cssi/SciSciGPT-SciSciNet huggingface dataset:
Ineffective Assistance at Sentencing

The legal standards for reviewing claims of ineffective assistance of counsel at sentencing are underdeveloped. In other contexts, defen- dants seeking to prove ineffective assistance must demonstrate that coun- sel's performance fell below appropriate professional standards and that there is a reasonable probability that, but for counsel's deficient perform- ance, the result of the proceeding would have been different. The doc- trinal uncertainty whether that standard applies to sentencing proceed- ings in non-capital cases, coupled with worries that ineffective assistance at sentencing claims will result in a flood of litigation, has led some courts to require defendants to satisfy stricter prejudice standards in discretion- ary non-capital sentencing regimes. This Article analyzes the ineffective assistance jurisprudence and concludes that the sufficiency of counsel's performance is largely evaluated against a backdrop of relevant substan- tive law. The substantive law of non-capital sentencing is not well- developed, which may explain the underdeveloped state of ineffective as- sistance at sentencing standards. Drawing on several recent ineffective as- sistance cases in the death penalty context, this Article identifies legal principles and practices that may assist in making the legal assessments necessary to analyze ineffective assistance at sentencing claims. These principles and practices may provide a sufficient legal framework to ren- der unnecessary the crude manipulation of the prejudice showing that some courts have employed.
Taxes, Institutions and Foreign Diversification Opportunities

Abstract Investors can access foreign diversification opportunities through either foreign portfolio investment (FPI) or foreign direct investment (FDI). The worldwide tax regime employed by the US potentially distorts this choice by penalizing FDI, relative to FPI, in low-tax countries. On the other hand, weak investor protections in foreign countries may increase the value of control, creating an incentive to use FDI rather than FPI. By combining data on US outbound FPI and FDI, this paper analyzes whether the composition of US outbound capital flows reflects these incentives to bypass home and host country institutional regimes. The results suggest that the residual tax on US multinational firms' foreign earnings skews the composition of outbound capital flows — a 10% decrease in a foreign country's corporate tax rate increases US investors' equity FPI holdings by approximately 10%, controlling for effects on FDI. Investor protections also seem to shape portfolio choices, though these results are not robust when only within-country variation is employed.
Estimating the Costs of Issuer-Paid Credit Ratings

We compare the stability and timeliness of credit ratings produced by a traditional issuer-paid rating agency (Moody's Investors Service) and a subscriber-paid rater (Rapid Ratings). Moody's ratings exhibit less volatility but are slower to identify default risk. We control for Moody's aversion to ratings volatility and still find its ratings lag Rapid Ratings'. More importantly, accuracy ratios indicate that Rapid Ratings provides a better ordinal ranking of credit risk. We quantify the loss avoidance associated with Rapid Ratings'signals to estimate costs associated with regulatory and contractual systems based on issuer-paid ratings. The Author 2013. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: journals.permissions@oup.com., Oxford University Press.
Financing decisions: who issues stock?

Abstract Financing decisions seem to violate the central predictions of the pecking order model about how often and under what circumstances firms issue equity. Specifically, most firms issue or retire equity each year, and the issues are on average large and not typically done by firms under duress. We estimate that during 1973–2002, the year-by-year equity decisions of more than half of our sample firms violate the pecking order.
Implied Cost of Equity Capital Estimates as Predictors of Accounting Returns and Stock Returns

ABSTRACT: Using a popular return decomposition, we show that expected returns should on average be positively associated with future return on equity (ROE), controlling for the book-to-market ratio (BM). However, we find that none of the commonly used implied cost of equity capital estimates (ICCs), which proxy for expected returns, are positively associated with future ROE. This lack of association with future accounting returns appears to affect the ability of ICCs to forecast future stock returns: ICCs do not provide information about future stock returns incremental to that contained in a linear combination of current ROE and BM. Our findings suggest that tractable accounting-based models that linearly combine BM and ROE, or other accounting-based variables, offer improvements on extant ICCs as expected returns proxies. JEL Classifications: M41; G3.
Two Concepts of Immortality: Reframing Public Debate on Stem-Cell Research

