cssi/SciSciGPT-SciSciNet huggingface dataset:
Geographic distance and corporate acquisitions: signals from IPO firms

This paper examines acquisitions of firms after they have undergone initial public offerings (IPOs). Combining insights from information economics with recent research on geographic distance in various market settings, the analysis investigates whether the presence or absence of different signals on IPO firms has an impact on the geographic proximity of acquirers. The central proposition we develop and test is that specific characteristics of IPOs—venture capitalist backing, investment bank reputation, and underpricing of issued shares—convey signals on these firms, which can facilitate acquisitions by more remote acquirers who are more likely to face the risk of adverse selection. Copyright © 2011 John Wiley & Sons, Ltd.
Average-Cost Optimal Policies for an Unreliable Flexible Multiproduct Machine

This paper is concerned with optimal production planning on a single failure-prone flexible machine that produces N distinct part types. The machine is flexible in the sense that no setup is required for switching from production of one part type to another. We consider the problem of controlling production rates to minimize the expected long-run average cost of product surpluses over time. We assume constant unit holding and shortage costs and constant demand rates for the part types. Moreover, the costs are assumed to be the same for all products. We provide an explicit optimal solution for the problem.
State Court Strategies and Politics during the Appropriations Process

This article explores state court budgetary strategies and their effectiveness in the appropriations process as perceived by key budgeting actors. In general, we find evidence of state judiciaries that try to remain “above politics” when dealing with budget issues. The most important strategies to this effect include submitting realistic requests, providing documentation to support needs, and not using budget “weapons” at their disposal (e.g., writs of mandamus). However, the survey results do indicate that state judiciaries use certain strategies that have a more political tint, such as lobbying by court officials.
The Effect of Group Composition on Individual Student Performance in an Introductory Economics Course

What is the best way to allocate students to small teams in those economics courses that rely on small group work to enhance individual student learning? While experts in collaborative learning provide many suggestions, little empirical work has been done. This article begins to fill the gap. It examines whether a variety of characteristics of the small semipermanent team to which an introductory economics student was randomly assigned affect the student's performance on the identical final exam in eight sections of a principles course over three years, holding individual student characteristics the same. The empirical results suggest that peer effects from such group characteristics have weak or negligible effects and do not support the experts’ general advice on how to form teams. A few other perhaps surprising results emerged.
Fidelity To Our Living Constitution

This essay explores the arguments of Bruce Ackerman, who decries the Roberts Court’s “shattering judicial betrayal” of our living constitution’s Civil Rights Revolution. He argues for a broader conception of the constitutional canon: The higher law of the Constitution includes not only formally adopted provisions but also “landmark statutes” and judicial “superprecedents,” for example, those of the Civil Rights Revolution. He also argues for a broader conception of popular sovereignty: We the People manifest our will not only through the formal amending procedures but also through higher lawmaking procedures outside Article V. He exhorts us to fidelity to our living constitution: the commitments “hammered out” through the processes of popular sovereignty during the Civil Rights Revolution. I reconstruct Ackerman’s living constitutionalism as a moral reading in which faithful interpretation requires normative judgments about the best understanding of the constitutional commitments that have been built out over time.
Error measures for generalizing about forecasting methods: Empirical comparisons

Abstract This study evaluated measures for making comparisons of errors across time series. We analyzed 90 annual and 101 quarterly economic time series. We judged error measures on reliability, construct validity, sensitivity to small changes, protection against outliers, and their relationship to decision making. The results lead us to recommend the Geometric Mean of the Relative Absolute Error (GMRAE) when the task involves calibrating a model for a set of time series. The GMRAE compares the absolute error of a given method to that from the random walk forecast. For selecting the most accurate methods, we recommend the Median RAE (MdRAE) when few series are available and the Median Absolute Percentage Error (MdAPE) otherwise. The Root Mean Square Error (RMSE) is not reliable, and is therefore inappropriate for comparing accuracy across series.
Modeling Intuition's Origins

Computational models of intuition typically focus on describing cognitive implementations of intuitive decision-making. In this commentary, we highlight several ways in which formal models can be used to consider a different perspective: the evolutionary and social origins of intuition. Why should intuitions have come to function as they do? We consider three case studies that demonstrate how introducing evolutionary game theory into the psychological study of intuition can help answer questions about the origins of intuitive processes. These case studies demonstrate why we should expect (i) intuition to persist within a population even when other forms of cognition perform better; (ii) intuition to favor cooperation rather than selfishness; and (iii) intuitive cooperators to be trusted more than people who cooperate after carefully calculating costs and benefits.
Beyond the Inevitable and Inadequate Regulation of Bankers: A Comment on Painter

