cssi/SciSciGPT-SciSciNet huggingface dataset:
The empirics of banking regulation

Abstract This paper empirically assesses whether banking regulation is effective at preventing banking crises. We use a monthly index of banking system fragility, which captures almost every source of risk in the banking system, to estimate the effect of regulatory measures (entry restriction, reserve requirement, deposit insurance, and capital adequacy requirement) on banking stability in the context of a Markov-switching model. Our methodology is less prone to selection and simultaneity bias which are common in this type of study. We apply this method to the Indonesian banking system, which has been subject to several regulatory changes over the last couple of decades, and at the same time, has experienced a severe systemic crisis. We draw the following findings from this research: (i) entry restriction reduces crisis duration as well as the probability of such an occurrence; (ii) larger reserve requirements reduce crisis duration, but increase banking instability; (iii) deposit insurance increases banking system stability and reduces crisis duration; (vi) capital adequacy requirement improves stability and reduces the expected duration of banking crises. Finally, we find that previous studies present a negative simultaneity bias for deposit insurance and a negative selection bias for capital adequacy requirement. We can infer from these findings that any relevant assessment of the impact of a regulation, which has been introduced during the recent period of banking instability, should account for simultaneity.
Estimation of Models With Multiple-Valued Explanatory Variables

We study estimation and inference when there are multiple values (“matches”) for the explanatory variables and only one of the matches is the correct one. This problem arises often when two dataset...
Getting a Full Bite of the Apple: When Should the Doctrine of Issue Preclusion Make an Administrative or Arbitral Determination Binding in a Court of Law?

In recent years, alternative means of dispute resolution have become important resource. Therefore, the question of when the determination of issues at administrative hearings and arbitrations should be granted preclusive effect in subsequent judicial litigations requires critical evaluation. Part I of this Article focuses on the general evolution of issue preclusion in New York. Part II discusses recent New York case law giving preclusive effect to administrative and arbitral issue determinations in subsequent state court proceedings. Part III analyzes the policy reasons for applying issue preclusion to administrative and arbitral issue determinations in such proceedings. Part IV concludes that the preclusive effect of these determinations in judicial forums should be limited by shifting the burden of satisfying the full and fair opportunity requirement to the party seeking to invoke the doctrine.
Creating My Client's Image: Is Case Theory Value Neutral in Public Benefits Cases?

Effective case theory demands that an attorney consider with the client the way that pursuing the theory comports with the client's self-image. This is particularly evident in public benefit cases as they are very value laden. Benefits are doled out using a two-tier system of social insurance and public assistance depending on whether we favor the reason that help is sought. People categorized as having personal traits leading to their need, like old age, blindness, and disability, benefit from our FICA social insurance system, getting higher benefits and having their welfare marketed as a pension with little stigma. People who are unemployed long term or just need help to support their families do not benefit from the FICA system, even if they have paid into it. They are confined to our public assistance system with fewer benefits and the stigma of welfare. Many people do not want to see themselves or be seen as getting welfare. Case theories that push people to into the social insurance or public assistance system fail when they do not consider this factor. This article uses the public benefits case to suggest a teaching a method for creating effective case theories that recognizes the need to determine if self-image is at issue for the client. Students study master narratives developed around legal issues. The master narrative surrounding public benefits is gone into in some detail. Students also study community narratives or alternative narratives that could influence personal narratives in the stories and decision making of their clients. After doing so, students are to listen for these narratives and personal narratives of their clients to develop effective case theories for their cases that comport with their client's self-image.
From Odious Debt to Odious Finance: Avoiding the Externalities of a Functional Odious Debt Doctrine

The odious debt doctrine, which holds that in some cases, successor governments should not be responsible for the debts incurred by previous despotic rule, has limped along in the legal imagination for over a hundred years. Recently, however, legal theorists and practitioners have attempted to define the contours of this controversial concept. This article investigates the contents of the odious debt doctrine to query what characteristics make debt odious rather than simply onerous. It then argues that there may be little distinction between those characteristics as they apply to debt and as they apply to other types of transnational financial obligations and financing arrangements that despots may adopt. Finally, the article posits that if there is, in fact, little distinction, there may be valuable lessons to be learned from the odious debt doctrine for application to other types of transnational financing arrangements, and proposes that a broader ?odious finance? doctrine is the better approach.
Defending the Third-Party Doctrine: A Response to Epstein and Murphy

This is a brief response to papers by Richard Epstein and Erin Murphy on the third-party doctrine of Fourth Amendment law. Epstein's paper was published as Richard A. Epstein, Privacy and the Third Hand: Lessons from the Common Law of Reasonable Expectations, 24 Berkeley Tech. L.J. 1199 (2009). Murphy's paper was published as Erin Murphy, The Case Against the Case for Third-Party Doctrine: A Response to Epstein and Kerr, 24 Berkeley Tech. L.J. 1239 (2009).
Brookshire Brothers v. Aldridge: Making the Spoliation Instruction a Litigation Unicorn