Regenerative medicine seeks not only to cure disease, but also to arrest the aging process itself. So far, public attention to the new health care has focused on two of its methods: embryonic stem-cell research and therapeutic cloning. Since both processes manipulate embryos, they alarm those who believe life begins at conception. Such religious objections have dominated headlines on the topic, and were central to President George W. Bush's decision to restrict stem-cell research. Although they are now politically potent, the present religious objections to regenerative medicine will soon become irrelevant. Scientists are fast developing new ways of culturing the biological materials now exclusively produced by embryos. Given their expressed commitment to the sanctity of life, religious leaders will soon find the tables turned: researchers will accuse them of causing death if they fail to support medicine that cures the sick without harming embryos. Perhaps anticipating this development, those uneasy with regenerative medicine have tried to shift the debate to focus on its long-term effects. They believe that innovations that now look benign might lead to an era of untrammeled biotechnological manipulation of our lives. For example, the same technology used to eliminate disease-causing genes or to clone embryos may eventually be deployed to produce genetically engineered children. That could, in turn, entrench class differences, since only the wealthy could afford the most desirable genetic enhancements. Such objections may be speculative. Nevertheless, they deserve more attention - not necessarily as predictions of the future, but as indictments of the present. We are all disturbed by hypothetical dystopias like Huxley's Brave New World. But their most important flaws - the inequality, degradation, and moral irresponsibility of their inhabitants - are already apparent in the distribution of regenerative therapies. The world's wealthiest nations spend hundreds of millions of dollars on elaborate technologies of life-extension, while contributing much less to efforts to assure basic medical care to the poorest. Public debate on regenerative medicine must acknowledge this inequality. Societies and individuals can invest in it in good conscience only if they are seriously committed to extending extant medicine to all.
Adorno vs. Levinas: Evaluating points of contention

Although Adorno and Levinas share many arguments, I attempt to sharpen and evaluate their disagreements. Both held extreme and seemingly opposite views of art, with Adorno arguing that art presents modernity's highest order of truth and Levinas denouncing it as shameful idolatry. Considering this striking difference brings to light fundamental substantive and methodological incompatibilities between them. Levinas' assertion of the transcendence of the face should be understood as the most telling point of departure between his and Adorno's critiques of instrumental reason. I attempt to explain why Levinas believed this move was justifiable and how Adorno would understand Levinas' notion of illeity as a cultural byproduct and a form of dogmatism. Adorno's historical and sociological account of the disenchantment of the world and the destruction of aura within a culture fully administered by scientific rationality and economic reductionism sharply contrasts to Levinas' transcendental phenomenology, and I argue that Adorno's thoroughgoing refusal to constrain dialectical reflection is ultimately more compelling.
Travails of the Entrepreneurial Ant: Reforming Tax-Favored Retirement Saving for SMall Business Owners

This article addresses an important public issue ? retirement security ? for self-employed small business owners. Although some in this cohort enjoy conspicuous affluence, many self-employed people ? such as shopkeepers, farmers, restaurateurs, and building contractors ? have modest incomes. They earn a living much like their employee counterparts, but without the security of employer-provided benefits. Current law allows the self-employed to establish retirement saving plans for themselves and their employees on a similar basis as larger employers. However, those plans fail to take into account practical constraints on participation, particularly capital formation demands. Small business owners often struggle to accumulate the capital needed to start their businesses and keep them competitive. They are savers, but their form of saving does not obtain the same tax-favored status as a retirement saving plan. The article starts with a basic discussion of retirement savings options and the economic benefits of tax-favored saving. It then discusses empirical data showing limited participation in retirement savings by small businesses generally, and more particularly by self-employed business owners. It explains that tax benefits received from business investment are not equivalent to tax benefits from retirement saving, and it shows how current rules contribute to a "lock-in" effect that limits efficient redeployment of business assets. The article discusses reforms to enhance retirement security and efficient deployment of business assets, including: (1) expanding options to access funds through loans; (2) changing the income tax base for contributions to include gains from the sale of business property; and (3) allowing additional contributions to tax-favored plans, up to a defined maximum balance, for those selling businesses in transition to retirement.
Climate Regulation and the Limits of Cost-Benefit Analysis

Over the past two years U.S. regulatory agencies have issued fourteen regulations that take into account the effect of industrial activities and products on the global climate. The regulatory activity so far has already set precedents on which future regulation will rest. Yet despite the potentially momentous consequences, it has received no comment in the law review literature. This Article examines the record of these agencies and criticizes the methods they have used to calculate the social cost of carbon emissions. We also develop a larger theme about the relationship between cost-benefit analysis and politics. The best case for cost-benefit analysis is that its recommendations are politically neutral in the sense of drawing on widely shared intuitions about human well-being. But cost-benefit analysis cannot cope with inherently political questions involving contested normative issues. Policymakers will have to find alternative tools when those questions predominate.
Squatters, Pirates, and Entrepreneurs: Is Informality the Solution to the Urban Housing Crisis?

