cssi/SciSciGPT-SciSciNet huggingface dataset:
Do Trading and Power Operations Mix? The Case of Constellation Energy Group 2008

For the first seven years following its creation in 2000, Constellation Energy Group was a leader in the merchant power business, and its stock significantly outperformed the industry. Then, in 2008, in the space of less than two months, the company found itself in a liquidity crisis in which its stock lost more than 70% of its value, leading to a forced sale at a low price. What happened? Constellation’s crisis illustrates the hidden dangers that arise when a power company’s trading operation stops playing a subordinate function and becomes the strategic focus of the business. The case highlights the illiquidity of many commodity trading portfolios, which increases the danger of potentially large contingent capital requirements. These are often overlooked in traditional value-at-risk calculations. It is therefore easy to underestimate exposure and the capital implicitly dedicated to the trading operation, exaggerating its profitability. When the trading unit shares a balance sheet with other operations, such as generation and customer supply, the capital required for trading is often borrowed from these other units at zero cost. Trading can improve the profitability of generation and customer supply if it is organized as a support function. If it is to be a profit center of its own, it should be organized on its own balance sheet, separate from the other operations.
Decision-Making in Mediation: The New Old Grid and the New New Grid System

This Article reviews the author's previous mediator-orientation models and proposes a new system for understanding the range of mediator orientations based on substantive, procedural, and meta-procedural decision-making grids.
Why consumers respond differently to absolute versus percentage descriptions of quantities

Consumers often provide different evaluations of absolute and percentage descriptions of the same quantity. Prior research has attributed this to two factors: selection of distinct reference contexts and differential cognitive difficulty. However, in a preliminary study, we show that discrepancies in consumer evaluations of absolute and percentage quantities can arise even when these two factors are held constant. A series of studies provides evidence that (1) this effect is rooted in automatic, nonverbal associations between numerical stimuli and analogue magnitude coding and (2) the influence of analogue magnitude codes manifests across different kinds of quantities, different evaluations, and different processing modes.
IMPACT OF THE GALLEON CASE ON INFORMED TRADING BEFORE MERGER ANNOUNCEMENTS

On October 16, 2009, the U.S. government charged Galleon hedge fund founder Raj Rajaratnam and five others with insider trading, in what was described by a key prosecutor overseeing the case as a “wake-up call to Wall Street and to every hedge fund manager.” We find that the mean abnormal stock price runup of targets (a measure of informed trading) during the 26 months since the inception of the Galleon case declined from 5.12% to 2.84%. The early evidence strongly suggests that the Galleon case has sent a clear signal to the traders, and that the traders are listening.
The Agricultural Origins of Time Preference

This research explores the origins of observed differences in time preference across countries and regions. Exploiting a natural experiment associated with the expansion of suitable crops for cultivation in the course of the Columbian Exchange, the research establishes that pre-industrial agro-climatic characteristics that were conducive to higher return to agricultural investment, triggered selection, adaptation and learning processes that generated a persistent positive effect on the prevalence of long-term orientation in the contemporary era. Furthermore, the research establishes that these agro-climatic characteristics have had a culturally embodied impact on economic behavior such as technological adoption, education, saving, and smoking.
The Effects of Preventive and Detective Controls on Employee Performance and Motivation

We examine how two attributes of preventive and detective controls affect employee performance and employee motivation. Specifically, we examine how the extent to which controls (1) restrict employees’ autonomy, and (2) provide more or less timely feedback impacts employees’ performance and intrinsic motivation. These characteristics are the defining differences between preventive and detective controls in that preventive controls restrict employee autonomy relative to detective controls and preventive controls always provide immediate feedback; whereas, detective controls can provide either immediate feedback or delayed feedback. We conduct an experiment to examine how and why these two types of formal controls impact employees’ performance in an incomplete contract setting in which one dimension of the employees’ task is compensated and one dimension is controlled. The results show that detective controls with more timely feedback improve employees’ performance toward the control objective, without affecting their intrinsic motivation. In contrast, the restriction of autonomy associated with preventive controls, has no additional effect on employees’ performance toward the control objective over detective controls with timely feedback but significantly reduces employees’ motivation. Neither control characteristic has a significant effect on employees’ performance on the compensated dimension of the task, suggesting that monetary incentives continue to provide an effective motivation. Our results reveal the importance of designing and implementing controls that provide timely feedback but do not restrict autonomy.
Expectation formation of older married couples and the rational expectations hypothesis

