cssi/SciSciGPT-SciSciNet huggingface dataset:
Staggered Versus All-At-Once Content Release in Massive Open Online Courses: Evaluating a Natural Experiment

We report on an experiment testing the effects of releasing all of the content in a Massive Open Online Course (MOOC) at launch versus in a staggered release. In 2013, HarvardX offered two "runs" of the HeroesX course: In the first, content was released weekly over four months; in the second, all content was released at once. We develop three operationalizations of "ontrackness" to measure how students participated in sync with the recommended syllabus. Ontrackness in both versions was low, though in the second, mean ontrackness was approximately one-half of levels in the first HeroesX. We find few differences in persistence, participation, and completion between the two runs. Controlling for a students' number of active weeks, we estimate modest positive effects of ontrackness on certification. The revealed preferences of students for flexibility and the minimal benefits of ontrackness suggest that releasing content all at once may be a viable strategy for MOOC designers.
Rainwater Recapture: Development Regulations Promoting Water Conservation

The increasing need for water conservation in the eastern as well as western parts of the United States is focusing attention on rainwater recapture. The technology available is effective and relatively inexpensive. Using land development regulations to require or encourage new development to incorporate rainwater recapture facilities is one approach to alleviation of local water shortages.
The impact of performance-based compensation on misreporting

Abstract This paper examines the effect of CEO compensation contracts on misreporting. We find that the sensitivity of the CEO's option portfolio to stock price is significantly positively related to the propensity to misreport. We do not find that the sensitivity of other components of CEO compensation, i.e., equity, restricted stock, long-term incentive payouts, and salary plus bonus have any significant impact on the propensity to misreport. Relative to other components of compensation, stock options are associated with stronger incentives to misreport because convexity in CEO wealth introduced by stock options limits the downside risk on detection of the misreporting.
Symbiotic Relationships: Pragmatic Acceptance of Data Scraping

This paper discusses the current legal regimes surrounding data scraping online. Although these doctrines can be used to protect data, the paper highlights situations when businesses can benefit from working with, instead of against, scrapers.
Sustainable Decentralization: Power, Extraconstitutional Influence, and Subnational Symmetry in the United States and Spain

In the Madisonian tradition of constitutional design, the foundation of a sustainable federalism is thought to be a scientifically precise balancing of national and subnational power. Experience shows, however, that national and subnational actors in highly diverse systems are capable of developing a rich array of extraconstitutional methods of mutual influence, so that the formal, constitutionalized balance of power rarely settles the question of the actual balance of power between levels of government. A more important factor in ensuring the long-term sustainability of a meaningfully federal system is the degree of symmetry across subnational units in their relation to the central state. A comparison of the U.S. and Spain suggests that federalism is most directly threatened when subnational units compete not collectively with the central state, thereby checking its power, but with each other, a condition that furnishes the central state with opportunities to exploit subnational rivalries in ways that risk genuine, long-term destabilization.
E-Commerce and Information Privacy: Privacy Policies as Personal Information Protectors

This article dives into the contemporary debate surrounding information privacy in the twenty-first century e-commerce environment through the lens of consumers submitting personally identifying information into the vast abyss of cyberspace. I argue that this information must be better protected and that United States law should emphasize electronic privacy policies as privacy-protecting devices. Currently, the United States operates under primarily a self-regulatory environment where the federal and state governments allow industry to regulate the use and content of their privacy policies. This article details current state of the United States legal regime, addresses its inefficiencies in this area and proposes a new federal law designed to remedy this situation. This piece argues that with minimal governmental regulation, electronic privacy policies can become effective tools to protect consumers personally identifying information.
Global Decentralization and the Subnational Debt Problem

