cssi/SciSciGPT-SciSciNet huggingface dataset:
Efficient Tests Under a Weak Convergence Assumption

The asymptotic validity of tests is usually established by making appropriate primitive assumptions, which imply the weak convergence of a specific function of the data, and an appeal to the continuous mapping theorem. This paper, instead, takes the weak convergence of some function of the data to a limiting random element as the starting point and studies efficiency in the class of tests that remain asymptotically valid for all models that induce the same weak limit. It is found that efficient tests in this class are simply given by efficient tests in the limiting problem—that is, with the limiting random element assumed observed—evaluated at sample analogues. Efficient tests in the limiting problem are usually straightforward to derive, even in nonstandard testing problems. What is more, their evaluation at sample analogues typically yields tests that coincide with suitably robustified versions of optimal tests in canonical parametric versions of the model. This paper thus establishes an alternative and broader sense of asymptotic efficiency for many previously derived tests in econometrics, such as tests for unit roots, parameter stability tests, and tests about regression coefficients under weak instruments.
Strategic Informed Trades, Diversification, and Expected Returns

ABSTRACT: We examine how strategic trade affects expected returns in a large economy. In our model, both a monopolist (strategic) informed trader and uninformed traders consider the impact of their demands on prices. In contrast to settings with price-taking traders, private information never eliminates a priced risk, and can lead to higher risk premiums. Also unlike settings with price-taking informed traders, risk premiums decrease in response to an increase in liquidity-motivated trades in diversified portfolios. These differing effects arise because a privately informed strategic trader conceals her trades by taking small positions relative to the magnitude of noise trades. Although prices partially reveal her information and reduce uncertainty, a concomitant decrease in her risk absorption dominates and leads to higher risk premiums. Similar to settings with price-taking traders, private information affects expected returns only via factor loadings and risk premiums on existing payoff risks—it introd...
What all-cash companies tell us about IPOs and acquisitions

Abstract We examine the IPOs of and acquisitions made by special purpose acquisition corporations (SPACs). This unique sample provides a perspective on these two corporate events unencumbered by much of the typical confounding information. We find the IPO gross spreads of these simple firms similar to the spreads accompanying the IPOs of much more complex firms. This result is consistent with illogically sticky spreads. We find acquirer announcement returns roughly triple that of typical acquisitions. Since these returns disproportionately reflect the valuation split between acquirer and target, they suggest that the lower returns of typical acquisitions stem from overestimating synergies and/or new information regarding the bidder.
The Dubitante Opinion

The 2004 Term of the United States Supreme Court resulted in 203 full opinions written, including 61 concurrences and 63 dissents. Judicial use of these three basic opinion types, the majority, concurring and dissenting opinions or variations thereof (e.g., concurring in part and dissenting in part) has been the norm in the Court and lower federal courts over recent decades. Yet, another type of opinion exists - the dubitante opinion. Judges rarely write dubitante opinions or use the term, and informal polling suggests not many legal scholars are aware of the practice. This short Essay endeavors to shed some light on the use of the term dubitante in judicial opinions and spark discussion as to the merits of the dubitante opinion - What is a dubitante opinion? When was the term first used, and how often is the term used? Who uses it and how? What are the consequences of its use?
Catholic Judges and Cooperation in Sin

For the first time in its history, the Supreme Court of the United States has a majority of Catholics. Yet there are a host of areas where Catholic teaching and American law are at variance. Some worry that Catholic judges will not be faithful to the law, while others worry that Catholic judges will not be faithful to the Church's teaching. Catholic Judges should be concerned with their faithfulness both to the law and to their informed consciences. This paper explores the basic tool that Catholic moral theology offers to handle situations where a judge's moral views and legal interpretation conflict - the doctrine of cooperation - and applies that tool in several particular circumstances. It also discusses what a judge should do if confronted with a case in which the law require morally impermissible cooperation in sin. It makes suggestions aimed at (1) those who worry that Catholic judges will not be faithful to the law; (2) those who worry that Catholic judges will not be faithful to the Church; and (3) Catholic judges themselves.
Foundations of Contemporary Revealed Preference Theory

This paper examines methodological issues raised by revealed preference theory in economics: particularly contemporary revealed preference theory. The paper has three goals. First, to make the case that revealed preference theory is a broad research program in choice theory—not a single theory—and understanding this diversity is essential to any methodological analysis of the program. Second, to explore some of the existing criticisms of revealed preference theory in a way that emphasizes how the effectiveness of the critique depends on the particular version of revealed preference under consideration. Finally, three additional criticisms are presented that are aimed specifically at contemporary revealed preference theory.
The Effects of Dividend Taxation on Short Selling and Market Quality