This is a Comment on Richard Painter’s article on The Moral Responsibilities of Investment Bankers. First, it identifies several reasons for both the inevitability and the inadequacy of business regulation. Next, it comments on Painter’s proposals for inducing greater responsibility by bankers and offers a few suggestions for introducing a moral tenor into the discourse about financial markets.
An Analysis of Risk Assessment Questions Based on Loss- Averse Preferences

A variety of risk assessment questionnaires are used within the financial planning profession to assess client risk preferences. Evidence indicates that the average person overweighs losses relative to an arbitrary reference point. This paper evaluated risk assessment questions on how well they correlate with monetary loss aversion. Twenty-nine Western Texas residents between the ages of 27 and 56 participated in experimental research and filled out several risk assessment questionnaires. Two weeks later their levels of loss aversion were measured using monetary gain and loss scenarios. The individual risk assessment questions were placed into three categories: expected utility theory, prospect theory and selfassessment. Composite measures were created for within-group and between-group comparisons. Statistically significant correlations were found between monetary loss aversion and different composite measures. The results provide financial planners with a group of risk assessment questions that capture loss-averse preferences.
Gunslingers on the High Seas: A Call for Regulation

Until very recently, commercial vessels travelling through waters that pose the greatest risk of pirate attacks typically relied on the world’s navies to protect them. Indeed, the world community has spent more than one billion dollars in each of the last several years to support naval fleets that patrol pirate-infested waters, with the goal of repressing piracy. The vastness of the area in which pirates now operate, however, has meant that those navies simply cannot keep every ship safe. Despite the presence of the world’s navies, pirates staged 439 violent attacks and held 802 crew members hostage in 2011 alone. The rewards they reaped for doing so are great – the average ransom paid to pirates in 2011 was $4.97 million.
Scaling of Entanglement Entropy for the Heisenberg Model on Clusters Joined by Point Contacts

The scaling of entanglement entropy for the nearest neighbor antiferromagnetic Heisenberg spin model is studied computationally for clusters joined by a single bond. Bisecting the balanced three legged Bethe cluster, gives a second Renyi entropy and the valence bond entropy which scales as the number of sites in the cluster. For the analogous situation with square clusters, i.e. two \(L \times L\) clusters joined by a single bond, numerical results suggest that the second Renyi entropy and the valence bond entropy scales as L. For both systems, the environment and the system are connected by the single bond and interaction is short range. The entropy is not constant with system size as suggested by the area law.
Price Adjustment Policy with Partial Refunds

Abstract Have you ever purchased an item only to notice a short while later that its price was reduced? Many retailers offer to refund customers the full price difference as long as the discount occurred within a short period of time after the original purchase. Such policy looks attractive to consumers as it shields them from future price fluctuations. But can this policy be advantageous for the retailer? In this paper we investigate the price difference refund policy (commonly referred to as price adjustment) and demonstrate how it can result in a higher profit even if all consumers request and receive a price adjustment. Further, the existing literature and practice both assume that if a price adjustment policy is employed, the consumers should get the full price difference refunded. In this paper we endogenize the refund amount, allowing the retailer to determine the optimal percentage of the price difference to be returned to consumers. We fully characterize the conditions under which it is optimal to offer a partial or greater than full price adjustment to customers as well as the optimal refund percentage. Additionally, we demonstrate that the practice of limiting the price adjustment option to a short period after the purchase incident is not necessarily in the best interest of retailers.
The ASCA Spectrum of the Vela Pulsar Jet

ROSAT observations of the Vela pulsar and its surroundings have previously revealed a collimated X-ray feature almost 45' in length, interpreted as the signature "cocoon" of a one-sided jet from the Vela pulsar. We report on a new ASCA observation of the Vela pulsar jet at its head, the point where the jet is believed to interact with the supernova remnant. The head is clearly detected, and its X-ray spectrum is remarkably similar to the surrounding supernova remnant spectrum, extending to X-ray energies of at least 7 keV. A ROSAT plus ASCA spectrum can be fitted by two-component emission models but not by standard one-component models. The lower energy component is thermal and has a temperature of 0.29 ± 0.03 keV (1 σ); the higher energy component can be fitted by either a thermal component of temperature ~4 keV or a power law with photon index ~2.0. Compared with the ROSAT-only results, the mechanical properties of the jet and its cocoon do not change much. If the observed spectrum is that of a hot jet cocoon, then the speed of the jet is at least 800 km s-1, depending upon the angle of inclination. The mechanical power driving the jet is ≥1036 ergs s-1, and the mass flow rate at the head is ≥10-6 M☉ yr-1. We conclude that the jet must be entraining material all along its length in order to generate such a large mass flow rate. We also explore the possibility that the cocoon emission is synchrotron radiation rather than thermal.
The Morality of Prophylactic Legislation (with Special Reference to Speed Limits, Assisted Suicide, Torture, and Detention Without Trial)