According to the World Bank, decentralization of government is a pivotal force that will shape global development policy in the twenty-first century. Subnational debt restructuring has emerged as one of decentralization’s most difficult problems. Financially troubled municipalities face many of the same concerns, for example, as financially troubled nations: holdout creditors can stymie collective attempts at debt restructuring, and reliance on politically motivated lenders of last resort (the International Monetary Fund in the case of troubled nations, the central government in the case of troubled municipalities) can foster moral hazard. In a prior article, I argued that an international convention for sovereign debt restructuring based on several universal principles of bankruptcy reorganization law can effectively address these concerns for nations. In this Article, I argue Copyright © 2002 by Steven L. Schwarcz. † Professor of Law, Duke University School of Law; Faculty Director, Duke University Global Capital Markets Center; Professor (Adjunct) of Business Administration, Fuqua School of Business. E-mail: schwarcz@law.duke.edu. The author thanks Michael Byers, Hang-do Choi, Wilson Freyermuth, David Gelfand, Clayton P. Gillette, Malcolm Grant, W. Bartley Hildreth, Shinsaku Iwahara, Martin Loughlin, Ernfred Olsen, Daniel Tarullo, Jacob Vigdor, and the participants in a Global Capital Markets Center interdisciplinary workshop at Duke University for helpful comments on drafts of this Article, and Susan Z. Jorgensen, Stephen E. Smith, and Youngsung Suh for research assistance. The author is indebted to Ernfred (“Ernie”) Olsen for confirming the importance of this topic and to Financial Security Assurance, Inc., Standard & Poor’s Ratings Group, and Moody’s Financial Services, Inc. for providing invaluable background information and sources. SCHWARCZ.DOC 03/01/02 1:16 PM 1180 DUKE LAW JOURNAL [Vol. 51:1179 that similar principles can be applied even more easily to the financial problems of subnational governments. To this end, I propose a model law based on these principles that might form the foundation for national laws, informed by local political and legal culture. Then, using the Japanese municipal crisis as an example, I show that countries enacting such a law can prudently and equitably resolve their subnational debt burdens.
Narrow Framing and Long-Term Care Insurance

We propose a model of narrow framing in insurance and test it using data from a new module we designed and fielded in the Health and Retirement Study. We show that respondents subject to narrow framing are substantially less likely to buy long-term care insurance than average. This effect is much larger than the effects of risk aversion or adverse selection, and it offers a new explanation for why people underinsure their later-life care needs.
Sample Selection In The Estimation Of Air Bag And Seat Belt Effectiveness

Because data are collected for only fatal crashes, it is difficult to accurately measure seat belt and air bag effectiveness. The use of safety devices influences survival rates which in turn determine whether a crash is included in the sample, leading to sample selection bias. We propose a simple solution to the selection problem: limiting the sample to crashes in which someone in a different vehicle dies. Empirically, we find seat belts more effective and air bags to be less effective than previously found. The cost per life saved through seat belts is approximately $30,000, compared to $1.8 million for air bags.
Bond Risk Premia

We study time variation in expected excess bond returns. We run regressions of one-year excess returns on initial forward rates. We find that a single factor, a single tent-shaped linear combination of forward rates, predicts excess returns on one- to five-year maturity bonds with R2 up to 0.44. The return-forecasting factor is countercyclical and forecasts stock returns. An important component of the returnforecasting factor is unrelated to the level, slope, and curvature movements described by most term structure models. We document that measurement errors do not affect our central results. (JEL GO, G1, EO, E4) We study time-varying risk premia in U.S. government bonds. We run regressions of oneyear excess returns-borrow at the one-year rate, buy a long-term bond, and sell it in one year- on five forward rates available at the beginning of the period. By focusing on excess returns, we net out inflation and the level of interest rates, so we focus directly on real risk premia in the nominal term structure. We find R2 values as high as 44 percent. The forecasts are statistically significant, even taking into account the small-sample properties of test statistics, and they survive a long list of robustness checks. Most important, the pattern of regression coefficients is the same for all maturities. A single "return-forecasting factor," a single linear combination of forward rates or yields, describes time-variation in the expected return of all bonds.
Financial Visibility and the Decision to Go Private

This paper documents that a large fraction of the companies going private from 1990 to 2004 were fairly young IPO firms that chose to revert back to their original organizational form, and therefore to a more concentrated ownership structure. Consistent with the findings of the earlier literature examining leverage buyouts (LBOs), we find strong support for Jensen’s free cash flow hypothesis, suggesting that one key reason for firms deciding to go private is to mitigate agency problems between insiders and outside shareholders. However, our evidence also reveals that firms with small growth in analyst coverage and institutional ownership, and low stock turnover were more likely to go private and opted to do so sooner. Thus, another potential reason for restructuring by these IPO firms may be their inability to enjoy the benefits of public ownership that come from financial visibility because of their failure to attract a critical mass of security analyst coverage and investor interest.
Why So Small? Explaining the Size of Firms in Latin America

