cssi/SciSciGPT-SciSciNet huggingface dataset:
Remuneration, Retention, and Reputation Incentives for Outside Directors

I study incentives received by outside directors in Fortune 500 firms from compensation, replacement, and the opportunity to obtain other directorships. Previous research has only shown these relations to apply under limited circumstances such as financial distress. Together these incentive mechanisms provide directors with wealth increases of approximately 11 cents per $1,000 rise in firm value. Although smaller than the performance sensitivities of CEOs, outside directors' incentives imply a change in wealth of about $285,000 for a 1 standard deviation (SD) change in typical firm performance. Cross-sectional patterns of director equity awards conform to agency and financial theories. WHAT CAUSES OUTSIDE DIRECTORS to monitor managers, rather than collude with them? Fama and Jensen (1983) posit the existence of a market for outside directors' services, conjecturing that "Our hypothesis is that outside directors have incentives to develop reputations as experts in decision control... They use their directorships to signal to internal and external markets for decision agents that they are experts... The signals are credible when the direct payments to outside directors are small, but there is substantial devaluation of human capital when internal decision control breaks down..." (p. 315). To date, most studies of the market for outside directors have focused on directors' accumulation of seats on additional boards, finding some evidence that fewer offers for new directorships are made to board members of firms that perform poorly. However, little research into outside directors has examined the most direct incentives-compensation and replacement-that form the backbone of rewards for company executives. Exceptions such as Gilson (1990) and Harford (2003) tend to focus on extreme circumstances, such as financial distress or hostile takeovers. For the vast majority of firms that do not face these crises, we have little evidence that outside directors face significant performance incentives. This paper investigates the range of incentives received by outside directors, studying a panel of 734 directors elected to the boards of Fortune 500 firms
Do Strikes Kill? Evidence from New York State

Hospitals now represent one of the largest union sectors of the US economy, and there is particular concern about the impact of strikes on patient welfare. We analyze the effects of nurses’ strikes in hospitals on patient outcomes in New York State. Controlling for hospital specific heterogeneity, the results show that nurses’ strikes increase in-hospital mortality by 18.3 percent and 30-day readmission by 5.7 percent for patients admitted during a strike, with little change in patient demographics, disease severity or treatment intensity. The results suggest that hospitals functioning during nurses’ strikes do so at a lower quality of patient care. (JEL H75, I11, I12, J52)
Research productivity and collaboration of the NIH-funded HIV vaccine trials network: A bibliometric analysis

The HIV Vaccine Trials Network (HVTN) is the world's largest publicly funded, multi-disciplinary international collaboration facilitating the development of vaccines to prevent HIV/AIDS and has conducted the vast majority of HIV/AIDS clinical trials since its inception in 1999. Although scientific findings from the program have been published in scholarly journals, the impact of a large scientific research network such as the HVTN on the HIV/AIDS vaccine field has not been assessed. This paper describes and elucidates the productivity, influence, and collaboration among HVTN researchers over the last two decades. Our analyses indicate that the HVTN has funded a large number of HIV/AIDS vaccine safety and efficacy clinical trials through a strong global network of clinical sites. In addition, several metrics indicate HVTN researchers also published original research articles that are influential in the HIV vaccine field. Scientific research collaboration is critically important in a complex and multidisciplinary field such as HIV vaccine development as it allows improved sharing of knowledge and expertise as well as the pooling of resources and data. We found that collaboration in the HIV vaccine field increased during this time period and collaboration among HVTN authors increased even more. Combining these productivity, influence, and collaboration metrics with research outcomes can provide a comprehensive assessment of large complex programs such as the HVTN.
Now or later? The political economy of public investment in democracies ☆

Abstract This paper explores the impact of elections on public investment. Working with a sample of 67 presidential and parliamentary democracies between 1975 and 2012, we find that the growth rate of nominal public investment is higher at the beginning of electoral cycles and decelerates thereafter. The peak in public investment growth occurs 28 months before elections, and each month closer to the next election the growth rate of public investment declines by 0.7 percentage points. Other political variables, such as cabinet ideology and government fragmentation have less influence on short-term public investment dynamics. Fiscal rules and stronger institutions seem to attenuate the impact of elections on investment, but available information is insufficient to draw definitive conclusions. These results are robust to a number of controls, including for fixed elections.
Regionalism in a Multilateral World