My subject is the morality of prophylactic legislation. What do I mean by ‘prophylactic’ legislation? Let me illustrate the concept by drawing a contrast with the most famous hypothetical case in the scholarly literature of Anglo-American jurisprudence. During the course of their debate over the relation between law and morality, Lon Fuller and H. L. A. Hart disagreed about what tools are needed to discern the meaning and scope of a rule barring vehicles from a public park.¹ Hart and Fuller clashed over whether legislative purpose and considerations of morality enter into the process of discerning what Hart famously called the ‘core of settled meaning’.² = ey themselves did not disagree about the fact that there will be cases at the margin of this and every rule, but the example has since come to illustrate the various positions one can take on marginal applications, especially the following question: when, if ever, should ambiguous statutory language be construed to reach circumstances that were not specifi cally contemplated by the legislature? My topic concerns the relation between law and morality, but in a somewhat diff erent sense from the way in which Hart, Fuller, and others have mooted these issues. For one thing, I am interested in the question of whether a legislature ought to enact a law, not in how judges should * = e author thanks Sherry Colb and Elizabeth Emens for very helpful conversations, and Jessica Karp for excellent research assistance. ¹ Compare L. L. Fuller, ‘Positivism and Fidelity to Law—A Reply to Professor Hart’ (1958) 71 Harvard Law Review, 663 with H. L. A. Hart, ‘Positivism and the Separation of Law and Morals’ (1958) 71 Harvard Law Review, 607–8. ² Hart, ibid, 607.
Parallel Imports in a Model of Vertical Distribution: Theory, Evidence and Policy

Parallel imports are goods traded without the authorization of an original trademark or copyright owner. In this paper, a model where parallel imports arise because of incentive problems in vertical distributions is discussed. A distributor receiving goods from a manufacturer at a low wholesale price can profitably sell the goods in another country, outside the authorized distribution channel. The manufacturer can limit such parallel imports by raising wholesale prices, but this reduces vertical pricing efficiency. Parallel imports can thus occur in equilibrium. The model is supported by empirical evidence from existing studies and new econometric work. Policy implications of the analysis are discussed.
International Institutions and Political Liberalization: Evidence from the World Bank Loans Program

How do international institutions affect political liberalization in member states? Motivated by an examination of the World Bank loans program, this article shows that institutions can incentivize liberalization by offering opportunities for countries to become associated with advanced, wealthy members. In the World Bank, when a loan recipient reaches a specified level of economic development, it becomes eligible to graduate from borrower status to lender status. Using a regression discontinuity design, the study demonstrates that this incentive motivates states to improve their domestic behavior with respect to human rights and democracy. Combining qualitative and quantitative evidence, the results suggest that the desire to become a member of this elite group is responsible for motivating member states to reform due to the belief that such membership brings diffuse international and domestic benefits.
Slowdown of credit flows in Jordan in the wake of the global financial crisis: Supply or demand driven?

Abstract This paper estimates a disequilibrium model of credit supply and demand to evaluate the relative role of these factors in the slowdown of credit flows in the Jordanian economy in the wake of the global financial crisis. The empirical analysis suggests that the credit stagnation is mainly driven by the restricted credit supply amid tighter monetary policy conditions in Jordan relative to the United States, as evidenced by the widened interest differential between the Central Bank of Jordan (CBJ) re-discount and the U.S. Federal Reserve funds rates. Although it appears that demand side factors related to the slowdown of economic activity have also had an impact, their role has been relatively modest. The estimation results imply that economic policies targeted towards stimulating the supply of credit are likely to be a more effective tool for expanding credit flows relative to demand stimulating policies.
Summers V. Earth Island Institute Rejects Probabilistic Standing, but a "Realistic Threat" of Harm Is a Better Standing Test