ABSTRACT: This study examines the effects of dividend taxation on the primary parties involved in a short sale: the lender of the stock and the short seller. For stock lenders, dividend taxation is associated with a decrease in the supply of shortable shares and an increase in equity lending fees around the dividend record date. For short sellers, potential reimbursement costs are associated with a significant decrease in short volume before the ex-dividend date followed by a significant increase after the ex-date. Prior research shows that short selling improves price efficiency and formation. Hence, because of the negative effects of taxation on shorting, market quality declines along several dimensions: equity mispricing, increased loan search frictions, loan price inefficiencies, and market microstructure breakdown. In sum, this study documents that taxation constricts the shorting market around the dividend dates, which in turn has negative implications for market quality. JEL Classifications: G11, G...
Risk and return in the Chinese stock market: Does equity return dispersion proxy risk?

Abstract We examine whether equity return dispersion, measured by the cross-sectional standard deviation of stock returns, is systematically priced in the cross-section of stock returns in China. We find that return dispersion carries a positive price of risk even after controlling for market, size, book-to-market, and idiosyncratic volatility effects. We observe that stocks with greater sensitivities to equity return dispersion yield higher average returns. The finding of a significant return dispersion effect is robust to alternative portfolio sorts based on the well-established risk factors as well as industry portfolios. We argue that equity return dispersion captures the fundamental uncertainty associated with economic transitions and the flexibility of adaptability to fundamental economic restructuring that cannot be captured by market and firm level factors. To that end, return dispersion serves as a more meaningful proxy for risk in this emerging market that has experienced a significant economic transition during much of the sample period.
Rethinking HIV-Exposure Crimes

This Article challenges the current legislative and scholarly approaches to HIV-exposure crimes and proposes an alternative framework to address their flaws. Twenty-four states criminalize consensual sexual activities of people with HIV. Current statutes and the scholarship that supports them focus on HIV-positive status, sexual activity, and knowledge of HIV-positive status as proxies for risk, mental state, and consent to risk. As a result, they are dramatically overand underinclusive and stigmatize individuals living with HIV. Criminalization should be limited to circumstances in which a defendant exposed her partner to a substantial degree of unassumed risk and did so with a culpable mental state as to transmission. This approach requires a fact finder to consider all evidence relevant to the risk of transmission and the victim’s understanding of that risk, a modest requirement that would nonetheless invert outcomes in numerous prosecutions. The Article contextualizes these arguments within the larger debate on the use of rules and standards in the criminal law and explores the implications of its approach for HIV-exposure criminalization as well as any offense drafted in response to an emerging threat.
Inventing racist roads not taken: The licensing effect of immoral counterfactual behaviors.

Six experiments examined how people strategically use thoughts of foregone misdeeds to regulate their moral behavior. We tested 2 hypotheses: 1st, that people will feel licensed to act in morally dubious ways when they can point to immoral alternatives to their prior behavior, and 2nd, that people made to feel insecure about their morality will exaggerate the extent to which such alternatives existed. Supporting the 1st hypothesis, when White participants could point to racist alternatives to their past actions, they felt they had obtained more evidence of their own virtue (Study 1), they expressed less racial sensitivity (Study 2), and they were more likely to express preferences about employment and allocating money that favored Whites at the expense of Blacks (Study 3). Supporting the 2nd hypothesis, White participants whose security in their identity as nonracists had been threatened remembered a prior task as having afforded more racist alternatives to their behavior than did those who were not threatened. This distortion of the past involved overestimating the number of Black individuals they had encountered on the prior task (Study 4) and exaggerating how stereotypically Black specific individuals had looked (Studies 5 and 6). We discuss implications for moral behavior, the motivated rewriting of one's moral history, and how the life unlived can liberate people to lead the life they want. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
Empirical Tests of Asset Pricing Models with Individual Assets: Resolving the Errors-in-Variables Bias in Risk Premium Estimation