Abstract This paper tests the Rational Expectations (RE) hypothesis regarding retirement expectations of older married American couples, controlling for sample selection and reporting biases. In prior research we found that individual retirement expectation formation was consistent with the Rational Expectation hypothesis, but in that work spousal considerations were not analyzed. In this research we take advantage of panel data on expectations to test the RE hypothesis among married individuals as well as joint expectations among couples. We find that regardless of whether we assume that married individuals form their own expectations taking spouse's information as exogenous, or the reports of the couple are the result of a joint expectation formation process, their expectations are consistent with the RE hypothesis. Our results support a wide variety of models in economics that assume rational behavior of married couples.
Social Security Reform in the United States

The Two Percent Plan (TTP) is a plan to save Social Security based on personal retirement accounts financed initially out of the budget surplus; this article discusses issues regarding problems the TTP can address and a way the TTP can be efficiently implemented.
Vigilance Response of a Key Prey Species to Anthropogenic and Natural Threats in Detroit

Rapid urbanization coupled with increased human activity induces pressures that affect predator-prey relations through a suite of behavioral mechanisms, including alteration of avoidance and coexistence dynamics. Synergisms of natural and anthropogenic threats existing within urban environments exacerbate the necessity for species to differentially modify behavior to each risk. Here, we explore the behavioral response of a key prey species, cottontail rabbits (Sylvilagus floridanus) to pressures from humans, domestic dogs, and a natural predator, coyotes (Canis latrans) in a human-dominated landscape. We conducted the first camera survey in urban parks throughout Detroit, Michigan in 2017-2020 to assess vigilance response corresponding to a heterogeneous landscape created from variation in the occupancy of threats. We predicted a scaled response where cottontail rabbits would be most vigilant in areas with high coyote activity, moderately vigilant in areas with high domestic dog activity, and the least vigilant in areas of high human activity. From 8,165 independent cottontail rabbit detections in Detroit across 11,616 trap nights, one-third were classified as vigilant. We found vigilance behavior increased with coyote occupancy and in locations with significantly high domestic dog activity, but found no significant impact of human occupancy or their spatial hotspots. We also found little spatial overlap between rabbits and threats, suggesting rabbits invest more in spatial avoidance; thus, less effort is required for vigilance. Our results elucidate strategies of a prey species coping with various risks to advance our understanding of the adaptability of wildlife in urban environments. In order to promote coexistence between people and wildlife in urban greenspaces, we must understand and anticipate the ecological implications of human-induced behavioral modifications.
The Factor–Spline–GARCH Model for High and Low Frequency Correlations

We propose a new approach to model high and low frequency components of equity correlations. Our framework combines a factor asset pricing structure with other specifications capturing dynamic properties of volatilities and covariances between a single common factor and idiosyncratic returns. High frequency correlations mean revert to slowly varying functions that characterize long-term correlation patterns. We associate such term behavior with low frequency economic variables, including determinants of market and idiosyncratic volatilities. Flexibility in the time-varying level of mean reversion improves both the empirical fit of equity correlations in the United States and correlation forecasts at long horizons.
Manufacturing Paradoxes: Foreign Ownership, Governance, and Value Chains in China’s Light Industries

Summary Utilizing Chinese industrial data and detailed transactional trade data, this paper finds two paradoxes. First, the distribution of FDI across value chains in light industries is the opposite of many extant explanations. Second, China’s dominance as an exporter is belied by the weaknesses of its domestic firms within the governance of value chains, with important implications for firm upgrading. By analyzing millions of US Customs Bureau trade transactions, the paradoxes are resolved by examining intermediary contractors in East Asian value chains. Even 30 years after reforms began and in the technologically simplest industries, Chinese firms continue to struggle to break through substantial ‘contractual’ barriers to entry.
Entrepreneurship theory and the poverty of historicism

Purpose – The author applies methodological concepts from The Poverty of Historicism to contemporary research in the area of entrepreneurship. This paper aims to explain why current theoretic models do not adequately explain entrepreneurial phenomena and to present outlines of a distinct entrepreneurship research paradigm.Design/methodology/approach – The author examines the essay from the perspective of a historian and then summarizes its concepts. Next, the author reviews the current state of entrepreneurship research and theory and applies concepts from the essay to its contemporary challenges. Finally, the author presents five implications.Findings – The five implications are that entrepreneurship research should include designs that predict failure, strive to develop theory that is distinct from other areas, emphasize novel arrangements of empirical elements that are also novel, utilize nonparametric statistics and case studies more fully, and push for a paradigmatic shift.Originality/value – The con...
Social Rules: Some Problems for Hart’s Account, and an Alternative Proposal

What is a social rule? This paper first notes three important problems for H.L.A. Hart’s famous answer in the Concept of Law. An alternative account that avoids the problems is then sketched. It is less individualistic than Hart’s and related accounts. This alternative account can explain a phenomenon observed but downplayed by Hart: the parties to a social rule feel that they are in some sense ‘bound’ to conform to it.
On social welfare functions on infinite utility streams satisfying Hammond Equity and Weak Pareto axioms: a complete characterization