In Summers v. Earth Island Institute, the Supreme Court recently rejected Justice Breyer’s dissenting opinion’s proposed test for organizational standing based upon the statistical probability that some of an organization’s members will likely be harmed in the near future by a defendant’s allegedly illegal actions. Implicitly, however, the Court had recognized some form of probabilistic standing in Friends of the Earth v. Laidlaw, which found standing where plaintiffs avoid recreational activities because of “reasonable concerns” about future health injuries from pollution; Summers did not overrule Laidlaw. There is an inherent tension between the Summers and Laidlaw decisions. This Article applies the Summers and Laidlaw frameworks to the facts in Natural Resources Defense Council v. EPA (NRDC II), where the D.C. Circuit found standing because the government’s exemption from regulation of certain uses of methyl bromide, an ozone destroying chemical, would causes 2 to 4 lifetime skin cancer cases among the NRDC’s members. Both Summers and Laidlaw produce questionable results when applied to NRDC II’s facts. The “realistic threat” test in Justice Breyer’s dissenting opinion in Summers offers a better approach to standing than either Summers’ unrealistic demand that plaintiffs precisely predict the future or Laidlaw’s focus on whether a plaintiff avoided recreational activities rather than whether the defendant’s activities caused actual harm. There was a more realistic threat of harm in Summers than Laidlaw, but the Court found standing in the latter case but not the former case. The Court’s current approach to standing for organizational plaintiffs and probabilistic risks is seriously flawed and the realistic threat test offers a more rational approach to assess which injuries are sufficiently serious for standing in Article III federal courts. Furthermore, a realistic threat test for standing is more consistent with congressional intent in enacting several citizen suit statutes that are involved in the vast majority of cases in which constitutional standing is at issue. In light of NRDC II, the Court should abandon both the Summers and Laidlaw approaches to standing and instead adopt Justice Breyer’s proposed “realistic threat” test to achieve reach more equitable and uniform standing determinations.
Governance in the Public Corporation of the Future: The Battle for Control of Corporate Governance

Eight years after passage of the Sarbanes-Oxley Act, Congress has again passed sweeping legislation in response to a corporate crisis.1 In addition to changes in the regulatory environment for Wall Street financial firms and banks, the DoddFrank Act (D-F Act) also proposes reforms to corporate governance.2 Before passage of the D-F Act, the Securities and Exchange Commission (SEC) began rulemaking on several governance matters addressed by Congress in the D-F Act; however, the SEC will begin rulemaking on many of the new corporate governance mandates over the next six to twelve months.3 As federal securities laws and rulemakings continue to define corporate governance requirements, the new rules raise anew a discussion of what is (or perhaps what should be) the balance between state corporate law and federal securities laws in regulating corporate governance for public corporations.4 As Congress, the SEC, and national exchanges continue to develop rulemaking on director independence, compliance processes, disclosures, and leadership structure, any concerns over further intrusion of federal securities laws into state
Above the Law? The Constitutionality of the Ministerial Exemption from Antidiscrimination Law

This Article critiques the constitutional underpinning of the ministerial exemption, which grants religious organizations immunity from anti-discrimination suits brought by ministerial employees. These employees, who range from parochial schoolteachers to church music directors, cannot assert Title VII sex or race discrimination claims against their religious employersregardless of whether or not religious belief motivated the discrimination. Lower courts and commentators assert that the right of church autonomy created by the religion clauses requires this result, but the Supreme Court has never blessed (or rejected) it. This Article argues there is no place for the ministerial exemption under the Supreme Court's current religion clause jurisprudence. The free exercise clause neither guarantees religious organizations autonomy in their internal affairs nor shields them from neutral laws of general applicability like Title VII. And while the establishment clause forbids the courts from resolving theological or spiritual disputes, this Article rebuts the unexplored assumption that adjudicating a Title VII suit requires courts to evaluate a plaintiff's spiritual qualifications. The Article also briefly explores freedom of expressive association as an alternative justification for the ministerial exemption and concludes that, to the extent it applies at all, it only protects those employers whose religious doctrine requires discrimination.
Clear Statement Principles and National Security: Hamdan and Beyond

