cssi/SciSciGPT-SciSciNet huggingface dataset:
The Impact of Opt-in Privacy Rules on Retail Credit Markets: A Case Study of MBNA

U.S. privacy laws are increasingly moving from a presumption that consumers must object to ("opt out" of) uses of personal data they wish to prohibit to a requirement that they must explicitly consent ("opt in ") to uses they wish to permit. Despite the growing reliance on opt-in rules, there has been little empirical research on their costs. This Article examines the impact of opt-in on MBNA Corporation, a diversified, multinational financial institution. The authors demonstrate that opt-in would raise account acquisition costs and lower profits, reduce the supply of credit and raise credit card prices, generate more offers to uninterested or unqualified consumers, raise the number of missed opportunities for qualified consumers, and impair efforts to prevent fraud. These costs would be incurred despite the fact that as of the end of 2000, only about two percent of MBNA's customers had taken advantage of existing voluntary opportunities to opt out of receiving MBNA's direct mail marketing offers. If Congress were to adopt opt-in laws applicable to financial information, the impact across the economy on consumers and businesses would be significant. Copyright @ 2003 by Michael E. Staten and Fred H. Cate. t Distinguished Professor and Director of the Credit Research Center, The Robert Emmett McDonough School of Business, Georgetown University. tt Distinguished Professor and Ira C. Batman Faculty Fellow, Indiana University School of Law-Bloomington; Senior Policy Advisor, Hunton & Williams Center for Information Privacy Leadership. We thank MBNA America for its participation in this case study and all of the MBNA employees who shared their time and expertise throughout the project. In addition, we received helpful comments and suggestions on earlier versions of this Article from Martin Abrams, Dan Jaffe, David Klaus, Mark MacCarthy, Harriet Pearson, and Michael Turner. This project was supported by a grant to Georgetown University from the Privacy Leadership Initiative.
Long‐Term Contracting: The Role of Private Information in Dynamic Supply Risk Management

We examine the critical role of evolving private information in managing supply risk. The problem features a dyadic channel where a dominant buyer operates a multiperiod inventory system with lost sales and fixed cost. He replenishes from a supplier, whose private state of production is vulnerable to random shocks and evolves dynamically over time. We characterize the optimal inventory policy with a simple semi-stationary structure; it distorts order quantity for limiting information rent only in the initial period; the optimal payment compensates for production cost in every period but concedes real information rent only in the initial period. These properties allow us to derive an easy-to-implement revenue-sharing contract that facilitates ex ante strategic planning and ex post dynamic execution. This work advances our understanding on when and how to use private information in dynamic risk management
TAX AVOIDANCE AND THE DEADWEIGHT LOSS OF THE INCOME TAX

Traditional analyses of the income tax greatly underestimate deadweight losses by ignoring its effect on forms of compensation and patterns of consumption. The full deadweight loss is easily calculated using the compensated elasticity of taxable income to changes in tax rates because leisure, excludable income, and deductible consumption are a Hicksian composite good. Microeconomic estimates imply a deadweight loss of as much as 30% of revenue or more than ten times Harberger's classic 1964 estimate. The relative deadweight loss caused by increasing existing tax rates is substantially greater and may exceed $2 per $1 of revenue.
Divine Sovereignty, Indian Property Law, and the Dispute over the Padmanabhaswamy Temple

Secular governance in India was meant to have incorporated religion within public life, but the implementation of ‘Indian secularism’ has in important ways been premised on separating religious and secular lifeworlds. Public Hindu temples, whose assets and operations are managed by a melange of statutory bodies, courts, and state governments, exemplify this puzzling situation. The 2011 discovery of treasures within the Padmanabhaswamy temple in Trivandrum, Kerala, prompted extended public debate about the ownership of temple assets as well as litigation that eventually reached the Supreme Court of India. Indian citizens, erstwhile princely rulers, and the deity of the temple were variously presented as the true owners of the wealth. Ultimately, both public discourse and judicial opinion largely reaffirmed the notion that religious institutions are to be treated as private, contractually defined properties, and that temple wealth, as specifically religious property, exists outside of market circulations.
Revealed political power.