Giving the poor legal title to the lands they occupy extra legally (informally) has been widely promoted by the World Bank and by best-selling author Hernando de Soto as a means of addressing both poverty and the scarcity of affordable housing in the urban centers of the global South.1 Using Bogota, Colombia, as a case study, this article interrogates de Soto's claims about the causes of informality and the benefits of formal title. The article concludes that de Soto's analysis is problematic in three distinct respects. First, de Soto exaggerates the benefits of formal title and fails to consider its risks. Second, de Soto con structs informality as a uniquely Third World phenomenon, and neglects to address the growth of poverty, inequality, and infor mality in both the global North and the global South as a conse quence of the neoliberal economic reforms that de Soto advocates. Third, de Soto's attribution of informality to the failure of law in the global South reinforces the narrative of Latin American inferi ority, thereby justifying the imposition of disadvantageous mar ket-oriented legal reforms on Latin American nations and discrediting Latin America legal innovations that might better alleviate poverty and address the shortage of affordable housing. Contrary to de Soto's policy prescriptions, the benefits of for mality and informality must be evaluated on a case by case basis. De Soto's ideas are dangerous to the extent that they persuade policy-makers that the "free market" will solve the problem of pov
Role of context and contest in the structuring of alliance governance

Purpose – The alliance governance – whether equity or non-equity based – through which an alliance is governed serves as a mechanism to protect a firm from partner's opportunistic behavior, manage resource dependence and facilitate knowledge sharing. Alliance governance structure also reflects the risk, reward and control that partners perceive in a relationship. In light of the conflicts and instabilities reported in strategic alliances, the purpose of this paper is to examine the interorganizational domain that affects the endurance and continuity of collaboration and explain how the alliance interface contexts determines the structuring of alliance governance. Design/methodology/approach – An empirical examination of 179 strategic alliances, using survey and archival data conducted to test the hypothesized relationship between the choice of governance structure and the complexity of alliance task, balance of power and competitive scope between partners. Findings – A multinomial logistic regression of t...
Capital Markets and Financial Politics: Preferences and Institutions

For capital markets to function, political institutions must support capitalism in general and the capitalism of financial markets in particular. Yet the shape, support, and extent of capital markets are often contested in the polity. Powerful elements — from politicians to mass popular movements — have reason to change, co-opt, and remove value from capital markets. And the competing capital markets’ players themselves have reason to seek rules that favor their own capital channels over those of others. How these contests are settled deeply affects the form, extent, and effectiveness of capital markets. And investigation of the primary political economy forces shaping capital markets can lead us to better understand economic, political, and legal institutions overall. Much important work has been done in recent decades on the vitality of institutions. Less well emphasized, however, is that widely-shared, deeply-held preferences, often arising from the interests and opinions that prevail at any given time, can sometimes sweep away prior institutions, establish new ones, or, less dramatically but more often, sharply alter or replace them. At crucial times, preferences can trump institutions, and how the two interact is well-illustrated by the political economy of capital markets. Since North’s (1990) famous essay, academic work has focused on the importance of institutions for economic development. Here, I emphasize the channels by which immediate preferences can trump institutional structure in determining the shape and extent of capital markets.
Market discipline by bank creditors during the 2008–2010 crisis

We investigate whether uninsured depositors, insured depositors, and general creditors exhibit evidence of quantity market discipline during the recent financial crisis. To establish which types of creditors expect to incur loss, we evaluate the FDIC's expectations about losses to creditors at banks that failed between 2008 and 2010. Our results show that quantity market discipline tends to begin far enough in advance to signal to both banks and supervisors that corrective actions can and should be taken. Furthermore, creditors are able to distinguish between banks of different risk levels. Our findings support several policy implications for encouraging market discipline.
Equity-incentive compensation and payout policy in Europe

Abstract We examine the effects of executive compensation and investor protection on payout policy in Europe. We find a negative (positive) relationship between both option and restricted stock compensation and dividends (repurchases). However, when the incentive compensation is dividend protected, dividend payouts increase. Firms in weak investor protection countries pay higher dividends consistent with maintaining a reputation for distributing excess free cash flows. However, growth firms in weak investor protection countries reduce dividends (increase repurchases) in relation to increases in equity-incentive compensation. Our results are consistent with growth firms in weak investor protection countries using equity incentives as a substitute for dividends to reduce agency costs.
Associations Between Community-Level Racial Biases, Office Discipline Referrals, and Out-of-School Suspensions

This study examined the extent to which disparities in Black and White students’ risks of receiving office discipline referrals (ODRs), and out-of-school suspensions (OSSs) were related to differen...
The issuer effect on default risk insured municipal bond yields

