cssi/SciSciGPT-SciSciNet huggingface dataset:
Bayesian estimation of multivariate-normal models when dimensions are absent

Multivariate economic and business data frequently suffer from a missing data phenomenon that has not been sufficiently explored in the literature: both the independent and dependent variables for one or more dimensions are absent for some of the observational units. For example, in choice based conjoint studies, not all brands are available for consideration on every choice task. In this case, the analyst lacks information on both the response and predictor variables because the underlying stimuli, the excluded brands, are absent. This situation differs from the usual missing data problem where some of the independent variables or dependent variables are missing at random or by a known mechanism, and the “holes” in the data-set can be imputed from the joint distribution of the data. When dimensions are absent, data imputation may not be a well-poised question, especially in designed experiments. One consequence of absent dimensions is that the standard Bayesian analysis of the multi-dimensional covariances structure becomes difficult because of the absent dimensions. This paper proposes a simple error augmentation scheme that simplifies the analysis and facilitates the estimation of the full covariance structure. An application to a choice-based conjoint experiment illustrates the methodology and demonstrates that naive approaches to circumvent absent dimensions lead to substantially distorted and misleading inferences.
Net Neutrality or Minimum Quality Standards: Network Effects vs. Market Power Justifications

Net neutrality—all bits should be treated identically by broadband Internet service providers regardless of source—is hotly debated. Proponents find adequate competition among broadband providers to prevent harm from content-based discrimination. Opponents find such regulation premature or unnecessary, noting that uniform treatment precludes higher quality services and effective congestion management. Both sides neglect network externalities—the value of broadband to each content provider depends on the expected quality of links to others’ content. Competition could exacerbate this, as each provider fails to internalize the network externality. This suggests an alternative approach—a minimum quality of service standard. This addresses underlying concerns at far lower cost than net neutrality, while fostering innovation by allowing providers to offer higher quality service and manage congestion, with the ancillary benefit of protecting potential speech rights of content providers. Ex post antitrust remedies will not be available if judicial limits on FCC authority remain.
THE HIDDEN ROLE OF COST: MEDICARE DECISIONS, TRANSPARENCY AND PUBLIC TRUST

There is an extraordinary, distorting pressure that cost places on the healthcare system. While the political system dictates the content of laws in this system, it is often the problem of cost that truly shapes how these laws are implemented. This article looks closely at this dynamic in the Medicare system, but also seeks to create a blueprint for further critical study of the broader problem’s effect on the institutions that health law seeks to regulate. In Medicare, CMS is not allowed to consider cost when making potentially expensive national coverage determinations about new medical technologies and procedures. Even with this constraint, it must grapple with both its own budget and the broader political problem of increased funding demands. This dynamic leads to hidden rationing of medical care for cost saving purposes. This article argues that broad scale rationing decisions such as these should be handled in a transparent manner, with ample opportunity for public input, which would be a significant change from the status quo. This process will not always result in better decisions than those currently made, and will certainly impose painful political costs on some participants. However, this article argues that its proposed process is 1) politically legitimate, 2) more likely to lead to a national consensus to guide rationing decisions, and 3) may be successful at reducing costs in the future.
Contradictory Policies of Neoliberalizing India

This paper examines the tensions and contradictions within the Indian state in its production of socio-economic policies. Pressure of global governance institutions, multinational corporations, and...
Why do corporate managers misstate financial statements? The role of option compensation and other factors

Abstract We investigate the incentives that led to the rash of restated financial statements at the end of the 1990s market bubble. We find that the likelihood of a misstated financial statement increases greatly when the CEO has very sizable holdings of in-the-money stock options. Misstatements are also more likely for firms that are constrained by an interest-coverage debt covenant, that raise new debt or equity capital, or that have a CEO who serves as board chair. Our results indicate that agency costs increased [Jensen, M.C., 2005a, Agency costs of overvalued equity. Financial Management 34, 5–19] as substantially overvalued equity caused managers to take actions to support the stock price.
THE GETTIER PROBLEM AND LEGAL PROOF

This article explores the relationships between legal proof and fundamental epistemic concepts such as knowledge and justification. A survey of the legal literature reveals a confusing array of seemingly inconsistent proposals and presuppositions regarding these relationships. This article makes two contributions. First, it reconciles a number of apparent inconsistencies and tensions in accounts of the epistemology of legal proof. Second, it argues that there is a deeper connection between knowledge and legal proof than is typically argued for or presupposed in the legal literature. This connection is illustrated through a discussion of the Gettier problem in epistemology. It is argued that the gap or disconnect between truth and justification that undermines knowledge in Gettier cases also potentially undermines the success of legal verdicts.
Accounting for reserves