On average, Latin American firms are small with respect to world patterns, both in terms of the quantity of assets they control and the amount of employment they generate. We examine data on firm size from developed and developing countries around the world to assess the influence of demand, supply and institutional factors on the size of the largest firms in each country. We find that, besides the size of the economy and the level of income per capita, the key determinants of the size of firms are trade openness, stock market capitalisation and physical infrastructure. Our simulations suggest that if the gaps with respect to the best Latin American performer were closed in each of these three areas, firm size in the countries of the region would – on average – reach world patterns.
Plea Bargaining and Victims: From Consultation to Guidelines

In its efforts to establish a genuine, participatory role for victims in the criminal process, the victims' rights movement has properly focused its attention on plea bargaining as a crucial locus of decisionmaking in the criminal justice system. Prompted by victims' advocates, many jurisdictions have adopted consultation requirements, mandating that prosecutors seek input from victims before consummating deals with defendants. Such requirements have been criticized on grounds of both principle (victims are not parties to criminal litigation, which exists to serve public interests in crime control and just punishment, not private interests in vengeance or compensation) and practical efficacy (consultation is costly and promotes expectations of decision control among victims that cannot be fulfilled). Against the former objections, and in light of social psychology research on procedural justice, this Article suggests reasons why victim participation in plea bargaining may actually advance, rather than undermine, public interests in crime control and just punishment. The Article further proposes, as a complement to mandatory consultation, the adoption by prosecutors of publicly available charging and plea-bargaining guidelines. Such guidelines may helpfully address the practical efficacy objections to mandatory consultation. They may also make an important contribution in their own right to victims' perceptions of procedural justice.
Only Yesterday: The Rise and Fall of Twentieth Century Sexual Psychopath Laws

Sexually violent predator laws are not the first wave of American legislation aimed at committing sex offenders to locked mental hospitals; they are the second. Preceding them by half a century were the sexual psychopath laws, which differed in significant detail but provided the same basic framework of indeterminacy and dangerousness. This article looks at the history of the sexual psychopath laws. It begins by critically examining the popular belief that there was a sex crime wave. It then discussed different solutions proffered to solve the sex crime problem. Finally, it provides an overview of the sexual psychopath laws and discusses the reasons for their demise.
“Preparing” the Equity Market for Adverse Corporate Events: A Theoretical Analysis of Firms Cutting Dividends

This paper presents the first theoretical analysis of the choice of firms between “preparing” and not preparing the equity market in advance of a possible dividend cut. In our model, insiders have private information about their firm’s intermediate cash flow as well as about the net present value of its growth opportunity. We show that, in equilibrium, firms in temporary financial difficulties but with good long-term growth prospects are more likely to prepare the market in advance of dividend cuts, while those with permanently declining earnings are less likely to prepare the market. Our model generates several new testable predictions.
The birth of rule 144A equity offerings

In a groundbreaking deal closed in May 2007, Oaktree Capital Management LLC, a leading private U.S. hedge fund advisory firm, sold a 15 percent equity stake in itself for $880 million. The deal is groundbreaking because it was not structured as an initial public offering (IPO), traditionally the only option for an equity offering of this size by a private company. Instead, it was structured as a private placement under Rule 144A of the Securities Act of 1933, which enables a company to market and sell securities through an underwriter to institutional investors without registering the offering with the Securities and Exchange Commission.Oaktree's novel use of Rule 144A was driven by two factors. First, passage of the Sarbanes-Oxley Act of 2002 made it much more expensive to be a public company, thereby decreasing the attractiveness of an IPO. Second, the emergence of a centralized trading market for Rule 144A equity securities improved their liquidity, thus increasing the attractiveness of a Rule 144A equity offering. Consequently, for some firms the value of pursuing a Rule 144A equity offering exceeded the value of pursuing an IPO. The purpose of this Article is to explore this development. Specifically, this Article analyzes the legal framework of Rule 144A and details the burgeoning Rule 144A trading market. It then compares the costs and benefits of an IPO to those of a Rule 144A equity offering and theorizes about a firm's calculus for choosing one structure over the other. Finally, this Article argues that Rule 144A equity offerings are firmly grounded in public policy and thus recommends regulatory reforms to improve their viability.
Scaling cost-sharing to wages: how employers can reduce health spending and provide greater economic security.