In July 2014, the Texas Supreme Court issued a new framework for analyzing and remedying the destruction of evidence, holding that spoliation jury instructions are warranted only when a trial court finds that a party acted with the specific intent to conceal discoverable evidence or that a party’s negligent destruction wholly prevented another from presenting a claim or defense. The Court addressed whether the trial court abused its discretion in submitting a spoliation instruction in a slip-and-fall case in which the defendant premises owner retained only eight minutes of video of the plaintiff’s fall and allowed the remaining footage to erase automatically. Although the Court recognized that a party’s willful blindness is sufficient to satisfy the intent requirement, according to critics, the Court’s application of the rule raises questions about the actions constituting willful blindness in the spoliation context and will likely invite parties to freely destroy relevant evidence without fearing a spoliation instruction or other harsh sanction. Although a thorough analysis of Texas spoliation law shows that the Brookshire framework largely follows the Trevino test previously used by a majority of Texas courts, the Court’s application of the framework indicates that spoliation instructions will now be nearly impossible for litigants to obtain.
Comparative Constitutional Advocacy

Introduction 554 I. Catalysts for the Comparative Constitutional Debate 561 A. External Factors 561 1. Growth of foreign Constitutional precedent 562 2. Similarity of issues 564 3. Analytic methods 568 4. Availability 570 B. Internal Factors 571 C. The Terms of the Present Debate 575 II. The American Tradition of Constitutional Insularity 589 A. Tradition of Separateness 590 B. Constitutional Uniqueness 592 C. A Constitutional Head Start 595 D. Insularity and Exceptionalism in American Legal Education 597 III. Prospects for Change 602 A. Globalization and its Constitutional Implications 602 B. International Judicial Interaction 607 C. Constitutional Convergence 608 D. Relative Sophistication: A Shift in the Constitutional Learning Curve 611 IV. The Merits of Comparative Constitutional Analysis 614 A. The Benefits of Comparative Constitutional Reasoning .....614 1. Constitutional curiosity 614 2. Shared institutional responsibility. 615
Shareholder democracy in play: Career consequences of proxy contests ☆

Abstract This paper shows that proxy contests have a significant adverse effect on careers of incumbent directors. Following a proxy contest, directors experience a significant decline in the number of directorships not only in the targeted company, but also in other nontargeted companies. The results are established using the universe of all proxy contests during 1996–2010. To isolate the effect of the proxy contest, our empirical strategy uses within-firm variation in directors׳ exposure to the possibility of being voted out and exploits the predetermined schedule of staggered boards that allows only a fraction of directors to be nominated for election every year. We find that nominated directors relative to non-nominated ones lose 58% more seats on other boards. The evidence suggests the proxy-contest mechanism imposes a significant career cost on incumbent directors.
The Unintentional Rapist

Rape law is replete with troubling cases. Using as a case in point McQuirter v. State, in which a black man was convicted of attempt to commit assault with intent to rape one Mrs. Ted Allen, a white woman, this Article argues that much of this trouble is traceable not to the black letter law of rape, but to what this Article terms the white letter law of rape. Though rarely made explicit, this white letter law of rape is decidedly color-coded, and promulgates the sexualization of race and the racialization of rape. Even more problematic, the reforms advocated by feminist scholars to eliminate sexism in rape law have in fact entrenched racism in rape law. This Article then asks what it means to be an unintentional rapist, i.e., to be wrongly perceived as a rapist, especially when that perception is informed by race. Is it possible to recast the unintentional rapists not as a suspect or defendant, but as a crime victim? Put differently, can we reframe McQuirter v. State into a hypothetical State v. Allen? Should we? The answers to these questions have profound implications for reforming the law of rape. They also have profound implications for the law of not rape.
Untangling the Value Premium with Labor Shares

This paper quantifies the relative importance of labor-induced operating leverage at explaining the value premium. I extend a traditional variance decomposition methodology using labor shares to disentangle labor leverage from the value premium and from the value spread and from the variation in profitability levels and growth. My extended decomposition shows that labor leverage explains approximately 50% of the value premium, whereas profitability and growth-based mechanisms explain the other 50%. I propose a tractable production-based asset-pricing model that qualitatively and quantitatively explains this finding, as well as the relation between book-to-market ratios, discount rates, profitability, and future growth.
Asymmetry as Fairness: Reversing a Peremptory Trend