In this study, an interesting aspect of the secondary market's pricing of the riskiness of insured municipal bonds is examined. Do secondary market investors still consider the underlying intrinsic credit quality of the issuer in pricing insured bonds? Is the pricing of this “issuer effect” treated equally for both revenue and general obligation bonds? We find that, while the market does not differentiate between equally insured revenue and general obligation bonds, the intrinsic credit quality of the issuer is reflected in the bond issue's quality spread. The results suggest that investors are concerned with the default risk protection of insured municipal bonds regardless of whether they are revenue or general obligation bonds. The market does not perceive insurers to be perfect substitutes for issuers in a risk transfer. Further, the results suggest there is justification for obtaining an agency rating according to issuer credit quality even for insured bonds.
Found Money? Split‐Award Statutes and Settlement of Punitive Damages Cases

We examine the effect of "split-award" statutes (wherein the state shares a punitive damages award) on equilibrium settlements and the incentives to go to trial. Splitaward statutes lower settlement amounts and the likelihood of trial, as both parties act to cut out the state. We analyze the revenue that split-award statutes generate; the revenue-maximizing share is robust to variations in economic parameters and to whether the state's share is gross or net of the plaintiff's attorney's fee. Moreover, these statutes need not deter filings, and their use can encourage plaintiffs' attorneys to pursue weaker cases than would otherwise be brought. Copyright 2003, Oxford University Press.
The Evisceration of the Attorney-Client Privilege in the Wake of September 11, 2001

This article examines the historical development and contours of the attorney-client privilege, and its relationship to the Sixth Amendment right to counsel. It describes the state of the privilege before September 11th, including those provisions of Title III - the federal wiretapping statute - and the Foreign Intelligence Surveillance Act, which impact the privilege. The piece sets forth John Ashcroft's new Bureau of Prisons regulation and discusses the legal challenges to it. It explains the federal indictment against attorney Lynne Stewart, her response to the charges, and the judge's decisions. The indictment is based on information the government secured by monitoring Stewart's conversations with her client in prison. The article concludes by warning of the dangers that undermining the privilege poses to the criminal justice system.
Representing Black Male Innocence

This Article is a case study of a California capital case. Drawing on cultural studies, the first part develops the social construction of Black male gang member, especially as that identity is understood within white imaginations. The powerful and frightening idea of a Black man who is a gang member, even gang leader, captured the imagination and moral passion of the decisionmakers in this case, recasting and reframing the evidence in furtherance of this idea. In fundamental ways, this idea or imposed identity is fundamentally inconsistent with any American concept of innocence.The second part uses the case to investigate some of the ways in which current criminal laws and procedures enable, reinforce, and police the inconsistency between being innocent and being a Black male gang member, or just Black male. Using specific examples from this case, I discuss the relentless distancing of the neighborhood by the prosecution, seating a jury for whom innocence was raced, the climate of fear engendered in the courtroom, the use of gang evidence, and other prosecutorial tools.
Likes Attract: The Sociopolitical Groupthink of (Social) Psychologists

Inbar and Lammers (2012, this issue) contribute to the growing empirical evidence of discrimination against conservative (i.e., right-of-center) people and ideas not only in social and personality ...
Working hard for long‐distance relationships: Geographic proximity and relationship‐specific investments

Suppliers that are farther away from their customers make more relationship-specific investments (RSI). This association is more pronounced when it is less costly for the customer to switch to alternative suppliers and when the supplier operates in relatively opaque information environments. Using the introduction of new airline routes as an exogenous shock to the distance between supply chain partners, we show that the relation between supplier RSI and distance may be causal. We also provide evidence that suppliers with larger RSI are better able to maintain long-distance business relationships and are associated with higher firm value. These findings suggest an important dimension of supplier commitment: Suppliers use RSI as a signal of their willingness to fulfill on-going implicit claims.
Honor Among Thieves: Open Internal Reporting and Managerial Collusion†

Firms have increasingly adopted open work environments. Although openness is thought to have benefits, it could also expose firms to an unanticipated cost. An open (closed) internal reporting environment makes it more (less) likely that managers will observe a colleague's communications with senior executives. This increase in what one manager knows about another manager's communication to senior executives could facilitate employee collusion to extract resources from the firm. To test whether internal reporting openness results in more collusion, we conduct an experiment in which two managers each make separate reports to the firm about cost information they know in common but that remains unknown by the firm. Because both managers face the same truth-inducing contract, conventional economic theory predicts that they will not collude to misreport costs regardless of reporting openness. However, using behavioral theory involving trust and reciprocity, we predict and find that managers honor their nonbinding collusive agreements and successfully collude more often in an open versus closed internal reporting environment, leading to lower firm welfare in the open environment. These results suggest that firms should consider how the cost of collusion compares to the benefits of openness.
Inter-Judge Sentencing Disparity After Booker: A First Look