In the employer-sponsored insurance market that covers most Americans; many workers are "underinsured." The evidence shows onerous out-of-pocket payments causing them to forgo needed care, miss work, and fall into bankruptcies and foreclosures. Nonetheless, many higher-paid workers are "overinsured": the evidence shows that in this domain, surplus insurance stimulates spending and price inflation without improving health. Employers can solve these problems together by scaling cost-sharing to wages. This reform would make insurance better protect against risk and guarantee access to care, while maintaining or even reducing insurance premiums. Yet, there are legal obstacles to scaled cost-sharing. The group-based nature of employer health insurance, reinforced by federal law, makes it difficult for scaling to be achieved through individual choices. The Affordable Care Act's (ACA) "essential coverage" mandate also caps cost-sharing even for wealthy workers that need no such cap. Additionally, there is a tax distortion in favor of highly paid workers purchasing healthcare through insurance rather than out-of-pocket. These problems are all surmountable. In particular, the ACA has expanded the applicability of an unenforced employee-benefits rule that prohibits "discrimination" in favor of highly compensated workers. A novel analysis shows that this statute gives the Internal Revenue Service the authority to require scaling and to thereby eliminate the current inequities and inefficiencies caused by the tax distortion. The promise is smarter insurance for over 150 million Americans. Language: en
The senatorial courtesy game: Explaining the norm of informal vetoes in advice and consent nominations

Despite the contentiousness of advice and consent nominations, the Senate usually rejects a candidate to whom a home senator objects. Using game theory, this article explains the persistence of senatorial courtesy and maps its effects on which candidates succeed. The greater salience of a home nomination allows retaliation and reciprocity in a repeated game to elicit support for a veto, even under adverse conditions. Comparative statics indicate the range of the president's feasible nominees and show which players gain and lose from the practice. Most notably, the president can benefit from an exercise of senatorial courtesy.
The topology of macro financial flows: An application of stochastic flow diagrams

A large portion of Macroeconomic and Financial research is built upon classical applications of Linear Algebra (such as regression analysis) and Stochastic Calculus (such as valuation models). As a result, most Macroeconomic and Financial research has inherited a focus on geometric locations rather than logical relations. Ideally, Econometric models could be complemented with Topological and Graph-Theoretical tools that recognize the hierarchy and relationships between system constituents. Stochastic Flow Diagrams (SFDs) are topological representations of complex dynamic systems. We construct a network of financial instruments and show how SFDs allow researchers to monitor the flow of capital across the financial system. Because our approach is dynamic, it models how and for how long a financial shock propagates through the system. Practical applications include stress-testing of investment portfolios under user-defined scenarios, and the discovery of Macro trading opportunities. SFDs add Topology to the Econometric toolkit used by Macroeconomists, and may enlighten perennial controversies, such as the one involving Keynesians and Austrian-school economists. Our findings have important implications for regulators, market designers and Macro investors.
Maximum likelihood estimation in space time bilinear models

The space time bilinear (STBL) model is a special form of a multiple bilinear time series that can be used to model time series which exhibit bilinear behaviour on a spatial neighbourhood structure. The STBL model and its identification have been proposed and discussed by Dai and Billard (1998). The present work considers the problem of parameter estimation for the STBL model. A conditional maximum likelihood estimation procedure is provided through the use of a Newton–Raphson numerical optimization algorithm. The gradient vector and Hessian matrix are derived together with recursive equations for computation implementation. The methodology is illustrated with two simulated data sets, and one real-life data set.
Employment Densities, Spatial Autocorrelation, and Subcenters in Large Metropolitan Areas

