cssi/SciSciGPT-SciSciNet huggingface dataset:
Delocation and Trade Agreements in Imperfectly Competitive Markets

We consider the purpose and design of trade agreements in imperfectly competitive environments featuring firm-delocation effects. In both the segmented-market Cournot and the integrated-market monopolistic competition settings where these effects have been identified, we show that the only rationale for a trade agreement is to remedy the inefficiency attributable to the terms-of-trade externality, the same rationale that arises in perfectly competitive markets. Furthermore, and again as in the perfectly competitive benchmark case, we show that the principle of reciprocity is efficiency enhancing, as it serves to “undo” the terms-of-trade driven inefficiency that occurs when governments pursue unilateral trade policies. Our results therefore indicate that the terms-of-trade theory of trade agreements applies to a broader set of market structures than previously thought.
Book-to-Market Equity, Financial Leverage, and the Cross-Section of Stock Returns ∗

I propose a new dynamic model of the firm that links operating l everage to both value premium and book-leverage premium in stock returns. Value firms are l ow-productivity firms with either high operating leverage or high financial leverage. Firms with hi gh operating leverage maintain low book leverage ratios. When operating leverage is economically significant, both value firms and low bookleverage firms can have high equity risk premiums. In particu lar, value premium becomes positive while book-leverage premium becomes negative. Without operating leverage, the signs of these premiums are reversed. The model captures quantitatively several important properties of the cross-section of stock returns.
Identifying Technology Transfer in Foreign Direct Investment: Influence of Industry Conditions and Investing Firm Motives

Firms have different motives for investing abroad, most notably to exercise existing capabilities, but also to build new capabilities by accessing knowledge located abroad. Recognizing this heterogeneity helps determine whether foreign investments transfer technology to their host industries. Using host industries' initial level of competition to differentiate when each of these dichotomous motives is more likely, I examine change in productivity resulting from inward FDI in US manufacturing industries for 1987 through 1991. While controlling for change in industry competition, I find that relatively uncompetitive industries experience productivity growth while competitive industries experience productivity stagnation from FDI. This differential outcome is consistent with heterogeneous investment motives.
Why did employee health insurance contributions rise

We explore the causes of the dramatic rise in employee contributions to health insurance over the past two decades. In 1982, 44% of those who were covered by their employer-provided health insurance had their costs fully financed by their employer, but by 1998 this had fallen to 28%. We discuss the theory of why employers might shift premiums to their employees, and empirically model the role of four factors suggested by the theory. We find that there was a large impact of falling tax rates, rising eligibility for insurance through the Medicaid system, rising medical costs, and increased managed care penetration. Overall, this set of factors can explain more than one-half of the rise in employee premiums over the 1982-1996 period.
Knowledge Sharing in Alliances and Alliance Portfolios

We develop a model of knowledge sharing in alliances and alliance portfolios. We show that, once the issue of encouraging effective collaboration is put center stage, many standard intuitions of th...
Justice for All: An Indigenous Community-Based Approach to Restorative Justice in Alaska

The current study reviews the comparative successes of two restorative justice programs in Alaska, namely, the Upper Tanana Wellness Program and the Circle Peacemaking Program in Kake, Alaska. In an analysis of the two case studies, the authors develop nine principles useful to those interested in developing restorative-justice programs. The authors recommend an Indigenous community-based approach consistent with practice in the field of Dispute Systems Design.
Protecting and Respecting Civilians: Correcting the Substantive and Structural Defects of the Rome Statute

There is a gap between the international humanitarian law of Geneva and the international criminal law of Rome, a gap between the law we have and the law we need if we are to “ensure respect for and protection of the civilian population” caught in the midst of armed conflict. The Rome Statute of the International Criminal Court fails to fully enforce four core principles of humanitarian law designed to protect civilians: distinction, discrimination, necessity, and proportionality. As a result, it is possible for a combatant with a culpable mental state, without justification or excuse, and in violation of humanitarian law, to kill civilians, yet escape criminal liability under the Rome Statute. The Rome Statute also ignores or misapplies three fundamental criminal law distinctions: between conduct offenses and result offenses, between material elements and mental elements, as well as between offenses and defenses. These distinctions are not empty formalisms but rather are the means by which any system of criminal law gives expression to its underlying moral values. The purpose of this article is to expose these defects and propose a way to overcome them. Drawing on contemporary criminal law theory, it offers a new approach to war crimes against civilians, one that better protects and respects the value of civilian life. This article proposes a redefined offense of Willful Killing that fully incorporates the principles of distinction and discrimination as well as a new affirmative defense that fully incorporates the principles of necessity and proportionality. Only by adopting such an approach can international criminal law provide civilians the legal protection and moral recognition they deserve. The recent adoption of an operative definition of the crime of aggression during a Review Conference in June 2010 suggests that further reform of the Rome Statute is achievable.
The impact of sell-side analyst research coverage on an affiliated broker’s market share of trading volume