A central purpose of the Sentencing Reform Act was to reduce inter-judge sentencing disparity, driven not by legitimate differences between offenders and offense conduct, but by the philosophy, politics, or biases of the sentencing judge. The federal Sentencing Guidelines, despite their well-recognized deficiencies, succeeded in reducing that form of unwarranted disparity. But in a series of decisions from 2005 to 2007, the Supreme Court rendered the Guidelines advisory (Booker), set a highly deferential standard for appellate review (Gall), and explicitly authorized judges to reject the policy judgments of the Sentencing Commission (Kimbrough). Since then, the Commission has received extensive anecdotal reports of a surge in inter-judge disparity at sentencing. This Article provides the first empirical evidence of inter-judge sentencing disparity since the Supreme Court upended federal sentencing, drawing on an original new dataset of sentences from the District of Massachusetts—the only district court that makes key sentencing documents available to the public. The data indicate a clear increase in inter-judge sentencing disparity, both in sentence length and in guideline sentencing patterns. Since Booker, Kimbrough, and Gall, the effect of the judge on sentence length has more than doubled in strength. In cases not subject to a mandatory minimum, the difference between the court’s more lenient and more severe judges translates into an average of more than two years in prison. The decisions also have altered guideline sentencing patterns. Some “business as usual” judges continue to sentence below the guideline range at essentially the same rate as before Booker, while other “free at last” judges now sentence below the guideline range at triple or quadruple their pre-Booker levels. In explaining the spike in inter-judge sentencing disparity, the Article casts doubt on the conventional theories that persistent within-guideline sentencing is the product of inertia, fear of reversal, anchoring effects, strategic behavior, or simple laziness. Instead, it proposes that some judges actually agree with the Guidelines or consciously choose to impose within-range sentences for institutional reasons. This article is available for download at http://ssrn.com/abstract=1446744. * Associate Professor, Indiana University Maurer School of Law, Bloomington. The author would like to thank the judges of the United States District Court for the District of Massachusetts for adopting the public-access policy that made this Article possible. Thanks in particular to two judges of that court, Nancy Gertner and William Young, for their assistance and encouragement. Thanks as well to participants in the spring 2009 Yale Law School Sentencing Workshop, and to Amy Baron-Evans, Craig Bradley, Samuel Bray, Paul Cassell, Ken Dau-Schmidt, Paul Hofer, Robert Lawless, Andrew Martin, Michael McConnell, Ben Roin, Larry Solum, Michelle Spak, and Sandra Guerra Thompson for their comments on earlier drafts.
Is Business Cycle Volatility Costly? Evidence from Surveys of Subjective Well-Being

This paper analyses the effects of business cycle volatility on measures of subjective well-being, including self-reported happiness and life satisfaction. I find robust evidence that high inflation and, to a greater extent, unemployment lower perceived well-being. Greater macroeconomic volatility also undermines well-being. These effects are moderate but important: eliminating unemployment volatility would raise well-being by an amount roughly equal to that from lowering the average level of unemployment by a quarter of a percentage point. The effects of inflation volatility on well-being are less easy to detect and are likely smaller.
Does the World Need a Universal Financial Institution

“The issue is not whether the Fund should take an interest in poverty, but whether it should continue working, and working better, with its poorest member countries. The answer to that is yes: as a universal institution, we have to stay involved with all our members.” Stanley Fischer (2001) When the Soviet Union disintegrated in 1991 and all of the newly emergent countries joined the membership of the International Monetary Fund, the IMF almost overnight became a nearly universal financial institution. Today (in 2005) it has 184 member countries, just seven fewer than the United Nations. In contrast, Citibank—the most globally engaged private financial institution—is active in about 100 countries. As Stanley Fischer (then the First Deputy Managing Director of the IMF) indicated in his farewell address to the IMF’s Executive Board (quoted above), the distinction is not trivial. Universalism is not only a question of membership. Several official international agencies now have universal, or near-universal, membership, including the United Nations and many of its specialized agencies as well as both the IMF and the World Bank (but not yet the World Trade Organization). 1 Having a very broad and inclusive membership is
Linking the Questions: Judicial Supremacy as a Matter of Constitutional Interpretation