In resolving conflicts between individual rights and national security, the Supreme Court has often said that Congress must unambiguously authorize presidential action; the Court has also attempted to ensure that defendants are not deprived of their liberty except pursuant to fair trials. These decisions, a form of liberty-promoting minimalism, reject claims of unilateral or exclusive presidential authority. The Court’s decision in Hamdan v. Rumsfeld reflects a distinctive clear statement principle, one that bans the President from convening a military commission, or otherwise departing from the standard adjudicative forms, unless Congress explicitly authorizes him to do so. The Court’s conclusion diverges sharply from a plausible alternative view, which is that in view of the President’s role as Commander-in-Chief, he should be permitted to construe ambiguous enactments as he see fits. The Court’s approach has implications for numerous other problems involved in the war on terror. Most generally, it suggests the need for clear congressional authorization for presidential action that intrudes on liberty or departs from well-established historical practices. More specifically, it significantly weakens the President’s argument on behalf of the legality of warrantless wiretapping by the National Security Agency. The Supreme Court has often declined to answer the most fundamental questions about the relationship between individual rights and national security. Instead it has said that if the executive seeks to enter into constitutionally sensitive domains, or to depart from standard adjudicative forms, clear congressional permission is required. This approach reflects a form of what I shall call liberty-promoting minimalism. It is libertyforcing insofar as it gives liberty the benefit of interpretive doubt. It is minimalist insofar as it avoids the most fundamental issues of constitutional law and to that extent reflects a form of judicial self-restraint. Liberty-promoting minimalism can be found at diverse stages of American history. The oldest example was during the Civil War period, when President Lincoln suspended the writ of habeas corpus; Chief Justice Roger Taney ruled that the President could not suspend the writ on his own. During World War I, Justices Brandeis and Holmes argued not only for use of the first amendment to invalidate legislation, but also * Karl N. Llewellyn Distinguished Service Professor, Law School and Department of Political Science, University of Chicago. I am grateful to Eric Posner and David Strauss for valuable comments on a previous draft and to Matthew Tokson for valuable research assistance. 1 See William H. Rehnquist, All the Laws But One 36-38 (1999).
Distinction or dichotomy: Rethinking the line between thymology and praxeology

The aim of this paper is to critically reexamine Ludwig Mises’ attempt to separate the psychological aspects of understanding (thymology) from the “science of action” (praxeology). There are, we contend, legitimate distinctions between theory, on the one hand, and, on the other, psychology or history. But, there is no need to dichotomize them from one another in the way Mises sometimes did.
Capital structure dynamics and transitory debt

Abstract Firms deliberately but temporarily deviate from permanent leverage targets by issuing transitory debt to fund investment. Leverage targets conservatively embed the option to issue transitory debt, with the evolution of leverage reflecting the sequence of investment outlays. We estimate a dynamic capital structure model with these features and find that it replicates industry leverage very well, explains debt issuances/repayments better than extant tradeoff models, and accounts for the leverage changes accompanying investment “spikes.” It generates leverage ratios with slow average speeds of adjustment to target, which are dampened by intentional temporary movements away from target, not debt issuance costs.
An empirical investigation of environmental performance and the market value of the firm

Abstract This paper analyzes the shareholder value effects of environmental performance by measuring the stock market reaction associated with announcements of environmental performance. We examine the market reaction to two categories of environmental performance. The first category includes 417 announcements of Corporate Environmental Initiatives (CEIs) that provide information about self-reported corporate efforts to avoid, mitigate, or offset the environmental impacts of the firm's products, services, or processes. The second category includes 363 announcements of Environmental Awards and Certifications (EACs) that provide information about recognition granted by third-parties specifically for environmental performance. Although the market does not react significantly to the aggregated CEI and EAC announcements, we find statistically significant market reactions for certain CEI and EAC subcategories. Specifically, announcements of philanthropic gifts for environmental causes are associated with significant positive market reaction, voluntary emission reductions are associated with significant negative market reaction, and ISO 14001 certifications are associated with significant positive market reaction. The difference between the market reactions to the CEI and EAC categories is statistically insignificant. Overall, the market is selective in reacting to announcements of environmental performance with certain types of announcements even valued negatively.
The dynamics of organizational emergence: a contemporary group formation perspective

This paper outlines contributions from social psychology to the study of entrepreneurship, especially the process of organizational emergence. The major topics covered are role theory, the minimal ...
Why stocks may disappoint

We provide a formal treatment of both static and dynamic portfolio choice using the Disappointment Aversion preferences of Gul (1991. Econometrica 59(3), 667–686), which imply asymmetric aversion to gains versus losses. Our dynamic formulation nests the standard CRRA asset allocation problem as a special case. Using realistic data generating processes, we find reasonable equity portfolio allocations for disappointment averse investors with utility functions exhibiting low curvature. Moderate variation in parameters can robustly generate
The Economic Dilution of Employee Stock Options: Diluted EPS for Valuation and Financial Reporting

In this paper, we derive a measure of diluted EPS that incorporates the economic implications of the dilutive effects of employee stock options. We show that the existing FASB treasury‐stock method of accounting for the dilutive effects of outstanding options systematically understates the options' dilutive effect, and thus overstates reported EPS. Using firm‐wide data on 731 employee stock option plans, our proposed measure suggests that economic dilution from options is, on average, 100 percent greater than dilution in reported diluted EPS using the FASB treasury‐stock method. We examine the implications of our analysis for stock price valuation, the price‐earnings relation, and the return‐earnings relation. We demonstrate analytically that when firms have options outstanding, empirical applications of equity valuation models that use reported per‐share earnings as an input (e.g., Ohlson 1995) yield upwardly biased estimates of the market value of common stock. We predict that when the difference betwee...
Universality and its limits: when research ethics can reflect local circumstances.

