cssi/SciSciGPT-SciSciNet huggingface dataset:
Corporate Governance, Executive Compensation, Corporate Performance, and Worker Rights in Bankruptcy: Some Lessons from Game Theory

This Article proposes amending the Bankruptcy Code so that when a publicly held company files for bankruptcy, its senior executives must automatically disgorge all compensation beyond 330,000 dollars annually for the previous three years. An annual salary of 330,000 dollars still places these senior executives in the top one percent of wage earners. Disgorged moneys recovered would be applied to compensate employees for losses to their 401k pension plans. These 401k plans are typically filled with company stock. This proposal is designed to compensate workers when their corporate employer files for bankruptcy, causing the 401k plan to be worthless. Bankruptcy is an appropriate triggering event because firms in bankruptcy typically lay off a substantial number of their workers. By providing this safety net, workers are less likely to face the prospect of both loss of employment and loss of retirement savings. The role of the firm is the maximize shareholder value. Executive compensation is designed to reflect firm performance. During the last two decades, however, executive compensation has increased dramatically without necessarily bearing any relationship to the company's performance. If the firm is filing for bankruptcy, then firm performance never warranted the senior executives receiving excessive compensation. Applying the Prisoner's Dilemma, a game theory exercise, to executive compensation and firm performance suggests that this proposal better aligns shareholder interests with firm performance. A severe sanction persuades executives to place corporate performance above stock manipulation for short-term gain. Theoretical justification for this proposal also can be found in the bankruptcy principles of avoidance of preferential transfers and fraudulent conveyances. The author concludes that the political environment may be ripe for reform in the areas of executive pay and workers' rights.
Online Network Revenue Management Using Thompson Sampling

Thompson sampling is a randomized Bayesian machine learning method, whose original motivation was to sequentially evaluate treatments in clinical trials. In recent years, this method has drawn wide...
The Link between Information and Bargaining Efficiency

The article reviews the relevant theory and research linking information and bargaining efficiency and presents results of an analysis of negotiation times associated with 290 franchise renewal agreements. Data reveal three main findings: (1) Information revealing a history of poor performance by the supplier resulted in a 74% increase in negotiation time; (2) A 1% increase in the value of a contract increased negotiation time by 18%; and (3) the participation of an expert resulted in a 24% decrease in negotiation time. We also consider and test various moderator and mediator effects and conclude that the length of the previous relationship between the parties neither directly nor indirectly affects the negotiation time in a substantively meaningful way, nor does it mitigate the negative effect of conflict history.
Does Anybody Really Need a Limited Public Forum

A large portion of the physical property and means of communications in this country is owned or controlled by the government. Consequently an important constitutional law issue is the extent to which speakers may use such property to exercise First Amendment protected speech rights. To resolve this question, the United States Supreme Court uses a forum analysis. Under this framework the right to use government property for speech purposes and the standard of judicial review that applies for government exclusions depend on how the property is categorized. The three basic categories that the Court has recognized are the traditional public forum, the designated public forum and the nonpublic forum. The Court has also recognized a fourth category known as the limited public forum. However, some commentators and individual Justices have concluded that the Court has drained the limited public forum of any practical significance. Nonetheless, it lives on as a shell, and its continued existence has caused doubt and confusion among the Federal Circuit Courts of Appeals. The article analyzes the Court’s forum structure. It argues that is time to bury the limited public forum as a separate and distinct category because as a practical matter it serves no useful purpose. Instead, it proposes that the Court analyze speaker access issues in terms of open and restrictive forums. Such an approach would make the analysis in forum cases easier, more direct, and less confusing.
The Shadow Cost of Bank Capital Requirements

We estimate the shadow cost of capital requirements using data on a costly loophole that allowed banks to relax these constraints. This loophole—liquidity guarantees to asset-backed commercial paper conduits—was exploited by the largest banks before the crisis of 2008. We show theoretically that a bank's use of the loophole reveals its private compliance cost, which takes into account both the costs of issuing equity and the effectiveness of capital regulation. We find that increasing capital requirements would impose a modest cost—$220 million a year for all participating banks combined per one-percentage-point increase, and $14 million on average.
Are all odd-lots the same? Odd-lot transactions by order submission and trader type

Abstract We study odd-lot trading and determine if an odd-lot trade results from odd-lot orders or if odd-lots are a result of orders broken into multiple trades. We confirm that odd-lot transactions contribute to price discovery. Our finding that odd-lot transactions contain substantial information is not being driven by orders that are originally larger than 100 shares and subsequently divided into odd-lot transactions. We further find that odd-lot transactions resulting from odd-lot orders add more to price discovery than odd-lot transactions resulting from orders for 100 or more shares. Additionally, we find that more price contribution occurs when non-high frequency traders trade in an odd-lot transaction.
Why Do Part-Time Workers Earn Less? The Role of Worker and Job Skills

