Volume 15, Issue 1 - Special Issue on ChatGPT; Guest Editor: Dennis Khong (Multimedia University) / AsLEA 2023 Annual Conference; Edited by Kan-Hsueh Chiang (Erasmus University of Roterdam) and Jeong-Yoo Kim (Kyung Hee University)

We conducted a survey experiment in the U.S. to analyze how the consent or dissent of a deceased individual influences the social acceptability of digital resurrection. The results showed a substantial relative treatment effect of consent versus dissent, with a 2-point difference in acceptability on a 5-point scale. When the deceased had consented, 58 % of respondents viewed digital resurrection as socially acceptable, whereas this number was only 3 % when the deceased had dissented. These findings suggest that relevant legal regulations should respect the decision of the deceased. Our study then explored the optimal default rule using observational research: 59 % of respondents were against the idea of their own digital resurrection. An opt-in rule seems socially desirable, where the default is the prohibition of digital resurrection, and exceptions allow it only with consent from the deceased.

This research investigates the application of corporate strategies in developing Large Language Models (LLMs) like ChatGPT, with a focus on law and economic aspects. Improved LLM performance is largely credited to expanded dataset size, leading to developments of similar models in non-English languages. This study questions whether such announcements, particularly in the Japanese market, could be classified as ‘vaporware’ posing potential antitrust issues. Using a stock event approach, the research scrutinizes the possibility of vaporware characteristics in these announcements by examining any resultant cumulative abnormal returns (CARs). The empirical evidence suggests an absence of significant upsurges in CARs in response to these announcements, implying a lack of vaporware characteristics and a stable market response. Consequently, in a market displaying reasonable efficiency towards investment in LLM development, these findings underscore the necessity for meticulous contemplation of competition policy regulation and the implementation of industrial policy promotion measures.

This paper aims to carry out empirical analysis of the viability of large language models (LLMs), specifically ChatGPT, in simulating the common law system and facilitating its evolutionary processes. Drawing on the Theory of Rules Evolution, it is understood that common law generates efficient rules by natural selection through constant litigation. Nonetheless, this evolutionary mechanism faces several hindrances. The process of change is typically slow and incremental. Courts often have to wait for a case that’s deemed ‘appropriate’ before they can change the law, leading to extended delays. Additionally, courts frequently struggle to make efficient decisions due to limited information. Other factors that decelerate the creation of efficient rules include judicial bias, unequal distribution of resources among litigating parties, and the diminishing presence of a competitive legal order. This study first assesses ChatGPT’s capability to embrace the essence of the common law system, namely the doctrine of stare decisis. We then assess its potential to overcome the hindrances in common law development and promote efficient rules. Through a series of meticulously designed hypothetical cases set in a virtual jurisdiction called the “Matrix Kingdom,” we observed that ChatGPT mimic the functions of a common law court by citing, following, and distinguishing its own precedents, but it accomplishes this with significantly fewer resources and in less time. This implies that humans can introduce hypothetical legal situations, enabling LLMs to replicate the natural selection process observed in the common law system but with a significantly accelerated pace. Given that LLMs are trained with diverse information sources, not just the factual contexts of cases, they could potentially lower the informational constraints in decision-making. As such, LLMs might significantly contribute to the evolutionary processes of common law development. However, it is important to remain cautious of certain limitations, such as the potential for AI Hallucination and inherent biases in LLMs, which require careful consideration and management.

To date, Friedrich Hayek is the only winner of the Nobel Prize in Economics who also holds a law degree. The role of law is central to Hayek’s work and prominent in the research program of the Austrian School of Economics generally. Although Hayek’s contributions to jurisprudence are manifest, as are the influence of his economics ideas, his influence on the field of law and economics has remained modest. This lecture, delivered as the Keynote Lecture at the 2023 Asian Law & Economics Association Annual Meeting, provides an introduction to the fundamentals of an Austrian Law & Economics research program in contrast to the mainstream, Chicago-school research program that has dominated the field since its early history. Compared to the neoclassical approach, Austrian thinking provides a more insightful approach to many of the key concepts generally associated with the economic analysis of law: the nature and success of the common law as a system of law, the importance of stability and simple rules in the law, and the strong preference for private ordering via contract, personal autonomy, and voluntary exchange exhibited in the common law. I identify and briefly describe six key distinguishing characteristics of the Austrian school that distinguishes it from neoclassical law and economics: (1) Methodological individualism, (2) Utility and Costs are subjective, (3) the division of knowledge, (4) spontaneous order, (5) competition as a discovery procedure, and (6) the nature of economic equilibrium. I will also highlight some of the ways in which examining law and economics through an Austrian framework provides valuable insights about law and economics. 

This study explores the factors influencing the achievement of a mutually agreed solution (MAS) in international trade disputes, drawing insights and patterns from the WTO dispute experience. Through an in-depth examination of prevailing literature and compliance theories, the research pinpoints various factors that impact the achievement of MAS in WTO disputes, including the dynamics of economic size, experience in WTO litigation, reputation as a respondent, and costs in time. The results, obtained through a probit model, reveal the significance of economic size in achieving MAS, where the complainant’s GDP surpasses that of the respondent but not the per capita GDP and trade ratio. Originally, this study discloses that experience in WTO litigation as a disputing party and reputation as the respondent also influence the willingness to settle amicably. While this research primarily centres on the WTO, its findings, derived from WTO data, have broader implications. The identified factors are not only pertinent to WTO members but also hold relevance for solving trade disputes between states. Recognizing these factors is crucial for policymakers across different trade platforms to devise strategies that bolster collaboration and elevate the efficacy of their respective dispute-resolution mechanisms. By illuminating the complexities of the decision-making processes in achieving MAS, this study offers invaluable insights. These insights are instrumental for all stakeholders involved in trade disputes, guiding them towards forging consensus-driven solutions that uphold the principles of just and balanced international trade.

It has been widely known that good firms use lower IPO prices to signal their superior prospects to investors. The underlying intuition is that good-type firms signal their type by underpricing their initial issue of shares, because investors can rationally infer that only the best can recoup the signaling cost from subsequent issues. In this paper, we argue that the intuition is not complete. We show that a good firm always has an incentive to deviate to raise the IPO price slightly from its equilibrium price if the price is the only signaling device, implying that signaling by underpricing is not an equilibrium phenomenon in the case of one-dimensional signal. Then, we show that if the firm can choose the equity fraction to be sold as well, a good-type firm can signal its high profitability by choosing a low equity fraction. In this case, a good-type firm engages in underpricing, but it cannot be a signal because both types choose same prices in equilibrium. We also discuss the effect of investor protection laws on IPO underpricing.