Abstract Views on the effectiveness of sterilized reserve intervention vary. Sterilized intervention is generally seen as ineffective in advanced countries while persistent intervention by some emerging markets is often cited as contributing to undervalued exchange rates and current account surpluses. This paper argues that capital controls reconcile these views. We find strong and highly robust evidence that sterilized intervention is fully offset by outflows of private money in countries without controls, while controls partially block this offset. For a country with extensive capital controls, every dollar in additional reserves increases the current account by some 50–100 cents. This is mainly offset by an opposite adjustment in the current account of the United States—the dominant reserve currency issuer with the deepest and most liquid bond markets—with a smaller diversion to emerging markets.
Analysis of racial profiling as policy analysis

Policy analysis techniques emphasize the tension between efficiency and equity in public decision-making (Friedman; 1984, 2002). This tension is aptly illustrated by the problem of racial profiling. The following case study and accompanying problem set help to underscore the difficulty of making public choices that pit cost-effectiveness or efficiency against civil liberties, civil rights and the equity goals of society. There is a growing literature pointing to racial disparities in traffic stops. Knowles, Persico and Todd (1999) report that in a stretch of interstate highway in Maryland (I-95) from 1995 to 1999, 63 percent of all motorists searched were African American. They report, however, that only 18 percent of the motorists on the road were African American. Similar patterns of disproportionality have been found in studies accusing the New Jersey State Patrol of racial bias (Kocieniewski and Hanley, 2000). The findings of racial profiling have resulted in a number of high-profile class action suits against police departments (Wilson, 2000; Higgin and Mihalopoulos, 2000; Nando Times, 2000; Still, 1999). These allegations have resulted in a number of different policy responses. Some states or police departments have focussed on banning racial profiling (Eddings, 2001; Times Union, Albany, 2001). Others have focused on collecting racial data on stops and searches (Poughkeepsie Journal, 2001; Doxsey, 2001; Jones, 2001; Find Law Legal News 2000; Bustillo, 2000). Many have instituted training and education programs to assist their law enforcement agencies in surviving costly litigation.
THE GREAT GATSBY: YALE, PRINCETON, COLUMBIA, HARVARD, OXFORD

Where did Fitzgerald get the idea of having Clay's Economics reside in Nick Carraway's library?
Providing Efficient Incentives to Work: Retirement Ages and the Pension System

This paper provides a theoretical and quantitative analysis of efficient pension systems as integral parts of the overall tax code. We study lifecycle environments with active intensive and extensive labor margins. First, we analytically characterize Pareto efficient policies when the main tension is between redistribution and provision of incentives: while it may be more efficient to have highly productive individuals work more and retire older, earlier retirement may be needed to give them incentives to fully realize their productivity when they work. We show that, under plausible conditions, efficient retirement ages increase with productivity. We also show that this pattern is implemented by pensions that not only depend on the age of retirement but are designed to be actuarially unfair. Second, using individual earnings and retirement data for the U.S. as well as intensive and extensive labor elasticities, we calibrate policy models to simulate robust implications: it is efficient for individuals with higher lifetime earning to retire (i) older than they do in the data (at 69.5 vs. at 62.8 in the data, for the most productive workers) and (ii) older than their less productive peers (at 69.5 for the most productive workers vs. at 62.2 for the least productive ones), in sharp contrast to the pattern observed in the U.S. data. Finally, we compute welfare gains of between 1 and 5 percent and total output gains of up to 1 percent from implementing efficient work and retirement age patterns. We argue that distorting the retirement age decision offers a powerful novel policy instrument, capable of overcompensating output losses from standard distortionary redistributive policies.
A Minimum Wage Increase Can Have an Adverse Distributional Impact:The case of Colombia

A rise in the minimum wage may contribute to decrease earnings inequality by promoting larger wage increases for workers in the low tail of the wage distribution, but it may also increase inequality by promoting layoffs. This paper uses a semiparametric model to analyze the impact on inequality of a 6.3 percent increase in the real minimum wage in Colombia between 1995 and 1999, a period of economic downturn. Simulations suggest that if the employment effects of the minimum wage increase are ignored, the underlying policy would contribute to reduce earnings inequality. On the contrary, by considering the drop in wages of those who lost their jobs, simulations suggest that the policy in question would increase earnings inequality under some assumptions about the employment elasticity of the minimum wage and the new level of earnings unemployed workers rely upon.
Pre-Markman Reversal Rates