Abstract Using NASDAQ reported individual stock level trading volume, we find that analyst research coverage on a stock increases the level of an affiliated broker’s market share of trading volume in that stock by 0.8 percent, on average, which corresponds to an additional annual volume of about one million shares in an average stock. Optimistic recommendations increase the level of market share by an additional 0.3 percent, on average, which is consistent with the notion that analysts have an incentive to issue optimistic recommendations. Also, a broker’s market share of volume increases on average when an affiliated analyst changes his/her recommendation, and decreases with the length of time during which an analyst maintains the same recommendation on a stock. The latter findings suggest that sell-side institutions are rewarded for providing new information to the market and for ongoing research services.
Optimal Taxation with Rent-Seeking

We develop a framework for optimal taxation when agents can earn their income both in traditional activities, where private and social products coincide, and in rent-seeking activities, where private returns exceed social returns either because they involve the capture of pre-existing rents or because they reduce the returns to traditional work. We characterize Pareto optimal income taxes that do not condition on how much of an individual's income is earned in each of the two activities. These optimal taxes feature an externality-corrective term, the magnitude of which depends both on the Pigouvian correction that would obtain if rent-seeking incomes could be perfectly targeted and on the relative impact of rent-seeking externalities on the private returns to traditional and to rent-seeking activities. If rent-seeking externalities primarily affect other rent-seekers, for example, the optimal correction lies strictly below the Pigouvian correction. A calibrated model indicates that the gap between the Pigouvian and optimal correction can be quantitatively important. Our results thus point to a hefty informational requirement for correcting rent-seeking externalities through the income tax code.
Reforming the Good Moral Character Requirement for U.S. Citizenship

This Article explores the impact of the convergence of criminal law and immigration law on the most valued government benefit in the land: citizenship. Specifically, it examines how criminal history influences the opportunity to naturalize through the good moral character requirement for U.S. citizenship. Since 1790, naturalization applicants have been required to prove their good moral character. Enacted to ensure that applicants were fit for membership and would not be disruptive or destructive to the community, the character requirement also allowed for the reformation and eventual naturalization of those guilty of past misconduct. This Article shows that recent changes in immigration law and the handling of naturalization petitions by the United States Citizenship and Immigration Services (USCIS) have turned the good moral character requirement into a powerful exclusionary device. Since 1990, Congress has added hundreds of permanent, irrebuttable statutory bars to a good moral character finding based on criminal conduct. Where no bar applies, examiners may still deny an applicant on character grounds in their discretion, which they are doing with management encouragement and increasing frequency. The effect is the creation of bars to citizenship not found in the statute, subverting the statutory and regulatory scheme governing naturalization. The expressively punitive nature of the current good moral character provision and USCIS’s misguided priorities in handling naturalization applications force legal resident immigrants with criminal histories to permanently live in the shadows of full membership, never able to possess the full rights, privileges, and respect that citizenship can bring. The Article argues that a robust, inclusive notion of citizenship remains necessary despite its apparent diminishment in the twentyfirst century world. Informed by insights from sociological research on community cohesion and criminological findings on desistance, it shows why there must be space for those residents with a criminal past to demonstrate their current fitness for membership. It urges statutory and agency reforms that would realign the good moral character requirement with its historical purpose and understanding and promote a naturalization scheme that, at no cost to public safety, promotes social cohesion and advances democracy and equality by making redemptive citizenship possible.
ARE STATE PUBLIC PENSIONS SUSTAINABLE? WHY THE FEDERAL GOVERNMENT SHOULD WORRY ABOUT STATE PENSION LIABILITIES

This paper analyzes the fl ow of state pension benefi t payments relative to asset levels and contributions. Assuming future state contributions fund the full present value of new benefi ts, many state systems will run out of money in 10–20 years if some attempt is not made to improve the funding of liabilities that have already been accrued. The expected shortfalls raise the possibility that the federal government will be faced with a decision as to whether to bail out states driven to insolvency by their pension programs.
Housing Inventory and Completion

The model of Hendry (1986) is extended to a vector autoregressive system, in order to examine the sources of fluctuations in housing completions and inventory. The time-series properties of the completion rate are examined as well as those of the accumulated inventory. Shocks to income, interest rates, materials price, and housing price are examined. The completion rate appears to be more or less constant, unaffected by these shocks, so that inventory is evidently the control variable for builders.
Evidentiary Rulings as Police Reform