Recent regional initiatives have been addressed from a Vinerian perspective of trade creation and trade diversion. This is true of both policy‐oriented economists, who tend to be critical of the initiatives, and theorists, who have added dynamic and gametheoretic elements to the Vinerian structure. This paper describes the stylized facts of much recent regional integration and develops an alternative model. The analysis suggests that regional integration, far from threatening multilateral liberalism, may in fact be a direct consequence of the success of past multilateralism and an added guarantee for its survival.
Terrorism and the Rule of Law

Nature hath made men so equall, in the faculties of body, and mind; as that though there bee found one man sometimes manifestly stronger in body, or of quicker mind then another; yet when all is reckoned together, the difference between man, and man, is not so considerable, as that one man can thereupon claim to himselfe any benefit, to which another may not pretend, as well as he. For as to the strength of body, the weakest has strength enough to kill the strongest, either by secret machination, or by confederacy with others. . . .
Agreeing to fight: an explanation of the democratic peace:

In this article, we extend the well-known ‘agreeing-to-disagree’ and ‘no-trade’ results from economics and game theory to international relations. We show that two rational countries should never a...
Bayesian Contractual Interpretation

AbstractCourts seeking the most likely intent of contracting parties should interpret contracts according to Bayes’s rule. The best interpretation of a contract reflects both the prior likelihood (base rate) of a pair of contracting parties having a given intention and the probability that the contract would be written as it is given that intention. If the base rate of the intention associated with the simplest reading of the contract is low, then Bayes’s rule implies that the simplest reading is not necessarily the interpretation of the contract that most likely captures the intention of the parties. The Bayesian framework explains when default rules should be more or less sticky and helps to define the appropriate role of boilerplate language in contractual interpretation.
A Bridge Too Far: The Fall of the Fifth WTO Ministerial Conference in Cancún and the Future of Trade Constitution

This article is intended to contribute to the process of diagnosis and prescription in response to the fiasco of the Fifth WTO Ministerial Conference in Cancun, Mexico, in September 2003. The article sketches previous WTO Ministerial Conferences in an attempt to glimpse the root of the problems that eventually caused the collapse of the Cancun Conference. It then focuses on the main developments in Cancun and offers a 'post- mortem', not in an attempt to place blame but to better understand what went wrong. It observes that North-South tension is likely to continue for the time being while rich countries, especially the US, will lean toward bilateralism and regionalism. Yet, it also suggests that with a combination of hard work by Member countries, political support from NGOs and businesses, and the Secretariat's constructive role, the Doha Round can and should be saved. The article concludes that the global trading community is now embracing another 'constitutional moment' which parallels the creation of the GATT 1947 and the WTO.
From the Schoolhouse to the Poorhouse: The Credit Card Act's Failure to Adequately Protect Young Consumers

Whether through personal experiences or through the experiences of our friends and family, most, if not all, of us are all too familiar with the credit card industry’s unrelenting attempts to saddle young, naive college students with debt that they cannot afford to repay. Students thoughtlessly apply for and use credit cards without considering the negative effects credit card debt can have on their academic, personal, and financial wellbeing. In May 2009, Congress attempted to address the pervasive problem of young consumer indebtedness by passing the Credit Card Accountability Responsibility and Disclosure Act of 2009. While this Article recognizes and applauds Congress’s attempt to protect college-aged consumers, it questions whether the current legislation, which narrowly focuses on restricting young consumers’ access to credit cards, is the most effective way to provide this
Diversification and the cost of debt of bank holding companies

Abstract In this study, we investigate the relationship between various dimensions of diversification and the cost of debt for publicly traded bank holding companies (BHCs). We find that both domestic geographic diversification of deposits and diversification of assets lead to a lower bond yield-spread. Diversification of non-traditional banking activities leads to a lower cost of debt only when yield-spread and diversification are estimated simultaneously. In addition, we find that medium-sized BHCs experience a greater reduction in bond yield-spread than small-sized and large-sized BHCs. This is consistent with the too-big-to-fail (TBTF) effects in the banking industry. Furthermore, we document that the association between diversification and yield-spread is bidirectional with higher yield-spreads being associated with greater asset and activity diversification and lower geographic deposit dispersion. The effect of diversification on bond yield-spread is robust after accounting for cross-sectional and serial correlation, and the endogeneity of diversification.
Are Catholic Bishops Seeking a Religious Preference or Religious Freedom