The decisions in Markman v. Westview Instruments by the U.S. Court of Appeals for the Federal Circuit and the Supreme Court shifted the responsibility for construing patent claims from jury to judge, and the Federal Circuit’s decision in Cybor Corp. v. FAS Technologies, Inc., adopted a de novo standard of review on appeal. These decisions were motivated in part to bring stability, predictability, and transparency to the claim construction process. The Federal Circuit’s reversal rate, which has hovered between 20 and 45 percent, has prompted calls for significant changes. These proposals are premised on the notion that the claim construction reversal rate is unduly high because of fundamental features of the appellate review process, such as the standard of review, the scope of judicial authority over claim interpretation, and the canons of claim interpretation. This Article, which is part of a symposium on the "Federal Circuit as an Institution," provides data from all Federal Circuit opinions from 1991 through 2008 to determine whether changes in the procedure for construing and reviewing claims has changed the reversal rate.
The Failure of Bowles v. Russell

This article, written for the Supreme Court Review issue of Tulsa Law Review, critiques Bowles v. Russell - perhaps last term's most underrated case - which characterized the time to file a civil notice of appeal as jurisdictional and therefore not subject to equitable excuses for noncompliance. In so holding, the Court overstated the supporting precedent, inflated the jurisdictional importance of statutes, and undermined an important recent movement to clarify when a rule is jurisdictional and when it is not. This did not have to be. The Court missed a golden opportunity to chart a middle course holding the rule mandatory but nonjurisdictional, which would have been more consistent with precedent while resolving the case on its narrowest grounds. This Article explains where Bowles went wrong, what it should have done, and how it may affect future questions on the jurisdictionality of rules and limits.
THE IRRELEVANCE OF WRITTENNESS IN CONSTITUTIONAL INTERPRETATION

Arguments about the nature of judicial review and appropriate methods of constitutional interpretation based on the “writtenness” of the Constitution date back at least to Marbury v. Madison. In recent years, originalists ranging from Jack Balkin to Keith Whittington to Randy Barnett have argued in varying fashion that an originalist interpretive approach follows logically from “our commitment to a written constitution.” This argument has been extraordinarily important to the ongoing originalism renaissance, but it is a mistake. Nothing—or virtually nothing—follows from the writtenness of the U.S. Constitution. One can be committed to a written constitution in any number of ways for any number of reasons, the vast majority of which do not entail an originalist interpretive approach. The originalist argument to the contrary is one instance of a broader rhetorical phenomenon that the philosopher C.L. Stevenson helpfully labeled “persuasive definition.” It is an attempt to resolve a normative debate through redefinition of a normatively charged term—in this case, “interpretation.” There is broad agreement that judges should interpret, rather than make, the law.
Statistics on Savings and Investment in Russia

This article presents basic concepts of flow of funds analysis, with application to the Russian economy. Flow of funds analysis can be used to examine private and public savings in an economy, investment decisions of economic agents, development of the financial system and its stability, and prospects for economic growth. Flow of funds accounts are a component of the System of National Accounts (SNA). They integrate capital and financial accounts of the SNA in a single framework of sources and uses of financial flows. Flow of funds accounts provide information about savings of individual sectors and their investment decisions. Monetary authorities, the IMF and World Bank, and business analysts use flow of funds accounts as a tool of analysis. For example, the Federal Reserve System of the US and the German Bundesbank regularly estimate and publish flow of funds accounts for their economies. This method also lies at the heart of financial programming - the approach used by the IMF and the World Bank in their macroeconomic analysis. Russian financial statistics have improved much over recent years. The Central Bank of Russia, Goskomstat, and the Ministry of Finance provide quite detailed information on financial transactions. In spite of this, official estimations of flow of funds accounts and the financial account are still unavailable though some experimental calculations have been made by the staff of the Central Bank. However, there are at least two Russian think-tanks - the Bureau of Economic Analysis (BEA) and the Institute for Economic Forecasting of the Russian Academy of Science (IEF) - that try to fill this information vacuum. The BEA estimates traditional flow of funds accounts, the IEF - the so-called Social Accounting Matrixes, which include the financial account. In this article we will use flow of funds accounts estimated by the BEA.
When Human Rights Conflict: Mediating International Parental Kidnapping Disputes Involving the Domestic Violence Defense