Part-time workers receive considerably lower hourly earnings than do full-time workers. Using Current Population Survey earnings files for September 1995 through December 2002, the author finds that measurable worker and job characteristics, including occupational skill requirements, account for much of the part-time penalty. Longitudinal analysis of the data indicates that much of the remaining gap reflects worker heterogeneity, evidenced by small wage gains and losses among workers switching between part-time and full-time jobs. The lower skills of part-time than full-time workers result primarily from limited work experience and accumulation of human capital. Little evidence can be found of a large wage gap between part-time and full-time women. A part-time wage penalty is found for men, but men account for less than one-third of total part-time employment.
A skeptical appraisal of asset pricing tests.

Abstract It has become standard practice in the cross-sectional asset pricing literature to evaluate models based on how well they explain average returns on size-B/M portfolios, something many models seem to do remarkably well. In this paper, we review and critique the empirical methods used in the literature. We argue that asset pricing tests are often highly misleading, in the sense that apparently strong explanatory power (high cross-sectional R2s and small pricing errors) can provide quite weak support for a model. We offer a number of suggestions for improving empirical tests and evidence that several proposed models do not work as well as originally advertised.
Analyzing Artistic Innovation: The Greatest Breakthroughs of the Twentieth Century

The true subject of art history is the succession of innovations that have changed the practices of artists over time. This article uses a survey of illustrations in textbooks to consider not only when in their careers the greatest artists of the twentieth century made their greatest discoveries but also how quickly they made them. The results underscore the dominant position of Pablo Picasso and Cubism in twentieth-century art: Picasso alone accounts for the two best three-year periods produced by any artist, and he and Georges Braque account for three of the best five-year periods, all for the work the two young artists did in creating Cubism. Andy Warhol's innovations in pop art and Henri Matisse's development of Fauvism also rank among the century's most important breakthroughs. In general, identifying the most important short periods of artistic creativity highlights the differing methods of conceptual and experimental artists: great conceptual innovators (e.g., Picasso, Matisse, and Warhol) made the...
Strategic Austerity: How Some Law School Affordability Initiatives Could Actually Improve Learning Outcomes

The legal profession is facing profound and perhaps irreversible changes. Whether you view these striking demographics as a “crisis” likely depends on the location of your perch. If you are a tenured professor at a T14 law school or a senior partner at an NLJ 250 firm, you may view the trends we have been discussing today as cyclical corrections. If you are an unemployed graduate looking for work or an untenured professor at a lower-tier school that is struggling to stay afloat, you may be more likely to view these trends as permanent and paradigm shifting. While applications to American law schools have been dropping markedly since 2005, the last three years have seen the most dramatic changes. Between 2010 and 2012, the total number of applicants to U.S. law schools decreased by twenty-four percent.1 This year alone—2012–2013—the number of applicants dropped another thirteen percent.2 By 2014, the legal academy may for the first time face an open enrollment situation where the total number of available seats exceeds the number of applicants. Most law schools have responded to this sharp application decline in one of two ways. Many schools have dramatically reduced their class sizes, which entails foregoing tuition revenue. Lower gross revenue means schools must seek out opportunities to cut costs. Other schools have kept their class sizes relatively stable by offering more scholarship assistance to attract students (essentially increasing their discount rates). This approach too requires expenditure cuts, because absent additional non-tuition
When did unsystematic monetary policy have an effect on inflation

Abstract An important stylized fact to emerge from VAR estimates is that exogenous monetary policy shocks (also labelled unsystematic monetary policy) have a delayed, persistent, hump-shaped effect on inflation. I argue that this empirical pattern is fragile. In particular, it disappears when one examines periods without large shifts in the level of inflation (such as 1984–2005). An important consequence is that the hump-shaped VAR estimated response of inflation is not appropriate to fit stylized models of the response of inflation around a stable steady state inflation level.
Takeovers and the dynamics of information flows

Abstract This paper analyzes the effect of a possible takeover on information flows and on the terms of trade in business relationships. We consider a long-term relationship between a firm and a privately informed stakeholder, say a buyer. In our model, takeovers both increase the surplus from trade and enable the firm to extract a potentially higher share of the surplus from the buyer. The possibility of a takeover that leaves the buyer with a higher (resp. lower) rent than the incumbent manager increases (resp. decreases) the buyer's willingness to reveal his valuation. We suggest a number of testable predictions on the performance of takeover targets and trade credit.
The Information in Management’s Expected Earnings Report Date: A Day Late, a Penny Short