How can law be a mechanism for police reform? The most familiar answer, for legal scholars who work on the regulation of law enforcement, is as a deterrent: the law sets some limit on police behavior and imposes some sanction for violations. But the deterrent model is not the only method through which the law can affect police behaviors. In this article, I contend that evidentiary considerations have the potential to change both police training and agency culture. My contention is based on the observation that evidentiary considerations have shaped not just police behavior but also the culture of policing itself. Cultural change is a critical component of meaningful police reform; one who seeks to change some aspect of policing must take into account the role of culture in shaping the objectionable behavior. But police culture is neither independently organic nor develops in a vacuum. The development of a police culture depends, in large part, on external factors including the legal rules and social expectations in which the culture develops. I focus on three examples of how the culture and practices of law enforcement have been shaped by different evidentiary considerations: the warnings required by Miranda v. Arizona, the perceived need to maintain an unbroken chain of custody for evidence, and the popular enthusiasm for forensic investigations.I then explore the possibility of using evidentiary rulings to further advance reform, focusing on the use of officers’ opinion testimony. Police testimony often straddles the line between lay and expert testimony. Much of their testimony requires specialized knowledge, experience, or training. Unfortunately, under the existing evidentiary framework, police officer testimony is frequently admitted in a way that blurs the already muddy line that separates lay and expert testimony, leading to three distinct problems. First, An officer may provide what is undeniably lay testimony, but using language that indicates a particular expertise. Second, an officer may provide expert testimony dressed in the guise of a lay opinion. Finally, and most importantly for the ultimate thesis of this article, an officer’s statements, even when he speaks as an expert, may lack the reliability that expert testimony is supposed to demonstrate. By addressing these concerns through the mechanism of evidentiary rulings, I suggest that police culture and training itself could be improved. While the impact of evidentiary considerations is neither certain nor the appropriate way to address all aspects of policing, it can be a useful addition to the broader conversation about police reform.
FROM GAUDIN TO GILES: CONTEXT, EQUITY, AND THE ADMISSION OF “WORDS FROM THE GRAVE” AGAINST THE ACCUSED KILLER

The doctrine of forfeiture by wrongdoing may be used to strip a defendant of both his right to confront witnesses and any hearsay objections to an unavailable witness's hearsay statements based on a judicial fact-finding that the defendant engaged in wrongful conduct intended to keep the hearsay declarant from testifying. The reflexive application of forfeiture by wrongdoing to admit a homicide victim's hearsay statements against the accused killer arguably undermines a defendant's due process and trial by jury rights. To determine whether to admit the victim's hearsay statement, the court must first determine whether the defendant killed the victim; this fact-finding is also necessary to the jury's determination of the defendant's guilt. As the Supreme Court discussed in United States v. Gaudin, the context of a factual question is important when considering whether the factual question is properly allocable to a judge in a case where the defendant has a Sixth Amendment jury trial right. Unlike preliminary questions of evidentiary admissibility, the doctrine of forfeiture by wrongdoing is concerned with punishing and discouraging egregious conduct. The required fact-finding is not focused on the quality of the evidence to be admitted, but on whether the defendant should be sanctioned with the admission of otherwise inadmissible evidence. Therefore, closer scrutiny should be given to the effect of judicial allocation of the required fact-findings on the defendant's right to have every element of the criminal charges against him decided by the jury by the beyond a reasonable doubt standard.
Volcanic risk perception and adjustment in a multi-hazard environment

Hazard risk perceptions and protective behaviors are examined for wildfires, earthquakes and volcanic activity. Data were gathered in two northern California (USA) communities that are exposed to all three hazard types. It was found that resident risk perceptions approximated the risks calculated by experts. Personal risks associated with fires were significantly lower than property risks associated with the same threat. The discrepancy between person and property risks for earthquakes and volcanic activity was much smaller. In general, it was found that the number of protective adjustments undertaken for each hazard was small (averaging about half of the possible number measured). When combined in a regression analysis, risk perception was not a statistically significant predictor of number of adjustments for any of the three hazards. Resident's sense of responsibility for self-protection and experience with property damage were significant predictors of adjustment for all three hazards. Information seeking behavior was significantly related to protective actions for earthquakes and volcanic activity, but not for fire hazards. In general, an insufficient number of residents reported experience with personal injury or harm to make meaningful assessments of the effect of this variable on adjustments.
The Racial Implications of Tort Reform