This Article questions whether religious institutions have become too aggressive in seeking preferences for themselves, often at the expense of the freedom of their members. In Hosanna Tabor, the Court recognized a "ministerial exception," based on the First Amendment, for religious organizations when sued by certain employees or former employees alleging a violation of a federal statute prohibiting discrimination in employment and retaliation against those who seek to enforce such a statute, or assist others in doing so. Shortly after the decision in Hosanna Tabor, the Catholic Bishops orchestrated a series of lawsuits challenging a provision of the Patient Protection and Affordable Care Act that requires most employer health insurance plans to provide certain essential health benefits, including "[p]reventive and wellness services," as required by Guidelines issued by Health Resources and Services Administration. The Catholic institutions pursuing these cases argue that the challenged provisions violate their religious freedom, protected by both the Religion Clauses of the First Amendment and a federal statute, because the mandated benefit includes birth control, the use of which Catholic doctrine prohibits. As in Hosanna Tabor, the institutions are asking the courts to provide them with a preference that trumps the freedom of their members. In my view, the institutions involved in these two situations are showing a callous disregard for the well-being of their employees where laws designed to promote equality and freedom have, at most, a marginal effect on the religious freedom of the institutions.
Capturing Technological Opportunity Via Japan's Star Scientists: Evidence from Japanese Firms' Biotech Patents and Products

Using detailed data on biotechnology in Japan, we find that identifiable collaborations between particular university star scientists and firms have a large positive impact on firms' research productivity, increasing the average firm's biotech patents by 34 percent, products in development by 27 percent, and products on the market by 8 percent as of 1989–1990. However, there is little evidence of geographically localized knowledge spillovers. In early industry formation, star scientists holding tacit knowledge required to practice recombinant DNA (genetic engineering) were of great economic value, leading to incentives motivating their participation in technology transfer. In Japan, the legal and institutional context implies that firm scientists work in the stars' university laboratories in contrast to America where the stars are more likely to work in the firm's labs. As a result, star collaborations in Japan are less localized around their research universities so that the universities' local economic development impact is lessened. Stars' scientific productivity is increased less during collaborations with firms in Japan as compared to the U.S.
Social network design for inducing effort

Many companies create and manage communities where consumers observe and exchange information about the effort exerted by other consumers. Such communities are especially popular in the areas of fitness, education, dieting, and financial savings. We study how to optimally structure such consumer communities when the objective is to maximize the total or average amount of effort expended. Using network modeling and assuming peer influence through conformity, we find that the optimal community design consists of a set of disconnected or very loosely connected sub-communities, each of which is very densely connected within. Also, each sub-community in the optimal design consists of consumers selected such that their “standalone” propensity to exert effort correlates negatively with their propensity to conform and correlates positively with their propensity to influence others.
Income sorting: Measurement and decomposition☆

Abstract This paper addresses the measurement of income sorting across jurisdictions and the attribution of sorting to governmental differences. Measurement error and differences between transitory and permanent income bias variance decompositions' sorting estimates downward by approximately 50 percent. Adjusted US Census data show an average across Metropolitan Areas (MSAs) of approximately eight percent of income variation explained by differences across jurisdictions; approximately 28 percent in the Boston MSA. There, the role of politics in the sorting process seems small because boundaries between adjacent jurisdictions explain only approximately two percent of income variation.
Community Support for Mayoral Control of Urban School Districts: A Critical Reexamination

Secretary of Education Arne Duncan has encouraged more mayors to take charge of their urban schools districts. Central to debates over mayoral control is the use of a citywide referendum to legitimize mayoral control. Referenda have been used in Boston (1996), Cleveland (1998), and Detroit (2004). Voters in Boston and Cleveland supported mayoral control, while in Detroit voters chose to return to an elected school board. The results of these votes have been used to argue that mayoral control ensures democratic accountability.This article, however, challenges the view that citywide referenda alone are an effective means of ensuring accountability for mayoral control. Through new empirical analysis of the referenda results in Boston and Cleveland, the article shows that rather than establish genuine democratic legitimacy, the referenda in fact mask strong class-based, and in Boston race-based opposition to the reform strategy. Although the available data do not allow for generalization to other municipalities, the implication of this article’s analysis remains clear: Legislatures considering mayoral control would do well to think carefully before adopting a referendum as the only or primary solution to the mayoral control accountability dilemma. A referendum in and of itself is not a satisfactory safeguard to ensure the participation of urban minorities and poor residents in urban education reform discussions.The article proceeds in several parts. The Literature Review section presents a review of the relevant literatures on mayoral control and issues of urban political representation. The Data and Analytic Framework section discusses the specific hypotheses to be tested, and the data and methodology utilized. The Results section presents the results of the analysis. The Discussion section synthesizes these findings and discusses their implications for the future of urban education policy under the Obama administration.
The Performance of Savings and Investments in Russia