Since 1995, managers of thousands of firms have voluntarily disclosed the expected date of their firm’s next quarterly earnings announcement to Thomson Financial Services Inc. These disclosures are approximately 500% more accurate than the simple time–series expected report dates used in prior accounting research. These disclosures are also informative. On average, managers who miss their own expected date eventually report earnings that fall about one penny per share below consensus forecasts for each day of delay. Investors respond by sending the price of late–announcing stocks down at the missed expected report date and continue to send them down as the reporting delay lengthens, consistent with our “day late, penny short” result. Despite this, we find that the market response at the time earnings are announced still depends on whether the announcement is early, on time, or late relative to the firm’s own expected report date.
Empirical Risk-Return Analysis of Real Estate Investments in the U.S., 1972–1999

This article reviews empirical risk and return statistics from physical real estate and financial real estate investments made in the U.S. Twenty-seven years of returns from various categories of U.S. real estate are compared and contrasted with concurrent U.S. returns from bonds, gold, silver, common stocks, commodities, and the rate of inflation.
A meta-analysis of the impact of price presentation on perceived savings

Abstract Pricing is one of the most crucial determinants of sales. Besides the actual price, how the price offering is presented to consumers also affects consumer evaluation of the product offering. Many studies focus on “price framing,” i.e., how the offer is communicated to the consumer —is the offered price given along with a reference price, is the reference price plausible, is a price deal communicated in dollar or percentage terms. Other studies focus on “situational effects,” e.g., is the evaluation for a national brand or a private brand, is it within a discount store or a specialty store. In this article, a meta-analysis of 20 published articles in marketing examines the effects of price frames and situations on perceived savings. The results reveal many features that significantly influence perceived savings. For instance, while both the percent of deal and the amount of deal positively influence perceived deal savings, deal percent has more impact. Further, the presence of a regular price as an external reference price enhances the offer value of large plausible deal and implausible deals, but not of small plausible deals. Thus, high value deals should announce the regular price, but not low value deals. Overall, the results have several useful insights for designing promotions.
Stock Returns over the FOMC Cycle

We document that since 1994, the equity premium is earned entirely in weeks 0, 2, 4, and 6 in Federal Open Market Committee (FOMC) cycle time, that is, even weeks starting from the last FOMC meeting. We causally tie this fact to the Fed by studying intermeeting target changes, Fed funds futures, and internal Board of Governors meetings. The Fed has affected the stock market via unexpectedly accommodating policy, leading to large reductions in the equity premium. Evidence suggests systematic informal communication of Fed officials with the media and financial sector as a channel through which news about monetary policy has reached the market.
Superior Information, Income Shocks, and the Permanent Income Hypothesis

According to the permanent income hypothesis with quadratic preferences, households save for a rainy day the transitory component of income innovations and consume entirely the permanent one. The m...
Why Study Large Projects? An Introduction to Research on Project Finance

Despite the fact that more than $200 billion of capital investment was financed through project companies in 2001, an amount that grew at a compound annual rate of almost 20% during the 1990s, there has been very little academic research on project finance. The purpose of this article is to explain why project finance in general and why large projects in particular merit separate academic research and instruction. In short, there are significant opportunities to study the relationship among structural attributes (i.e., high leverage, contractual details, and concentrated equity ownership), managerial incentives, and asset values, as well as improve current practice in this rapidly growing field of finance.
News and volatility of food prices

Financial markets exhibit an asymmetric news effect with unexpected low prices generating more price volatility than ‘news’ of high prices. The present study examines US food markets for such asymmetric news effects. Analysis of 25 years of monthly data for 45 retail food items shows that price news destabilizes about a third of the markets with unexpected price increases more destabilizing.
Justice-as-Fairness as Judicial Guiding Principle: Remembering John Rawls and The Warren Court

This Article looks to the United States Supreme Court’s jurisprudence during the years 1953-1969 when Earl Warren served as Chief Justice, a period marked by numerous landmark rulings in the areas of racial justice, criminal procedure, reproductive autonomy, First Amendment freedom of speech, association and religion, voting rights, and more. The Article further discusses the constitutional bases for the Warren Court’s decisions, principally the Fourteenth Amendment equal protection and due process clauses.The Article explains that the Warren Court’s equity-based jurisprudence closely resembles, at its root, the “justice-as-fairness” approach promoted in John Rawls’s monumental 1971 work, A Theory of Justice. The Article relates how Rawls’s theory, based on principles of fairness and equal opportunity, has resonated in legal and constitutional theory.The Article suggests that by combining elements of both the Warren Court’s jurisprudence and John Rawls’s theory of justice, it is possible to devise an approach to judicial decision-making that would well serve America’s core principles of liberty and equal justice for all. A justice-as-fairness approach would enable the judiciary to impartially address the social and political realities of the twenty-first century.
Shaping future GATS rules for trade in services