This paper adopts a “revealed preference” approach to the question of what can be inferred about bias in a political system. We examine a dynamic environment in which individuals dier by income each period. Long run preference profiles are unobserved to an outside observer but are known to belong to a well behaved class in which individual preferences are ordered by income in each state. Policy data is summarized by a Markov policy rule. The observer makes inferences about the underlying distribution of political power as if political power were derived from a wealth-weighted voting system with weights that can vary across states. The weights determine the nature and magnitude of the wealth bias. Positive weights on relative income in any period indicate an “elitist” bias in the political system whereas negative weights indicate a “populist” one. We ask: what class of weighted systems can rationalize a given policy rule as a weightedmajority outcome each period? Our first result shows that without further knowledge, all forms of bias are possible: any Markov policy rule can be shown to be rationalized by any system of wealth-weighted voting. An additional single crossing restriction on preferences can, however, rule out certain weighting systems. We then augment policy data with polling data and show that the set of rationalizing wealth-weights are bounded above and below. In some cases, polls can provide information about the change in political inequality across time.
A Quantitative Method for the Analysis of Nomothetic Relationships between Idiographic Structures: Dynamic Patterns Create Attractor States for Sustained Posttreatment Change.

Objective The present article aimed to demonstrate that the establishment of dynamic patterns during the course of psychotherapy can create attractor states for continued adaptive change following the conclusion of treatment. Method This study is a secondary analysis of T. D. Borkovec and E. Costello (1993). Of the 55 participants in the original study, 33 were retained for the present analysis due to the homogeneity of psychotherapy outcome among these participants. Of these 33, the majority were White (88%) and female (70%), and the average age was 35.44 years (SD = 14.46). Participants participated in 12 weeks of either cognitive behavioral therapy or applied relaxation. Daily diary entries from the treatment period were subjected to time series analyses in order to determine the degree of order versus disorder present within individual dynamic systems. These idiographic data were then aggregated for nomothetic analysis of treatment outcome via linear mixed effect models. Results Spectral power due to daily to intradaily oscillations in thrice-daily diary data significantly moderated reliable change over posttreatment follow-up such that lesser power predicted increases in reliable change over the 1-year follow-up period. Additionally, residual variance for dynamic factor models significantly moderated the slope for change over the follow-up period, such that lesser variance--and thus greater order in dynamic systems--predicted increases in reliable change. Conclusions The degree of order in dynamic systems established during therapy acted as an adaptive attractor state, promoting continued positive gains 1 year after the conclusion of therapy. The present study represents an important innovation in the study of dynamic systems in psychotherapy.
An Empirical Analysis of Entrant and Incumbent Bidding in Road Construction Auctions

This paper explores differences in the bidding patterns of entrants and incumbents in road construction auctions. We find that entrants bid more aggressively and win auctions with significantly lower bids than incumbents. The differences in their bidding patterns are consistent with a model of auctions in which the distribution of an entrant's costs exhibits greater dispersion than that of an incumbent's and relations of stochastic dominance in the distributions do not persist for the entire range of estimated costs. We also find that more efficient firms bid, on average, more aggressively and firms with greater backlogs bid less aggressively.
Near optimization of dynamic systems by decomposition and aggregation

This paper is concerned with the reduction of a class of optimal control problems to simpler problems by using decomposition and aggregation. Decomposition is shown to provide a good approximation when the system dynamics involve nearly decomposable matrices or variables with strong and weak interactions. Aggregation provides a good approximation if each of the decomposed matrices has one or more dominant eigenvalues. It is shown how one can construct nearly-optimal controls for the given system from the optimal solutions of the simpler reduced problems.
From Generosity to Sustainability: The Austrian Pension System and Options for its Reform

Austria has one of the world's highest pension expenditures relative to GDP, largely because of the generosity of its pension system. This paper examines the institutional setup of the Austrian pension system and projects its medium- and long-term development based on current policies. The projection results show a swift worsening of the finances of the pension system. With the already high level of contribution rates, pension expenditures, and budget transfers, the results underscore the need for reform. Much of the necessary reform can, however, be achieved by maintaining the structure of the system and adjusting some of its key parameters, as begun in the recent pension accord. The paper outlines options for further reform steps.
Catching Up and Convergence: Long‐run Growth in East Asia

The paper attempts to combine the traditional learning model with the recent theory of economic growth using Maddison’s long-run real GDP per capita data of the three fastest growing countries in East Asia: Korea, Taiwan, and Japan. The authors first explain games of catching-up among nations, and then explain the learning coefficients of Taiwan and Korea with Japan and the United States through periods before and after World War II. The model of leaning leads to the logistic model of economic growth of convergence between two countries. Using time-series data, the coefficients of a logistic model are estimated to confirm that the real GDP per capita of Taiwan and Korea are converging to that of Japan and the United States, respectively. Similarly, Japan’s GDP per capita converges to that of the United States. The time required for finite convergence for these countries is also estimated.
The Information Content of Idiosyncratic Volatility