This paper examines the problem of aggregating infinite utility streams with a social welfare function that respects the Hammond Equity and Weak Pareto axioms. The paper provides a complete characterization of domains (of the one period utilities) on which such an aggregation is possible. A social welfare function satisfying the Hammond Equity and Weak Pareto axioms exists on precisely those domains which are well-ordered sets in which the elements of the set are ordered according to the decreasing magnitude of the numbers belonging to the set. We show through examples how this characterization can be applied to obtain a number of results in the literature, as well as some new ones.
Executive Foreign Policy and the States: Recent Developments

On February 23 of this year, the Ninth Circuit Court of Appeals invalidated a California statute permitting victims of the Armenian genocide to file insurance claims, finding that the state's use of the label "Genocide" intruded on the federal government's conduct of foreign affairs. This decision, Movsesian v. Versicherung AG, addresses foreign affairs federalism — the division of authority between the states and the federal government. Just one month later, the Supreme Court weighed in on another foreign affairs issue: the separation of foreign relations powers within the federal government. In Zivotofsky v. Clinton, the Supreme Court ordered the lower courts to help referee a conflict between the executive and legislative branches of the federal government concerning how Jerusalem — born American citizens list their country of birth on their passports. The former case presented an issue of federalism and the latter an issue of separation of powers; yet both cases sought to delineate foreign affairs authority in the United States. This Essay addresses the relationship between the states and the federal executive in foreign affairs — a federalism question — in light of coming separation-of-powers decisions. Part I briefly outlines foreign affairs federalism: how far into foreign affairs may states reach without stepping into the federal government's exclusive terrain? Part II looks at a particular permutation of this federalism debate, examining the conflict between the states and the national executive. Movsesian, the Armenian genocide case, highlights this state-executive clash. The panel and en banc opinions in Movsesian offered two different approaches to this federalism question, both of which present textual and practical difficulties. Having laid out the problems with these approaches, Part III looks for answers in an unlikely place: decisions about the separation of powers within the federal government. In Zivotofsky, the Supreme Court called for increased judicial participation in contests between Congress and the President in foreign affairs. This command will produce a body of law defining the sphere of exclusive executive authority vis-a-vis Congress. Synthesizing these decisions, Part IV argues that, for structural and pragmatic reasons, courts should bar states as well as Congress from this exclusive executive sphere. The Supreme Court has called upon the courts to articulate the boundaries of executive and legislative authority within the federal government, but in so doing, the courts indirectly will provide guidance about the division between the federal government and the states.
A Provocative Defense

It is common wisdom that the provocation defense is, quite simply, sexist. For decades, there has been a trenchant feminist critique that the doctrine reflects and reinforces masculine norms of violence and shelters brutal domestic killers. The critique is so prominent that it appears alongside the doctrine itself in leading criminal law casebooks. The feminist critique of provocation embodies several claims about provocation's problematically gendered nature, including that the defense is steeped in chauvinist history, treats culpable sexist killers too leniently, discriminates against women, and expresses bad messages. This article offers a (likely provocative) defense of the provocation doctrine. While fully acknowledging widespread gender inequity in society, the article argues that the feminist critique may overestimate the provocation doctrine's contribution to such inequality and underestimate its value to marginalized defendants. Provocation, like many legal doctrines, has a complex history. Further, the limited available empirical evidence appears to undermine rather than confirm assertions that the defense disproportionately burdens women and proves strategically vital to murderous men. Moreover, efforts to utilize criminal punishment to express an anti-masculinity, anti-violence message may, in the end, reinforce destructive masculine norms, exacerbate racial hierarchies, justify extant unequal power distributions, and ironically increase violence and suffering. In the end, the article cautions that the feminist critique of provocation and similar progressive critiques of doctrinal leniency may unintentionally instantiate and entrench the punitive impulses that create and sustain mass incarceration. * Professor of Law, University of Colorado Law School. I would like to thank Donna Coker, Joshua Dressler, Jorge Esquirol, Leigh Goodmark, Cynthia Lee, Carolyn Ramsey, Mimi Wesson, and Ahmed White for their extremely helpful input. I am particularly grateful to Kim Buchanan for inspiring me to write a "feminist defense" of provocation. A PROVOCATIVE DEFENSE (Feb. 2014)
Analogical Legal Reasoning: Theory and Evidence