The new round of negotiations has begun with a mechanical sense of"since we said we would, therefore we must,"says the author. To make the General Agreement on Trade in Services (GATS) more effective ay liberalization, the author suggests improving the agreement's rules, countries'specific commitments, and the negotiating methodology: 1) Wasteful regulations, and entry restrictions pervade trade in services. Unlike the GATT, the GATS has created no hierarchy of instruments of protection. It may be possible to create a legal presumption in favor of instruments (such as fiscal measures) that provide protection more efficiently. 2) Many countries have taken advantage of the GATS to create a more secure trading environment, by making legally binding commitments to market access. The credibility of reform would increase with wider commitments to maintain current levels of openness, or to increase access in the future. 3) Multilateral rules on domestic regulations can help promote, and consolidate domestic regulatory reform, even when the rules are designed primarily to prevent the erosion of market access for foreign providers. The pro-competitive principles developed for basic communications, could be extended to other network-based services sectors, such as transport (terminals and infrastructure), and energy services (distribution networks). The"necessity test"instituted for accounting services, could be applied to instruments in other sectors (so that doctors judged competent in one jurisdiction, wouldn't have to be retrained for another, for example). 4) Anticompetitive practices that fall outside the jurisdiction of national competition law, may be important in such sectors as maritime, air transport, and communications services. Strengthened multilateral rules are needed to reassure small countries with weak enforcement capacity, that the gains from liberalization will not be appropriated by international cartels. 5) Explicit departures from the most-favored-nation rule matter most in such sectors as maritime transport, audiovisual services, and air transport services - which have been excluded from key GATS disciplines. Implicit discrimination can be prevented by developing rules to ensure the non-discriminatory allocation of quotas, and maintaining the desirable openness of the GATS provision on mutual recognition agreements. 6) Reciprocity must play a greater role in negotiations, if the GATS is to advance liberalization beyond measures taken independently.
A Means-Methods Paradox and the Legality of Drone Strikes in Armed Conflict

This article examines the legality of drone strikes. It limits the analysis to conduct within a traditionally defined armed conflict, in order to focus more clearly on the question of whether features inherent to the drone as a weapons system might make it conducive to violations of international law. The article reviews the applicable legal principles from international humanitarian law and international human rights law, and examines the record of civilian deaths caused by drone strikes in Afghanistan. While transparency and accountability are a problem, the study suggests that the drone strike operations may be characterised by more direct systemic violations of international law. In examining such potential violations the article considers the features inherent to the drone as a ‘means' of warfare, and the features of the policy and practices that underlie the ‘methods' of warfare related to drone strikes, with the aim of determining which is more responsible for any violations. The features of the ar...
Boards, Uncertainty, and the Use of Fairness Opinions

Manuscript Type: Empirical Research Question/Issue: We propose and test a new perspective on why the boards of some acquiring firms purchase a fairness opinion (FO). Specifically, we examine whether the board's knowledge explains the use of an FO and the market reaction to the FO. Research Findings/Insights: We find that FOs are more likely to be purchased when the acquiring firm's board feels uncertain about the deal. Specifically, we find that boards with more outside directors are more likely to use an FO, while boards whose directors hold more outside appointments (busy boards) are less likely to seek an FO. Moreover, we find that although the market reacts negatively to the FO, board characteristics both moderate and exacerbate the reaction. When an FO is used by a busy board, the market reacts more negatively to the merger announcement. In contrast, board independence and the average service years for directors seem to moderate the market's reaction to the FO. Theoretical/Academic Implications: The results of this study are consistent with the idea that a lack of knowledge and underlying transaction uncertainty motivates the board to purchase an FO. In addition, our empirical evidence supports a sophisticated market reaction, where the market recognizes the board's knowledge when assessing the necessity of the FO. Practitioner/Policy Implications: This study provides a new perspective on why boards use FOs. A board with more outside directors may be strong on monitoring, but may lack knowledge on the deal. This essentially provides an example of a cost associated with an independent board. Further, we show that the market can differentiate the types of boards that use an FO.
REDD+, Adaptation, and Sustainable Forest Management: Toward Effective Polycentric Global Forest Governance

The Reduced Emissions from Deforestation and Degradation (REDD+) program emerging as a part of the international climate change regime holds the potential to dramatically affect forestry in the tropics. REDD+ has demonstrated an ability to overcome the major political obstacles to earlier efforts to promote sustainable forest management (SFM) in the tropics, but key questions regarding its on-the-ground impact remain. This article suggests that REDD+ can become a successful vehicle for advancing SFM if it is re-conceived to include support for adaptation as one of its primary goals. Some degree of adaptation is necessary to effectively implement any form of REDD+, and SFM practices offer the core toolkit for securing forest adaptation in the context of REDD+. Re-envisioning REDD+ as a dual-focus program aimed at mitigation and adaptation builds upon the potential synergies between these two climate regime goals and calls upon experiences with SFM to provide the means of achieving them. Operationalizing th...
Technology Trends in Staffing and Assessment: A Practice Note