This article analyses the problem of economic growth in transition countries. It is argued that growth in transition economies is investment-driven. The saving ratio and balance of payments are two factors among several, which can limit economic growth, and we concentrate on these issues, using flow of funds accounts in our analysis. We find that there is no limitation for investment-driven growth in Russia, at least in the short and middle term. Enterprises are the most important savers, and private savings are concentrated in the fuel sector, transport and in trade and catering. Hence, the investment decisions of these industries determine Russia’s macroeconomic performance.
Of Envelopes and Legends: Reflections on Tort Law

While contract law can be reduced to three basic questions, tort law can be reduced to only one: when harm occurs or is threatened because of a human act, is it the better societal choice to impose the loss upon the actor, or to let the loss stay with the victim? This single issue can be subdivided (we are up to two questions now, approaching parity with contract law): 1) did the actor’s conduct expose others to a risk of harm that society generally condemns (which we may call the “general risk”) and 2) under the particular circumstances of this case, do we want to impose liability upon this actor for this conduct which caused these damages to this plaintiff in this particular manner (which we may call the “specific risk”)?
Politics and Culture in an Age of Austerity

The Great Recession forced many people around to cut back on consumption and is one reason that drives the rise of right-wing forces. One response to the downturn has been a call for a return to high-level growth and consumption of goods. By contrast, this paper argues in favor of an alternative conception of the good life. To defend this thesis, it first surveys the social science literature regarding the relationship between income and happiness, noting that the growth of the former does not necessarily translate to improvements in the latter. Next, it provides a number of explanations of why greater income and consumption often do not yield greater happiness. The paper then goes on to discuss historical and theoretical alternatives to consumerism-driven life and society. Finally, it discusses how happiness can best be found in socializing with others, participating in the community, and engaging in spiritual and intellectual pursuits. The paper, thus, concludes that human contentment and flourishing is perhaps best found outside of the high-growth, high-consumption paradigm. Moreover, it finds that such a new normal is not only protective of the environment, but also enhances social justice.
Competition, innovation, and the number of firms

Abstract Theories of endogenous markups, firm entry, and innovation consistently predict a positive relationship between barriers to competition and firm-level innovation, in stark contrast to a large empirical literature that documents a negative relationship. I argue that this puzzle can be resolved by considering two distinct types of barriers – barriers to starting a firm, and barriers to competing in a product market. Barriers to starting firms discourage startups, resulting in higher markups, higher market shares, and more innovation. Barriers to product-market entry also increase market shares within each market, and thereby encourage innovation. But firms also enter fewer markets, which discourages innovation. On net, market-entry barriers decrease firm-level innovation and the number of competitors per market, while increasing the number of firms per industry. To test the implications of the theory, I consider an episode of product market deregulation (the Single Market Programme in the E.U.), and find that lower market-entry barriers indeed resulted in fewer firms. Interpreted through the lens of the model, I estimate that productivity increased by 8.4% in deregulated industries, and show that this estimate would be 30% lower if deregulation was mistakenly modeled as lowering firm startup costs. Across countries, I provide evidence that market-entry barriers are quantitatively much more important than startup barriers. As evidence for the central mechanism in the model I show that across countries, higher market-entry barriers are associated with fewer products per firm.
Stock market interdependence, contagion, and the U.S. financial crisis: The case of emerging and frontier markets ☆

Abstract This paper examines transmission of shocks between the U.S. and foreign markets to delineate interdependence from contagion of the U.S. financial crisis by constructing shock models for partially overlapping and non-overlapping markets. There exists important bi-directional, yet asymmetric, interdependence and contagion in emerging markets, with important regional variations. Interdependence is driven more by U.S. shocks, while contagion is driven more by emerging market shocks. Frontier markets also exhibit interdependence and contagion to U.S. shocks. Except for Latin America, there is no contagion from U.S. to emerging markets. But there is contagion from emerging markets to the U.S.
Driven to distraction: Extraneous events and underreaction to earnings news

Psychological evidence indicates that it is hard to process multiple stimuli and perform multiple tasks at the same time. This paper tests the INVESTOR DISTRACTION HYPOTHESIS, which holds that the arrival of extraneous news causes trading and market prices to react sluggishly to relevant news about a firm. Our test focuses on the competition for investor attention between a firm's earnings announcements and the earnings announcements of other firms. We find that the immediate stock price and volume reaction to a firm's earnings surprise is weaker, and post-earnings announcement drift is stronger, when a greater number of earnings announcements by other firms are made on the same day. Distracting news has a stronger effect on firms that receive positive than negative earnings surprises. Industry-unrelated news has a stronger distracting effect than related news. A trading strategy that exploits post-earnings announcement drift is unprofitable for announcements made on days with little competing news.
Is there a constitutional right to select the genes of one's offspring?