Mediating an international parental kidnapping dispute involving domestic violence allegations is certain to prove precarious, challenging, and controversial. Nonetheless, where the destination state involved in a dispute lacks legal or diplomatic parental kidnapping remedies, is non-compliant with international treaty obligations, or lacks effective domestic violence and child protection institutions, mediation may prove the only available mechanism to ensure an abducted child's safety and well-being, secure the child's return to a state that has effective protections, or facilitate appropriate access to both parents. Elective mediation can compensate for ineffectual remedies by affording system actors and parents an opportunity to build protective terms into a stipulated agreement and craft a safe, appropriate, cooperative co-parenting regime. Mediation may provide a domestic violence victim charged with international parental kidnapping an alternative to facing criminal prosecution, extradition and incarceration. The option to mediate a mutually agreeable solution could prevent a desperate, disenfranchised parent from taking unilateral actions that place the child, the parent and others at risk of grave harm. Denying any parent the choice of whether or not to mediate violates international laws and principles that guarantee all persons dignity, non-discrimination, gender equity, equality in the family, shared parenting rights and responsibilities, access to justice and equality before the law. Treating parental kidnapping as a domestic violence remedy, instead of treating domestic violence as a rebuttable affirmative defense to parental kidnapping, does injustice to left-behind parents, summarily deprives children of their right to access both parents, and undermines the rule of law.
Ever Onward: Expanding the Use of Perma.cc

Authors, law journal staff members, and courts can create permanent citations to online resources with Perma.cc, a free library-sponsored service. This article explores expanding the use of Perma.cc to capture material otherwise inaccessible behind “paywalls” and to material the Bluebook requires authors to cite in print. These expansions would be simple to implement and would enhance the utility of legal citations. The author suggests three areas in which Perma.cc might expand: using Perma.cc to capture images of print-only materials, using Perma.cc as a legal blog repository, and expanding Perma.cc beyond legal citations.
Choice of Law and Minimal Scrutiny

To what extent does, or should, the Constitution control choices of law? This paper offers a simple reformulation and clarification of the issues which can provide a general analytic framework for understanding constitutional review in conflicts cases, and can help us reach a general theory of such review. In light of this general theoretical approach, this paper argues that neither fairness nor federalism has played any role in the Supreme Court's supervision of conflicts cases; that the Court in fact has employed a level of constitutional scrutiny in these cases akin to the "minimal scrutiny"' used in other cases challenging the constitutionality of applications of state law; that a more refined or restrictive scrutiny would be inappropriate in view of fundamental national policy goals, and unworkable in view of constraints upon the Court in conflicts cases; and that the Supreme Court should therefore reject current proposals for tighter constitutional control over the choice-of-law process.
The potential for underinvestment in internet security: implications for regulatory policy

With the continuing growth of the use of the Internet for business purposes, the consequences of a possible cyber attack that could create a large scale outage of long time duration becomes a more and more serious economic issue. In this paper, we construct a game-theoretic model that addresses the economic motivations for investment in added Internet security and makes a case for a possible market failure in the form of underinvestment in the provision of Internet security. This result relies on the fact that the social value derived from consumption (which is at least equal to a fraction of the surplus derived from e-commerce) greatly exceeds the revenue at stake associated with the telecommunications companies’ and ISP’s security levels. If the ratio of social value to revenue at stake to Internet providers continues to grow, the likelihood of underinvestment in security becomes higher and some form of regulation may become necessary. We discuss the difficulties associated with designing and enforcing a regulatory scheme based upon mandatory security standards.
Liquidity, Systemic Risk, and the Bankruptcy Treatment of Financial Contracts

Parties to repos, and to swaps and other derivatives are accorded privileged treatment under the bankruptcy laws of several dozen countries. Several key international “best practice” standards urge legislators in other jurisdictions to provide likewise. The beneficiaries of these privileges are solvent counterparties enabled, unimpeded by bankruptcy moratoria, to implement close-out netting arrangements and to dispose of collateral. The purported rationale is mitigation of systemic risk. Taking a broad international perspective, this Article explores the “domino” contagion view of distress that motivates the privileges. This view derives from the outdated “microprudential” understanding of systemic risk, and is theoretically flawed and empirically false. Drawing instead on the “macroprudential” approach, the Article argues that the elements of the broad close-out netting process—contractual termination, marked-to-market valuation, netting, and unimpeded collateral disposals—exacerbate systemic risk by increasing common exposures to risk, systemic uncertainty, procyclicality, and leverage, while reducing lending standards, collateral utilization, and regulatory capital buffers. A recent attempt to provide a new rationale for financial contract privileges highlights their contribution to the “exponentiation” of liquidity. This Article shows that the privileges diminish the liquidity of markets and financial institutions alike. What they exponentiate is “froth.” This rather unfamiliar label describes the all too familiar state in which assets are persistently and/or progressively overvalued and in which negative net-value projects obtain funding. The exponentiation of froth—the textbook recipe for systemic crises—should only be attractive to financial institution decision makers whose remuneration perversely tracks the riskiness of their institutions. The Article also throws new light on the international spread of financial contract privileges. It expands on existing literature by mapping the path-dependent process by which national legislators and international standard setters were persuaded as to the alleged value of these privileges. It illustrates the key mechanisms by which any consideration of the costs of the privileges was precluded. The Article concludes by rebutting the argument that bankruptcy law should not play any role in systemic risk mitigation, and by consolidating proposals to reform bankruptcy laws to protect the social welfare-enhancing features of financial contracts without encouraging systemic risk, value destruction, or unfairness.
On the value of influence activities for capital budgeting