This Article explains that what has been missing from the debate between advocates of popular constitutionalism and defenders of judicial supremacy is any account of the practice of constitutional interpretation. Without a clear sense of what constitutional interpretation involves, one cannot assess the prevailing assumption that the Supreme Court is uniquely positioned to interpret the Constitution or explore an expertisebased justification for its claim to finality. This Article, therefore, revisits the debate about judicial supremacy by starting, not with history or politics, but with constitutional interpretation itself. Having explored the conventions of argument that constitute the practice of constitutional interpretation, this Article concludes that the Supreme Court can claim expertise with respect to determining constitutional meaning, but that its expertise has limits. It proceeds to explore whether and how this insight might be translated into limits to judicial supremacy. Toward that end, this Article develops a framework for assessing when the work of constitutional interpretation should be shared between the Supreme Court, the other branches of government, and the public itself. Finally, it uses the Court‟s doctrine with respect to race-conscious legislative districting to illustrate how the proposed framework might work.
Deep borehole disposal of nuclear waste: US perspective

Abstract Radioactive waste disposal in deep boreholes may be more “ready” than disposal in mined geologic repositories since humans have greater experience operating small deep holes (i.e., boreholes) than big shallow holes (i.e., mines). There are millions of precedents for constructing >2 km deep boreholes and several hundred precedents for disposing long-lived wastes in boreholes. Borehole disposal is likely to be faster, cheaper, and more flexible than mined disposal, while also offering greater long-term isolation. Isolation would rely on the great depth, water density gradients, and reducing conditions to prevent vertical movement of waste up the borehole.
Measuring the Importance of Precursor Steps to Transformative Learning

Transformative learning has been important in the development of adult education since Jack Mezirow proposed it more than 35 years ago as a theoretical description of the steps learners undergo in changing their worldviews. However, despite much qualitative research, little quantitative study has been made of the incidence of transformative learning or the 10 steps predicted by Mezirow to precede it. This study of 256 undergraduate business school students reports the incidence of transformative learning and each of the 10 precursor steps. The more steps respondents remembered experiencing, the more they also reported transformative learning. The highest incidence of reporting transformative learning was associated with the precursor step of critical reflection, followed by the steps of disorienting dilemmas and trying on new roles. Implications for practitioners and researchers are discussed.
Same-Sex Marriage in the Heartland: The Case for Legislative Minimalism in Crafting Religious Exemptions

This commentary cousels legislative caution in creating exemptions to Iowa's nondiscrimination law for those with religious objections to same-sex marriage.
Forecasting risk attitudes: An experimental study using actual and forecast gamble choices

Abstract We develop and evaluate a simple gamble-choice task to measure attitudes toward risk, and apply this measure to examine differences in risk attitudes of male and female university students. In addition, we examine stereotyping by asking whether a person's sex is read as a signal of risk preference. Subjects choose which of five 50/50 gambles they wish to play. The gambles include one sure thing; the remaining four increase (linearly) in expected payoff and risk. Each subject also is asked to guess which of the five gambles each of the other subjects chose, and is paid for correct guesses. The experiment is conducted under three different frames: an abstract frame where the two highest-payoff gambles carry the possibility of losses, an abstract frame with no losses, and an investment frame that mirrors the payoff structure of the former. We find that women are significantly more risk averse than men in all three settings, and predictions of both women and men tend to confirm this difference. While average guesses reflect the average difference in choices, only 27 percent of guesses are accurate, which is slightly higher than chance.
Pricing growth-indexed bonds

Abstract Growth-indexed bonds have been suggested as a way of reducing the procyclicality of emerging-market countries’ fiscal policies and the likelihood of costly debt crises. Investor attitude surveys suggest that pricing difficulties are seen as a considerable obstacle. In an effort to reduce such concerns, this article presents a simple way of pricing growth-indexed bonds. As a pleasant by-product, the analysis tracks the quantitative implications of an increase in the share of growth-indexed bonds in total debt, measuring the ensuing decline in the probability of default and the reduction in the spreads at which standard bonds can be issued.
Conventional mutual index funds versus exchange-traded funds

Abstract This paper examines the implications of substitutability of two similar investment vehicles: conventional index mutual funds and exchange-traded funds (ETFs). It seeks to explain the coexistence of these vehicle types, which offer a claim on the same underlying index return process, but have distinctly different organizational structures. This study compares aggregate fund flows into conventional open-ended index funds to those into ETFs for various underlying indexes. The study shows that conventional funds and ETFs are substitutes, but not perfect substitutes for one another. Evidence suggests that the coexistence of both instruments can be explained by a clientele effect that segregates the two vehicles into different market niches.
How Authoritarian Rule Works

Common features of the articles by Xueguang Zhou and Jiang Shigong include attention to governance rather than reform or regime change, to informal as well as formal rules, and to practice over texts. The articles differ mainly in their level of abstraction and the reach of their findings. But even here, Zhou’s “organizational practices” are essentially micro-level variants of the broader, constitutional principles that Jiang explores. Both authors make a persuasive case that there are abiding rules that pattern behavior between Chinese political elites, though what these rules are, and what distinguishes constitutional principles from other institutions (and temporary political compromises), await further study.
The Effects of Prior Impressions of a Firm's Ethics on the Success of a Cause-Related Marketing Campaign: Do the Good Look Better While the Bad Look Worse?