Employment density functions are estimated for 62 large metropolitan areas. Estimated gradients are statistically significant for distance from the nearest subcenter as well as for distance from the traditional central business district. Lagrange Multiplier (LM) tests imply significant spatial autocorrelation under highly restrictive ordinary least squares (OLS) specifications. The LM test statistics fall dramatically when the models are estimated using flexible parametric and nonparametric methods. The results serve as a warning that functional form misspecification causes spatial autocorrelation.
Weight‐adjusted discontinuous Galerkin methods: Matrix‐valued weights and elastic wave propagation in heterogeneous media

Summary Weight-adjusted inner products [1,2] are easily invertible approximations to weighted L2 inner products. These approximations can be paired with a discontinuous Galerkin (DG) discretization to produce a time-domain method for wave propagation which is low storage, energy stable, and high order accurate for arbitrary heterogeneous media and curvilinear meshes. In this work, we extend weight-adjusted DG (WADG) methods to the case of matrix-valued weights, with the linear elastic wave equation as an application. We present a DG formulation of the symmetric form of the linear elastic wave equation, with upwind-like dissipation incorporated through simple penalty fluxes. A semi-discrete convergence analysis is given, and numerical results confirm the stability and high order accuracy of WADG for several problems in elastic wave propagation. This article is protected by copyright. All rights reserved.
Can Managers Use Discretionary Accruals to Ease Financial Constraints? Evidence from Discretionary Accruals Prior to Investment

ABSTRACT: Despite a large literature on discretionary accruals, how the use of discretionary accruals impacts corporate financial decisions is not well understood. We hypothesize that a financially constrained firm with valuable projects can use discretionary accruals to credibly signal positive prospects, enabling it to raise capital to make the investments. We examine a large panel of firms during 1987 to 2009 and find that financially constrained firms with good investment opportunities have significantly higher discretionary accruals prior to investment compared to their unconstrained counterparts. Constrained high-accrual firms have higher earnings-announcement returns than constrained low-accrual firms, obtain more equity and debt financing, and invest in projects that appear to improve performance. These results provide supporting evidence that the use of discretionary accruals can help constrained firms with valuable projects ease those constraints and increase firm value. Data Availability: Data ...
Infinite Portfolio Strategies

In inÞnite-date models the received deÞnitions of the payoff so fÞnite portfolio strategies imply discontinuous valuation. Accordingly, in the absence of trading restrictions, arbitrage results when inÞnite trading strategies are admitted. We propose an alternative that is free of these problems. The alternative produces a cleaner, if more abstract, treatment of equilibrium in Þnancial models in inÞnite-date settings. We consider the bearing of the revised treatment on the theory of rational bubbles, overlapping generations models and equivalent martingale measures.
More Oil, Less Democracy: Evidence from Worldwide Crude Oil Discoveries

This article exploits variations in the timing and size of oil discoveries to identify the impact of oil wealth on democracy. I find that discovering 100 billion barrels of oil (approximately the initial endowment of Iraq) pushes a country's democracy level almost 20 percentage points below trend after three decades. The estimated effect is larger for oilfields with higher-quality oil and lower exploration and extraction costs. However, the estimates become less precise when oil abundance is measured by oil discovery per capita, suggesting politicians may care about the level instead of the per capita value of oil wealth.
“I’d only let you down”: Guilt proneness and the avoidance of harmful interdependence.

Five studies demonstrated that highly guilt-prone people may avoid forming interdependent partnerships with others whom they perceive to be more competent than themselves, as benefitting a partner less than the partner benefits one's self could trigger feelings of guilt. Highly guilt-prone people who lacked expertise in a domain were less willing than were those low in guilt proneness who lacked expertise in that domain to create outcome-interdependent relationships with people who possessed domain-specific expertise. These highly guilt-prone people were more likely than others both to opt to be paid on their performance alone (Studies 1, 3, 4, and 5) and to opt to be paid on the basis of the average of their performance and that of others whose competence was more similar to their own (Studies 2 and 5). Guilt proneness did not predict people's willingness to form outcome-interdependent relationships with potential partners who lacked domain-specific expertise (Studies 4 and 5). It also did not predict people's willingness to form relationships when poor individual performance would not negatively affect partner outcomes (Study 4). Guilt proneness therefore predicts whether, and with whom, people develop interdependent relationships. The findings also demonstrate that highly guilt-prone people sacrifice financial gain out of concern about how their actions would influence others' welfare. As such, the findings demonstrate a novel way in which guilt proneness limits free-riding and therefore reduces the incidence of potentially unethical behavior. Lastly, the findings demonstrate that people who lack competence may not always seek out competence in others when choosing partners.
Anxious or angry? effects of discrete emotions on the perceived helpfulness of online reviews