A recent Ninth Circuit decision, prohibiting peremptory challenges on the basis of sexual orientation, reveals the continuing evolution of the Batson doctrine. Meanwhile, contrary judicial voices demand the abolition of the peremptory challenge. This Article uncovers two phenomena that militate against abolition of the peremptory challenge, and in favor of allowing Batson’s evolution. First, the justifications for abolition apply asymmetrically to prosecution and defense, suggesting that an asymmetrical approach is more apt. Second, the states historically adopted an asymmetrical approach—unequal allocation of peremptory challenges to prosecution and defense—and yet many state legislatures have recently abandoned asymmetry, with some legislators declaring that there are no reasons not to. This Article supplies those reasons, demonstrating that asymmetrical allocation of peremptory challenges not only brings benefits in the context of jury selection but also may help resist tendencies elsewhere in the criminal justice system to equate asymmetry with unfairness, and thus to erode foundational protections.  Assistant Professor, Seattle University School of Law; J.D., New York University School of Law; B.A., University of Cambridge. My thanks to Deborah Ahrens, Janet Ainsworth, Amna Akbar, Steven Bender, Aaron Caplan, Robert Chang, Sidney DeLong, Diane Dick, Lauryn Gouldin, Stephen Henderson, Paul Holland, Lea Johnston, John Kirkwood, Ronald Krotoszynski, Margaret Lewis, Erik Lillquist, Lily Kahng, Michael Mannheimer, Henry McGee, Janet Moore, Russell Powell, Karena Rahall, Lawrence Rosenthal, Josephine Ross, Kathryn Sabbeth, and Julie Shapiro for their feedback, Barbara Swatt Engstrom for her terrific archival research, and Mac Brown, Jess Buckelew, Clare Fitzpatrick, Jordann Hallstrom, Max Kaplan, Robert Lehman, Alex Muir, Nikita Parekh, and Robert Wilke for their dedicated research assistance. I am also grateful to the participants in the Legal Theory Workshop of the University of Maryland School of Law and the Faculty Workshop of Gonzaga University School of Law, and to the members of the Washington University Law Review, for their improvements to this Article. Washington University Open Scholarship 1504 WASHINGTON UNIVERSITY LAW REVIEW [VOL. 92:1503
Professional Guilds, Tension and Knowledge Management

Abstract Scientific research is a crucial success factor for knowledge intensive firms and is often a joint effort of scientists and managers. However, scientists and managers belong to different “professional guilds,” subscribing to different belief systems and valuing different types of incentives. These differences give rise to tension between scientists and managers. We integrate a large body of literature from knowledge management to develop a new theoretical model predicting that this organizational tension is affected by environmental factors such as the degree of industry munificence, firm-specific factors like knowledge-management policies, and the individual roles of boundary spanners within the firm. Further, we argue that this tension can lead to positive or negative outcomes.
Nudging the Public's Health: The Political Psychology of Public Health Law Intervention

From menu calorie counts to counting youth concussions, in recent years lawmakers have designed new public health law interventions that attempt to nudge individuals toward better health outcomes by limiting choice, providing information and education, and changing norms and values. But why do we expect the general public to adopt and be informed by these new interventions, and pursuant to what theoretical framework? Utilizing a nationwide 2,000 participant survey sample that was developed and deployed by the author to evaluate socio-demographic differences within public support for recent public health law interventions, the Article engages recent interventions (from coercion to nudging) across food-diet, smoking, and youth sports TBI law domains, arguing that such interventions and their impacts are best understood through the lens of political-psychology. Particular attention is paid to race, gender, and ideological differences in public perception of public health law interventions and the role that such differences play in the transmission of legal norms and the adoption of such norms in sub-populations. To further explore the intersection of socio-demographic variables in the transmission and adoption of new public health law interventions, experiments were conducted to vary the advocate for such interventions (the messenger) and the reasoning behind the interventions (the message). Although it was expected that both the messenger and message would result in substantial variance in public support for various interventions, this is not uniformly true. While the messenger, at first glance, does not seem to matter, socio-demographic group membership does. In particular, individuals who identify as politically conservative consistently resist all identified forms of public health law intervention. Smokers and conservatives also resist public health law interventions focused on the transmission of information and education as primary methods to influence the public’s adoption of desired behaviors and norms. The results suggest that to achieve optimal public support and behavioral change at the individual level, substantially more attention must be paid to the communication and messaging function of lawmaking – bringing innovation to intervention. Because some segments of the population may prove increasingly resistant to a variety of messengers and messages further attention is needed to creating new and multi-stratified approaches to intervention – rooted in socio-demographic differences within the population.
First Do No Harm? Tort Reform and Birth Outcomes

In the 1980s and 1990s many states adopted tort reforms. It has been argued that these reforms have reduced the practice of defensive medicine arising from excess tort liability. We find that this does not appear to be true for a large and important class of cases—childbirth in the United States. Using data from national vital statistics natality files on millions of individual births from 1989 to 2001, we ask whether specific tort reforms affect the types of procedures that are performed, and the health outcomes of mothers and their infants. We find that reform of the Joint and Several Liability rule (or the "deep pockets rule") reduces complications of labor and procedure use, whereas caps on noneconomic damages increase them. We show that these results are consistent with a model of tort reform that explicitly allows for variations in patient condition.
Human Capital Development Before Age Five