Ang, Hodrick, Xing, and Zhang (2006a) show that stocks with high idiosyncratic return volatility tend to have low future returns. This paper further documents that idiosyncratic volatility is inversely related to future earning shocks, and more importantly, that the return-predictive power of idiosyncratic volatility is induced by its information content about future earnings. We examine various explanations of the triangular relation among idiosyncratic volatility, future earning shocks, and future stock returns. Our results show that the idiosyncratic volatility anomaly is not a simple manifestation of previously documented market anomalies related to excessive extrapolation on firm growth, over-investment tendency, accounting accruals, or investor underreaction to earnings news. On the other hand, there is evidence that the idiosyncratic volatility anomaly is related to corporate selective disclosure, and the anomaly is stronger among stocks with a less sophisticated investor base.
Perceptual Harm and the Corporate Criminal

This article will consider the structure and effects of corporate acts of bribery as an entry point to explore why, notwithstanding its many critics, there are good reasons to retain corporate criminal liability along with individual liability in many circumstances. I will argue, first, that due to shared social intuitions about corporations as personified moral actors, the punishment of corporations along with their executives, if otherwise justified, serves an important expressive function that in turn helps legitimize the criminal justice system by vindicating the intuitions about moral blameworthiness that support it. Second, I will examine the example of the crime of bribery, especially in the context of recent enforcement of the Foreign Corrupt Practices Act (FCPA), to demonstrate how some of the most important substantive harms caused by corporate bribery, including social deterioration and cultural malaise, flow in part from the very networks bribery creates to consolidate power -- real and perceived -- over consumers and other market participants. This consolidation is made possible by the enduring nature of a corporation, which is in turn created by the state and facilitates institutional connections with state power. I argue that a societal judgment of blameworthiness for the corruption of these networks must attach, through criminal sanction, to the collective entities perceived as directly participating in them in order for the perceptual aspects of this harm to be removed and for the adverse effects on the fabric of society remedied. (While corporate criminal punishment must primarily take the form of financial penalties, the expressive stigma of criminal liability in and of itself can serve to disrupt the perceived alignment between the corporate structure and sources of state power.) Third, I will suggest that the same perceptual harms identifiable in the context of bribery can be discerned in many other cases of corporate criminal misconduct, based upon the psychological and cultural effects of a corporation’s enduring nature and institutional connections with state power. Finally, I will argue that, notwithstanding these strong arguments for corporate criminal liability, the bribery cases also demonstrate how the dramatic and variable role of prosecutorial discretion in attaching official blame to corporate harm runs the risk of undermining the expressive value of corporate punishment through an emphasis on consequentialist outcomes. These outcomes, I argue, improperly aggrandize the prosecutor’s ex post remedial role at the expense of redressing the underlying corporate harm.
The impact of informed trading on dividend signaling: a theoretical and empirical examination

Abstract This paper examines how the trading behavior of various investors impacts the market reaction to a dividend signal. The dividend signaling model incorporates asymmetric information among traders, firm insiders, and the market. This interaction among market participants explains why not all dividend increases are viewed by the market as good news. The model predicts that the announcement day returns for a dividend increase are inversely related to measures of informed trading and decreasing in the level of buy demand relative to sell demand. Further, the model hypothesizes that more informed trading results in larger dividend increases. Empirical tests confirm these predictions.
Policy-Motivated Parties in Dynamic Political Competition

We analyze a model of a dynamic political competition between two policy-motivated parties under uncertainty. The model suggests that electoral mandates matter: increasing the margin of victory in the previous election causes both parties to shift towards policies preferred by the winner, and the loser typically shifts more than the winner. The model also provides potential answers to a number of empirical puzzles in the field of electoral politics. In particular, we provide possible explanations for why close elections may lead to extreme platforms by both parties, why increased extremism in the platform of one party may lead to greater moderation in the platform of the other party, and why increasing polarization of the electorate causes winning candidates to become more sensitive to mandates. We also show that, contrary to previous findings, increasing uncertainty sometimes decreases platform divergence. Finally, we pay special attention to the proper methodology for doing numerical comparative statics analysis in computational models.
The Internationalisation of Legal Education

It makes very little difference where a future architect or future doctor attends school. The subject matter that is studied is essentially the same, regardless of the country where the person is educated. Law, on the other hand, is very different, and at least until recently, a person who studied law in one country was limited in his or her future practice location to that particular place.
The Self-Defensive Cognition of Self-Defense