The paper offers a formal model of analogical legal reasoning and takes the model to data. Under the model, the outcome of a new case is a weighted average of the outcomes of prior cases. The weights capture precedential influence and depend on fact similarity (distance in fact space) and precedential authority (position in the judicial hierarchy). The empirical analysis suggests that the model is a plausible model for the time series of U.S. maritime salvage cases. Moreover, the results evince that prior cases decided by inferior courts have less influence than those decided by superior courts.
Bargaining and competition revisited

Abstract We show the robustness of the Walrasian result obtained in models of bargaining in pairwise meetings. Restricting trade to take place only in pairs, most of the assumptions made in the literature are dispensed with. These include assumptions on preferences (differentiability, monotonicity, strict concavity, bounded curvature), on the set of agents (dispersed characteristics) or on the consumption set (allowing only divisible goods).
Another Look at GAAP Versus The Street: An Empirical Assessment of Measurement Error Bias

Bradshaw and Sloan (2002, Journal of Accounting Research, 40, 41–66.) document a significant increase in the difference between the earnings response coefficients (ERCs) for GAAP and Street (I/B/E/S) earnings over the 1990s, suggesting that the market has become increasingly reliant or fixated on Street earnings. In this study we investigate whether, alternatively, an “errors in variables” problem caused by a mismatch between the definitions of realized and expected earnings drives the ERC divergence. Our findings suggest that results from conventional analyses of GAAP and Street ERCs, including the ERC divergence pattern, are significantly contaminated by measurement errors in earnings surprises.
New evidence on the urbanization of global poverty

This paper probes into the empirical roots of the debate as to whether poverty is now indeed mainly an urban problem. It aims to throw new light on the extent to which poverty is in fact urbanizing in the developing world and what role urbanization of the population has played in overall poverty reduction. The study reports its results in studying a new data set created for this paper, covering about 90 developing countries with observations over time for about 80% of them. The authors conclude, however, that the recent pace of urbanization and current forecasts for urban population growth imply that a majority of the world's poor will still live in rural areas for many decades to come.
Has the CDS market lowered the cost of corporate debt

Abstract Many have claimed that credit default swaps (CDSs) have lowered the cost of debt financing to firms by creating new hedging opportunities and information for investors. This paper evaluates the impact that the onset of CDS trading has on the spreads that underlying firms pay to raise funding in the corporate bond and syndicated loan markets. Employing a range of methodologies, we fail to find evidence that the onset of CDS trading lowers the cost of debt financing for the average borrower. Further, we uncover economically significant adverse effects on risky and informationally opaque firms.
Divergence of CAT(0) Cube Complexes and Coxeter Groups

We provide geometric conditions on a pair of hyperplanes of a CAT ( 0 ) cube complex that imply divergence bounds for the cube complex. As an application, we classify all right-angled Coxeter groups with quadratic divergence and show right-angled Coxeter groups cannot exhibit a divergence function between quadratic and cubic. This generalizes a theorem of Dani and Thomas that addressed the class of 2 –dimensional right-angled Coxeter groups. As another application, we provide an inductive graph-theoretic criterion on a right-angled Coxeter group’s defining graph which allows us to recognize arbitrary integer degree polynomial divergence for many infinite classes of right-angled Coxeter groups. We also provide similar divergence results for some classes of Coxeter groups that are not right-angled.
Bankruptcy Law as a Liquidity Provider

Since the outset of the recent financial crisis, liquidity problems have been cited as the cause behind the bankruptcies and near bankruptcies of numerous firms, ranging from Bear Stearns and Lehman Brothers in 2008 to Kodak more recently. This paper expands the prevailing normative theory of corporate bankruptcy — the Creditors’ Bargain theory — to include a role for bankruptcy as a provider of liquidity. The Creditors’ Bargain theory argues that bankruptcy law should be limited to solving problems caused by multiple, uncoordinated creditors, but focuses almost exclusively on the problem of creditor runs. We argue that two well-known problems that cause illiquidity — debt overhang and adverse selection — are also caused by multiple creditor coordination problems. As such, bankruptcy law is justified in solving these problems in addition to creditor run problems. With this insight in hand, we argue that many of bankruptcy’s existing rules, including debtor-in-possession financing, sales free and clear of liens, and coerced loans can be seen as liquidity-providing rules that target either debt overhang problems, or adverse selection problems, or both. Using bankruptcy to solve liquidity problems can create costs, however, such as the risk of continuation bias. We suggest rules of thumb for judges to use in balancing the benefits and costs of these rules. We also connect our theory to the use of bankruptcy for financial institutions, where liquidity concerns loom large.
Creating Conflicts of Interest: Litigation as Interference with the Attorney–Client Relationship