This practice note listed and described, from a practitioner's perspective, ten dominant technology trends that are impacting the personnel testing industry. Five trends were classified as ‘platform-centric,’ and five were classified as ‘information-centric.’ Platform-centric trends were related to virtual career centers, integrated assessment platforms, media-rich assessments, technology-friendly tests, and the adaptation of personnel tests to emerging technologies. Information-centric trends were related to Internet-age access and fairness concerns, computer-enabled scoring innovations, strategic HR data warehousing and mining, satisfaction with computer-based assessments, and computer-based testing standards. A review of these ten technology trends suggests that the personnel testing industry is keeping pace with rapid technological innovations.
Why do pro forma and Street earnings not reflect changes in GAAP? Evidence from SFAS 123R

This study examines how key market participants—managers and analysts—responded to SFAS 123R’s controversial requirement that firms recognize stock-based compensation expense. Despite mandated recognition of the expense, some firms’ managers exclude it from pro forma earnings and some firms’ analysts exclude it from Street earnings. We find evidence consistent with managers opportunistically excluding the expense to increase earnings, smooth earnings, and meet earnings benchmarks but no evidence that these exclusions result in an earnings measure that better predicts future firm performance. In contrast, we find that analysts exclude the expense from earnings forecasts when exclusion increases earnings’ predictive ability for future performance and that opportunism generally does not explain exclusion by analysts incremental to exclusion by managers. Thus our findings indicate that opportunism is the primary explanation for exclusion of the expense from pro forma earnings and predictive ability is the primary explanation for exclusion from Street earnings. Our findings suggest the controversy surrounding the recognition of stock-based compensation expense may be attributable to cross-sectional variation in the relevance of the expense for equity valuation, as well as to differing incentives of market participants.
The Design and Production of New Retirement Savings Products

As pension plans in the United States and other countries shift from defined-benefit to defined-contribution plans, employees are being asked to bear investment risk formally borne by employers and/or governments. Using a simulation model, the authors examine the performance of alternative investment strategies and products over the working life of a hypothetical employee. The results illustrate the uncertainty inherent in standard investment products and suggest the need for new products that would help employees manage investment risk. The authors explore the performance of investment products that provide a floor on the value of the worker9s investment over some period of time, say, five years, and also provide some share of the upside of the equity market. These products appear to work well; for example, workers who invest their annual retirement contributions in a series of five-year insured products appear to have a higher chance of achieving their retirement income target than if they were to invest the same amount in the S&P 500 index.
The United States as a Coastal Nation

US economic activity is overwhelmingly concentrated at its ocean and Great Lakes coasts, reflecting a large contribution from coastal proximity to productivity and quality of life. Extensively controlling for correlated natural attributes and initial conditions decisively rejects that the coastal concentration of economic activity is spurious or just derives from historical forces long since dissipated. Measuring proximity based on coastal attributes that contribute to either productivity or quality of life, but not to both, suggests that the coastal concentration derives primarily from a productivity effect but also, increasingly, from a quality of life effect.
Peculiar Risk in American Tort Law

American tort law includes a significant strand of liability tied to an intriguing concept variously termed “peculiar risk,” “special danger,” and “special risk inherent in the work,” among others. Peculiar risk presents a basis for liability different from other standards or actions that trigger liability in tort law - it is different from intent, recklessness, negligence, nuisance, and abnormally dangerous activity. Both England and the United States endorsed versions of the doctrine in the late nineteenth and early twentieth centuries. Yet, by 1965, American and English tort law had sharply diverged on the doctrine. American courts continued to apply it; meanwhile, the doctrine had been severely limited in England and rejected in several other common law countries. The divide between the American approach and treatment of the doctrine outside the U.S. is a puzzle. In countries that have rejected or severely limited the doctrine, the critiques have included decisional indeterminacy and shaky historical and normative justifications. Yet a doctrine subject to these criticisms elsewhere has remained well accepted in the United States in the last thirty years - a thirty-year period characterized by extensive tort reform across the bandwidth of tort law.This Article explores three points about this divide between American tort law and the tort law of other common law countries: when and how the divide occurred; why this doctrine - whose breadth and indeterminacy spelled its disfavor elsewhere - remained well-accepted in America despite the intensity and duration of American tort reform; and whether the American version of the doctrine offers lessons for tort law outside the United States.
Macroeconomic Theory For a World of Imperfect Knowledge