The Supreme Court has long recognized a due process right to make deeply personal decisions such as whether to bear or beget a child. Might this right extend to selecting the genes of one’s offspring? Perhaps more important, should courts interpret it to do so? Thus far, discussion of these questions has focused almost exclusively on the normative goals that a constitutional commitment to procreative liberty should be taken to embrace. That is undoubtedly an important issue, but it cannot tell us whether courts are the institution best suited to carry any particular goal into effect. This is a basic but frequently overlooked point in constitutional analysis and one that has received next to no attention in the context of assisted reproductive technologies. This Article begins to remedy the oversight. In so doing, it has two overlapping goals: to enrich the constitutional analysis of emerging issues in reproductive liberty and to use those issues as a vehicle for exploring the complexities of institutional analysis more generally.
Removing federal judges

In a provocative recent article,1 Professors Saikrishna Prakash and Steven D. Smith argue that Congress may provide for the removal of federal judges through means other than the impeachment-and removal provisions of Articles I and II.2 Building on the work of Pro fessor Burke Shartel,3 Prakash and Smith base their claim of im peachment nonexclusivity on the good behavior provisions of Article III.4 Prakash and Smith suggest that, in addition to congressional im peachment and removal for "treason, bribery, or other high crimes and misdemeanors," judges may be removed following a judicial determi nation that they have violated the "good behavior" provisions of their office under Article III. Although they do not dwell on the point,
Expectations in micro data: rationality revisited

An increasing number of longitudinal data sets collect expectations information regarding a variety of future individual level events and decisions, providing researchers with the opportunity to explore expectations over micro variables in detail. We present a theoretical framework and an econometric methodology to use that type of information to test the Rational Expectations (RE) hypothesis in models of individual behavior. This RE assumption at the micro level underlies a majority of the research in applied fields in economics, and it is the common foundation of most work in dynamic models of individual behavior. We present tests of three different types of expectations using two different panel data sets that represent two very different populations. In all three cases we cannot reject the RE hypothesis. Our results support a wide variety of models in economics, and other disciplines, that assume rational behavior.
The Authoritarian Impulse in Constitutional Law

Should there be greater participation by legislators and citizens in constitutional debate, theory, and decision-making? An increasing number of legal theorists from otherwise divergent perspectives have recently argued against what Paul Brest calls the "principle of judicial exclusivity" in our constitutional processes. These theorists contend that because issues of public morality in our culture either are, or tend to become, constitutional issues, all political actors, and most notably legislators and citizens, should consider the constitutional implications of the moral issues of the day. Because constitutional questions are essentially moral questions about how active and responsible citizens should constitute themselves, we should all engage in constitutional debate. We should stop relying on the courts to shoulder the burden of resolving the constitutional consequences of our political decisions. According to this argument, our methods of resolving moral issues in this country are "deeply flawed." The flaw is that we have delegated to the courts, rather than kept for ourselves, the moral responsibility for our decisions. By protecting, cherishing, and relying upon judicial review, we have essentially alienated our moral public lives to the courts. I agree with Brest that our methods of resolving issues of public morality in this culture are deeply flawed, but I view with skepticism both the diagnosis – insufficient community participation in constitutional processes – and the cure – increased community participation in constitutional processes – suggested by the participation theorists. The call for increased participation in constitutional thought rests on the assumptions that constitutional questions are moral questions, and that constitutional debate is the forum in which we engage in moral decision-making. From these assumptions it follows that all citizens, not just courts, should take up issues of constitutionalism. If we take very seriously the text of the opinions in a significant number of recent constitutional cases, however, it is clear that as a descriptive matter, the assumption that constitutional questions are moral questions is flatly false. According to the Justices themselves, constitutional issues are by definition legal issues, as opposed to moral issues. Countless "neutral principles" constitutional theorists as well insist upon making a distinction between constitutional issues and moral issues. Thus, according to a well-respected strand of constitutional theory, as well as an increasing number of recent cases, constitutional questions are definitionally amoral, as are the answers they propose.
Credit constraints, equity market liberalizations and international trade☆☆☆