Abstract This chapter seeks to set out what economists have learned about the effects of early childhood influences on later life outcomes, and about ameliorating the effects of negative influences. We begin with a brief overview of the theory which illustrates that evidence of a causal relationship between a shock in early childhood and a future outcome says little about whether the relationship in question is biological or immutable. We then survey recent work which shows that events before five years old can have large long term impacts on adult outcomes. Child and family characteristics measured at school entry do as much to explain future outcomes as factors that labor economists have more traditionally focused on, such as years of education. Yet while children can be permanently damaged at this age, an important message is that the damage can often be remediated. We provide a brief overview of evidence regarding the effectiveness of different types of policies to provide remediation. We conclude with a list of some of the many outstanding questions for future research.
Does Corporate Tax Aggressiveness Influence Audit Pricing

We evaluate whether, and under what circumstances, corporate tax aggressiveness influences audit pricing. Using a compound measure of two long-run effective tax rates, we find that tax aggressive firms pay higher fees for external audit services after controlling for factors related to earnings management. The fee premium increases with management’s uncertainty about the sustainability of tax positions if audited by tax authorities (i.e., disclosed tax reserves). Further, the provision of auditor-provided tax services may create knowledge spillovers that alleviate the fee premium for tax aggressiveness, unless tax uncertainty is high. Finally, an accounting firm’s industry expertise in auditing is associated with higher audit fees independent of tax aggressiveness, whereas industry expertise in taxation leads to a fee premium only for tax aggressive clients. Overall, the evidence implies firms’ aggressive tax behavior, tax services provider, and auditor-expertise interact to influence the pricing of audit engagements.
The Conscientious Legislator and Public Opinion on Taxes

If a conscientious legislator desired to enact the tax policy preferences of the general public (as indicated by public opinion polling), she would have to start, of course, by identifying those preferences. Unfortunately, on a number of important tax policy questions, public opinion is difficult to discern; on some issues, public opinion even appears to contradict itself. This article examines some of the difficulties of understanding public opinion on taxes and offers some suggestions as to how the conscientious legislator might proceed in light of those difficulties. Part I describes two contexts in which public opinion appears to contradict itself and suggests how the apparent contradictions might be resolved. Part II offers three suggestions for the conscientious legislator whose goal is to discern, rather than to manipulate, public opinion on taxes—to be neither unduly optimistic nor despairing about the potential for educating the public on tax policy issues, to understand and guard against the manipulation of public opinion by those with particular tax policy agendas, and to be guided by opinion surveys that give the public a range of policy options rather than forcing a choice between two polar positions. Part III briefly concludes.
Efficiency criteria for nudges and norms

This article outlines benefit-cost criteria for nudges and behavioral norms for a wide range of policy situations. The principal benefits from well-designed policies usually derive from promoting efficient behaviors, but counterpart costs may also be generated by discouraging efficient behaviors. The distinguishing economic characteristic of nudges is not only that they are less intrusive interventions that nudge rather than mandate behavior, but that they exploit additional policy dimensions other than financial incentives. Policies utilizing financial incentives have a cost advantage over nudges to the extent that they involve transfers, which are not net social costs. Failure to understand this cost distinction has led to overestimation of the cost-effectiveness of nudges compared to financial incentives. Financial incentives are flexible and can be varied continuously on a single dimension. Nudges usually involve indivisible components, but their stringency sometimes can be varied by utilizing nudges on multiple policy dimensions.
Redistricting by Formula: An Ohio Reform Experiment

In the last decade, Ohio reformers advocated redistricting by formula: selecting the redistricting plan that scores best on a predefined objective scoring function that combines prima facie neutral criteria with political goals of plan fairness and district competition. In the post-2010 redistricting, these reformers hosted a public competition where prizes were awarded to the best legal plan scored on the reformers’ formula. The submitted plans provide a unique opportunity to evaluate how redistricting by formula may work in practice. Our analysis finds the public yields a broader range of redistricting plans, on indicia of legal and public policy interest, than developed by the state legislature. The Pareto frontier reveals plans that perform better than the legislature’s adopted plan on one and two dimensions, as well as the reformers’ overall scoring function. Our evaluation reveals minimal trade-offs among the components of the overall competition’s scoring criteria, but we caution that the scoring f...
Aggressive Tax Avoiders: U.S. Multinationals Shifting Domestic Earnings to Zero