Whether discussing the impact of typical tort reform proposals or the broad rhetoric used to support restrictions on legal rights, racial prejudice lurks behind the tort reform movement. Some connections to race appear to be part of a deliberate public relations effort, while others are not so apparent. However, it is clear that these pervasive connections are often obscured by less offensive arguments that allow some tort reform proponents to mask a racially discriminatory agenda. This Article examines some of the ways racial issues have been deliberately concealed by the rhetoric of the “tort reform” movement, and how tort reform proposals will have a disparate impact on racial and ethnic minorities. In particular, it analyzes some of the pillars of the tort reform movement: attacks on the medical malpractice system, limits on non-economic damages, class actions, and political attacks against the jury system. It also examines specific cases involving hate crimes and environmental justice, illustrating the importance of the tort system in furthering racial justice.
Justice Blackstone's common law orthodoxy

INTRODUCTION 1553 I. COMMON LAW ORTHODOXY 1556 II. THE DEVELOPMENT OF BLACKSTONE'S VIEWS OF LAW.. 1560 III. BLACKSTONE ON THE BENCH 1576 A. The Reports 1578 B. Decisionmaking.. 1582 C. Authority 1585 D. Precedent 1589 E. Discretion.. 1592 F. Blackstone as the Anti-Mansfield 1598 CONCLUSION 1604 INTRODUCTION On Monday, January 28, 1771, four justices who would eventually serve together for nine years presided for the first time as a group over the English Court of Common Pleas. Wearing black robes trimmed in white ermine and long white full-bottomed wigs, they took their seats behind the individual podiums that comprised the bench.' At the center sat the newlyappointed Chief Justice, William de Grey, a man of learning and excellent political connections, whose career trajectory had pointed him almost inexorably toward this moment.2 To his right sat Henry Gould, the most senior puisne, or associate, justice. With eight years on Common Pleas, and almost two before that as a baron of the Exchequer, Gould was the sole member of the Court with significant judicial experience.3 At one end, George Nares took his place as a new judge. "[B]red an att[orne]y, called to the bar," he was the quintessential common lawyer and the only one of the four justices who had practiced at the Common Pleas bar.4 Finally, to the Chief Justice's left sat William Blackstone, the first person to lecture on the common law at an English university, the author of the first comprehensive and readable summary of English law, and - although this has gone largely unremarked - the first law professor to serve as a judge on a common law court. Blackstone had joined the bench the previous February after a successful career not as a barrister, like the other members of the Court, but as an academic. In 1769, only shortly before his appointment, he had published the last of the four volumes of the Commentaries on the Laws of England, a milestone in the history of English legal literature, and the work that ensured its author's lasting fame in both England and America. The outsized reputation of the Commentaries has caused the rest of Blackstone's legal writing to go mostly unnoticed. Consequently, nearly all the scholarship about Blackstone's views on law has relied solely on a work he originally drafted when he was no older than thirty and had spent only seven unsuccessful years at the bar. Yet the Commentaries ought not to be assumed to reflect Blackstone's views. In the lectures that formed the basis of the Commentaries, Blackstone had other masters to serve besides his own personal beliefs. For example, when he began to teach privately in 1753, he relied on students to pay to attend.5 Displeasing this authence with scathing critiques of the common law, which the English people generally viewed as akin to holy, was not in his economic interest.6 Once he became an official university professor in 1758, Blackstone still occupied a somewhat precarious position, for the very existence of his course on English law was not uncontroversial. …
Political vs. currency premia in international real interest differentials: A study of forward rates for 24 countries

Abstract Different approaches to quantifying the degree of capital mobility for a cross-section of currencies — particularly saving-investment correlations and tests of real interest parity — have appeared to show a surprisingly low degree of financial integration. We use a new data set, forward rate data for 24 countries, including many small industrialized countries and seven LDCs, to decompose the real interest differential into two parts: the covered interest differential, or political premium, and the real forward discount, or currency premium. The latter in turn can be decomposed into the exchange risk premium and expected real depreciation. We find a high degree of capital mobility across political boundaries for most of the G-11 countries, plus Hong Kong and Singapore, for our sample period of 1982 to 1987. Even for most of the other LDCs and smaller industrialized countries, for which covered interest parity clearly fails, the political premium is not as big a component of the real interest differential as the currency premium. France would appear to have higher capital mobility than most by the criterion of real interest differentials, but is seen in fact to have low capital mobility by the criterion of covered interest differentials, a clear example of the superiority of the latter criterion.
New Product Team Decision Making: Regulatory Focus Effects on Number, Type, and Timing Decisions*