Abstract This paper provides evidence that credit constraints are an important determinant of international trade flows. I exploit shocks to the availability of external finance and examine the impact of equity market liberalizations on the export behavior of 91 countries in the 1980–1997 period. I show that liberalizations increase exports disproportionately more in financially vulnerable sectors that require more outside finance or employ fewer collateralizable assets. This result is not driven by cross-country differences in factor endowments and is independent of simultaneous trade policy reforms. Moreover, it obtains with equal strength in the full panel of countries as well as in both panel and event-study analyses of countries which removed capital controls during the sample period. Finally, the effects of liberalizations are more pronounced in economies with initially less active stock markets, indicating that foreign equity flows may substitute for an underdeveloped domestic financial system. Similarly, opening equity markets has a greater impact in the presence of higher trade costs caused by restrictive trade policies.
Equity return predictability, time varying volatility and learning about the permanence of shocks

Abstract I consider a consumption based asset pricing model where the consumer does not know if shocks to dividends are stationary (temporary) or non-stationary (permanent). The agent uses a Bayesian learning algorithm with a bias towards recent observations to assign probability to each process. While the true process is stationary, the consumer’s beliefs change as he misinterprets a drift in dividends from their steady state value as an increased likelihood that the dividend process is non-stationary. Belief changes result in large swings in asset prices which are subsequently reversed. The model then is consistent with a broad array of asset pricing puzzles. It predicts the negative correlation between current returns and future returns and the PE ratio and future returns. Consistent with the data, I also find that consumption growth negatively correlates with future returns and the PE ratio and consumption growth forecast future consumption growth. The model amplifies return volatility over the benchmark rational expectations case and exactly matches the standard deviation of consumption. Finally, the model generates time varying volatility consistent with the data on quarterly equity returns.
Dynamic forecasting of sticky-price monetary exchange rate model

The Dornbusch-Frankel monetary model is used to estimate the out-of-sample forecasting performance for the U.S. or Canadian dollar exchange rate. By using Johansen's multivariate cointegration, up to three cointegrating vectors were found between the exchange rate and macroeconomic fundamentals. This means that there is a long-run relationship between exchange rate and economic fundamentals. Based on error-correction models, the random-walk model outperforms the Dornbusch-Frankel model at every forecasting horizon. The random-walk model also dominates the Dornbusch-Frankel model with the modified money demand function at every forecasting horizon except one month. However, this paper shows that the share price variable can improve the accuracy of forecasts of exchange rates at short-run horizons.
The Case for Imperfect Enforcement of Property Rights

INTRODUCTION 1927 I. AN IMAGINARY WORLD OF PERFECT ENFORCEMENT 1935 II. THE DISTORTIVE EFFECT OF STATE ENFORCEMENT 1940 A. Prepay Pumps 1941 B. Copyright Formalities 1942 C. Policing Land Boundaries 1945 D. Trade Secrets 1947 E. Deductibles 1949 III. IMPLICATIONS FOR PROPERTY THEORY 1950 CONCLUSION 1953
Disagreement and return predictability of stock portfolios

This paper provides evidence that portfolio disagreement measured bottom-up from individual-stock analyst forecast dispersions has a number of asset pricing implications. For the market portfolio, market disagreement mean-reverts and is negatively related to ex post expected market return. Contemporaneously, an increase in market disagreement manifests as a drop in discount rate. For book-to-market sorted portfolios, the value premium is stronger among high disagreement stocks. The underperformance by high disagreement stocks is stronger among growth stocks. Growth stocks are more sensitive to variations in disagreement relative to value stocks. These findings are consistent with asset pricing theory incorporating belief dispersion. & 2010 Elsevier Ltd All rights reserved.
Expert Evidence, Partisanship, and Epistemic Competence

This essay, written for the symposium A Cross-Disciplinary Look at Scientific Truth, takes a close look at the two most significant structural problems with the use of expert evidence within the adversary system: partisanship and epistemic competence. Each of these has long been recognized as a central difficulty with our present system for using expert evidence. Because parties both select and pay their experts, there is an inevitable danger that the experts chosen are those specifically prepared to shape their testimony to please their employer. Because we permit experts precisely because their knowledge and insights go beyond that which a lay jury is expected to know without their assistance, there is an inevitable epistemic difficulty with asking a lay jury to assess competing claims by experts on opposing sides. Not only are these difficulties familiar, but so are a set of proposed solutions. To eliminate partisanship, many have called for court-appointed, or neutral, experts. To eliminate the problem of epistemic competence, many have called for expert juries or expert judges. In this essay, I attempt to show that even though these oft-lamented problems are indeed significant ones, these familiar (though rarely implemented) solutions offer less than meets the eye. The calls for neutral experts, I suggest, typically rely on a misunderstanding of the nature of many scientific disputes. In practice, neutral experts would often either reinscribe the same difficulty generated by competing experts (presenting multiple points of view among which a lay jury would not have a rational basis for distinguishing), or else would mask legitimate disagreement among the expert community. Making use of epistemically-competent decisionmakers also raises both practical and theoretical difficulties (for example, who is epistemically competent? Just how often could we ask, say, epidemiologists to be jurors? Would epistemically competent decisionmakers tend already to have made up their minds in advance of trial, or might they reduce diversity of the jury along numerous other dimensions separate from their epistemic competence?) In the end, I conclude that the real lesson is this: the best we can hope for is to manage imperfectly, rather than resolve, the deep structural tensions surrounding both partisanship and epistemic competence. This ought not to invite quiescence, but it does suggest the need for both realism and modesty about the use of expert evidence within our adversarial system.
Monetary policy, time-varying risk, and the bond market debacle of 1994*