Abstract This paper shows that a capital budgeting process in which the division manager is required to engage in personally costly influence activities prior to a project approval has beneficial incentive effects: it provides the manager with incentives to acquire costly information about project prospects and helps to elicit the revelation of the acquired information. As a consequence, imposing influence costs on the manager can lead to improved capital allocations. The optimal level of influence costs, chosen by the firm, trades off ex ante incentives for information acquisition against efficient use of the acquired information ex post.
Resource-Based Strategies in Law and Positive Political Theory: Cost-Benefit Analysis and the Like

While the notion of decision costs and limited resources as constraints on law and policy making have found their way into recent legal analyses, few scholars have described the broader political control strategies available to institutions using such resource-based approaches. The political control exercised by Congress, the President, and courts through cost-benefit analysis, and similar strategy-laden instruments, allows one or more policy makers to force a competing policy maker to expend valuable, and limited, resources thereby preventing, or greatly compromising, policies desired by the competing policy maker. Resource-based strategies can be exercised horizontally through separated powers games or vertically (upstream and downstream) in court-agency hierarchies. These strategies are revealed in legislation and agency design by Congress, executive orders by the President, and doctrine and other instruments of legal reasoning by the judiciary. Positive Political Theory offers a framework for thinking about these resource-based strategies and the implications are profound. This article solidifies the current understanding of resource-based strategies from the Positive Political Theory (PPT) perspective and presents extensions, including analyses of (1) the differential resource impacts on policy players from the various types of regulation that may be imposed on agencies (benefits statutes and cost-benefit statutes), and (2) the introduction of regulated targets as resource strategizers with public institutions.
The Strategic Listing Decisions of Hedge Funds

The voluntary nature of hedge fund database reporting creates strategic listing opportunities for hedge funds. However, little is known about how managers list funds across multiple databases or whether investors are fooled by funds’ listing decisions. In this paper, we find that hedge funds strategically list their small, best-performing funds in multiple outlets immediately while preserving the option to list their other funds in additional databases later. We generally find that investors react rationally to these fund listings based on the predictability of performance. Finally, our results lead to specific guidelines on handling backfilled returns to minimize biases.
The rise of corporate governance in corporate control research

This article has two related tasks. First, we review the articles published in this Special Issue on Corporate Control, Mergers, and Acquisitions. These articles provide new evidence on several aspects of corporate control and governance including the value and performance effects of various ownership groups, the impact of internal governance structures, the effects of regulatory changes on specific industries and evidence on bidding strategies in takeovers. This analysis leads us to our second task - to examine the evolution of corporate control research, broadly defined. Our analysis shows a movement in research from mergers and acquisitions to a broader analysis of corporate governance, especially internal governance features. We suggest that there is a trend toward an increase in the relative importance of internal governance compared to discipline from the market from corporate control. This trend reflects an important change over the past several decades in the means through which the market disciplines corporate behavior.
Supreme Court Advocacy and Domestic Violence: Lessons From Vermont v. Brillon and Other Cases Before the Court

This article is based upon a presentation given at the St. John’s University School of Law, Journal of Legal Commentary symposium 'Thinking Outside the Box: New Challenges and New Approaches to Domestic Violence.' In recent years, the United States Supreme Court has considered a number of cases with implications for domestic violence victims. The article argues that broadening and expanding advocacy before the Court by filing amicus briefs is an important and imperative strategy to pursue. It begins with an overview of Vermont v. Brillon, a case on the Court’s 2008-2009 docket in which the author filed an amicus brief on behalf of eighteen organizations in the domestic violence advocacy community. Reflecting on this case and others before the Court, the author suggests that there are some lessons that can be learned about Supreme Court advocacy. She argues that advocates should develop a more deliberate process of reviewing petitions for certiorari, expand advocacy to include a wider range of cases, ensure that only committed domestic violence advocates define the interests of victims, and foster alliances with the those advocacy groups committed to sexual autonomy and reproductive rights.
The Anatomy of Health Insurance