To attenuate an inherent errors-in-variables bias, portfolios are widely employed to test asset pricing models; but portfolios might mask relevant risk- or return-related features of individual stocks. We propose an instrumental variables approach that allows the use of individual stocks as test assets, yet delivers consistent estimates of ex post risk premiums. This estimator also yields well-specified tests in small samples. The market risk premium under the capital asset pricing model (CAPM) and the liquidity-adjusted CAPM, premiums on risk factors under the Fama-French three- and five-factor models, and the Hou, Xue, and Zhang (2015) four-factor model are all insignificant after controlling for asset characteristics.
Persuasion in Auditing: A Review Through the Lens of the Communication-Persuasion Matrix

We provide a comprehensive review and synthesis of behavioral experimental literature that examines persuasion in auditing. We organize our review by applying the five Components of Persuasive Comm...
An Empirical Analysis of the Welfare Magnet Debate Using the NLSY

This paper examines the extent to which differences in welfare generosity across states leads to interstate migration. Using microdata from the National Longitudinal Survey of Youth (NLSY) between 1979 and 1992, we employ a quasi-experimental design that utilizes the categorical eligibility of the welfare system. The pattern of cross-state moves among poor single women with children, who are likely to be eligible for benefits is compared to the pattern among other poor households. We find little evidence indicating that welfare-induced migration is a widespread phenomenon.
Not Featherbedding, but Feathering the Nest: Human Resource Management and Investments in Information Technology

This study draws on employment relations and management theory, claiming that certain innovative employment practices and work structures pave the way for organizational innovation, namely investments in information technology (IT). It then finds support for the theory in a cross-section of UK workplaces. The findings suggest that firms slow to adopt IT realize that their conventional employment model hinders their ability to make optimal use of new technologies. Therefore, the paper advances the literature beyond studies of unionization's impact on business investment to a broader set of issues on the employment relations features that make organizations ripe for innovation.
INFLATION AND FINANCIAL DEPTH

There is now a substantial theoretical literature arguing that inflation impedes financial deepening. Furthermore, it has been hypothesized that the relationship is a nonlinear one, in that there is a threshold level of inflation below which inflation has a positive effect on financial depth, but above which the effect turns negative. Using a large cross-country sample, empirical support is found for the existence of such a threshold. The estimates indicate that the threshold level of inflation is generally about 3–6 percent per annum, depending on the specific measure of financial depth that is utilized.
The Past as Prologue: How the Early Years of the US Institute for Environmental Conflict Resolution Helped Shape the Program at Age Fifteen

This article reflects empirically on the early history and evolution of the US Institute for Environmental Conflict Resolution (USIECR) to analyze how and why this public entity not only has survived in an ever-changing political environment but also has succeeded in shaping a robust environmental conflict resolution field. The authors use Quinn and Rohrbaugh's (1981) competing values framework, as well as theories about organizational birth and early evolution, as lenses through which to view this organizational birth and evolution. Project data derive from sixty interviews carried out in the early years of USIECR, as well as archival materials, government documents, and participant observation. The authors conclude that a balanced approach to strategic leadership from early planning phases to adolescent reauthorization resulted in success and set the stage for the accomplishments that USIECR celebrates on its fifteenth birthday, an occasion for all government-based environmental conflict resolution programs to reflect on their own strategic approaches for achieving success.
Intermediation in Private Equity: The Role of Placement Agents

Intermediation in private equity involves illiquid investments, professional investors, and high information asymmetry. We use this unique setting to empirically evaluate theoretical predictions regarding intermediation. Using placement agents has become nearly ubiquitous, but agents are associated with significantly lower abnormal returns in venture and real estate funds, consistent with investor capture and influence peddling. However, returns are higher for buyout funds employing a top-tier agent and for first-time real estate and venture funds employing an agent, and are less volatile for agent-affiliated funds, consistent with a certification role. Our results suggest heterogeneous motives for intermediation in the private equity industry.
Dynamic Scoring: A Back-of-the-Envelope Guide

Abstract This paper uses the neoclassical growth model to examine the extent to which a tax cut pays for itself through higher economic growth. The model yields simple expressions for the steady-state feedback effect of a tax cut. The feedback is surprisingly large: for standard parameter values, half of a capital tax cut is self-financing. The paper considers various generalizations of the basic model, including elastic labor supply, general production technologies, departures from infinite horizons, and non-neoclassical production settings. It also examines how the steady-state results are modified when one considers the transition path to the steady state.
A Bayesian Approach to Real Options: The Case of Distinguishing between Temporary and Permanent Shocks