SUMMARY This research examines the effect of the initial perception of the ethical nature of a firm on the effects of that firm participating in a cause-related marketing campaign. In two studies, the effects of a cause-related marketing campaign are examined for companies perceived as ethical, unethical and ethically neutral. It is found that firms initially perceived as ethical are least likely to be seen as having ulterior motives for running a cause-related marketing campaign, whereas firms initially perceived as unethical are most likely to be suspected of having ulterior motives. However, it is also found that firms perceived as ethically neutral gained the most from a cause-related marketing campaign in terms of improvements to their image. Implications and directions for future research are discussed.
Asymptotically efficient recursive estimation for incomplete data models using the observed information

For a recursive maximum-likelihood estimator with step lengths decaying as 1/n, an adaptive matrix needs to be incorporated to obtain asymptotic efficiency. Ideally, this matrix should be chosen as the inverse Fisher information matrix, which is usually very difficult to compute for incomplete data models. In this paper we give conditions under which the observed information can be incorporated into the recursive procedure to yield an efficient estimator, and we also investigate the finite sample properties of these estimators by simulation.
Advertising Expensive Mortgages

Using information on advertising and mortgages originated by subprime lenders, we study whether advertising helped consumers find cheaper mortgages. Lenders that advertise more within a region sell more expensive mortgages, measured as the excess rate of a mortgage after accounting for borrower, contract, and regional characteristics. These effects are stronger for mortgages sold to less sophisticated consumers. We exploit regional variation in mortgage advertising induced by the entry of Craigslist and other tests to demonstrate that these findings are not spurious. Analyzing advertising content reveals that initial/introductory rates are frequently advertised in a salient fashion, where reset rates are not.
The distorting effect of the prudent-man laws on institutional equity investments☆

Abstract I examine the effect of prudent-man laws on the behavior of institutional investors. Variation in exposure to legal liability across types of investment managers allows me to disentangle the effect of the prudent-man laws from other potential influences on manager behavior. Bank managers significantly tilt the composition of their portfolios toward stocks that are viewed by the courts as prudent, while mutual fund managers choose not. I show that differences in the direction that bank and mutual fund managers choose to tilt may explain their portfolio performance differences over time.
The Elusive Object of Punishment

All observers of our legal system recognize that criminal statutes can be complex and obscure. But statutory obscurity often takes a particular form that most observers have overlooked: uncertainty about the identity of the wrong a statute aims to punish. It is not uncommon for parties to disagree about the identity of the underlying wrong even as they agree on the statute's elements. Hidden in plain sight, these unexamined disagreements underlie or exacerbate an assortment of familiar disputes—about venue, vagueness, and mens rea; about DUI and statutory rape; about hate crimes, child pornography, and counterterrorism laws; about proportionality in punishment; and about the proper ambit of the criminal law. Each of these disputes may hinge on deeper disagreements about the identity of the wrong a statute aims to punish, and these deeper disagreements can be surprisingly hard to resolve, fueled as they are by the complex inner structure of our penal laws and the discretionary mechanisms of their administration.
Justice Souter and the Civil Rules

Justice Souter’s recent retirement from the Court after nearly twenty years presents a unique opportunity to comment on his legacy. No doubt others will eulogize or castigate him for his membership in the Planned Parenthood v. Casey troika, but there is much more to the man and his jurisprudence. Indeed, the danger is that Justice Souter will be pigeonholed into one opinion, an opinion that he wrote early in his Supreme Court career, to the detriment of understanding the complex justice that he was. This short essay therefore analyzes a unique set of opinions - those that he authored on the federal civil rules. And what it finds is a justice deeply committed to the fair treatment of the litigants that come before him. That trait says much about David Souter, both the justice and the man.
Accruals and Future Stock Returns: Tests of the Naïve Investor Hypothesis:

