, as well as recommendations for decreasing it. It also allows analysis of the relation between multicultural policies and such conflict. Copyright 2000 by WWZ and Helbing & Lichtenhahn Verlag AG

Baseball’s International Division of Labor

Major League Baseball draws players from many nations. This article tests the predictions of neoclassical and product-lifecycle trade theory against the careers of Major League Baseball players from six foreign countries. Sustained specialization, consistent with neoclassical trade theory, is found in pitching versus other positions, as well as within the various fielding positions. Home-run production is found to be a later stage skill in the product-lifecycle sense.

Courts as Casinos? An Empirical Investigation of Randomness and Efficiency in Civil Litigation

For a variety of reasons, the U.S. legal system has been accused of performing poorly because of the haphazard way in which courts assess liability and award damages. This article examines the relation of court awards to the pretrial expectations of litigants and their attorneys and to measurable, economically relevant damages. Court awards are highly predictable, as variance in expectations explains much of the variance in awards. In addition, awards are significantly related to both medical costs and property damage. The hypothesis of a highly unpredictable court system is conclusively rejected.

Playing it safe? A Fibonacci strategy for soccer betting

Soccer betting in Europe has grown rapidly in the past two decades. It is well known that such sports betting markets can be analyzed similarly to financial markets. The present article differs from others in the literature in two respects. The first is that the outcome of betting interest is the draw. The second is the betting strategy, which relies on the Fibonacci sequence to generate bets. Using this approach on International Federation of Football Association World Cup Finals data, it is possible to earn economic profits through this strategy in expectation, albeit with fairly large risk.

Economic freedom, ethnic separatism, and ethnic conflict

Ethnic conflict has not been tested using economic theory, except its most extreme forms - violence and warfare. This paper adopts the newer economic approach to conflict to analyze ethnic conflict more broadly defined. The analysis is able for the first time to derive equilibrium discrimination by a dominant group and separatism by a weaker group. Consistent with the predictions developed, cross-sectional instrumental-variables estimates and other evidence indicate that government restrictions on commerce promote separatism and conflict and hamper trust. Economic freedom is thus argued to be a key if thus far largely neglected force for ethnic cooperation within states, consistent with the empirical findings for nation-state interactions.