Traditional real options models demonstrate the importance of the “option to wait” due to uncertainty over future shocks to project cash flows. However, there is often another important source of uncertainty: uncertainty over the permanence of past shocks. Adding Bayesian uncertainty over the permanence of past shocks augments the traditional option to wait with an additional “option to learn.” The implied investment behavior differs significantly from that in standard models. For example, investment may occur at a time of stable or decreasing cash flows, respond sluggishly to cash flow shocks, and depend on the timing of project cash flows. DURING THE PAST TWO DECADES the real options approach to valuation of irreversible investment opportunities has become part of the mainstream literature in financial economics. The central idea is that the opportunity to invest is equivalent to an American call option on the underlying investment project. As a consequence, the problem of optimal investment timing is analogous to the optimal exercise decision for an American option. Applications of the real options approach are now numerous. 1 One feature that is common to virtually all real options models is that the underlying uncertainty pertains only to future shocks. Since future cash flows are uncertain, there is an important opportunity cost of investing today: the value of the asset might go up so that tomorrow will be an even better time to invest. This opportunity cost is often referred to in the literature as the “option
In Defense of Bacon

Feminist science critics, in particular Sandra Harding, Carolyn Merchant, and Evelyn Fox Keller, claim that misogynous sexual metaphors played an important role in the rise of modern science. The w...
Buried by the Sands of Time: The Problem with Peremption

Peremption, in Louisiana law, is a mode of destroying rights due to nonuse. Though seemingly simple in definition, the application of peremption creates vast jurisprudential problems. The problems of peremption lie in the inequities the doctrine creates, its misapplication by courts, and the confusion it causes with other institutions that also temporally affect when a party may bring a cause of action. Given these issues, this article argues that the doctrine of peremption is in need of legislative overhaul and recommends four, alternative solutions to alleviate the identified problems. The article concludes by advocating for one of the particular legislative remedies.
Does Audit Committee Monitoring Matter in the Government Sector? Evidence from Municipal Internal Control Quality

ABSTRACT: We investigate whether the presence of municipal audit committees is associated with internal control quality in the municipal setting. The evidence shows that only 20 percent of municipalities in our sample voluntarily maintained an audit committee during the sample period of 2001 through 2004. Our results highlight that municipalities with audit committees are associated with fewer internal control problems, which in turn suggests these cities should be less likely to experience future significant financial reporting failures. These results persist in specifications that use econometric procedures to address concerns about self-selection. Overall, our findings suggest that audit committee presence plays an important role in municipal financial oversight.
On the vanishing of Hochster's $\theta$ invariant

Hochster’s theta invariant is defined for a pair of finitely generated modules on a hypersurface ring having only an isolated singularity. Up to a sign, it agrees with the Euler invariant of a pair of matrix factorizations. Working over the complex numbers, Buchweitz and van Straten have established an interesting connection between Hochster’s theta invariant and the classical linking form on the link of the singularity. In particular, they establish the vanishing of the theta invariant if the hypersurface is even-dimensional by exploiting the fact that the (reduced) cohomology of the Milnor fiber is concentrated in odd degrees in this situation. We give purely algebraic versions of some of these results. In particular, we establish the vanishing of the theta invariant for isolated hypersurface singularities of even dimension in characteristic p > 0 under some mild extra assumptions. This confirms, in a large number of cases, a conjecture of Hailong Dao.
Regulating Network Industries: A Look at Intel

This paper examines the Federal Trade Commission's recent settlement with Intel. Evaluating the FTC's case against Intel turns on tricky issues regarding the dynamics of cross-licensing. These are essentially barter transactions, and we have only a weak understanding of when firms will turn to barter. Interfering with cross-licensing will make it more difficult for these transactions to take place, and to understand the importance of that, we need to have a better handle on the relative importance for a licensor of cash returns versus the in-kind returns that are obtained from cross-licenses. We can say with more confidence that the FTC's case appears to give very little weight to the benefits that arise from royalty-free cross-licenses. These licenses eliminate the double monopoly problem that can arise when two patent holders hold essential patents. Royalty-free cross-licensing eliminates through a contract an externality between the patent holders that would otherwise push up prices, to the detriment of the patent holders and their customers. The settlement may very well make it more difficult for Intel to negotiate royalty-free cross-licenses and may harm society in doing so. The licensing regime that emerges from the settlement may have the benefit of making it possible for prospective PC makers who might not deal with Intel to do so -- though this point does not appear to have figured in the FTC's calculus. These prospective PC makers will have less reason to fear that Intel will later pressure them into a cross-license. This will increase the pool of PC makers, though the benefits of this are quite speculative. Equally speculative is whether the settlement will foster R&D on microprocessors -- the chief focus of the FTC's complaint -- though there is little public evidence to suggest that outcome.
Reparations and Equal Opportunity