Abstract This article describes the anatomy of health insurance. It begins by considering the optimal design of health insurance policies. Such policies must make tradeoffs appropriately between risk sharing on the one hand and agency problems such as moral hazard (the incentive of people to seek more care when they are insured) and supplier-induced demand (the incentive of physicians to provide more care when they are well reimbursed) on the other. Optimal coinsurance arrangements make patients pay for care up to the point where the marginal gains from less risk sharing are just offset by the marginal benefits from reduced provision of low valued care. Empirical evidence shows that both moral hazard and demand-inducement are quantitatively important. Coinsurance based on expenditure is a crude control mechanism. Moreover, it places no direct incentives on physicians, who are responsible for most expenditure decisions. To place such incentives on physicians is the goal of supply-side cost containment measures, such as utilization review and capitation. This goal motivates the surge in managed care in the United States, which unites the functions of insurance and provision, and allows for active management of the care that is delivered. The analysis then turns to the operation of health insurance markets. Economists generally favor choice in health insurance for the same reasons they favor choice in other markets: choice allows people to opt for the plan that is best for them and encourages plans to provide services efficiently. But choice in health insurance is a mixed blessing because of adverse selection – the tendency of the sick to choose more generous insurance than the healthy. When sick and healthy enroll in different plans, plans disproportionately composed of poor risks have to charge more than they would if they insured an average mix of people. The resulting high premiums create two adverse effects: they discourage those who are healthier but would prefer generous care from enrolling in those plans (because the premiums are so high), and they encourage plans to adopt measures that deter the sick from enrolling (to reduce their overall costs). The welfare losses from adverse selection are large in practice. Added to them are further losses from premiums that vary with observable health status. Because insurance is contracted for annually, people are denied a valuable form of intertemporal insurance – the right to buy health coverage at average rates in the future should they get sick today. As the ability to predict future health status increases, the lack of intertemporal insurance will become more problematic. The article concludes by relating health insurance to the central goal of medical care expenditures – better health. Studies to date are not clear on which approaches to health insurance promote health in the most cost-efficient manner. Resolving this question is the central policy concern in health economics.
Theories of the evolution of technology based on processes of competitive substitution and multi-mode interaction between technologies

Abstract. Evolution of technology is a stepwise advancement of a complex system of artifact, driven by interaction with sub-systems and other systems, considering technical choices, technical requirements and science advances, which generate new and/or improved products or processes for use or consumption to satisfy increasing needs and/or to solve complex problems of people in society. This study explains evolution of technology with two different approaches: theories based on processes of competitive substitution of a new technology for the old one and theories considering a multi-mode interaction between technologies, such as the theory of technological parasitism. These theories described here can encourage further theoretical and empirical exploration in the terra incognita of the evolution of technology to explain economic and social change in human society. Keywords. Evolution of technology, Technological evolution, Technological change, Technological progress, Technological advances, Technological parasitism. JEL. F34, F43, F63, C01.
Communicating Identity The Use of Core Value Statements in Regulative Institutions

This study analyzes the core value statements of 25 regulative institutions located in 11 different OECD countries. Four types of institutions are studied: six tax agencies, six food safety authorities, four environmental protection agencies, and nine supreme audit institutions. The study shows that there is a clear emphasis on people-related and professional values. Based on these findings, I argue that regulative organizations, which we normally would assume need legitimacy for their authoritative role and coercive powers, attempt to become identified with values that imply a more lenient identity, distancing themselves from the more “traditional” authoritative and bureaucratic identity. Potential implications for organizational legitimation are discussed.
Entry Policy in Local Telecommunications: Iowa Utilities and Verizon

The Telecommunications Act of 1996 requires, among other things, that incumbent local telephone carriers lease parts of their telephone networks to would-be rivals. 1 If you have children, you can easily imagine the difficulties inherent in this approach; mandated sharing is often contentious when forced upon young kids and is no easier as applied to firms with strong, contradictory interests. These problems are exacerbated in the telecommunications setting by imprecision in the rules of the game. As Justice Scalia put it AT&T Corp. v. Iowa Utilities Board, 2 “[i]t would be gross understatement to say that the Telecommunications Act of 1996 is not a model of clarity. It is in many important respects a model of ambiguity or indeed even self-contradiction.” 3 However complicated the legal provisions, the intuition behind them is straightforward: the purpose of mandatory sharing is to facilitate competition. Without mandatory sharing, a competitor can enter the market only if it can either cut a deal with an existing telephone company or build its own network from the ground up. With mandatory sharing, by contrast, a competitor has a third option: it can enter the
Electronic Commerce: Implications of the Internet for Business Practice and Strategy