LL.M., Georgetown University Law Center; J.D., University of Akron School of Law. Ms. Anenson is an Assistant Professor of Business Law at the University of Akron and is Of Counsel at the law firm of Reminger & Reminger Co., L.P.A. This article was a Holmes-Cardozo Award finalist for the best paper submitted at the Annual Conference of the Academy of Legal Studies in Business in August 2005. Thanks to Dave Redle for his comments on an earlier draft of this manuscript and to Stephanie Greene for her editorial assistance. I am also grateful to Yulia Chandrahalim for her skillful research and unfailing good humor.
Do CMO Incentives Matter? An Empirical Investigation of CMO Compensation and Its Impact on Firm Performance

Despite growing interest in various facets of the position of chief marketing officer (CMO), there is very little research on CMO compensation. Accordingly, we set out to investigate the determinants of CMO compensation and its effect on firm performance. Employing the lens of agency theory, we hypothesize that the CMO’s marginal productivity will positively impact the amount of total compensation as well as the extent of performance-based compensation in the CMO’s compensation contract. Moreover, we hypothesize that deviations in contracting elements from predicted levels will adversely impact firm performance. Analyzing a sample of 9,230 firm-year observations over the period 1992–2013, we find that CMOs employed at firms with high advertising and R&D intensity, and operating in competitive product markets, command larger amounts of total compensation. Moreover, a greater proportion of their compensation is market based, with heightened sensitivity to movements in the firm’s stock price. We also find th...
Should governments compete for foreign direct investment

Abstract Two governments consider competing to attract a foreign monopoly to their markets. Competition involves offering incentives to the firm, lowering its marginal cost. The firm chooses to enter either of the markets, produce there and export to the other, to enter both with local production, or to reject all offers. We find conditions when it is optimal for one country not to compete, preferring imports to improving its economy. We show conditions when the country, knowing it will lose (win) the firm, finds it optimal (not) to compete, and establish the relationship between the firm’s choice and the governments’ characteristics.
The Origins of the fertility transition in rural Japan

An earlier paper suggested that Easterlins thesis might yield a plausible explanation for the marked rise and subsequent decline of marital fertility in Japan. Now considering this hypothesis to be inadequate a life cycle model of fertility is sketched which starts from a different premise i.e. that rational decisions about fertility are not formulated in terms of a number of surviving children. The presentation shows that the implications of this model for understanding the effects of a drop in infant mortality and an improvement in natural fertility differ from those in Easterlins framework. This precedes an analysis of a data set for interwar Japan from which findings are drawn which are consistent with the model presented but not with Easterlins. The basic theory concerns the operations of a peasant household that controls a fixed amount of land and arrives at its own decisions about production and consumption subject to institutional rules and exogenous constraints (e.g. the operation of external labor markets and general level of health prevailing in the surrounding community). The relevant institutional rules governing the patriarchal stem family system are twofold: labor tasks are differentiated on the basis of sex; and 1 son inherits the land when the patriarch the household head dies or retires and the surviving parent continues to reside with the heir but the other children leave. Decision making in the household is characterized as follows: the patriarch makes decisions for the household subject to bargaining with household members; and the patriarch has leverage over his children. The adjustment mechanisms described both concern demographic variables adjusting to a combination of economic and demographic variables through a process of maximization. Specifically the patriarch has 2 demographic instruments which he exercises choice over: the length of interbirth intervals and the age of his wife when they marry. The model can now be formulated as a problem in constrained maximization. The theory presented emphasizes 2 structural changes in accounting for the disappearance of the household behavior described by the model and of the associated aggregate demographic properties: the expansion of education which offers job certification independent of the patriarch; and the growth of labor markets which offer alternatives to the children and diminish the patriarchs control. Analysis of the Japanese materials suggests that the benefits and costs of leverage over children changes among all sectors of Japanese society in the period from about 1900 to the mid 1920s although the relative shifts in the costs and benefits varied from group to group. The findings suggest that the life cycle model of fertility has considerable explanatory power in accounting for the origins of the fertility transition in the "gun" of Japan.
Emerging Structures in Entrepreneurship Education: Curricular Designs and Strategies:

Analyzes the history of entrepreneurship education and presents frameworks for the development of entrepreneurship education courses and programs. In evaluating whether entrepreneurship has become an established discipline, the following areas are considered: systematic theory and an established body of literature; authority, professional associations, and communication sanction; ethical codes and culture; and career opportunities for graduates. At the time of this study, there were at least 12 academic journals and 20 annual conferences focused on entrepreneurship. In addition career opportunities included positions with newly established firms or as entrepreneurial executives with established firms. While entrepreneurship was recognized as a discipline and a career, business and management education was slow to react. Entrepreneurship education has developed along two dimensions: the absolute number of entrepreneurship courses and the degree of integration of the entrepreneurship courses. Using these dimensions, two frameworks are presented. The first framework, a matrix of these two dimensions, identifies four optimal combinations. The second framework is built upon two paths: stages of transition in a firm and a functional approach. As entrepreneurship programs are developed, multiple alternative structures and learning mechanisms are needed to meet the needs of a variety of individuals. (SRD)
Revenue Recognition in a Multiperiod Agency Setting