Why do certain self-defense cases—ones, e.g., involving battered women who kill their sleeping abusers, or beleaguered commuters who shoot panhandling minority teens—provoke intense political conflict? The conventional and seemingly obvious answer is that people judge such cases in a politically partisan fashion. This paper, however, suggests a subtler and more complex explanation. Social psychologists have shown that individuals resolve factual ambiguities in a manner supportive of their defining values, both to minimize dissonance and to protect their connection to others who share their commitments. This form of selfdefensive cognition, it is submitted, shapes individuals’ perceptions of violent interactions between parties seen to be complying with or defying contested social norms. As a result, even individuals who are trying to decide such cases based on honest and politically impartial assessments of the facts polarize along cultural lines. The paper presents the results of an original empirical study (N = 1,600) that supports this hypothesis. It also explores the normative significance of this account of the origins of political conflict over self-defense cases and how such conflict can be mitigated.
Predatory Pricing in Two-Sided Markets: A Brief Comment

Over the past few years, there has been a burgeoning literature on two-sided markets and economic understanding of such markets has improved hugely. Less attention has, however, been paid to how competition policy should be applied in two-sided markets. This short note does not attempt to provide a comprehensive analysis of this issue, but merely presents a brief comment on the implications of two-sided market theory for one possible abuse of a dominant position under Article 82 of the EC Treaty: predatory pricing.
Why a Narrowly Defined Legal Scholarship Blog Is Not What I Want: An Argument in Pseudo-Blog Form

This essay, written for the symposium Bloggership: How Blogs Are Transforming Legal Scholarship, adopts the format of a blog and argues in favor of preserving the playful, spontaneous qualities of blogging. Blogging is a powerful and fruitful form of writing which should be allowed to develop in its own fashion and not constrained by the conventions of scholarship.
Little Black Boxes: Legal Anthropology and the Politics of Autonomy in Tort Law

Law’s interdisciplinary turn toward social sciences suggests a growing realization that jurists may not be independently equipped to explain the world in and upon which they act. But if law embraces empirical social science for its usable output, it struggles to make sense of the more interpretive disciplines such as anthropology. This has proven to be a major setback for both law and anthropology and confounds the historically productive rapport between the two fields stretching back more than a century. While it may be tempting to conclude that today’s legal academic misunderstands the interpretive turn in anthropology, that conclusion offers little to facilitate a rapport of the kind badly needed today. Instead, in this piece I wish to argue that legal scholars’ difficulty with anthropology arises not from its interpretivism generally, but from its particular approach that equates law with culture for what appears to be methodological expediency. As I explain below, the equation that treats law as culture permits the anthropologist to study law at a wide variety of “locations” or “field sites” while sacrificing a distinction that is — even if socially fabricated — of great significance to the people for and against whom it operates.
Heisenberg's Uncertainty: An Analysis of Criminal Tax Pretextual Prosecutions in the Context of Breaking Bad's Notorious Anti-Hero

Commentators have roundly criticized pretextual prosecutions, such as prosecuting Al Capone for tax evasion rather than bootlegging, arguing that the government should minimize the use of pretextual prosecutions. However, pretextual prosecutions serve as a valuable tool for law enforcement.In Breaking Bad, Walter White becomes a violent criminal who produces and sells narcotics. Throughout the series, he is very careful to conceal or destroy any evidence linking him to the violence and drug trafficking. However, as the bootleggers and gangsters of the Prohibition-era learned, the government holds the trump card, criminal tax prosecution. By charging drug traffickers with criminal tax fraud, the government can imprison dangerous criminals without having to prove beyond a reasonable doubt that the drug traffickers actually produced and sold narcotics. This article examines criminal tax fraud statutes and methods of proof, analyzing these statutes and methods in the context of whether Walter White should have fled from prosecution. Through this analysis, this article demonstrates the value of pretextual criminal tax fraud prosecutions.
Can Average Stock Returns Match the Performance of the 20th Century

This study examines likely stock market performance for the first two decades of the new century. The analysis indicates that the market is on course to be one of the most disappointing decades in market history on the basis of the average annual return for the decade, and that even the first 20 years of the 21st century are likely to show below-average performance. This is not based on a prediction of what the market will do but rather a combination of what has occurred and various alternatives for what could occur. The analysis has implications for investors particularly with regard to asset allocation decisions.
The Determinants of On-the-job Search : An Empirical Exploration

There was a surge in the number of employed people looking for another job in the United Kingdom in the 1980s. In this paper, we present a panel analysis of aggregate data and a cross-section analysis of individual data on on-the-job search in the United Kingdom. We find evidence that the availability of jobs and wage dispersion increase on-the-job search. The importance of these results is twofold. First, to the extent that on-the-job search responds to the tightness of the labor market, it can contribute to explaining the observed cyclical behavior of the unemployment outflow rate. Second, as shown in Fuentes (2002), to the extent that changes in on-the-job search can be explained by factors other than labor market tightness, such as wage dispersion, these shift the unemployment-vacancies relationship (the Beveridge curve) and therefore have a role to play in the determination of unemployment.
The impact of nominal stock price on ex-dividend price responses