This paper offers a sympathetic interpretation of reparations claims made on behalf of African Americans and suggests how they could properly be honored. It reviews the federal government's role in supporting racial subordination and its continuing failure to address the inequitable consequences, which public policy now largely ignores. It sketches a national rectification project, comprising a comprehensive set of public programs that would attack the persisting legacy of slavery and Jim Crow. The programs can be justified by the government's duty to insure equal opportunity for our society's children and, most urgently, by corrective justice. because the inequities are attributable to the government's own policies.
Right to Health Litigation and HIV/AIDS Policy

Domestic litigation has become a principal strategy for realizing international treaty obligations for the human right to health, providing causes of action for the public’s health and empowering individuals to raise human rights claims for HIV prevention, treatment, and care. In the past 15 years, advocates have laid the groundwork on which a rapidly expanding enforcement paradigm has arisen at the intersection of human rights litigation and HIV/ AIDS policy. As this enforcement develops across multiple countries, human rights are translated from principle to practice in the global response to HIV/AIDS, transforming aspirational declarations into justiciable obligations and implementing human rights through national policies and programs. Yet despite this national progress in creating accountability for health-related rights, there is scarce empirical research on the scope, content, and effect of legal claims pursuant to these human rights standards. As judicial enforcement has increased, rising to the forefront of a budding health and human rights movement, both proponents and opponents of rightsbased policy have questioned the limits of this litigation strategy and the impact of litigation on global HIV/AIDS efforts. Reflecting on this growing back lash, there arises an imperative for interdisciplinary analysis — to survey these rights-based claims, compare divergent legal strategies conducive to the realization of human rights, and assess the effects of this litigation on public health outcomes. This article sketches the evolving interaction between human rights case law and HIV/AIDS policy. To clarify the need for such analysis, this article discusses the promise of human rights litigation in providing accountability for state public health commitments. Given the promise of this litigation in realizing public health outcomes, this article reviews the origins and development of human rights jurisprudence for HIV/AIDS. With this enforcement movement facing increasing criticism for distorting the global health governance agenda, the authors examine the backlash against this human rights jurisprudence in setting HIV/AIDS policy. This article concludes that scholars and practitioners must engage in comparative analyses of these rights-based litigation strategies and empirical research on their public health impacts.
You Can't Always Get What You Want: Presidential Elections and Supreme Court Appointments

In this article, Professor Finkelman discusses the process of Supreme Court appointments in light of the 2000 Presidential election. As Supreme Court appointments are for an unlimited period of years, those Presidents who have the opportunity to make judicial appointments are able to shape the bench for years after their own terms have ended. However, Professor Finkelman notes that not all appointees turn out in the way a President may have hoped. For example, President Franklin D. Roosevelt likely did not anticipate that Justice Felix Frankfurter would emerge as one of the most conservative justices of his era. With this in mind, Supreme Court appointments are an important factor in presidential elections.
Transatlantic innovation infrastructure networks: public- private, EU-US R&D partnerships

Collaborative, team-based research is now the most significant mode of activity in the global scientific community. Anecdotal and statistical evidence shows moreover that collaboration in scientific research is increasingly global in nature. That is, the groups of researchers who are involved in scientific progress often span one or more nations in origin, location and/or sponsorship. Another significant trend in recent cases of scientific collaboration is the increase in cross-sectoral cooperation, where researchers in a group are employed by government, private industry, and/or academic and other non-profit institutions. In this paper, we review the scale, scope and intensity of cross-national, cross-sectoral research collaboration through the analysis of historical data on co-authorship of scientific publications. The first part of the paper reviews existing literature on the analysis of coauthorship data, and discusses the limitations of this form of analysis and typical strategies to mitigate those limitations. The second part of the paper describes a preliminary study of crossnational, cross-sectoral scientific collaborations covering the years 1988 through 1997, where we examined the scale (volume of co-authored papers), intensity (co-authored papers versus other kinds of co-authorship), and scope (patterns in co-authorship) for cross-national, crosssectoral collaborations. The conclusion of the paper discusses significant trends and patterns derived from this study, and their implications for further research into these types of collaborations.
Anatomy of a Financial Crisis