We have recently proposed an alternative approach to economic analysis, which we call Imperfect Knowledge Economics (IKE). Although IKE builds on the methodology of contemporary macroeconomics by modeling aggregate outcomes on the basis of mathematical representations of individual decision making, it jettisons models that generate sharp predictions. In this paper, we elaborate on and extend the arguments that led us to propose IKE. We show analytically that in order to avoid the fundamental epistemological flaws inherent in extant models, economists must stop short of fully prespecifying change. We also show how acknowledging the limits of their knowledge may enable economists to shed new light on the basic features of observed time-series of market outcomes, such as fluctuations and risk in asset markets, which have confounded extant approaches for decades.
See No Evil: Applying a Labor Lens to Prostitute Organizing

This Note examines labor organizing efforts of marginalized labor and, based on that examination, formulates a theory of what I call "margins-organizing." It then applies that theory to the labor organizing efforts of sex workers. It argues that whatever one's feelings are about sex work itself, the separate work of labor organizing is as similar to and as valid as that of other marginalized workers. The hope is that by bringing sex workers within the margins-organizing lens, that group will be better able to form ties with, learn from, and teach other marginalized labor groups. Part I introduces the notion that sex worker organizing should be included within the framework of margins-organizing. Part II gives a quick background in the NLRA and explains why the NLRA may be of little use to sex workers and other marginalized-workers. Part III explores commonalities between immigrant day laborers, immigrant domestic workers, and sex workers. Part III then looks role of worker centers, cooperatives, and other identity-based organizing in the organizing efforts of day laborers and domestic workers. Part IV suggests a holistic framework of organizing at the margins, drawn from these methods. Part V shows how sex workers are also organizing in much the same way as other marginalized groups by applying the framework of margins-organizing to the work that sex workers are already doing.
THE STATION NIGHTCLUB FIRE AND FEDERAL JURISDICTIONAL REACH: THE MULTIDISTRICT, MULTIPARTY, MULTIFORUM JURISDICTION ACT OF 2002

1. Pub. L. No. 107-273, § 11020, 116 Stat. 1758 (2002). It is part of the 21st Century Department of Justice Appropriations Authorization Act. 2. Professor of Law, Western New England College School of Law. Professor Adomeit teaches Civil Procedure and Labor Law. He is a member of the National Academy of Arbitrators. He also has served as a Special Master in discovery matters in Federal Court. 3. The others were Boston, Massachusetts, 1942-"the Coconut Grove fire"­ (491 killed); Natchez, Mississippi, 1940 (198 killed); and Southgate, Kentucky, 1977 (175 killed). Elizabeth Mehren & Stephen Braun, Rhode Island Nightclub Fire Toll Nears 100; Band's Pryotechnics Ignite a Life-or-Death Rush for the Exits, L.A. TIMES, Feb. 22, 2003, at 1. For a history of nightclub fires in America, and how strict enforcement and building codes have reduced the yearly number of nightclub fires from 1,369 in 1980 to 510 in 1998, see id. The worst single-building fire in American history killed 600 at the Chicago Iroquois Theater in 1903 when the stage curtains ignited. This is the subject of a book by Tony Hatch entitled TINDER Box. Sean D. Hamill, "Tinder Box" Author Notes Tragic Parallel to Club Deaths, CHI. TRIB., Mar. 4, 2003, at 1. The Ringling Bros. and Barnum & Bailey tent fire of 1944 in Hartford killed 168. Raja Mishra, Hartford Group-Home Fire Kills 10, Dozens of Disabled, Aged Patients Led to Safety, 23 Hurt, BOSTON GLOBE, Feb. 27, 2003, at B-1. 4. Dave Wedge & Jessica Heslam, Station Pyro Passed Muster in Past, BOSTON HERALD, Mar. 5, 2003, at 1; Michael Powell, R.l. Inspector Never Cited Foam; Club Where 98 Died in Fire Used Flammable Soundproofing , WASH. POST, Mar. 4, 2003, at A-2. 5. The Act, which became effective on November 2, 2002, provides: "The amend­ ments made by subsection (b) [adding 28 U.S.C.S. §§ 1369,1697, and 1785, and amend­
Competition in Service Industries with Segmented Markets

We develop a model for the competitive interactions in service industries where firms cater to multiple customer classes or market segments with the help of shared service facilities or processes so as to exploit pooling benefits. Different customer classes typically have distinct sensitivities to the price of service as well as the delays encountered. In such settings firms need to determine (i) the prices charged to all customer classes; (ii) the waiting time standards, i.e., expected steady state waiting time promised to all classes; (iii) the capacity level; and (iv) a priority discipline enabling the firm to meet the promised waiting time standards under the chosen capacity level, all in an integrated planning model that accounts for the impact of the strategic choices of all competing firms. We distinguish between three types of competition: depending on whether firms compete on the basis of their prices only, waiting time standards only, or on the basis of prices and waiting time standards. We establish in each of the three competition models that a Nash equilibrium exists under minor conditions regarding the demand volumes. We systematically compare the equilibria with those achieved when the firms service each market segment with a dedicated service process.
Collection of Student Loans: A Critical Examination