The Internet and the emerging global infostructure pose new opportunities and threats to businesses. This paper looks at the implications of these emerging low cost communications infrastructures on business practice and strategy. I examine how firms are using the Internet to improve innovation, production, sales, and service processes and I consider the effects of lower conununications and coordination costs on business practices and strategies. Specifically, I propose that widespread use of the Internet and related technologies will dramatically reduce transaction costs, leading to a growth in electronic commerce and productivity. At the same time, the reduction in transactions and coordination costs will reduce the profit opportunities of inefficient firms, requiring them to re-focus their strategies. This paper identifies foci for strategic responses to the above challenges. Center for Digital Economy Research Stem School of Business IVorking Paper IS-95-22
From Smile Asymptotics to Market Risk Measures

The left tail of the implied volatility skew, coming from quotes on out-of-the-money put options, can be thought to reflect the market’s assessment of the risk of a h uge drop in stock prices. We analyze how this market information can be integrated into the theoreti cal framework of convex monetary measures of risk. In particular, we make use of indifference pricing by dynamic convex risk measures, which are given as solutions of backward stochastic differential equations (BSDEs), to establish a link between these two approaches to risk measurement. We derive a characterization of the implied volatility in terms of the solution of a nonlinear PDE and provide a small time-to-maturity expansion and numerical solutions. This procedure allows to choose convex risk measures in a conveniently parametrized class, distorted entropic dynamic risk measures, which we introduce here, such that the asymptotic volatility skew under indifference pricing can be matched with the market skew.
The Trueblood Study Group on the Objectives of Financial Statements (1971–73): A historical study

Abstract This paper examines the background and work of the AICPA’s Accounting Objectives Study Group, chaired by Robert M. Trueblood, which issued its important report, Objectives of Financial Statements, in October 1973. The research is informed by interviews with three members of the Study Group and with four of the principal members of its research staff. Evidence is presented about the members of the Study Group who supported, or did not support, various positions in the report, including their apparent reasons, as well on the influential role of the research staff, especially George Sorter, in shaping the report. The conclusion is that the research staff, abetted by the financial analyst member of the Study Group, played a decisive role in driving the key recommendation in the report, namely, that financial statements should provide investors and creditors with information about the cash-generating ability of the enterprise, and eventually the cash flows to them. This recommendation resonated with the FASB and eventually with standard setters around the world.
Flattening the organization: the effect of organizational reporting structure on budgeting effectiveness

This study investigates whether increasing a superior’s span of control improves the effectiveness of the budgeting process. We characterize the superior’s utility function as consisting of utilities for norm enforcement and wealth, leading the superior to reject profitable projects believed to contain excessive slack. We develop theory to predict that superiors become more willing to reject projects as their span of control increases. Further, subordinates anticipate superiors’ behavior and reduce slack as span of control increases. Experimental results are consistent with these predictions. As span of control increases, superiors show a greater willingness to reject projects that they believe contain excessive slack, and subordinates submit budgets with less slack. The net result is that superiors earn more profit per subordinate under an expanded span of control. Our study suggests that increasing span of control can improve the effectiveness of the budgeting process, an important component of most firms’ control environments.
Transitional Dynamics in Two-Sector Models of Endogenous Growth

The steady state and transitional dynamics of two-sector models of endogenous growth are analyzed in this paper. We describe necessary conditions for endogenous growth. The conditions allow us to reduce the dynamics of the solution to a system with one state-like and two control-like variables. We analyze the determinants of the long run growth rate. We use the Time-Elimination Method to analyze the transitional dynamics of the models. We find that there are transitions in real time if the point-in-time production possibility frontier is strictly concave which occurs for example if the two production functions are different or if there are decreasing point-in-time returns in any of the sectors. We also show that if the models have a transition in real time the models are globally saddle path stable. We find that the wealth or consumption smoothing effect tends to dominate the substitution or real wage effect so that the transition from relatively low levels of physical capital is carried over through high work effort rather than high savings. We develop some empirical implications. We show that the models predict conditional convergence in that in a cross section the growth rate is predicted to be negatively related to initial income but only after some measure of human capital is held constant. Thus the models are consistent with existing empirical cross country evidence. (authors)
Drug testing welfare recipients as a constitutional condition