This paper examines how various revenue recognition rules affect the incentive properties of accounting information in a stewardship setting. Our analysis demonstrates that if revenues are recognized according to the realization principle, a single performance measure based on aggregated accounting information can be used to provide desirable production and effort incentives to the manager. In contrast, mark-to-market accounting does not provide efficient aggregation of raw information to solve the stewardship problem. Mark-to-market accounting, though sensible from a valuation perspective, fails to provide desirable incentives because it relies on the anticipated, rather than the actual, performance of the manager. We also consider a setting in which the manager can control the timing of the firm’s sales. It then becomes desirable to modify the realization principle and apply the lower-of-cost-or-market valuation rule. The desirable accounting thus exhibits a conservative bias.
The Remixing Dilemma The Trade-Off Between Generativity and Originality

In this article we argue that there is a trade-off between generativity and originality in online communities that support open collaboration. We build on foundational theoretical work in peer production to formulate and test a series of hypotheses suggesting that the generativity of creative works is associated with moderate complexity, prominent authors, and cumulativeness. We also formulate and test three hypotheses that these qualities are associated with decreased originality in resulting derivatives. Our analysis uses a rich data set from the Scratch Online Community—a large website where young people openly share and remix animations and video games. We discuss the implications of this trade-off for the design of peer production systems that support amateur creativity.
Technological Change and Risk Adjustment: Benefit Design Incentives in Medicare Part D†

Abstract Subsidized health insurance markets use diagnosis-based risk adjustment to induce insurers to offer an equitable benefit to individuals of varying expected cost. I demonstrate that technol...
Empirical evidence on the relation between stock option compensation and risk taking

Abstract We examine whether executive stock options (ESOs) provide managers with incentives to invest in risky projects. For a sample of oil and gas producers, we examine whether the coefficient of variation of future cash flows from exploration activity (our proxy for exploration risk) increases with the sensitivity of the value of the CEO's options to stock return volatility (ESO risk incentives). Both ESO risk incentives and exploration risk are treated as endogenous variables by adopting a simultaneous equations approach. We find evidence that ESO risk incentives has a positive relation with future exploration risk taking. Additional tests indicate that ESO risk incentives exhibits a negative relation with oil price hedging in a system of equations where ESO risk incentives and hedging are allowed to be endogenously determined. Overall, our results are consistent with ESOs providing managers with incentives to mitigate risk-related incentive problems.
Overview of the Term: The Rule of Law & Roberts's Revolution of Restraint

In this introduction to a symposium on Chief Justice Roberts’ first term, Professor Kmiec begins with a discussion of how the addition of Chief Justice Roberts and Justice Alito to the Supreme Court resulted in a continuation of the center-right tradition of the Rehnquist-O’Connor era, and he addresses the impact of Justice O’Connor’s retirement on Justice Kennedy’s jurisprudence. Professor Kmiec also evaluates Rehnquist’s final term, determining that, during this term, Rehnquist lost some of the hard earned constitutional advantages in the areas of religious accommodation, federalism, and the protection of property rights. Professor Kmiec ends his article with a discussion of Roberts’s first term as well as Roberts’s and Alito’s judicial approaches. He concludes that the appointment of Roberts and Alito bring to the Court a partnership in favor of judicial restraint and that Roberts’s and Alito’s attitude of humility and the new Chief’s desire and capability to achieve unanimity along with Justice Kennedy’s free thinking ways should mean a less ideological Bench overall.
Energy Footprint of the City: Effects of Urban Land Use and Transportation Policies

Abstract Urban land use and transportation policies have dramatic effects on the density and spatial distribution of residences in large cities. Effects of these policies have been analyzed using numerical urban simulation models. At the same time, the US Energy Information Administration’s Residential Energy Consumption Survey has allowed researchers to investigate the relation between household energy consumption and characteristics of housing units. This paper links these two lines of inquiry by demonstrating how simulation results on the implications of land use and transportation policies for the spatial form of cities can be used to compute implications for energy consumption. The resulting Urban Energy Footprint Model, “UEFM,” allows one to trace the implications of a change in land use zoning or transportation policy through its effects on housing markets and residential location to the resulting changes in energy use for residential and commuting purposes – i.e. to understand the energy footprint of transportation, housing, and land use policies. Accordingly, the UEFM provides, perhaps for the first time, a link between urban and energy economics, and can allow measurement of rebound effects of energy policies in a more general equilibrium context.
UPSTREAM VOLATILITY IN THE SUPPLY CHAIN: THE MACHINE TOOL INDUSTRY AS A CASE STUDY