Company executives rely on new product development teams to carry out their directives and make decisions according to management's goals. However, team members bring their own motivational perspectives to strategic decisions. This research examines how individual and leadership motivations influence a dyadic team's new product decisions. Specifically, this article investigates how matching vs. mismatched motivations between team members affect new product number, type, and timing decisions. In addition, this study asks how effective leadership-provided motivations are in guiding teams' new product decisions. A set of hypotheses is developed using regulatory focus theory, which identifies basic motivational differences in individuals (i.e., promotion vs. prevention focus) and their effects on decision making. The hypotheses examine the effects of regulatory focus match vs. mismatch within teams on the likelihood to introduce new products, the timing of new product introductions, and the types of new products introduced. To test the hypotheses, a controlled, yet realistic product management simulation is employed. A total of 124 undergraduate seniors (83 women and 41 men) at a large public university enrolled in a marketing management capstone course participated in this study for partial course credit. Utilizing two-person teams engaged in a business simulation ensured an appropriate level of controlled complexity in the decision making task, while allowing the phenomena of interest to be isolated and tested. Results show that when dyads share the same motivational approach (regulatory focus match), leadership-prescribed goal pursuit strategies are largely ineffective. Only dyads that do not share the same motivational approach to decision making (regulatory focus mismatch) make new product decisions consistent with leadership-prescribed goal pursuit strategies. For regulatory focus match dyads, the results demonstrate that a promotion focus (when compared to a prevention focus) leads to greater numbers of new products introduced, faster new product introductions, and more novel new product introductions. For new product managers, these results carry important implications. Which new product opportunities to invest in and which to forgo is presumably determined by the strategic direction given to teams by top management. Results suggest that when team members share the same motivational approach, this not only influences new product decisions, but also diminishes or eliminates the influence top management can exert on new product decisions. Such “isolation” from leadership influences does not have to be detrimental. For example, companies that seek to insulate new product development teams from influences from the top, such as is the case in many new venture incubations, would be well served to staff those teams ensuring a promotion focus match.
Trade Credit: Theories and Evidence

Firms may be financed by their suppliers rather than by financial institutions. There are many theories of trade credit, but few comprehensive empirical tests. This article attempts to fill the gap. We focus on small firms whose access to capital markets may be limited and find evidence suggesting that firms use more trade credit when credit from financial institutions is unavailable. Suppliers lend to constrained firms because they have a comparative advantage in getting information about buyers, they can liquidate assets more efficiently, and they have an implicit equity stake in the firms. Finally, firms with better access to credit offer more trade credit. Article published by Oxford University Press on behalf of the Society for Financial Studies in its journal, The Review of Financial Studies.
CORRECTIVE JUSTICE AND THE REVIVAL OF JUDICIAL VIRTUE

moral principle is best understood" in the context of a particular legal dispute. Id. at 2. "Judges may not read their own convictions into the Constitution. They may not read the abstract moral clauses as expressing any particular moral judgment, no matter how much that judgment appeals to them, unless they find it consistent in principle with the structural design of the Constitution as a whole, and also with the dominant lines of past constitutional interpretation by other judges. They must regard themselves as partners with other officials, past and future, who together elaborate a coherent constitutional morality, and they must take care to see that what they contribute fits with the rest." Id. at 10. 4. Richard Posner argues that "j]udges have got to understand that the only sound basis for a legal rule is its social advantage, which requires an economic judgment, balancing benefits against costs." RICHARD A. POSNER, THE PROBLEMATICS OF MORAL AND LEGAL THEORY 208 (1999). He further claims that "[m]ost economic analysis of law is pragmatic," id. at 239, and argues that "pragmatist judges always try to do the best they can do for the present and the future, unchecked by any felt duty to secure consistency in principle with what other officials have done in the past," id. at 241. Posner's legal pragmatism, however, is not the same as philosophical pragmatism; it is entirely consistent with resorting to the technical reasoning employed by the economic analysis of law. 5. Roberto Unger argues that the critical legal studies movement rejects the claims that law and morality can be based on an apolitical method or procedure of justification and that the legal system can be objectively defended as embodying an intelligible moral order. The legal order is merely the outcome of power struggles or practical compromises. Thus, he advocates "the purely instrumental use of legal practice and legal doctrine to advance leftist aims." Roberto M. Unger, The Critical Legal Studies Movement, 96 HARV. L. REV. 563, 567 (1983). For a good introduction to critical legal studies, see MARK KELMAN, A GUIDE TO CRITICAL LEGAL STUDIES (1987). Similarly, Robin West claims that masculine jurisprudence proceeds from the presupposition of individuals as essentially separate from one another ("separation thesis") while feminist jurisprudence proceeds from the presupposition that individuals are essentially connected or related to one another. See Robin West, Jurisprudence and Gender, 55 U. CHI. L. REV. 1 (1988), reprinted in FEMINIST LEGAL THEORY (Katharine T. Bartlett & Rosanne Kennedy eds., 1991). Finally, critical race theorists have tried to show that "areas of law ostensibly designed for our benefit often benefit whites even more than blacks." Richard Delgado, Brewer's Plea: Critical Thoughts on Common Sense, 44 VAND. L. REV. 1, 6 (1991). See also Richard Delgado & Jean Stefancic, Critical Race Theory: An Annotated Bibliography, 79 VA. L. REV. 461 (1993). 2 Yale Journal of Law & the Humanities, Vol. 12 [2000], Iss. 2, Art. 2 http://digitalcommons.law.yale.edu/yjlh/vol12/iss2/2
Altruism and Turnout