This paper explores the effects of emotions embedded in a seller review on its perceived helpfulness to readers. Drawing on frameworks in literature on emotion and cognitive processing, we propose that over and above a well-known negativity bias, the impact of discrete emotions in a review will vary, and that one source of this variance is reader perceptions of reviewers' cognitive effort. We focus on the roles of two distinct, negative emotions common to seller reviews: anxiety and anger. In the first two studies, experimental methods were utilized to identify and explain the differential impact of anxiety and anger in terms of perceived reviewer effort. In the third study, seller reviews from Yahoo! Shopping web sites were collected to examine the relationship between emotional review content and helpfulness ratings. Our findings demonstrate the importance of examining discrete emotions in online word-of-mouth, and they carry important practical implications for consumers and online retailers.
Same-Sex Marriage, Indian Tribes, and the Constitution

This Article explores the impact of a same-sex marriage amendment on the place of Indian tribes in the federal constitution. A same-sex marriage amendment, depending on the text, might serve to incorporate Indian tribes into the federal union as the third sovereign. The Constitution has not been amended to incorporate Indian tribes into the federal union, rendering their place in Our Federalism uncertain and unpredictable. A same-sex marriage amendment that applies to limit or expand tribal authority to recognize or authorize same-sex marriage could constitute an implicit recognition of Indian tribes as the third sovereign in the American system of federalism. Even an amendment that excludes mention of Indian tribes may have something to say about Indian tribes as the third sovereign.
Nonlinear PPP Deviations: A Monte Carlo Investigation of Their Unconditional Half-Life

Recent research has generated support of the notion that the real exchange rate adjustment is nonlinear and that the PPP half-life is faster than the puzzling 3 to 5 years based on linear models. While different nonlinear models survive the specification tests against linear ones, there is little consensus on which specific threshold-type model outperforms the others in the family. In this paper, a Monte Carlo study is designed to address the issue and the findings support that the MR-LSTAR process is the most likely suspect that generates the puzzle.
Estimating the Demand for Reserve Assets Across Diverse Groups

This paper takes a fresh look at the determinants of reserves holding with the aim of highlighting similarities and differences in the motives for holding reserves among emerging markets (EMs), advanced economies (AEs), and low-income countries (LICs). We apply two panel estimation techniques: fixed effects (FE) and common correlated effects pooled mean group (CCEPMG). FE regression results suggest that precautionary savings motives, both current account- and capital account-related, are generally the most important determinants of reserves holding across country groups and that their importance has increased for AEs and LICs since the global financial crisis while receding for EMs. Mercantilist motives matter mostly for EMs. Intertemporal motives have been gaining importance everywhere over time. The CCEPMG results confirm the importance of precautionary motives and suggest that current account motives matter only for EMs and LICs and capital account motives matter for all groups while being more important for EMs in both the shortand long runs. The CCEPMG results also point to the importance of taking into account unobserved common factors that affect coefficient estimates and the dynamic process through which reserves adjust to changes. At about 0.6, the speed of adjustment to the long-run equilibrium implies that more than half of the gap between actual and desired reserve holdings is closed within a year.
Preserving the Rule of Law in the 21st Century: The Importance of Infrastructure and the Need to Create a Global Lawyer Regulatory Umbrella Organization