Cyclicality is a well-known and accepted fact of life in market-driven economies. Less well known or understood, however, is the phenomenon of amplification as one looks “upstream” in the industrial supply chain. We examine the amplification phenomenon and its implications through the lens of one upstream industry that is notorious for the intensity of the business cycles it faces: the machine tool industry. Amplification of demand volatility in capital equipment supply chains, e. g., machine tools, is particularly large relative to that seen in distribution and component parts supply chains. We present a system dynamics simulation model to capture demand volatility amplification in capital supply chains. We explore the lead-time, inventory, production, productivity, and staffing implications of these dynamic forces. Several results stand out. First, volatility hurts productivity and lowers average worker experience. Second, even though machine tool builders can do little to reduce the volatility in their order streams through choice of forecast rule, a smoother forecasting policy will lead companies to retain more of their skilled work force. This retention of skilled employees is often cited as one of the advantages that European and Japanese companies have had relative to their U. S. competitors. Our results suggest some insights for supply chain design and management: downstream customers can do a great deal to reduce the volatility for upstream suppliers through their choice of order forecast rule. In particular, companies that use smoother forecasting policies tend to impose less of their own volatility upon their supply base and may consequently enjoy system-wide cost reduction.
Anglo-American Corporate Taxation: Tracing the Common Roots of Divergent Approaches

The UK and the USA have historically represented opposite ends of the spectrum in their approaches to taxing corporate income. Under the British approach, corporate and shareholder income taxes have been integrated under an imputation system, with tax paid at the corporate level imputed to shareholders through a full or partial credit against dividends received. Under the American approach, by contrast, corporate and shareholder income taxes have remained separate under what is called a 'classical' system in which shareholders receive little or no relief from a second layer of taxes on dividends. Steven A. Bank explores the evolution of the corporate income tax systems in each country during the nineteenth and twentieth centuries to understand the common legal, economic, political and cultural forces that produced such divergent approaches and explains why convergence may be likely in the future as each country grapples with corporate taxation in an era of globalization.
Lumpy Capacity Investment and Disinvestment Dynamics

Capacity addition and withdrawal decisions are among the most important strategic decisions made by firms in oligopolistic industries. In this paper, we develop and analyze a fully dynamic model of an oligopolistic industry with lumpy capacity and lumpy investment/disinvestment. We use our model to suggest answers to two questions: First, what economic factors facilitate preemption races? Second, what economic factors facilitate capacity coordination? With a series of examples we show that low product differentiation, low investment sunkness, and high depreciation tend to promote preemption races. The same examples also show that low product differentiation and low investment sunkness tend to promote capacity coordination. Although depreciation removes capacity, it might impede capacity coordination. Finally, our examples show that multiple equilibria arise over at least some range of parameter values. The distinct structures of these equilibria suggest that firms' expectations play a key role in determining whether or not industry dynamics are characterized by preemption races and capacity coordination. Taken together, our results suggest that preemption races and excess capacity in the short run often go hand-in-hand with capacity coordination in the long run.
Foreign Portfolio Investment and Shareholder Dividend Taxes

ABSTRACT: We investigate the effects of dividend taxes on foreign equity portfolio holdings. Based on the extension of an equilibrium model with risky assets to an international setting, we predict that a change in the tax rate on dividends of a country's domestic investors is positively related to changes in foreign investors' portfolio holdings in that country. The evidence from two research settings, which exploit changes in the national tax policies of different countries, supports this prediction. More generally, the model predicts that a foreign investor's equilibrium portfolio holdings in a country are negatively related to the dividend tax rate that she directly pays on assets in that country and positively related to the weighted-average dividend tax rate of worldwide investors in that country. Results from analyses using panel data provide empirical support for these predictions.
Information Leakage Prior to Company Issued Guidance

We find that information leakages prior to public guidance issued by company management exist even after Regulation Fair Disclosure (FD), and are more pronounced when characteristics of the firm, the guidance, or the industry reflect higher levels of information asymmetry. Since public guidance is only partially leaked, this information leakage can be used to anticipate the information content of the impending public guidance. We simulate a trading strategy based on the preguidance leakage in the period after Regulation FD, which suggests that information leakage is an effective signal of the information content within impending public guidance.
Enlivening Election Law