Scholars have recently reworked the traditional calculus of voting model by adding a term for benefits to others. Although the probability that a single vote affects the outcome of an election is quite small, the number of people who enjoy the benefit when the preferred alternative wins is large. As a result, people who care about benefits to others and who think one of the alternatives makes others better off are more likely to vote. I test the altruism theory of voting in the laboratory by using allocations in a dictator game to reveal the degree to which each subject is concerned about the well-being of others. The main findings suggest that variation in concern for the well-being of others in conjunction with strength of party identification is a significant factor in individual turnout decisions in real world elections. Partisan altruists are much more likely to vote than their nonpartisan or egoist peers.
Heterogeneity, adverse selection and valuation with endogenous labor supply ☆

Abstract This paper considers models of intratemporal consumption–labor choice and intertemporal consumption choice under heterogeneity and private information in preferences towards labor. We show that market regime regarding unemployment insurance is important to determine the effects of heterogeneity and private information on allocations and valuations. There are two main results. First, intertemporal choice can mitigate adverse selection. Second, in countries where unemployment insurance is generous capital markets should have low usage and the risk-free rate of return is low. However, in countries where unemployment insurance is less generous, capital markets should have more usage and the risk-free rate of return is higher.
Debt Contract Enforcement and Conservatism: Evidence from a Natural Experiment

This study provides evidence that the use of conservative accounting in debt contracting depends on the enforceability of the contract. To test the effect of debt contract enforcement on borrowers' timely loss recognition, we exploit the staggered introduction of enhanced debt contract enforcement in Indian states as a natural experiment, where the implementation of the enforcement is exogenous to the accounting choices and borrowing behavior of firms. The main results show that enhanced enforcement has a significant positive effect on the timeliness of loss recognition of borrowing firms. We find that the effect is strongest for firms that increased their overall borrowing and for firms with high levels of tangible assets, consistent with a collateral‐based explanation. This study also provides causal evidence that firms adopt conservative accounting due to lenders' demand.
Conservative accounting and equity valuation

Abstract This paper examines how conservative accounting affects the relation between accounting data and firm value. The analysis shows that conservative accounting can be characterized equivalently in terms of book value, earnings, or book rate of return. Furthermore, capitalized earnings generally provide a less biased estimate of equity value than book value does. In addition, firm growth affects the way earnings and book value are combined in valuation. A weighted average of book value and capitalized earnings, with the weight on earnings being an increasing and convex function of growth, yields an asymptotically unbiased estimate of equity value. When growth is positive, the weight on book value is negative.
Trust and Trustworthiness among Economics Majors

We use a simple trust-game to elicit trusting and trustworthy behavior among students majoring in economics and other disciplines. We also administer a Social Values Orientation (SVO) survey to evaluate any possible correlation between an individual's levels of trust indicated in the survey and his/her action in the game. Our results suggest that although students pursuing a major in economics appear to be no different than other students in choosing trusting actions, when it comes to being trustworthy, the former group always chooses the self payoff maximizing action rather than the trustworthy action. Scores from the SVO survey do not help in predicting trusting or trustworthy behavior in our experiment.
Is environmental policy a secondary trade barrier? An empirical analysis

Should international trade agreements be extended to include negotiations over environmental policy? The answer depends on whether countries distort levels of environmental regulations as a secondary means of providing protection to domestic industries; our results suggest that they do. Previous studies of this relationship have treated the level of environmental regulation as exogenous, and found a negligible correlation between environmental regulation and trade flows. In contrast, we find that, when the level of environmental regulation is modelled as an endogenous variable, its estimated effect on trade flows is significantly higher than previously reported. JEL Classification: Fl, F14, F18 Est-ce que la politique environnementale est une barriere commerciale secondaire? Une analyse empirique. Est-ce que les accords commerciaux internationaux doivent etre etendus pour couvrir la politique environnementale? La reponse depend du degre de distorsion que les pays introduisent dans leur politique environnementale pour proteger leurs industries nationales. Nos resultats suggerent que cet impact est important. Des etudes anterieures de cette relation ont traite la politique environnementale comme exogene, et ont montre qu'il existe une co-relation negligeable entre politique envir- onnementale et flux commerciaux. Au contraire, nous revelons que, quand la politique environnementale est consideree comme variable endoge'ne, son effet sur les flux com- merciaux est plus eleve de maniere significative que ce qu'on a note anterieurement.
A Comparative Fault Defense in Contract Law