This paper provides an asymmetric information framework for understanding the nature of financial crises. It provides the following precise definition of a financial crisis: A financial crisis is a disruption to financial markets in which adverse selection and moral hazard problems become much worse, so that financial markets are unable to efficiently channel funds to those who have the most productive investment opportunities. As a result, a financial crisis can drive the economy away from an equilibrium with high output in which financial markets perform well to one in which output declines sharply. The asymmetric information framework explains the patterns in the data and many features of these crises which are otherwise hard to explain. It indicates that financial crises have effects over and above those resulting from bank panics and therefore provides a rationale for an expanded lender-of-last-resort role for the central bank in which the central bank uses the discount window to provide liquidity to sectors outside of the banking system.
Widening Our Lens: Incorporating Essential Perspectives in the Fight against Human Trafficking

An essay is presented on combating human trafficking. It offers a history of adoption of the Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children, Supplementing the United Nations Convention Against Transnational Organized Crime (Trafficking Protocol) and other international human trafficking laws. It further discusses the limitations in current laws and the impact of criminal law on such violence.
The impact of homework on student achievement

Summary Utilizing parametric and nonparametric techniques, we assess the role of a heretofore relatively unexplored ‘input’ in the educational process, homework, on academic achievement. Our results indicate that homework is an important determinant of student test scores. Relative to more standard spending related measures, extra homework has a larger and more significant impact on test scores. However, the effects are not uniform across different subpopulations. Specifically, we find additional homework to be most effective for high and low achievers, which is further confirmed by stochastic dominance analysis. Moreover, the parametric estimates of the educational production function overstate the impact of schooling related inputs. In all estimates, the homework coefficient from the parametric model maps to the upper deciles of the nonparametric coefficient distribution and as a by-product the parametric model understates the percentage of students with negative responses to additional homework.
Governance Delegation Agreements: Shared Sovereignty as a Substitute for Limited Statehood

Author(s): Matanock, AM | Abstract: Governance delegation agreements-international treaties allowing external actors legal authority within host states for fixed terms-succeed in simple and, under certain conditions, complex state-building tasks. These deals are well institutionalized and have input legitimacy because ratification requires sufficient domestic support from a ruling coalition. In order to obtain that input legitimacy, however, host states constrain external actors commensurate with their level of statehood: Stronger states delegate less legal authority. This article argues that these constraints, which produce joint rather than complete authority, require external actors to work within state structures rather than substituting for them, and thus make coordination of complex tasks more difficult. A quantitative overview of data on consent-based peacekeeping missions complements a qualitative analysis focused on comparative case studies in Melanesia and Central America to test the theory. The results support the theory and suggest that these deals hold promise particularly for accomplishing complex tasks in especially weak states.
Dynamic Patterns of Knowledge Flows across Technological Domains: Empirical Results and Link Prediction

The purpose of this study is to investigate the structure and evolution of knowledge spillovers across technological domains. Specifically, dynamic patterns of knowledge flow among 29 technological domains, measured by patent citations for eight distinct periods, are identified and link prediction is tested for capability for forecasting the evolution in these cross-domain patent networks. The overall success of the predictions using the Katz metric implies that there is a tendency to generate increased knowledge flows mostly within the set of previously linked technological domains. This study contributes to innovation studies by characterizing the structural change and evolutionary behaviors in dynamic technology networks and by offering the basis for predicting the emergence of future technological knowledge flows.
Finding a Good Price in Opaque Over-the-Counter Markets

This paper offers a fully rational, dynamic model of opaque over-the-counter markets. An investor searches for an attractive price by visiting multiple dealers in any chosen sequence, including repeat contacts. The dealers do not observe negotiations elsewhere in the market, including the order of contacts. Under stated conditions, a repeat contact with a dealer reveals the investor’s reduced outside options and worsens the price quote. When the fundamental value of an asset is uncertain, market opacity and uncertain contact order could exacerbate adverse selection and lead to inefficient market breakdown.
Trade and Foreign Direct Investment in China: A Political Economy Approach

Abstract We view the political process in China as trading off the social benefits of increased trade and foreign direct investment against the losses incurred by state-owned enterprises due to such liberalization. A model drawing on Grossman and Helpman [Am. Econ. Rev. 84 (1994) 833; The Political Economy of Trade Policy: Papers in Honor of Jagdish Bhagwati, MIT Press, Cambridge (1996) 199] is used to derive an empirically estimable government objective function. The key structural parameters of this model are estimated using province-level data on foreign direct investment and trade flows in China, over the years 1984–1995. We find that the weight applied to consumer welfare is between one - seventh and one - quarter of the weight applied to the output of state-owned enterprises.
Cost Sharing under Increasing Returns: A Comparison of Simple Mechanisms