This article, for the Teaching Election Law Symposium issue, explains how I use visual and other aids in my Election Law course. I provide specific examples of images, video clips, and other tools I present to my class to enliven discussion of the cases.
Trade costs and multimarket collusion

Contrary to conventional wisdom, this article argues that trade liberalization may facilitate collusion and reduce welfare. With the help of a duopoly model in which firms interact repeatedly in multiple markets, we first show that, if trade costs (i.e., tariffs/transport costs) and discount factors are not too high, efficient cartel agreements necessitate the cross-hauling of goods, as that entails lower deviation incentives. In this setting, we then demonstrate that reciprocal trade liberalization always raises total output when trade costs are within a range whose lower bound exceeds a threshold level, but may reduce total output (and thus be pro-collusive) when trade costs are below that threshold level.
The Grand Bargain: Revitalizing Labor through NLRA Reform and Radical Workplace Relations

Amid steadily declining union density, debate has taken center stage in the American labor movement regarding the potential or even utility of reforming the National Labor Relations Act to reverse the trend. This Note argues that such reform is possible, through a grand legislative bargain nationalizing the so-called rightto-work regime in exchange for abolishing the NLRB election in favor of the card-check union certification procedure. Using legal, sociological, and radical democratic theory and examples, this Note demonstrates that, counterintuitively, the right-to-work environment can strengthen unions instead of weakening them. Both changes therefore benefit labor. Notes
Crime and Urban Flight Revisited: The Effect of the 1990s Drop in Crime on Cities

The ‘flight from blight’ and related literatures on urban population changes and crime have primarily considered times of high or increasing crime rates. Perhaps the most cited recent work in this area, Cullen and Levitt (1999), does not extend through 1990s, a decade during which crime rates declined almost continuously, to levels that were lower than experienced in decades. This paper examines whether such declines contributed to city population growth and retention (abated flight). Through a series of population growth models that attempt to identify causality through several strategies (including instrumental variables) we find at best weak evidence that overall city growth is affected by changes in crime. We find no evidence that growth is differentially sensitive to reductions in crime, as compared to increases. Focusing more narrowly on within MSA migration, residential decisions that are more likely to be sensitive to local conditions, we do find evidence supporting abatement of ‘flight’ – that is, lower levels of crime in central cities in the 1990s are associated with lower levels of migration to the suburbs. This greater ability to retain residents already in the city does not appear to be accompanied by a greater ability to attract new households from the suburbs, or from outside of the metropolitan area.
Health systems in East Asia : what can developing countries learn from Japan and the Asian tigers ?

The health systems of Japan and the Asian Tigers (Hong Kong, Korea, Singapore and Taiwan), and the recent reforms to them, provide many potentially valuable lessons to East Asia's developing countries. All five systems have managed to keep a check on health spending despite their different approaches to financing and delivery. These differences are reflected in the progressivity of health finance, but the precise degree of progressivity of individual sources and the extent to which households are vulnerable to catastrophic health payments depend on the design features of the system - the height of any ceilings on social insurance contributions, the fraction of health spending covered by the benefit package, the extent to which the poor face reduced copayments, whether there are caps on copayments, and so on. On the delivery side, too, Japan and the Tigers offer some interesting lessons. Singapore's experience with corporatizing public hospitals - rapid cost and price inflation, a race for the best technology, and so on - illustrates the difficulties of corporatization. Korea's experience with a narrow benefit package illustrates the danger of providers shifting demand from insured services with regulated prices to uninsured services with unregulated prices. Japan, in its approach to rate setting for insured services, has managed to combine careful cost control with fine-tuning of profit margins on different types of care. Experiences with DRGs in Korea and Taiwan point to cost-savings but also to possible knock-on effects on service volume and total health spending. Korea and Taiwan both offer important lessons for the separation of prescribing and dispensing, including the risks of compensation costs outweighing the cost savings caused by more 'rational' prescribing, and cost-savings never being realized because of other concessions to providers, such as allowing them to have onsite pharmacists.
The Ethics of Incentivizing Mammography Screening.

Patient health incentives are an increasingly common policy tool and have been used widely in areas including smoking cessation and weight loss. In such cases, achieving the incentivized targets produces health and financial benefits without any risks. But other incentivized health behaviors differ. Breast cancer screening is a case in point: incentives for completion of mammograms are an ethically disconcerting distraction in a complex decision-making process. However, incentives for making an evidence-based active choice about breast screening can be ethical — even if this policy may avert fewer breast cancer deaths overall.
Institutional and strategic choice perspectives on board involvement in the strategic decision process.

The level of a board of directors’ involvement in strategic decisions can be viewed as an institutional response or as a strategic adaptation to external pressures for greater board involvement. We...