In this paper, we examine whether nominal stock price can help to explain the ex-dividend day anomaly where stock prices drop by less than the dividend amount on the ex-dividend date. We find that stocks with lower nominal prices have ex-dividend day price drops that are more consistent with theoretical predictions based on an efficient market. After controlling for factors that have been previously documented to influence ex-dividend day stock price behavior, price-drop-to-dividend ratios are closer to one for lower priced stocks. To further explore this phenomenon, we examine the change in the price-drop-to-dividend ratio around stock splits. Firms that split their shares have a larger price-drop-to-dividend ratio after the split, and companies that reverse split their shares have a smaller price-drop-to-dividend ratio after the split. Our evidence indicates that ex-dividend day stock price behavior is influenced by the nominal price of a share and that this relation could also influence the decision to split a firm’s shares.
The Effectiveness of Alternative Monetary Policy Tools in a Zero Lower Bound Environment

This paper reviews alternative options for monetary policy when the shortterm interest rate is at the zero lower bound and develops new empirical estimates of the effects of the maturity structure of publicly held debt on the term structure of interest rates. We use a model of risk-averse arbitrageurs to develop measures of how the maturity structure of debt held by the public might affect the pricing of level, slope, and curvature term structure risk. We find that these Treasury factors historically were quite helpful for predicting both yields and excess returns over 1990‐2007. The historical correlations are consistent with the claim that if in December 2006, the Fed were to have sold off all its Treasury holdings of less than 1-year maturity (about $400 billion) and use the proceeds to retire Treasury debt from the long end, this might have resulted in a 14-basis-point drop in the 10-year rate and an 11-basis-point increase in the 6-month rate. We also develop a description of how the dynamic behavior of the term structure of interest rates changed after hitting the zero lower bound in 2009. Our estimates imply that at the zero lower bound, such a maturity swap would have the same effects as buying $400 billion in long-term maturities outright with newly created reserves and could reduce the 10-year rate by 13 basis points without raising short-term yields.
Exploring the Dynamics of Latent Variable Models

Researchers face a tradeoff when applying latent variable models to time-series, cross-sectional data. Static models minimize bias but assume data are temporally independent, resulting in a loss of efficiency. Dynamic models explicitly model temporal data structures, but smooth estimates of the latent trait across time, resulting in bias when the latent trait changes rapidly. We address this tradeoff by investigating a new approach for modeling and evaluating latent variable estimates: a robust dynamic model. The robust model is capable of minimizing bias and accommodating volatile changes in the latent trait. Simulations demonstrate that the robust model outperforms other models when the underlying latent trait is subject to rapid change, and is equivalent to the dynamic model in the absence of volatility. We reproduce latent estimates from studies of judicial ideology and democracy. For judicial ideology, the robust model uncovers shocks in judicial voting patterns that were not previously identified in the dynamic model. For democracy, the robust model provides more precise estimates of sudden institutional changes such as the imposition of martial law in the Philippines (1972–1981) and the short-lived Saur Revolution in Afghanistan (1978). Overall, the robust model is a useful alternative to the standard dynamic model for modeling latent traits that change rapidly over time.
Resource Allocation, Level of International Diversification and Firm Performance

This paper investigates the threads between international diversification and firm performance, resource allocation to R&D and capital expenditure. The context of this study is a resource-based view and transaction costs theory. Firms that are going international, benefit from the resources available to them outside their home country as well as from the utilization of their core competencies in other countries. Regression models without interactive terms indicate that resource allocation significantly impacts firm performance. Capital expenditure is positively associated with return on assets, while research and development expenditure undermines the firm’s performance. Analyses suggest that there is no thorough relation between international diversification and returns, regardless of using asset or sales diversification variables. The estimates of diversification variable are negative and insignificant in most models.
How Law Schools Benefit When Librarians Publish, Teach and Hold Faculty Status

Many nondirector academic law librarians publish and teach legal research classes. Some hold faculty status as well. Law librarians have expertise in the development and delivery of legal research instruction methodologies and are developing a body of literature documenting their efforts to create and share a pedagogy of legal research instruction. Principles of shared faculty governance entitle library faculty to contribute to the development and delivery of a curriculum of legal research instruction. Encouraging law librarian participation in the shared governance of law schools should lead to increasing opportunities for the successful reform of legal education curricula with respect to legal research instruction.
Does brand management of corporate reputation translate into higher market value