Although the collection of college student loans centers this article, some background precedes its main topic. It begins by defining and distinguishing federal and private student loans. Next is repayment of loans, postponing repayment through deferment, forbearance, extensions, and public-interest assistance and cancellation. Perkins loan deferment, forbearance, and cancellation follow. Delinquency and default are next, including collection fees and penalties, administrative wage garnishment, state and federal income-tax-refund offsets, federal benefits offsets, and professional-license suspension. The lender’s judicial collection is followed by the borrower’s limited affirmative defenses and post-judgment tools. A borrower may exit default through consolidation and rehabilitation. There are two types of statutory discharges: school-related discharges and discharges for death and disability. The article turns to discharge of student loans in federal bankruptcy; the scope of the discharge exception leads to the rigorous statutory test, “undue hardship.” The article also compares collection techniques and policy justifications for delinquent family support with collection of student loans. Like a maze, educational debt is easy to enter but difficult to exit. The important policy that a debtor should pay her just debts isn’t an absolute. Life happens. Considering the formidable pre- and post-judgment collection techniques and the absence of defenses like of the statute of limitations, the student-loan borrower’s only sure exit is the final exit of death. The article concludes by recommending that the delinquent student-loan borrower’s plight be ameliorated. Treatment of student-loan debt like other debt, for example like credit-card debt, is a consummation sincerely to be wished.
Was the disparate impact theory a mistake

The disparate impact theory has long been viewed as one of the most important and controversial developments in antidiscrimination law. In this article, Professor Selmi assesses the theory's legacy and challenges much of the conventional wisdom. Professor Selmi initially charts the development of the theory, including a close look at Griggs v. Duke Power Co. and Washington v. Davis, to demonstrate that the theory arose to deal with specific instances of past discrimination rather than as a broad theory of equality. In the next section, Professor Selmi reviews the success of the theory in the courts through an empirical analysis and concludes that the theory has had a strikingly limited impact outside of the context of written employment tests and is, in fact, an extremely difficult theory on which to succeed. In the final section, Professor Selmi contends that whatever gains the disparate impact theory has produced could likely have been obtained through other means, particularly in large urban cities, and that the theory may have had the unintended effect of limiting our conception of intentional discrimination. Disparate impact theory has always been seen as beginning where intentional discrimination ends, and by pushing an expansive theory of impact we were left with a truncated theory of intentional discrimination, one that continues to turn on animus and motive. Rather than a new legal theory of discrimination, what was needed, Professor Selmi concludes, was a greater societal commitment to remedying inequities and the ultimate mistake behind the theory was a belief that legal theory could do the work that politics could not.
Dividend Yields and Expected Stock Returns: Alternative Procedures for Interference and Measurement

Alternative ways of conducting inference and measurement for long-horizon forecasting are explored with an application to dividend yields as predictors of stock returns. Monte Carlo analysis indicates that the Hansen and Hodrick (1980) procedure is biased at long horizons, but the alternatives perform better. These include an estimator derived under the null hypothesis as in Richardson and Smith (1989), a reformulation of the regression as in Jegadeesh (1990), and a vector autoregression (VAR) as in Campbell and Shiller (1988), Kandel and Stambaugh (1988), and Campbell (1991). The statistical properties of long-horizon statistics generated from the VAR indicate interesting patterns in expected stock returns.
Quote setting and price formation in an order driven market

Abstract This paper models quote setting and price formation in a non-intermediated, order driven market where trading occurs because investors differ in their share valuations and the advent of news that is not common knowledge, and tests the model using transaction data on individual stocks in the ParisBourse CAC40 index. As an extension of Foucault (1999) , we show that the size of the spread is a function of the differences in valuation among investors and of adverse selection. Both GMM estimation of the model parameters and empirical evidence on spread behavior as the relative proportion of buyers and sellers in the market changes, provide strong support for the model. Our analysis yields further insight into the dynamic process of price formation and into the market clearing process in an order driven market.
On the Divergent American Reactions to Terrorism and Climate Change