Stock and bond prices plummeted in early 1994. These losses occurred while the Fed was raising interest rates. Campbell (1995) argues that the Fed could have triggered the losses either by increasing the risk premium associated with monetary policy uncertainty or by communicating information about incipient inflation. This paper uses a multi-factor model to choose between these two hypotheses. The evidence indicates that both greater monetary policy uncertainty and especially news about inflation explain the asset price declines of 1994.
THE SCHOOLING OF SOUTHERN BLACKS: THE ROLES OF LEGAL ACTIVISM AND PRIVATE PHILANTHROPY, 1910-1960*

Improvements in education and educational quality are widely acknowledged to be major contributors to black economic progress in the twentieth century. This paper investigates the sources of improvement in black education in the South in the first half of the century and demonstrates the important roles of social activism, especially NAACP litigation and private philanthropy, in improving the quality and availability of public schooling. Many scholars view education as a rival to social activism in explaining black economic progress, but such a view misses the important role of philanthropic and legal interventions in promoting education.
A Unified Theory of Underreaction, Momentum Trading, and Overreaction in Asset Markets

We model a market populated by two groups of boundedly rational agents: “newswatchers” and “momentum traders.” Each newswatcher observes some private information, but fails to extract other newswatchers' information from prices. If information diffuses gradually across the population, prices underreact in the short run. The underreaction means that the momentum traders can profit by trend-chasing. However, if they can only implement simple (i.e., univariate) strategies, their attempts at arbitrage must inevitably lead to overreaction at long horizons. In addition to providing a unified account of under- and overreactions, the model generates several other distinctive implications.
Different Worlds, Different Realities

Allegations of serious police misconduct in the Los Angeles Police Department's Rampart Division have once again cast a light on the different societies existing side-by-side in America. In some Los Angeles communities, it is virtually inconceivable that police would routinely harass members of certain minority groups and engage in an organized effort to frame people for crimes they did not commit. In other communities, the allegations have been accepted as simply the latest volleys in a long-standing pattern of official oppression. This essay explores some ways in which the divergent experiences of various groups within the same city affect the groups' perceptions of the world. In particular, the essay focuses on such factors as poverty, race, and exposure to crime as contributing to the development of different world views. As examples of the starkly different views of reality, the essay examines two sensational sets of cases, those surrounding the police beating of Rodney King and the criminal and civil actions against O.J. Simpson. In both cases, different juries reached contrary results. A state jury from a largely white, middle-class suburb far from the inner city acquitted the police officers accused of beating Mr. King, while a federal jury in a downtown courtroom issued guilty verdicts against some of the defendants. In the Simpson matter, a downtown criminal jury issued an acquittal after only a few hours of deliberation, while a civil jury in an affluent suburb held Mr. Simpson liable in a wrongful death action. The essay argues that the inconsistent results in both sets of cases can best be understood as arising from the different world views of the jurors. Inner-city jurors had no difficulty, for example, believing that the police mishandled the Simpson investigation, and might even have planted evidence against him. The civil jury, on the other hand, clearly found such possibilities preposterous. The criminal justice system has yet to come to terms with the simultaneous existence of different sets of perceptions about the world, and there is no obvious solution to the problems this creates. But to maintain public respect for the criminal justice system, we must begin to assess the damage done by huge disparities in wealth and opportunity in America. We should not strive for homogeneity, but we must recognize that as long as such wide disparities exist, we will remain a society characterized more by conflict than by cooperation.
A Legitimate Interest in Promoting the Progress of Science: Constitutional Constraints on Copyright Laws