Brand associations affect image and one source of brand association is a company's reputation. While the relationship between a positive corporate reputation and operational performance is intuitively appealing, there has been relatively little empirical research. This study, using a comprehensive approach, seeks to empirically test the relationship and thereby determine whether firms with a positive brand image, that is those with a positive reputation, experience an economic benefit. Findings are that these firms are associated with a significant market-value premium, superior financial performance, and lower cost of capital. Given these findings, marketing managers would do well to strive to build and maintain a positive reputation.
Re-Valuing Lawyering for Middle-Income Clients

In this short Article I argue that we should assign more honor to lawyering for middle-income clients. By this I mean that we should hold in esteem careers involving lawyering for middle-income clients in much the same way we currently value careers in what is often referred to as "public interest" law. Instead of conceiving of a binary distinction between "public" and "private" interest law, we should think about jobs in the legal profession as falling on a spectrum, along which the public service dimension of a legal position is inversely related to the wealth and power of one's clients. Thus, my proposed model would see more value in representing poor people than middle-income clients, but would also see more value in representing middle-income clients than wealthy and powerful ones, especially when one is representing middle-income clients against more powerful interests. This model, if adopted as an alternative prestige hierarchy among even a small group of the nation's law students, could have important benefits in steering the many socially committed students who do not secure traditional "public interest" jobs to law practice settings other than large law firms representing the nation's most powerful and wealthy interests. At the same time, it would increase the quality and availability of legal services for middle-income clients.
The Role of Ego Networks in Manufacturing Joint Venture Formations

This article develops a network theory�based framework of manufacturing joint venture formations and provides an empirical test in the context of the automotive industry. Hypotheses are developed regarding the implications of the network structure for a firm's partner selection in manufacturing joint ventures. The roles of network theory constructs such as ego network size, ego network density, and ego network betweenness centrality on new manufacturing joint venture formations are explored using a dynamic framework. A comprehensive time series panel dataset with 3,247,124 observations containing the joint venture information of 1,158 automotive firms collectively engaging in 589 manufacturing joint ventures over 19 years is utilized to test the hypotheses. Results provide strong empirical support for the role of network structure in equity-based partnership formation. Specifically, ego network size and ego network betweenness centrality of both the focal manufacturer and potential partner have significant effects on new manufacturing joint venture formations. Findings regarding the role of ego network density are mixed
Am I My Brother’s Keeper? A Tax Law Perspective on the Challenge of Balancing Gatekeeping Obligations and Zealous Advocacy in the Legal Profession

In recent years the question of whether lawyers have a general ethical obligation to serve a gatekeeping function has been raised in a number of legal contexts. The reaction of the practicing bar generally has been unenthusiastic. While asserting that a gatekeeping function should be generally applicable to all attorneys is a relatively recent stance, such an obligation historically has been acknowledged to various degrees in several specific practice areas, including particularly in the field of federal income taxation. This piece examines the gatekeeping question, and how the practicing bar should react to it, through an examination of the gatekeeping role historically asserted as applicable to tax lawyers, including how modern pressures (e.g., literalist statutory interpretation, profit maximization law firm models, changing business and societal ethical norms, etc.) have altered that historically asserted ethical norm. The article then suggests avenues for combating these modern trends in the tax arena in order to strengthen and reestablish the historic balance in a tax lawyer’s planning role (e.g., by creating intentional conflicts of interest to create a “divide and conquer” dynamic between clients and attorneys in aggressive transactions, emphasizing the ethical training of tax attorneys, clarifying the proper approach for statutory interpretation in the tax context, creating disincentives for a legal race to the bottom among attorneys competing for business, highlighting the importance of individual trend setters, channeling the competitive pressures in the legal marketplace in the government’s favor, etc.). The piece concludes with some closing thoughts regarding the lessons that the practicing bar might take from the tax gatekeeping example in their future reactions to gatekeeping initiatives in other areas of the law and accepting gatekeeping as a generally applicable ethical norm. * Professor, University of Akron School of Law; Dartmouth College, A.B.; Cornell University, J.D.; New York University, LL.M. (Taxation). I appreciate the helpful comments of the members of the Law, Society, and Taxation Collaborative Research Network on an earlier draft of this article. AM I MY BROTHER’S KEEPER? A TAX LAW PERSPECTIVE ON THE CHALLENGE OF BALANCING GATEKEEPING OBLIGATIONS AND ZEALOUS ADVOCACY IN THE LEGAL PROFESSION
UNINTENDED CONSEQUENCES OF LEGAL WESTERNIZATION IN NIGER: HARMING CONTEMPORARY SLAVES BY RECONCEPTUALIZING PROPERTY