We explore whether the association between accruals and future returns documented by Sloan (1996) is due to fixation by naive investors on the total amount of reported earnings without regard for the relative magnitude of the accrual and cash flow components. Contrary to the predictions of the naive investor hypothesis, we find that the predictive ability of accruals for subsequent annual returns and for quarterly earnings announcement stock returns is not lower for large firms or for firms followed more by analysts or held more by institutions. Further, we find that the ability of accruals to predict future returns does not seem to depend on stock price or transaction volume, measures of transaction costs, also contrary to predictions of the naive investor hypothesis. These results are robust to regression and hedge portfolio tests. We conclude that the predictive ability of accruals for subsequent returns does not seem to be due to the inability of market participants to understand value-relevant inform...
Do Foreigners Invest Less in Poorly Governed Firms

As domestic sources of outside finance are limited in many countries around the world, it is important to understand factors that influence whether foreign investors provide capital to a country's firms. We study 4,409 firms from twenty-nine countries to assess whether and why concerns about corporate governance result in fewer foreign holdings. We find that foreigners invest less in firms that reside in countries with poor outsider protection and disclosure and have ownership structures that are conducive to governance problems. This effect is particularly pronounced when earnings are opaque, indicating that information asymmetry and monitoring costs faced by foreign investors likely drive the results. The Author 2008. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: journals.permissions@oxfordjournals.org., Oxford University Press.
Arbitrating Human Rights

The article addresses the vexing problem of holding corporations liable for assisting in the sovereign abuse of human rights. Currently domestic human rights litigation against corporations appears to be a proxy fight in which the accomplice is pursued while the principal evades punishment. Typically the principal malfeasor - the sovereign - is immune from suit because of foreign sovereign immunity. But corporations can be found liable for aiding and abetting those violations. This article suggests a solution to this problem, drawing on principles from contract law and arbitration. If a corporation is found liable for aiding and abetting sovereign abuse, it may invoke contractual provisions in the agreement with the sovereign to arbitrate the question of shared responsibility. While the victims may not pursue the sovereign because of immunity, there is no impediment for a corporate joint malfeasor to pursue the sovereign in arbitration to secure its share of liability, either in the form of contribution or indemnification. In short, human rights litigation against the corporation could lead to "who pays" cross-claim arbitration against the sovereign. Using Guido Calabresi's scheme of cost avoidance, this approach establishes a system of cost avoidance for human rights, in which corporations incur costs, and then seek to transfer those costs to the cheapest cost avoider - the sovereign. But the tools of contract law and arbitration are not simply for the corporation that aids and abets human rights abuse. They also are available to the majority of corporations that are good corporate citizens. For these corporations, contract law and arbitration procedures create opportunities to impose human rights obligations on transnational contractors, vendors, and suppliers. Human rights obligations can be internalized by contract and subjected to effective dispute resolution procedures, including international arbitration. Finally, some corporations may wish to go even further and create opportunities for non-contracting parties - such as employees or NGOs - to invoke third party beneficiary rights to facilitate compliance with human rights obligations embedded in the contract. These corporations thereby can incorporate a mechanism for those third parties to initiate an effective dispute resolution process to address core human rights concerns.
Due Process, Free Expression, and the Administrative State

The Supreme Court has long imposed on the judiciary a due process requirement of neutrality. Any temptation to the reasonable judge to decide a case other than on its merits is deemed unconstitutional, even in the absence of any showing of actual bias. The Court has been wisely willing to risk over-enforcement of the neutral adjudicator requirement, rather than under-enforcement. In the administrative context, however, the Court has imposed the exact opposite presumption: that absent a clear showing of bias, administrative adjudicators will be assumed to satisfy due process, even though they are part of the very agency instituting the adversary proceeding and will often have played a direct role in the institution of the proceeding. This Article argues that because of their built-in connections to the interests of the agencies for which they work, administrators should be deemed at least as inherently suspect, for due process purposes, as are judges. As in judicial proceedings, property or other constitutional rights may well be at stake, and due process protections are triggered equally in both contexts. The Article acknowledges the practical reality that many will consider it simply too late in the day to force so sweeping revisions in the administrative process, despite the serious constitutional problems it raises. Therefore as a second line of attack, the Article argues that a categorical exception be made to the blanket assumption of administrative adjudicatory neutrality for those cases challenging the constitutionality of agency action. In such situations, the administrators’ connection to their own agencies renders them inherently ill-equipped to neutrally adjudicate such challenges. This is particularly so, the Article argues, when First Amendment rights of free expression are implicated. Because of their simultaneous importance and fragility, the Article argues that plausible claims that proposed agency adjudicatory action will contravene a regulated party’s First Amendment rights should be allowed to reach the courts prior to the conduct of the administrative proceeding.