This Article calls for the recognition of a comparative fault defense in contract law. Part I sets the framework for this defense and suggests the situations in which it should apply. These situations are sorted under two headings: cases of noncooperation and cases of overreliance. Part II unfolds the main argument for recognizing the defense and recommends applying the defense only in cases where cooperation or avoidance of overreliance is low cost.
Gulliver’s Trials: A Modest Proposal to Excuse and Justify Satire

Satire and parody are both examples of what copyright law denominates “derivative works.” And the two are, philologically, rather interrelated, while nevertheless remaining distinct categories. But, following ambiguous Supreme Court guidance, the status of the two genres in fair use defenses to allegations of copyright infringement is somewhat uncertain, and varies significantly amongst the circuit courts. Satire is the unequivocally underprivileged, when not categorically disallowed, genre in fair use evaluations. But refining, without changing, current judicial method in this area could serve to protect arguably more “Useful Art,” while leaving the current treatment of parody untouched. This article serves three distinct, but related, purposes: (1) to disambiguate, for copyright law purposes, the terms “parody” and “satire”; (2) to prove that protection, as fair use, for satire is constitutionally consistent—and, indeed, compelled—by both copyright and First Amendment jurisprudence; and (3) to recommend a judicial method by which to incorporate this view while leaving wholly intact all current precedent. GREEN_JCI 2/20/2008 8:09 AM 184 Chapman Law Review [Vol. 11:183
The Health Insurance Reform Debate

This article provides an overview of the U.S. health care reform debate and legislation, with a focus on health insurance. Following a synopsis of the main problems that confront U.S. health care and insurance, it outlines the health care reform bills in the U.S. House and Senate as of early December 2009, including the key provisions for expanding and regulating health in surance, and projections of the proposals' costs, funding, and impact on the number of people with insurance. The article then discusses (1) the potential effects of the mandate that individuals have health insurance in conjunction with proposed premium subsidies and health insurance underwriting and rating restrictions, (2) the proposed creation of a public health insurance plan and /or nonprofit cooperatives, and (3) provisions that would modify permissible grounds for health policy rescission and repeal the limited an titrust exemption for health and medical liability insurance. It concludes by contrasting the reform bills with market-oriented proposals and with brief perspective on future developments.
Strategic Positioning and the Financing of Nonprofit Organizations: Is Efficiency Rewarded in the Contributions Marketplace?

This article addresses the question of whether operational efficiency is recognized and rewarded by the private funders that support nonprofit organizations in fields ranging from education to social service to arts and beyond. Looking at the administrative efficiency and fundraising results of a large sample of nonprofit organizations over an 11-year period, we find that nonprofits that position themselves as cost efficient—reporting low administrative to total expense ratios—fared no better over time than less efficient appearing organizations in the market for individual, foundation, and corporate contributions. From this analysis, we suggest that economizing may not always be the best strategy in the nonprofit sector.
Reviving the Case for GDP-Indexed Bonds

This paper seeks to revive the case for countries to self-insure against economic growth slowdowns by issuing GDP-indexed bonds. We simulate the effects of GDP-indexed bonds under different assumptions about fiscal policy reaction functions and their output effects and find that they could substantially reduce the likelihood that debt/GDP paths become explosive. The insurance premium would likely be small, because cross-country comovement of GDP growth rates is low and cross-country GDP growth risk is thus largely diversifiable for an investor holding a portfolio of GDP-indexed bonds. Potential obstacles to the emergence of a market for these bonds include the verifiability of GDP data, the trade-off between insurance and moral hazard, and the need for liquidity. The paper discusses institutional fixes and suggests an approach to attempting to start up a market.
Short selling in initial public offerings.

Abstract Short sale constraints in the aftermarket of initial public offerings (IPOs) are often used to explain short-term underpricing that is subsequently reversed. This paper shows that short selling is integral to aftermarket trading and is higher in IPOs with greater underpricing. Perceived restrictions on borrowing shares are not systematically circumvented by “naked” short selling. Short sellers, on average, do not appear to earn abnormal profits in the near term and our findings are not driven by market makers. Short selling in IPOs is not as constrained as suggested by the literature, implying that other factors may be responsible for underpricing.
A New Angle on Rules versus Standards