There are slaves living today in the West African Republic of Niger and their plight is being exacerbated by that country's aggressive program of legal westernization. Under the guidance of the United States and other Western countries, Niger recently passed a surfeit of new laws, including some that introduce and enforce the notion of private property ownership. The theory - widely accepted by donor countries and international development experts - is that uniform, easily enforceable rights in private property will spur investment and help breathe life into Niger's moribund economy. This paper does not dispute the validity of that legal and economic theory, but it shows that the introduction of the legal concept of private property has resulted in unintended, potentially devastating consequences for Niger's contemporary slaves, a result that is particularly ironic given that some of those laws were intended to abolish slavery. Drawing upon insights from the language and culture of the Zarma people of Niger, and upon careful ethnographic fieldwork among slaves, the paper explains how legal westernization has gone awry, and suggests a new, culturally attuned approach to law reform in Niger and across the developing world.
Beyond Independence: CEO Influence and the Internal Operations of the Board

Using a detailed dataset on the meeting sub-structure of the board, this paper investigates the time trends and cross-sectional determinants of internal boardroom control. First, I document that th...
Beating the Market: The Allure of Unintended Value

Consumers face many options that are presented to them as bargains, but in reality, they only subjectively construe a fraction of them as valuable. The authors propose that consumers are particularly attracted to offers they perceive as more valuable than the marketer presumably intended. Consistent with this analysis, six experiments indicate that consumers may perceive customized offers that are presented as tailored to their individual preferences or circumstances as less valuable than offers that seem to fit their preferences and provide value without the marketer's explicit intent. The experiments also suggest that the urge to exploit unintended value reflects a competitive desire to outsmart the market. The findings have theoretical implications for understanding consumers' subjective perceptions of value as well as important practical implications for designing customized offers and targeted promotions.
Do tax credits stimulate R&D spending? The effect of the R&D tax credit in its first decade

Abstract This paper examines the impact of the U.S. federal R&D tax credit between 1981–1991 using confidential IRS data from corporate tax returns. The empirical analysis makes two key advances on previous work. First, it implements a new instrumental variables (IV) strategy based on tax changes that directly addresses the simultaneity of R&D spending and marginal credit rates. Second, the analysis makes use of new restricted-access IRS corporate return data describing R&D expenditures. Estimates imply that a10% reduction in the user cost of R&D leads the average firm to increase its research intensity—the ratio of R&D spending to sales—by 19.8% in the short-run. Long-run estimates imply that the average firm faces adjustment costs and increases spending over time, though small and young firms show evidence of reversing initial increases. Analysis of the components of qualified research shows that wages and supplies account for the bulk of the increase in research spending. Elasticities of qualified and total research intensities from a smaller sample suggest firms respond to user cost changes largely by increasing their qualified spending, meaning that the type of R&D the federal credit deems qualified research is an important margin on which the credit affects firm behavior.
Distance-to-default in banking: A bridge too far?

In contrast to corporate defaults, regulators typically take a number of statutory actions to avoid the large fiscal costs associated with bank defaults. The distance-to-default, a widely used market-based measure of corporate default risk, overlooks such regulatory actions. To overcome this limitation, this paper introduces the concept of distance-to-capital that accounts for pre-default regulatory actions such as those prescribed in a prompt-corrective-actions framework. We show that both risk measures can be analysed using the same theoretical framework but differ depending on the level of capital adequacy thresholds and asset volatility. We also use the framework to illustrate pre-default regulatory actions in Japan in 2001–2003.
Conformity to Inegalitarian Conventions and Norms: The Contribution of Coordination and Esteem

In this contribution to a symposium on "Conformism," I comment on two of the many mechanisms producing conformity: coordination and esteem. First, I set forth one point about conformity in coordination settings - that there can be a strong stability to conventions in which the required behavior varies by the observable physical differences among human beings, such as sex and those that come to be associated with race. In a certain class of important games, observable personal differences work to "break symmetry," which significantly changes the possible outcomes to the game. Second, I explain the claim that human beings desire the esteem of others and then discuss how this simple preference can produce significant conformity. As with coordination, one implication is that esteem-seeking among strangers is likely to make behaviorally relevant the distinctions among individuals that even a stranger will know, i.e., observable physical traits, including sex and race. In both cases - coordination and esteem - I emphasize some inegalitarian (and illiberal) types of conformity.
The Ethical and Economic Case Against Sweatshop Labor: A Critical Assessment

During the last decade, scholarly criticism of sweatshops has grown increasingly sophisticated. This article reviews the new moral and economic foundations of these criticisms and argues that they are flawed. It seeks to advance the debate over sweatshops by noting the extent to which the case for sweatshops does, and does not, depend on the existence of competitive markets. It attempts to more carefully distinguish between different ways in which various parties might seek to modify sweatshop behavior, and to point out that there is more room for consensus regarding some of these methods than has previously been recognized. It addresses the question of when sweatshops are justified in violating local labor laws. And it assesses the relevance of recent literature on coercion and exploitation as it applies to sweatshop labor. It concludes with a list of challenges that critics of sweatshops must meet to productively advance the debate.
Who's in Charge? Does the President Have Directive Authority Over Agency Regulatory Decisions?