We investigate whether U.S. multinational corporations shift income overseas to the point of recording domestic pretax earnings around zero. We label firms with near-zero domestic earnings “Small” firms, and present evidence that Small captures targeted income shifting that minimizes worldwide and domestic current taxes. Because shifting essentially all income out of the U.S. represents a very aggressive form of international tax planning, Small firms represent an important margin for understanding the income shifting of U.S. MNCs. We find that firms facing tax incentives to shift income and firms with greater income shifting ability are more likely to report near-zero domestic earnings. In addition, investors value the earnings of Small firms higher than that of other U.S. multinational firms, conditional on overall profitability, suggesting that, on average, investors hold a positive view of income shifting to the point of recording domestic earnings around zero.
Safety first consumption

Abstract This paper develops a model of safety first consumption behavior in which the likelihood of survival to the next period depends on current consumption levels. Below a threshold asset level, individuals follow a decumulation path, and above that level they follow an accumulation path. Saving rates then vary discontinuously with asset level, generating a poverty trap and divergence in incomes. An increase in the likelihood of surviving raises aggregate saving. A more equitable distribution of assets can be consistent with greater aggregate savings and growth because of declining marginal propensity to save over some asset intervals.
Was the Sarbanes-Oxley Act of 2002 really this costly? A Discussion of Evidence from Event Returns and Going-Private Decisions *

Abstract This paper discusses evidence on the costs of the Sarbanes–Oxley Act (SOX) from stock returns and going-private decisions. Zhang, [2007. Economic consequences of the Sarbanes–Oxley Act of 2002. Journal of Accounting and Economics, doi:10.1016/j.jacceco.2006.07.002 ] analyzes returns around legislative events and concludes that SOX imposes significant costs on firms. Engel, et al. [2007. The Sarbanes–Oxley Act and firms’ going-private decisions. Journal of Accounting and Economics, doi:10.1016/j.jacceco.2007.02.002 ] examine going-private decisions and point to unintended consequences. Both studies are carefully conducted and deserve praise for tackling an important issue. However, as my discussion highlights, several key findings may not be attributable to SOX and we should exercise caution in interpreting the evidence. While it is not implausible that one-size-fits-all regulation imposes substantial costs on firms, we presently do not have much SOX-related evidence to support this conclusion.
FINANCIAL CRISES AND LIQUIDITY SHOCKS: A Bank-Run Perspective

Abstract In contrast with the financial multiplier literature, this note explores a case in which the shock triggering a financial crisis stems from the financial sector itself; it is not a shock stemming from the real sector which gets amplified by, say, agency problems. The basic intuition is provided by the bank-run literature of the Diamond and Dybvig (1983) variety. Financial development is modeled as a mechanism that endows real assets (e.g., land and capital) with liquidity. However, liquidity can be impaired by shocks that are equivalent to a bank run. Liquidity creation enhances real asset prices, while a liquidity crunch generates asset price collapse. This bubble-looking episode is not driven by standard fundamentals, although it is fully in line with rationality. In this context, devoid of other frictions like price stickiness, the note examines the effect of monetary policy in the absence of nominal rigidities. It shows that preventing price deflation is not enough to offset relative (to output) asset price meltdown, but lower policy interest rates increase relative asset prices and steady-state output. Moreover, in the neighborhood of a first-best capital allocation, an increase in the liquidity of capital may lower the welfare of the representative individual, even if the higher liquidity of capital is sustainable and, hence, not destroyed by future crash – illustrating the possibility of “excessive” financial innovation. An extension of the basic model supports the conjecture that low policy interest rates may have given further incentives to the development of “shadow banking.”
Valuing improved hurricane forecasts

Abstract The value to households of improved hurricane forecasts is estimated from a pilot survey using discrete choice econometric methods. Each household is willing to pay approximately $13 for improvements in forecast attributes such as landfall time and position, wind speed, and storm surge.
Internet Advertising and the Generalized Second-Price Auction: Selling Billions of Dollars Worth of Keywords

We investigate the "generalized second-price" (GSP) auction, a new mechanism used by search engines to sell online advertising. Although GSP looks similar to the Vickrey-Clarke-Groves (VCG) mechanism, its properties are very different. Unlike the VCG mechanism, GSP generally does not have an equilibrium in dominant strategies, and truth-telling is not an equilibrium of GSP. To analyze the properties of GSP, we describe the generalized English auction that corresponds to GSP and show that it has a unique equilibrium. This is an ex post equilibrium, with the same payoffs to all players as the dominant strategy equilibrium of VCG.
Reforming Legal Education to Prepare Law Students Optimally for Real-World Practice