In recent years, many research trials in developing countries have been criticized because they would have been unethical in developed countries. For example, studies of therapy to prevent HIV-transmission from mother to child were criticized for employing a placebo control when a similar study in the United States would have required an active treatment control. In the view of many commentators, researchers may not employ a double standard in which studies that would be unacceptable in their own country are conducted instead in developing countries. I argue in this paper that researchers can take into account local circumstances in applying universal principles of research ethics, with the result that studies may be ethical in some countries even though they are unethical in other countries. I further argue that while strong safeguards must be adopted to prevent exploitation of citizens of developing countries when local circumstances are taken into account, the guidelines of the Council for International Organizations of Medical Sciences (CIOMS) are unduly strict. CIOMS requires that the therapy studied be made reasonably available in the host country after the clinical trial. By analogizing to non-research settings, I conclude that exploitation can be avoided by the provision of other kinds of benefit to the host country, such as royalty payments from sales of the therapy in developed countries.
Robust Portfolio Control with Stochastic Factor Dynamics

Portfolio selection is vulnerable to the error-amplifying effects of combining optimization with statistical estimation and model error. For dynamic portfolio control, sources of model error include the evolution of market factors and the influence of these factors on asset returns. We develop portfolio control rules that are robust to this type of uncertainty, applying a stochastic notion of robustness to uncertainty in model dynamics. In this stochastic formulation, robustness reflects uncertainty about the probability law generating market data, and not just uncertainty about model parameters. We analyze both finite- and infinite-horizon problems in a model in which returns are driven by factors that evolve stochastically. The model incorporates transaction costs and leads to simple and tractable optimal robust controls for multiple assets. We illustrate the performance of the controls on historical data. As one would expect, in-sample tests show no evidence of improved performance through robustness—e...
Chefs move to schools. A pilot examination of how chef-created dishes can increase school lunch participation and fruit and vegetable intake

To demonstrate the feasibility of introducing a main dish designed by a professional chef in the National School Lunch Program and to document the impact on child participation, a chef was recruited to design pizza to be served in an upstate New York school district. The pizza was designed to meet both the cost and ingredient requirements of the NSLP. High school students were significantly more likely to select the pizza prepared by the chef. While the chef had no significant impact on main dish consumption given selection, more students took a vegetable and vegetable consumption increased by 16.5%. This pilot study demonstrates the plausibility of using chefs to boost participation in the school lunch program, and potentially increase nutrition through side selection, among high school students.
Corporate bond credit spreads and forecast dispersion

Recent research establishes a negative relation between stock returns and dispersion of analysts’ earnings forecasts, arguing that asset prices more reflect the views of optimistic investors because of short-sale constraints in equity markets. In this article, we examine whether a similar effect prevails in corporate bond markets. After controlling for common bond-level, firm-level, and macroeconomic variables, we find evidence that bonds of firms with higher dispersion demand significantly higher credit spreads than otherwise similar bonds and that changes in dispersion reliably predict changes in credit spreads. This evidence suggests a limited role of short-sale constraints in our corporate bond data sets. Consistent with a rational explanation, dispersion appears to proxy largely for future cash flow uncertainty in corporate bond markets.
Reviving the Assurance Conception of Promising

It’s generally wrong to break promises. But it’s not obvious why. T.M. Scanlon gives an influential answer, proposing that breaking promises involves violating what he calls a moral duty of fidelity. Niko Kolodny and R. Jay Wallace have offered a sophisticated criticism of Scanlon’s account, arguing that it’s circular, and that his attempt to avoid the circularity won’t work. In this paper, I defend Scanlon against their attack. The second goal will be to explain why Scanlon’s theory nevertheless faces serious problems. In particular, Scanlon’s approach incorrectly implies that some people lack the ability to make binding promises, even though it’s clear that they have this ability. Given this objection, this paper then presents and defends a modified Scanlonian approach to promissory obligation that preserves his key insights, avoids the problems, and removes the risk of circularity pointed out by Kolodny and Wallace.
Hobby Lobby and the Pathology of Citizens United