Most regulatory statutes specify that agency heads rather than the President shall make regulatory decisions .1 Yet for more than four decades every President has established some program to require pre-decisional review and clearance of agency regulatory decisions, usually conducted by the Office of Management and Budget (OMB).2 On January 18, 2011, President Barack Obama joined his seven predecessors in expressly endorsing regulatory review when he signed Executive Order 13,563.3 President Obama’s regulatory review program generally emulates those of his two most recent predecessors, relying on OMB’s Office of Information and Regulatory Affairs (OIRA) to review only the most significant agency rulemaking actions. 4 Although this form of presidential oversight of rulemaking is now well established, an important, unresolved question is whether the President has the authority to dictate the substance of regulatory decisions entrusted by statute to agency heads. While proponents of a unitary executive argue in favor of presidential directive authority,5
Federal Reserve Communication and the Media

ABSTRACTThe effectiveness of monetary policy and political legitimacy of central banks depend on monetary policymakers ability to communicate through the media. The literature on monetary policy co...
One-Way Contracts: Consumer Protection without Law

What if consumer contracts were legally enforceable only against the consumers, but not against the business? This paper, part of my project on the “myths of consumer protection,” describes a regime of “one-way contracts”— contracts between consumers and business to which only consumers are bound, the business is not. A breaching business would face no contractual liability. The paper argues that many consumer contracts are already disguised one-way contracts. It then demonstrates the variety of alternative consumer protections devices that would emerge in the total absence of legal protection. In a one-way contracts world, transactions will be redesigned to limit consumers’ exposure to breach; insurance and bond services would develop to protect aggrieved consumers; reputation services and rating intermediaries would have a greater role; and public enforcement could potentially fill some of the remaining deterrence gaps. Thus, despite weakening the legal protections, the one-way contracts regime has the potential to improve consumer well being. The paper concludes that the focus within the consumer protection movement on enhancing access to, and the scope of, legal remedies may be misguided. * Frank and Bernice Greenberg Service Professor of Law, University of Chicago Law School. I am grateful to Oren Bar‐Gill, Saul Levmore, and Ariel Porat for helpful suggestions.
Consumer intertemporal preferences

Consumers’ intertemporal preferences have been studied across multiple theoretical and applied areas. This article outlines research showing that the context in which intertemporal preferences are expressed matters, as well as research exploring the mechanisms that account for these effects. These processes range from emotion-based to various cognitive-based accounts, and focus on the outcomes relevant to the choice, the future self, the perception of resources, and the perception of the time horizon relevant to the choice. The various mechanisms surveyed all tend to result in a heightened motivation for an immediate outcome, compared to a distant one. Understanding these mechanisms can yield better designed behavioral interventions that could increase farsighted consumer decision making and improve consumers’ long-term well-being.
Valuing Time-Varying Attributes Using the Hedonic Model: When Is a Dynamic Approach Necessary?

Abstract We build on the intuitive (static) modeling framework of Rosen (1974) and specify a simple, forward-looking model of location choice. We use this model, along with a series of graphs, to d...
Tax and Education Policy in a Heterogeneous‐Agent Economy: What Levels of Redistribution Maximize Growth and Efficiency?

This paper studies the effects of progressive income taxes and education finance in a dynamic heterogeneous-agent economy. Such redistributive policies entail distortions to labor supply and savings, but also serve as partial substitutes for missing credit and insurance markets. The resulting tradeoffs for growth and efficiency are explored, both theoretically and quantitatively, in a model that yields complete analytical solutions. Progressive education finance always leads to higher income growth than taxes and transfers, but at the cost of lower insurance. Overall efficiency is assessed using a new measure that properly reflects aggregate resources and idiosyncratic risks but, unlike a standard social welfare function, does not reward equality per se. Simulations using empirical parameter estimates show that the efficiency costs and benefits of redistribution are generally of the same order of magnitude, resulting in plausible values for the optimal rates. Aggregate income and aggregate welfare provide only crude lower and upper bounds around the true efficiency tradeoff.