The Supreme Court certified two questions in Golan v. Holder: (1) Does section 514 of the Uruguay Round Agreements Act (“URAA”) violate the Progress Clause of the Constitution? (2) Does the URAA violate the First Amendment? This Essay argues that section 514 violates the Progress Clause’s requirement that copyright laws “promote the Progress of Science.” This is because the statute bequeaths copyright status without in return achieving any net increase in the creation or dissemination of creative works. Even if the Government relies on other constitutional authorities to justify section 514 - such as the Commerce Clause or the Treaty Power - the limitations of the Progress Clause still must apply. Since First Amendment analysis turns, in part, on whether the speech restriction in question violates any constitutional limitations on the federal power under which the law is passed, this Essay argues that the URAA must fail. Any law that violates constitutional restrictions on federal power cannot, by definition, serve a legitimate government interest.
Limitations of Hartree-Fock with quantum resources

The Hartree-Fock problem provides the conceptual and mathematical underpinning of a large portion of quantum chemistry. As efforts in quantum technology aim to enhance computational chemistry algorithms, the Hartree-Fock method, central to many other numerical approaches, is a natural target for quantum enhanced algorithms. While quantum computers and quantum simulation offer many prospects for the future of modern chemistry, the non-deterministic polynomial-complete Hartree-Fock problem is not a likely candidate. We highlight this fact from a number of perspectives including computational complexity, practical examples, and the full characterization of energy landscapes for simple systems.
Toward a logical/physical theory of spreadsheet modeling

In spite of the increasing sophistication and power of commercial spreadsheet packages, we still lack a formal theory or a methodology to support the construction and maintenance of spreadsheet models. Using a dual logical/physical perspective, we identify four principal components that characterize any spread sheet model: schema, data, editorial, and binding. We present a factoring algorithm for identifying and extracting these components from conventional spreadsheets with minimal user intervention, and a synthesis algorithm that assists users in the construction of executable spreadsheets from reusable model components. This approach opens new possibilities for applying object-oriented and model management techniques to support the construction, sharing, and reuse of spreadsheet models in organizations. Importantly, our approach to model management and the Windows-based prototype that we have developed are designed to coexist with, rather than replace, traditional spreadsheet programs. In other words, the users are not required to learn a new modeling language; instead, their logical models and data sets are extracted from their spreadsheets transparently, as a side-effect of using standard spreadsheet programs.
Scale effects of R&D as reflected in earnings and returns

Abstract Using returns to scale as a conceptual foundation, we explore how R&D-related earnings performance and earnings variability depend upon firm size. We find that the positive association between the level of future earnings and R&D intensity increases with firm size, and that the positive association between the volatility of future earnings and R&D intensity decreases with firm size, consistent with R&D productivity increasing with scale. We also show that R&D scale is associated with lower market returns, consistent with the idea that R&D investment risk declines with scale.
Manufacturing FDI and economic growth: evidence from Asian economies

Previous empirical studies on inward foreign direct investment (FDI) and economic growth generate mixed results. This article suggests that the ambiguous results might be caused by the use of total FDI. We study the heterogeneous effects of different sector-level FDI inflows on host country's economic growth. Data from 12 Asian economies over the period of 1987 to 1997 are employed. Strong evidence shows that FDI in manufacturing sector has a significant and positive effect on economic growth in the host economies. FDI inflows in nonmanufacturing sectors do not play a significant role in enhancing economic growth. Furthermore, without the decomposition of total FDI inflows, the effect of manufacturing FDI on host country's economic growth is understated by at least 48%.
Lovewell v. Physicians Insurance Co.: Personal Liability for Prejudgment Interest

This article looks at the Supreme Court of Ohio's decision in Lovewell v. Physicians Insurance Co. and the variety of issues and unanswered questions the decision presents relating to insurance law. First, it may no longer be assumed that the insurer acts in tandem with the insured when the insurer is defending a suit brought against the covered individual. Secondly, the Lovewell decision seems to be contrary to one of the basic tenets of insurance law – that an insurance contract must be construed liberally in favor of the insured and strictly against the insurer. Third, the decision gives insureds cause to wonder whether a clause allowing them the right to refuse settlement may result in personal liability.
Schütz on meaning and culture

The hermeneutical Austrians wanted to provide (1) a philosophically sound justification for the contention that praxeology is a science of meaning and (2) justification for an approach to empirical/historical work that favors ethnographic methods. This article argues that had the hermeneutical Austrians relied on Alfred Schutz rather than Hans-Georg Gadamer to support their positions much of the firestorm surrounding their methodological pronouncements could have been avoided. Schutz’s phenomenology offers a more than adequate defense for these (two) positions and, as a member of the Austrian school, his views on these arguments may have been more readily received.