The debate over standards versus rules has traditionally been framed as a trade-off between the certainty and lower administrative costs of rules versus standards' flexibility to consider case-specific information. We argue that even if judges have no ability to directly assess case-specific information, using standards creates a sorting effect that favors ex-post efficient decisions. When judges are not bound by rules, their decision is more likely to be sensitive to the quality of legal representation. In the absence of externalities, the party that desires the ex-post efficient decision has the most to gain, and, thus, a greater incentive to invest in high-quality representation. While the higher litigation costs under standards can easily outweigh the increased likelihood of an efficient decision, bargaining in the shadow of standards can preserve their sorting benefit while ameliorating the increase in legal costs.
Preferential Admission and MBA Outcomes: Mismatch Effects by Race and Gender

We consider the "mismatch" hypothesis in the context of graduate management education. Both blacks and Hispanics, conditional on a rich set of human capital variables, prior earnings and work experience, and non-cognitive attributes, are favored in admission to top 50 Master of Business Administration (MBA) programs. To test for mismatch effects, we provide two comparisons: (1) comparable individuals (in terms of race, gender, and credentials) at different quality MBA programs and (2) individuals of differing race or gender (but with similar credentials) at comparable MBA programs. Despite admission prefer- ences, blacks and Hispanics enjoy similar or even higher returns to selectivity than whites.
The Answer is Blowing in the Wind of Creative Destruction: Reflections on the Strategic Management of Technology and Innovation Research

This is the introductory note to a special issue on the management of technology and innovation. It is not an exhaustive review of the vast literature to date, as this would be a difficult undertaking in itself, well beyond the scope of this introductory note. Instead, I limit myself here to highlighting some of the theoretical foundations on which our community has been built, drawing the attention to a couple of reasons behind its success (not only in numbers but also in terms of impact on academia and business practice), and pointing out examples of prominent work done by our members and the exciting new research that is taking place today and will continue to propel this field in the coming years.
Priority Dissemination of Public Disclosures

ABSTRACT: This study examines the unintended effects of a pre-Reg FD practice that gave a broad group of sophisticated market participants 15-minute earlier access to all corporate press releases than the general public. We find that roughly one-eighth of the price discovery to earnings announcements issued during regular trading hours was due to privileged access to information in earnings press releases, with the 15-minute priority dissemination contributing to just over 50 percent of price discovery from all privileged access. In addition, we find that transient institutions benefited from priority dissemination, especially when the earnings contained good news. Finally, consistent with economic theory, we find that intraday bid-ask spreads decreased post-Reg FD for firms that had sufficient market liquidity to allow trading opportunities during the 15-minute window. Our study has implications for current discussions on whether preferential information distribution by firms and information intermediari...
Perish the forethought: Premeditation engenders misperceptions of personal control

People are normally encouraged to engage in premeditation — to think about the potential consequences of their behavior before acting. Indeed, planning, considering, and studying can be important precursors to decision-making, and often seem essential for effective action. This view of premeditation is shared by most humans, a kind of universal ideal, and it carries an additional interesting implication: Even the hint that premeditation occurred can serve as a potent cue indicating voluntary action, both to actors and observers. In legal and moral contexts, for example, actors are seen as especially culpable for the consequences of their actions if those consequences were premeditated, whether or not the premeditation influenced the decision. In this chapter, we review evidence indicating that even irrelevant premeditation can lead people to believe that an action’s consequences were under personal control. We present research exploring how various forms of premeditation — including foresight, effortful forethought, wishful thinking, and the consideration of multiple possible outcomes of action — may lead actors to prefer and to feel responsible for action outcomes even when this premeditation has no causal relation to the outcomes.
Striving to Fulfill the Promise: The Purple House Conversations and the Practice of Transformative Mediation

In early 2005 Robert A. Baruch Bush and Joseph Folger released a new and revised edition of their important book The Promise of Mediation, first published in 1994. In the new edition they added a transcript of The Purple House Mediation, a video documenting a mediation session, accompanied with commentaries. In so doing, Bush and Folger have taken additional steps to put the transformative theory of mediation into practice. In this essay, I use The Purple House Mediation as a lens through which to examine some of the underpinnings of the transformative approach and the relationship between theories of mediation and the actual practice of mediation.
The effects of earmarks on the likelihood of reelection

Abstract Many models predict that incumbent legislators use government spending – “pork barrel” spending – to increase their vote shares in elections. To date, however, evidence for this hypothesis is scarce. Using recently available data on the sponsorship of earmarks in U.S. appropriations legislation, this paper tests the effects of earmarks on the likelihood of legislators' reelection. The results show that secured earmarks lead to higher vote shares. The analysis demonstrates that a $10 million increase in earmarks leads to as much as a one percentage point increase in vote share on election day. Furthermore, the paper tests for voter responses to earmarks when earmarks have few or many sponsors.