This Essay explores a distinct way Citizens United v. Federal Election Commission promises to influence pending challenges to the Patient Protection and Affordable Care Act (ACA), and a host of cases to come. Specifically, the way Citizens United approached precedent will likely affect, and radiate well beyond, the current ACA challenges. Citizens United read a number of prior decisions to adopt rules those decisions deliberately chose not to espouse. While this is not an entirely new move for the Court, the contribution of Citizens United was to normalize this disconcerting stance. The Roberts Court seems increasingly comfortable approaching precedent just as it did in that case. This Essay identifies this move as a consistent practice across a number of decisions, and explains why it is cause for deep concern.
Innovation and spillovers in regions: Evidence from European patent data

Abstract This paper estimates the effect of research externalities in generating innovation. We use R&D and patent data for European Regions in the 1977–1995 period. We find that spillovers are very localized and exist only within a distance of 300 km . The estimates are robust to simultaneity, omitted variable bias, different specifications of distance functions, country and border effects. However the size of these spillovers is small. Doubling R&D spending in a region would increase the output of new ideas in other regions within 300 km only by 2–3%, while it would increase the innovation of the region itself by 80–90%.
Investment, Credit Rationing, and the Soft Budget Constraint: Evidence from Czech Panel Data

Strategic restructuring of firms through investment is key to a transition from plan to market. Using data on industrial firms in the Czech Republic during 1992-1998, we find that foreign-owned companies invest the most and cooperatives the least, that private firms do not invest more than state-owned ones, and that cooperatives and small firms are credit rationed. Given the large volume of nonperforming bank loans to firms and the high rate of investment of large state-owned and private firms, our findings also suggest that these firms operate under a soft budget constraint. Estimates of a dynamic model, together with the support for the neoclassical model, suggest that firms started to behave consistently with profit maximization.
Trade and uneven growth

Abstract In many endogenous growth models, trade leads to the convergence of growth rates across countries. What has not been adequately recognized is that this result depends on one crucial assumption: that trade occurs simultaneously with the international diffusion of knowledge. If instead we drop this assumption, and consider the case where no diffusion of knowledge occurs, then we find that trade in goods can lead to a divergence of growth rates. We also explore how these results are affected by trade in intermediate inputs or by multinational corporations, which may facilitate the diffusion of knowledge.
The DMCA and the Regulation of Scientific Research

This Article analyzes the impact of the Digital Millennium Copyright Act (DMCA) on academic encryption research. In this Article, I argue that for both legal and practical reasons academic encryption researchers should be able to conduct and publish certain types of research without significant fear of liability under the DMCA. However, the DMCA will have a non-trivial impact on the conditions under which such research takes place, and this impact can be expected to have several undesirable effects. More broadly, this impact highlights the problematic way in which the DMCA regulates scientific research in furtherance of intellectual property rights. The Article concludes with a number of suggestions for mitigating some of these negative effects.
Marriage ≠ Marriage: Querying the Relevance of Equality to the Interstate Recognition of Same-Sex Relationships

This essay seeks to explore and complicate the contemporary U.S. interstate same-sex relationship-recognition debate and, in particular, to offer a reconsideration of the relevance of popular notions of equality to this debate. Indeed, to the extent that equality is meant to treat identical things identically, it is not a value that is easily applicable to the radical plurality of American family law—a plurality that complicates even the translation of any state’s ‘marriage’ as ‘marriage’ outside of that state. Ultimately then, this essay’s explorations lead to an uncomfortable possibility—for liberals and conservatives alike—namely that same-sex marriages and civil unions cannot simplistically be inter-jurisdictionally translated in the United States as ‘marriage’ always, but neither can opposite-sex ‘marriage’ itself. Indeed, insisting on the identity, or equality, of marriage from U.S. state to U.S. state occludes the inter-jurisdictional differences that are always present—if often ignored—in translating (for example) a ‘Massachusetts marriage’ as a ‘Mississippi marriage,’ or viceversa.
Andreoni–McGuire algorithm and the limits of warm-glow giving

We provide a full equilibrium characterization of warm-glow giving a la Andreoni (1989, 1990) by extending the Andreoni-McGuire (1993) algorithm. We then generalize and offer an intuitive meaning to the large-economy crowding-out results by Ribar and Wilhelm (2002). The algorithm indexes individuals according to their free-riding levels of the public good. This level is finite for an individual whose donation is always dictated by some altruism or concern for charity. We show that if all individuals have finite free-riding levels, then the crowding-out is complete in a large economy. If, on the other hand, a non-negligible fraction of the population never free rides, then the crowding-out is zero in a large economy. We discuss implications of these extreme crowding-out predictions for charitable behavior and fund-raising strategies.
Economics Research at the FTC: Information, Retrospectives, and Retailing