A technology with decreasing marginal costs is used by agents with equal rights. Each agent demands a quantity of output and costs are divided by means of a fixed formula. Several such mechanisms are compared for the existence of Nash equilibrium demand profiles and for the equity properties of these equilibria. Among three mechanisms, average cost pricing, the Shapley–Shubik cost sharing, and serial cost-sharing, only the latter two possess at least one Nash equilibrium on a reasonable domain of individual preferences. Only the serial cost sharing equilibria pass the equity tests of No Envy and Stand Alone cost.Journal of Economic LiteratureClassification Numbers: C72, D63.
A unifying view on implicit bias in training linear neural networks

We study the implicit bias of gradient flow (i.e., gradient descent with infinitesimal step size) on linear neural network training. We propose a tensor formulation of neural networks that includes fully-connected, diagonal, and convolutional networks as special cases, and investigate the linear version of the formulation called linear tensor networks. With this formulation, we can identify the convergence direction of the network parameters as singular vectors of a tensor defined by the network. For L-layer linear tensor networks that are orthogonally decomposable, we show that gradient flow on separable classification finds a stationary point of the l2/L max-margin problem in a "transformed" input space defined by the network. For underdetermined regression, we prove that gradient flow finds a global minimum which minimizes a norm-like function that interpolates between weighted l1 and l2 norms in the transformed input space. Our theorems subsume existing results in the literature while removing standard convergence assumptions. We also provide experiments that corroborate our analysis.
Market Structure and Productivity: A Concrete Example

Many studies have documented large and persistent productivity differences across producers, even within narrowly defined industries. This paper both extends and departs from the past literature, which focused on technological explanations for these differences, by proposing that demand‐side features also play a role in creating the observed productivity variation. The specific mechanism investigated here is the effect of spatial substitutability in the product market. When producers are densely clustered in a market, it is easier for consumers to switch between suppliers (making the market in a certain sense more competitive). Relatively inefficient producers find it more difficult to operate profitably as a result. Increases in substitutability truncate the productivity distribution from below, resulting in higher minimum and average productivity levels as well as less productivity dispersion. The paper presents a model that makes this process explicit and empirically tests it using data from U.S. ready...
A Coherent Model of DCF Valuation

Business valuation through DCF is recognized as one of the most popular valuation approaches. DCF valuation models, however, have become extremely complex. Modeling requires plenty of input data to be processed, the process is done in many stages, and the data obtained on each of the stages may be interrelated. The process then is not simply a chain of tasks. The modern models work via sophisticated mechanisms of loops being triggered whenever a new piece of information is revealed and the whole model needs updating. Technically speaking, in the spreadsheets environment, this may only be done with the use of iterations. The valuation model should also be subjected to the sensitivity analysis, which is able to quantify the impact of every single assumption made on the final company value. The analysis points out the set of critical assumptions, which have the major impact on the calculated company’s value. Apart from quantifying the impact of the assumptions, the analysis runs qualitative checks on the assumptions assessing the robustness of the arguments standing behind the critical factors for valuation. Consequently, the sensitivity analysis improves the objectivity of the model and mitigates the exposure for the possible results manipulation. The sensitivity analysis reveals its critical role in the valuation process and proves that it should be considered as the standard step in every DCF valuation.
The Aims of Public Administration: Reviving the Classical View

The discipline of public administration is concerned with the construction, management, and adaptation of institutions that perform essential state functions. Many scholarly enterprises address questions falling within the domain of public administration. This paper compares three enterprises that gained prominence over the last thirty years: Public Management, Statebuilding, and American Political Development. Each of these enterprises has a crisp but limited view of the domain of public administration. These enterprises rarely engage with each other. Consequently, scholars within each enterprise are sometimes unaware of how their view is distinctive and blinkered. Our overall understanding of public administration will improve when barriers between these three enterprises are knocked down. Public Management particularly will benefit from a dialogue among enterprises. Scholars working within Public Management will identify important but neglected problems of public administration, improve their ability to address neglected "big questions," and have a better understanding of the constraints on institutional reform.
Estimation of affine term structure models with spanned or unspanned stochastic volatility