Two of the most important sources of catastrophic risk are terrorism and climate change. The United States has responded aggressively to the risk of terrorism while doing very little about the risk of climate change. For the United States alone, the cost of the Iraq war is now in excess of the anticipated cost of the Kyoto Protocol. The divergence presents a puzzle; it also raises more general questions about both risk perception and the public demand for legislation. The best explanation for the divergence emphasizes bounded rationality. Americans believe that aggressive steps to reduce the risk of terrorism promise to deliver significant benefits in the near future at acceptable cost. By contrast, they believe that aggressive steps to reduce the risk of climate change will not greatly benefit American citizens in the near future—and they are not willing to pay a great deal to reduce that risk. This intuitive form of cost-benefit analysis is much influenced by behavioral factors, including the availability heuristic, probability neglect, outrage, and myopia. All of these contribute, after 9/11, to a willingness to support significant steps to respond to terrorism and to relative indifference to climate change. It follows that Americans are likely to support such steps in response to climate change only if one of two conditions is met: the costs of those steps can be shown to be acceptably low or new information, perhaps including a salient incident, indicates that Americans have much to gain from risk reduction in the relatively near future. * Karl N. Llewellyn Distinguished Service Professor, Law School and Department of Political Science, University of Chicago. I am grateful to Elizabeth Emens, Jacob Gersen, Robert Hahn, Eric Posner, Richard Posner, and Adrian Vermeule for valuable comments on a previous draft. Thanks to Jennifer Rho for excellent research assistance.
Access to Health Care as an Incentive for Healthy Behavior - An Assessment of the Affordable Care Act's Personal Responsibility for Wellness Reforms

Underappreciated provisions in the Affordable Care Act encourage third-party payers — employers, private health insurers, and public Medicaid programs — to take a more active role in reducing health care costs by conditioning the terms of coverage on individuals’ compliance with recommended health behaviors. Champions of this approach, which I call “personal responsibility for wellness,” argue that it could help halt rising health care costs and turn the tide against some of the most pressing public health problems of our time. Employers exhibit enormous enthusiasm for programs that condition financial rewards and penalties (typically in the form of premium discounts or surcharges or differential cost-sharing through deductibles, co-pays, and co-insurance) on individual participation in wellness programs ranging from health screenings to weight loss counseling. At the same time, Medicaid programs in politically conservative states have been experimenting with applying the corporate wellness program model to their Medicaid populations, with mixed results. Critics of these programs are concerned that they may simply shift health care costs from third-party payers to individuals without resulting in better health outcomes. Given that there is often a lapse of decades between behaviors like tobacco use, unhealthy eating, or physical inactivity and the health care costs associated with them, and given that Americans frequently move from one form of health care coverage to another over the course of a lifetime, third-party payers’ interests may not be entirely well aligned with sound prevention policy. Elsewhere, I have argued that personal responsibility reforms reflect cultural biases that exaggerate the extent to which ill health is attributable to the personal failings of unhealthy individuals and that they serve as a political distraction from less punitive measures aimed at making our communities, workplaces, schools, and marketplaces more conducive to healthy living. Here, I assess ongoing agency implementation of the ACA’s personal responsibility for wellness reforms and find cause for hope. I argue that in implementing these provisions, the Department of Health and Human Services appears to be taking an appropriately skeptical stance toward personal responsibility for wellness measures that use rewards and penalties to encourage, but not necessarily facilitate, healthier behavior. I conclude by arguing that recent agency actions are a step in the right direction, but continued vigilance is necessary to ensure that third-party payers do not use wellness reforms to undermine the ACA’s goals with respect to health care access and disease prevention. I also suggest that public health advocates should continue to seek the support of third-party payers in their efforts to transform our workplaces, communities, schools, and marketplaces to make them more conducive to healthy living.
Complementarity’s Monopoly on Justice in Uganda: The International Criminal Court, Victims and Thomas Kwoyelo

Complementarity has been extolled as the pioneering way for the International Criminal Court (ICC) to navigate the difficulties of state sovereignty when investigating and prosecuting international crimes. Victims have often been held up to justify and legitimise the work of the ICC and states complementing the Court through domestic processes. This article examines how Uganda has developed its laws, legal procedure, and accountability for international crimes over the past decade. This has culminated in the trial of Thomas Kwoyelo, which after five years of proceedings, has yet to move to the trial phase, due to the issue of an amnesty. While there has been a profusion of provisions to allow victims to participate, avail of protection measures and reparations, in practice very little has changed for them. This article highlights the dangers of complementarity being the sole solution to protracted conflicts, in particular the realisation of victims’ rights.
What Determines the Variability of Accounting Accruals

The variability of accounting accruals provides a measure of the normal level of managers’ accounting discretion and has important implications for event studies of earnings management. We examine how this measure is related to the economic factors including both firm characteristics and attributes of the disclosure environment. We show that the variability of accruals is related to firm size, leverage, variability of cash flows, operating cycle, growth, and other factors. Significant industry differences and temporal patterns are also found.