This article synthesizes major points in the October 2012 symposium of the University of Missouri School of Law Center for the Study of Dispute Resolution, entitled "Overcoming Barriers in Preparing Law Students for Real-World Practice." There is a growing consensus that American law schools need to do a better job of preparing students to practice law. Teaching students to think like a lawyer is still necessary but it is not sufficient for students to act like a lawyer soon after they graduate. Although legal education has evolved in recent decades, the legacy of the Langdellian system makes it hard to combine instruction in legal doctrine, practical skills, and clinical experience. Recognizing the general problems of legal education is fairly easy. Solving them can be quite hard. Law schools serve many constituencies that have demanding and diverse interests. This article catalogs a long and growing list of difficult pressures that law schools must cope with. It provides an overview of general processes and possible goals that schools may adopt in undertaking educational reform efforts. It then describes some options for improving practical education of law students. It concludes that although educational reform is very difficult, it will be necessary for most law schools to undertake some reforms, in part for survival in a challenging environment with shrinking enrollments, innovative competitor law schools, and employers demanding better-trained graduates. Reforming legal education to produce more effective lawyers is not only in law schools’ self-interest but it is also important to fulfill commitments to our stakeholders including students, alumni, legal employers, courts, clients, and society generally.
Tort Law and In Vitro Fertilization: The Need for Legal Recognition of "Procreative Injury"

Prospective parents who attempt in vitro fertilization, and who suffer in humanly grievous ways when the medical procedures go awry due to negligence, almost never recover in their tort suits. The problem is that their injuries are not cognizable under existing tort law categories. When, for example, a doctor implants the wrong person’s eggs in the uterus of a woman seeking to become pregnant, there is no obvious physical injury beyond that which the woman agreed to, nor loss of property, nor even emotional distress that would permit recovery under existing law. But plainly she has suffered a serious harm for which, assuming negligence, she ought to recover. This paper argues that, in response to new reproductive technologies, tort law must recognize a new category of injury - procreative injury - based on an unacknowledged human interest: the procreative interest. The paper attempts to define that interest and describe the kinds of suit it would authorize.
Incentives, supervision, and sharecropper productivity

Abstract Though sharecropping remains widespread, its determinants are still poorly understood and the debate over the extent of moral hazard is far from settled. We address both issues by analyzing the role of landlord supervision. When landlords vary in their cost of supervision, otherwise identical share-tenants can have different productivity. Unique data on monitoring frequency collected from share-tenants in rural Pakistan confirms that, controlling for selection, ‘supervised’ tenants are significantly more productive than ‘unsupervised’ ones. Also, landlords' decisions regarding monitoring and incentives offered to tenants depend importantly on the cost of supervision.
Getting to the Nexus of the Matter: A Sliding Scale Approach to Faculty-Student Consensual Relationship Policies in Higher Education

INTRODUCTION 56 I. CURRENT APPROACHES TO FACULTY-STUDENT CONSENSUAL RELATIONSHIPS IN HIGHER EDUCATION 58 A. The Laissez-Faire Approach to Consensual Relationships .........59 B. The Advisory Approach to Consensual Relationships 61 C. The Conflict of Interest Approach to Consensual Relationships 62 D. The Prohibitory Approach to Consensual Relations 64 II. THE LABOR ARBITRATION LAW PERSPECTIVE ON EMPLOYEE PRIVATE CONSENSUAL SEXUAL CONDUCT 66 A. A Primer on Labor Arbitration 67 B. Employee Off-Duty Conduct and the Nexus Test 68 C. Labor Arbitration Cases Applying the Nexus Test to Employee Private Consensual Sexual Conduct 71 III. SHOULD THE LABOR ARBITRATION NEXUS PRINCIPLE APPLY IN THE COLLEGE AND UNIVERSITY SETTING? 73 A. The “Special” Status of Colleges and Universities Should Not Affect Utilization of the Nexus Principle in the Higher Education Context 74 B. Faculty-Student Relationships Are Akin to SupervisorSubordinate Relationships Which Are Subject to the Nexus Principle 77
Consumer Contract Exchanges and the Problem of Adhesion

Businesses and sophisticated parties have long used “contract exchanges,” like the Chicago Board of Trade, to obtain a fair price and protect themselves from market volatility. These contract exchanges have greatly benefitted both their participants and the public at large, but participation was long limited to a wealthy few. A decade ago, however, Internet websites, including Hotwire and Priceline, brought the power of contract exchanges directly to consumers, allowing regular people to flex their collective bargaining power to obtain low prices on travel services. Even more recently, other such “consumer contract exchanges,” including Prosper and MoneyAisle, have organized vibrant markets for small loans and certificates of deposit, to the benefit of consumer borrowers and investors. Modern contract law usually bends over backwards to protect consumers, so one would surely expect it to be supportive, or at least not hostile, to these developments. Surprisingly, however, one strand of common law doctrine - the rules that pertain to so-called “contracts of adhesion” - actually stifles the development of consumer contract exchanges by undermining the reliable enforceability of the contracts they generate. Courts should therefore clarify that while exchange-traded consumer contracts fit the formal definition of contracts of adhesion, they should be enforced as if they were ordinary, negotiated agreements. This Article makes four novel contributions: First, it defines contract exchanges and enumerates their necessary institutional attributes. Second, it theorizes and recognizes a new form of contract exchange - the consumer contract exchange. Third, it suggests that the doctrine of adhesion hinders the further development of consumer contract exchanges, and fourth, it offers a common law solution to this common law problem.
Recovery with Unbounded Diffusion Processes