In the past few years, there has been a flurry of legislative proposals in the states to require welfare recipients to submit to suspicionless drug testing. A federal district court has recently granted a preliminary injunction enjoining such a program in Florida on the grounds that the plaintiffs were likely to succeed on the merits of a Fourth Amendment claim. Only the Sixth Circuit has otherwise addressed the question, with the appellate panel disagreeing with a trial judge who also granted a preliminary injunction on Fourth Amendment grounds, and the full Circuit upholding the trial judge by an equally divided, six-to-six vote. The constitutionality of these legislative proposals is, therefore, very much open to question. All the literature written on the question of suspicionless drug testing of welfare recipients have come to the same conclusion that such testing violates the Fourth Amendment. This Note challenges the prior and current scholarship on suspicionless drug testing of welfare recipients, and the Supreme Court’s special needs doctrine more broadly, by applying the doctrine of unconstitutional conditions to the cases. It contends that the Fourth Amendment’s special needs doctrine is insufficient, because conditioning welfare benefits on drug testing may fail the special needs test but still be a constitutional condition. This Note argues that, where the unconstitutional doctrine could otherwise apply, the doctrine is in fact necessary to apply; that doing so resolves certain contradictions and fictions that currently exist in the Fourth Amendment doctrine, while better explaining some of the Fourth Amendment cases; and that conditioning welfare on drug testing is more likely to be constitutional under the unconstitutional conditions doctrine than under the current Fourth Amendment approach, which would instead stop the inquiry with the special needs doctrine. More specifically, the Note concludes that if there is a connection between drug use and decreased productivity or increased unemployment, absenteeism, and occupational injury, then drug testing appears a 'germane' condition to the receipt of welfare benefits and thus constitutional. If there is no such connection, however, then we might begin to question why drugs are illegal at all. Update: A discussion on the recent Eleventh Circuit decision in Lebron v. Secretary, Florida Department of Children and Families has been added. The Note argues that the decision did not properly apply the doctrine of unconstitutional conditions.
Iatrogenic Specification Error: A Cautionary Tale of Cleaning Data

It is common practice to use sensible rules of thumb for cleaning data. Measurement error is often the justification for removing (trimming) or recoding (winsorizing) observations where the dependent variable has values that lie outside a specified range. We consider a general measurement error process that nests many plausible models. Analytic results demonstrate that winsorizing and trimming are solutions for a narrow class of error processes. Indeed such procedures can induce or exacerbate bias. Monte Carlo simulations and empirical results demonstrate the fragility of cleaning. Even on root mean square error criteria, we cannot find generalizable justifications for these procedures.
Conditional Dominance, Rationalizability, and Game Forms☆☆☆

Abstract We propose a notion of conditional dominance for games whose representations designate information sets. We prove that iterated conditional dominance is equivalent to extensive form rationalizability. We also conduct a general analysis of these concepts, yielding new insights on rationalizability and on the equivalence of solutions when applied to different representations of a game.Journal of Economic Literature Classification Numbers:C63, C72, C73.
Beyond Localized Graph Neural Networks: An Attributed Motif Regularization Framework

We present InfoMotif, a new semi-supervised, motif-regularized, learning framework over graphs. We overcome two key limitations of message passing in popular graph neural networks (GNNs): localization (a $k$ -layer GNN cannot utilize features outside the $k$ -hop neighborhood of the labeled training nodes) and over-smoothed (structurally indistinguishable) representations. We propose the concept of attributed structural roles of nodes based on their occurrence in different network motifs, independent of network proximity. Two nodes share attributed structural roles if they participate in topologically similar motif instances over co-varying sets of attributes. Further, InfoMotif achieves architecture independence by regularizing the node representations of arbitrary GNNs via mutual information maximization. Our training curriculum dynamically prioritizes multiple motifs in the learning process without relying on distributional assumptions in the underlying graph or the learning task. We integrate three state-of-the-art GNNs in our framework, to show significant gains (3-10% accuracy) across six diverse, real-world datasets. We see stronger gains for nodes with sparse training labels and diverse attributes in local neighborhood structures.
Molecular Phosphates, Phosphonates, Phosphinates, and Arsonates of the Group 13 Elements

Acids of phosphorus and arsenic form cyclic and cage compounds upon reaction with group 13 element alkyls. The molecular products obtained not only have a structural relationship to secondary building units in phosphate and arsenate materials, but these molecular species may act as models of and precursors to the solid state materials. The synthesis, characterization, reactivity and potential applications of these compounds are reviewed.
Seeding the Herd: Pricing and Welfare Effects of Social Learning Manipulation

This paper is motivated by the recent emergence of various interference tactics employed by sellers attempting to manipulate social learning. We revisit the classic model of observational social le...