We develop new procedures for maximum likelihood estimation of affine term structure models with spanned or unspanned stochastic volatility. Our approach uses linear regression to reduce the dimension of the numerical optimization problem yet it produces the same estimator as maximizing the likelihood. It improves the numerical behavior of estimation by eliminating parameters from the objective function that cause problems for conventional methods. We find that spanned models capture the cross-section of yields well but not volatility while unspanned models fit volatility at the expense of fitting the cross-section.
The Effects of Cross‐Sectional Scale Differences on Regression Results in Empirical Accounting Research*

Abstract. This study investigates coefficient bias and heteroscedasticity resulting from scale differences in accounting levels-based research designs analytically and using simulations based on accounting data. Findings indicate that including a scale proxy as an independent variable is more effective than deflation at mitigating coefficient bias, even if the proxy is 95 percent correlated with the true scale factor. In fact, deflation can worsen coefficient bias. Also, deflation often does not noticeably reduce heteroscedasticity and can decrease estimation efficiency. White (1980) standard errors are close to the true ones in regressions using undeflated variables. Replications of specifications in three recent accounting studies confirm the simulation findings. The findings suggest that when scale differences are of concern, accounting researchers should include a scale proxy as an independent variable and report inferences based on White standard errors.
Network Effects, Bargaining Power, and Product Review Bias: Theory and Evidence

I construct a theoretical framework for expert product reviews and demonstrate how the existence of positive network effects can make review inflation profitable even when fully rational consumers understand the existence of bias. This finding moreover suggests that product reviews, in addition to transmitting information, may also serve as a coordination mechanism for early adopters. Empirical application to video game review data suggests that this industry is in an inflation equilibrium. Specifically, I find evidence that reviews are inflated for games produced by large firms and for those that are part of pre-existing game franchises. Additionally, I find that review inflation is heterogeneous across genres that vary by the extent to which they produce network externalities, and I argue that this result is inconsistent with alternative explanations of review inflation.
The Participation Constraint and CEO Equity Grants

We examine whether firms benchmark annual equity grants to compensation peers and whether meeting the participation constraint is a motive. Studying CEO equity grants over the period of 2006-2016 a...
What's in Your 403(b)? Academic Retirement Plans and the Costs of Underdiversification*

Sponsors of defined contribution retirement plans typically limit the investment choices of plan participants to a small number of investment managers and a limited number of investment vehicles. Such restrictions may limit excessive risk-taking by participants but also may preclude opportunities for efficient diversification. Many college and university 403 (b) plans have restricted investment choices to the retirement annuities offered by TIAA-CREF, the current manager of over half of all 403(b) contributions. Using 10 years of historical data, we study the efficiency of this TIAA-CREF opportunity set relative to a larger set that includes several standard index funds. Extrapolations must be interpreted -with caution. Assuming optimal rebalancing, depending on loss aversion and diversification constraints, the historical sample of returns implies that over a 20-year remaining work life, an employee -with an expanded menu that includes standard index funds could gain over 40% in terminal wealth compared to one who is restricted to TIAA-CREF retirement annuities. Even when a naive diversification strategy of equally weighting (1/n) all available funds is used, the expandedmenu outperforms the restricted portfolio by more than 25% over20years. These differences generally are significant at conventional levels based on parametric and nonparametric testing and do not appear to result from idiosyncratic market performance durinz the sample period.
Legal Responses and Countermeasures to National Security Letters

In early June of 2013, governmental surveillance suddenly and dramatically entered the public consciousness, prompting a torrent of debate and backlash. This Note describes what strategies and countermeasures American entities (including businesses, organizations, and individuals) have used and can use to minimize or avoid their exposure to NSLs. Additionally, this Note describes what American entities can do if they receive an NSL, regardless of the letter's constitutionality.Part I of this Note briefly examines past court rulings and current litigation regarding NSLs. Part II discusses the disclosure of aggregate statistics of issued NSLs. Part III explores potential countermeasures to NSLs (assuming the letters are constitutional), including a warrant canary, anonymization of user data, use of Tor, avoiding US jurisdiction, using alternative networks and protocols, and challenging the NSL itself. It also discusses cases that bear on these countermeasures and briefly explores the repercussions of not complying. Part IV analyzes the likelihood of success in utilizing each of these countermeasures and concludes that telecommunications companies should collect as little information as possible, and entities should choose to use those telecommunications companies that have committed to protecting user data.