We analyze the problem of recovering the pricing kernel and real probability distribution from observed option prices, when the state variable is an unbounded diffusion process. We derive necessary and sufficient conditions for recovery. In the general case, these conditions depend on the properties of the diffusion process, but not on the pricing kernel. We also show that the same conditions determine whether recovery works in practice, when the continuous problem is approximated on a bounded or discrete domain without further specification of boundary conditions. Altogether, our results suggest that recovery is possible for many interesting diffusion processes on unbounded domains.
The exchange rate exposure of U.S. and Japanese banking institutions

Abstract In this paper, we examine the foreign exchange exposure of a sample of U.S. and Japanese banking firms. Using daily data, we construct estimates of the exchange rate sensitivity of the equity returns of the U.S. bank holding companies and compare them to those of the Japanese banks. We find that the stock returns of a significant fraction of the U.S. companies move with the exchange rate, while few of the Japanese returns that we observe do so. We next examine more closely the sensitivity of the U.S. firms by linking the U.S. estimates cross-sectionally to accounting-based measures of currency risk. We suggest that the sensitivity estimates can provide a benchmark for assessing the adequacy of existing accounting measures of currency risk. Benchmarked in this way, the reported measures that we examine appear to provide a significant, though only partial, picture of the exchange rate exposure of U.S. banking institutions. The cross-sectional evidence is also consistent with the use of foreign exchange contracts for the purpose of hedging.
Locking in Democracy: Constitutions, Commitment, and International Law

During the fall of 2005, ordinary citizens and political leaders in Iraq, the United States, and elsewhere debated complex issues of institutional design in the process of adopting the Iraqi Constitution. Little-noticed in the discussions, however, was a seemingly minor change in the rights provisions applicable to Iraqi citizens. Whereas Iraq’s Transitional Administrative Law had guaranteed Iraqis a wide array of rights in international law, including customary international law, the Constitution as adopted only guaranteed rights in treaties endorsed by Iraq and not in conflict with the principles of the Constitution.
The BP Oil Spill Settlements, Classwide Punitive Damages, and Societal Deterrence

The BP oil spill litigation and subsequent settlements provide an opportunity to explore a novel societal economic deterrence rationale for classwide supra-compensatory damages. Judge Jack Weinstein was a pioneer in the field of punitive damages class certification. In In re Simon II, he certified a nationwide punitive-damages-only class in a multijurisdiction, multidefendant tobacco lawsuit. Using Judge Weinstein’s innovations in In re Simon II as an analytical lens, the Article evaluates the future prospects for classwide punitive damages claims.Specifically, the Article considers how private litigants might adopt a societal damages approach in negotiating and achieving class action settlements. Class action settlements readily accommodate the “public law” dimension of societal damages, as demonstrated by the classwide punitive damages settlement with BP’s co-defendant Halliburton. Indeed, on closer inspection, even the BP compensatory damages class settlement has a surrounding aura of societal damages. For even that ostensibly purely compensatory arrangement included an unusual (and mostly overlooked) feature: a provision for supra-compensatory multipliers applicable to certain claimants. This Article advances the new idea that these supra-compensatory multipliers are a form of classwide societal damages embedded within the settlement, and, in turn, a potential blueprint for nascent punitive damages classes of the future.
The Indicative Value–Price Puzzle in ETNs: Liquidity Constraints, Information Signaling, or an Ineffective System for Share Creation?

The prices of ETNs often significantly exceed their indicative values. Because ETNs share many features in common with zero-coupon bonds, this empirical finding is unexpected. Adopting the language of their prior research, the authors refer to this as the negative WDFD puzzle. Using a sample of 94 ETNs over the period June 6,2006, to December 31,2009, they explore three possible explanations for the negative WDFD puzzle. They find that the puzzle is not a result of liquidity constraints. In fact, increased trading volume is mildly correlated with more extreme mispricing in ETNs. The authors also find that ETN prices significantly exceeding their corresponding indicative values do not possess information about the future prospects of the asset, commodity, or index tied to the ETN. Instead, they conclude that the negative WDFD puzzle is the result of 1) uninformed, returnchasing investors and 2) a largely inefficient current system for creating new shares of existing ETNs. To work toward eliminating the negative WDFD puzzle, the authors recommend that ETN issuers who have not already done so restructure their systems for creating new ETN shares by allowing profit-motivated investors to initiate the process of share creation as they identify extreme mispricing in the marketplace. The authors also advise extreme caution to investors trading ETNs that suffer from share-creation inefficiencies because price inefficiencies are likely prevalent in such ETNs.
“A Jewish And Democratic State:” Reflections on the Fragility of Israeli Secularism