Individual Federal Trade Commission (FTC) cases invariably raise broad questions about consumers, markets, and effective enforcement policy. Recent consumer protection cases raise questions about information regulation. Horizontal merger enforcement has recently focused on retrospective analysis of mergers and the role of the retail sector in predicting the effects of manufacturer mergers. In this paper, we describe research by the FTC’s Bureau of Economics that addresses these three areas. We argue that such research is well worth the agency’s relatively small resource investment because it demonstrably contributes to more thoughtful policy analysis and better policy outcomes.
Studying Japanese Law because It's There

Comparativists are a defensive lot, accustomed to justifying our field to colleagues and students who do not fully understand what we do. The core question, “Why Compare?” is the starting point for many a course and many a casebook in comparative law. In his short but sweeping essay, John Haley re-asks the classic question in the context of Japan. As prominent scholars of Japanese law now reach out to study China and other neighboring countries, Haley’s question seems particularly timely.1 His answer is provocative and challenging, and with luck will advance a fresh set of work on issues for which Japan should be of great interest. It is hardly my place to disagree that the study of Japanese law is important and can help generate insights into questions of broader theoretical interest. My purpose in this reply is to extend, supplement, and in some places challenge Haley’s claims. Before turning to Haley’s essay in particular, I should state at the outset that I sometimes find the comparativist’s handwringing to be overwrought. The study of law is a practical discipline, but it is also an academic one and academic inquiry by its nature involves a certain responsibility to follow one’s interests regardless of “payoff.” To say that Japanese, or German, or Chinese law are worth studying because those jurisdictions are large and important is to imply that
There will be blood: Crime rates in shale-rich U.S. counties

Abstract Over the past decade the production of tight oil and shale gas significantly increased in the United States. This paper examines how this energy boom has affected regional crime rates throughout the country. We find positive effects on rates of various property and violent crimes in shale-rich counties. In 2013, the cost of the additional crimes in the average treatment county was roughly $2 million. These results are not easily explained by shifts in observed demographics like gender and age. There is however evidence that people with criminal records (registered sex offenders) moved disproportionally to shale-boom towns in North Dakota. We also document a rise in income inequality (a postulated determinant of criminal activity) that coincides with the timing of the energy boom. Policy makers in boom towns should anticipate these crime effects and invest in public infrastructure accordingly.
Errors in estimating share repurchases

Abstract We examine the accuracy of various estimates of firms' repurchases of common stock used in earlier studies, and find high error rates in the most commonly used estimators. We also find that the procedure used to estimate open market share repurchases can significantly impact results. The Compustat-based measure, which is the most accurate, deviates from the actual number of shares repurchased by more than 30% in about 16% of the cases. We conclude that many studies should be revisited now that the SEC mandates disclosure of precise information about share repurchases in Forms 10-Q and 10-K.
Demand-Based Option Pricing

We model the demand-pressure effect on prices when options cannot be perfectly hedged. The model shows that demand pressure in one option contract increases its price by an amount proportional to the variance of the unhedgeable part of the option. Similarly, the demand pressure increases the price of any other option by an amount proportional to the covariance of their unhedgeable parts. Empirically, we identify aggregate positions of dealers and end users using a unique dataset, and show that demand-pressure effects help explain well-known option-pricing puzzles. First, end users are net long index options, especially outof-money puts, which helps explain their apparent expensiveness and the smirk. Second, demand patterns help explain the cross section of prices and skews of single-stock options.
Longitudinal study of green marketing strategies that influence Millennials

Many companies are increasing their efforts to have sustainable operations and offer environmentally preferable products. However, consumers are often unaware of the environmental benefits because the companies are not communicating in ways that are compatible with the consumer's schema regarding environmental issues. The current study identifies emerging marketing strategies that are influencing Millennials' awareness of environmentally preferable products and also impacting their consumption behavior. Data were collected over a three-year period. Results indicate Millennials are taking note of a company's reputation, reading product labels, and looking for clues on product packaging to discern if a product is environmentally preferable. Specific symbols and terms are identified as being effective in conveying the green message.
The value of diffusing information.

Abstract How does the speed by which information diffuses affect its value to a stock market investor? In a structural model solved in closed-form, this speed has two opposing effects on the empirically dominant term of the value of information. Faster-diffusing information means quicker and less noisy profits, but, also increases competing informed trading, impounding more information into prices and eroding profits. Structural empirical analysis of stock market reaction to drug approvals using media coverage as a proxy for the transmission rate of information finds that the value of information is hump-shaped in its future transmission rate. Moreover, the estimated amount of noise trading is small.