While Israel self-defines itself as “a Jewish and democratic State,” the Israeli laws that pertain to the most intimate of choices — the choice of a life partner — are ancient religious laws and not laws that were enacted in a democratic process. The only way to get married in Israel is in a religious ceremony according to one’s religion. The determination of a person’s religion, as will be discussed below, is also under the sole jurisdiction of religious tribunals according to religious law.This regime creates numerous problems from a secular point of view, three of which will be discussed in this Essay. First, religious affiliation is not a matter of self-definition, nor is it a matter of determination by secular state law. It is determined according to ancient religious laws and the secular state therefore has no way of altering or adapting them to our time. Second, Israelis have apparently a very narrow right to freedom from religion. Secular Israelis, whether Jews, Muslims, or Christians, who do not wish to marry in a religious ceremony or to have a religious divorce have no civil procedure or ceremony available in Israel. They must travel abroad and get married in a country that allows non-citizens to get married on its territory. Third, Israeli citizens who wish to get married in Israel are limited to choose only partners from their own religion, since most religions regard interfaith marriages as void.After briefly introducing the roots of the religious monopoly over personal status issues in Israel, this Essay will discuss these three limitations on the “democratic” part in Israel’s self-definition and the impact they have on Israeli secularism.
Does Hedging Affect Firm Value? Evidence from a Natural Experiment

We exploit an exogenous change in basis risk in the oil and gas industry to analyze the channels through which hedging affects firm value. Using a difference-in-differences framework, we find that firms affected by a basis risk shock reduce investment, have lower valuations, sell assets, and reduce debt. Our findings are driven by firms with ex ante high leverage. Overall, our results provide evidence that reducing the probability of financial distress and underinvestment risk are first-order channels through which hedging affects firm value. Received October 5, 2015; editorial decision December 22, 2016 by Editor David Denis.
Mechanisms for dividing labor and sharing revenue in joint ventures

Organizing the productive efforts of firms participating in a joint venture involves assigning firms to tasks according to abilities. A multidimensional incentive problem arises when abilities are private information. In any equilibrium, it is better to be a firm who is a specialist rather than a generalist. However, generalists can expect to receive a larger allocation of revenue. If at least one firm is decisive to the profitability of the joint venture (i.e., if it can make a credible cost announcement that implies the joint venture earns zero profit), then the joint venture will not be able to implement a profit maximizing or cost minimizing production plan.
Distributional Effects of Globalization in Developing Countries

The authors discuss recent empirical research on how globalization has affected income inequality in developing countries. They begin with a discussion of conceptual issues regarding the measurement of globalization and inequality. Next, they present empirical evidence on the evolution of globalization and inequality in several developing countries during the 1980s and 1990s. The authors then examine the channels through which globalization may have affected inequality, discussing theory and evidence in parallel. They conclude with directions for future research.
The Knowledge and Policy Limits of New Institutional Economics on Development

Abstract:I critically examine the effort of new institutional economics (NIE) scholars to define, map, and measure the realm of formal and informal institutions, and to offer specific policy prescriptions. I also articulate why these efforts face insurmountable barriers, and demonstrate the limits of the NIE policy agenda by showing that scholars are repeating lessons learned in law and development over four decades ago.
Comovement in Cities

Abstract Recent research has shown that industries that locate together in space also move together over the business cycle, and that this correspondence between spatial and temporal comovement is important to aggregate volatility. This paper asks whether this correspondence is due to local common shocks or to local spillovers. I examine interindustry comovements within seven large U.S. cities and find strong evidence for local spillovers. I estimate that local spillovers explain roughly one-third of manufacturing employment volatility at the city level. Local spillovers do not appear to result from transport costs and locally traded goods.
Cybersecurity and the Administrative National Security State: Framing the Issues for Federal Legislation

In the digital age, every part of federal government has critical cybersecurity interests. Many of those issues are brought into sharp focus by Edward Snowden's disclosure of sensitive government cyber intelligence programs conducted by the National Security Agency, the Federal Bureau of Investigation, and the Central Intelligence Agency. Courts are reviewing various constitutional and statutory challenges to those programs, two government review groups have reported on related legal and policy issues, and Congress is considering cyber intelligence reform proposals. All of this action comes on the heels of significant efforts by successive administrations to restructure government and pass comprehensive cybersecurity legislation to improve the nation's posture to strategically address cyber issues. This Article proposes that new framework legislation is needed to comprehensively address issues relating to Snowden's disclosures and broader cybersecurity interests.