INTRODUCTION 735 I. WHY THERE IS A NEED: THERE ISN'T A GLOBAL UMBRELLA 0RGANIZA TION FOR LAWYER REGULATORS 736 II. PRECEDENTS EXIST FOR CREATING A GLOBAL REGULATOR UMBRELLA 0RGANIZA TION 7 41 III. ARTICLE THESIS: LAWYER REGULATORS NOT ONLY NEED GLOBAL INFORMATION EXCHANGE AND COOPERATION, BUT THEY WOULD WELCOME IT 749 IV. LOGISTICAL STEPS THAT WOULD BE REQUIRED IN ORDER TO CREATE A GLOBAL UMBRELLA 0RGANIZA TION FOR LAWYER REGULATORS 757 CONCLUSION 768
Rating Agency Adjustments to GAAP Financial Statements and Their Effect on Ratings and Credit Spreads

ABSTRACT: I examine a dataset of both quantitative (hard) adjustments to firms' reported U.S. GAAP financial statement numbers and qualitative (soft) adjustments to firms' credit ratings that Moody's develops and uses in its credit rating process. I first document differences between firms' reported and Moody's adjusted numbers that are both large and frequent across firms. For example, primarily because of upward adjustments to interest expense and debt attributable to firms' off-balance sheet debt, on average, adjusted coverage (cash flow-to-debt) ratios are 27 percent (8 percent) lower and adjusted leverage ratios are 70 percent higher than the corresponding U.S. GAAP ratios. I then find that Moody's hard and soft rating adjustments are associated with significantly higher credit spreads and flatter credit spread term structures. Overall, the results indicate that Moody's quantitative adjustments to financial statement numbers and qualitative adjustments to credit ratings enable it to better capture de...
Copyright's Private Ordering and The "Next Great Copyright Act"

Private ordering plays a significant role in the application of intellectual property laws, especially in the context of copyright law. In this Article, I highlight some of the dominant modes of private ordering and consider what formal copyright law should do, if anything, to engage with private ordering in the copyright space. I conclude that there is not one single approach that copyright law should take with regard to private ordering, but instead several different approaches. In some instances, the best option is for the law to get out of the way and simply continue to provide room for various approaches to flourish. In other contexts, the copyright statute should actively support private ordering efforts that may be jeopardized by the current regime. Private ordering may also highlight areas where the law is in need of reform. This is perhaps most noticeable in the context of fair use which has led to the proliferation of much of the private ordering. The combination of the unpredictability and expense of fair use litigation combined with potentially high statutory damages has created a series of risk-averse litigation-avoidance practices and an underutilization of fair use. Legislation may be necessary to prevent a lock-in effect of some of these industry practices and norms. In particular, courts should be barred from using these customs to set the boundaries of fair use. Revisions to the Copyright Act could also address some of the uncertainty surrounding fair use and facilitate the use of works in instances that we would like to encourage. In recent years, copyright holders have used technology and contracts to greatly limit what users can do with copyrighted works and even with uncopyrightable elements of those works. Revisions to copyright law should engage with these private efforts and protect a significant fair use zone. Copyright’s private ordering also reveals some areas of agreement which merit codification, such as faculty ownership of course materials and scholarship. Copyright law does not operate in a vacuum and any major revisions to copyright law must take into consideration the practices that have developed in its wake. As we look forward to a Copyright Act for the twenty-first century, Congress must not only consider ways to limit online piracy, but also how to protect the public’s vital space to engage with, comment on, and rework copyrighted material in light of the myriad practices that have developed in the shadow of the 1976 Act. © 2014 Jennifer E. Rothman. † Professor of Law and Joseph Scott Fellow, Loyola Law School, Loyola Marymount University, Los Angeles. This article is adapted from remarks given on April 4, 2014 as part of The Next Great Copyright Act conference held at UC Berkeley. I am grateful to Jane Ginsburg, Pam Samuelson, and Wendy Gordon for comments on that presentation. I also thank Moira Lion and Ryan Patterson for their research assistance. Please send comments to jennifer.rothman@lls.edu or jrothman@alumni.princeton.edu. 1596 BERKELEY TECHNOLOGY LAW JOURNAL [Vol. 29:1595
Do Institutional Investors Know Banks Better? Evidence From Institutional Trading Surrounding the 2008 Financial Crisis:

The catastrophic economic damage caused by the 2008 financial crisis was unprecedented and caught many market participants by surprise. It raises the question: To what extent do institutional inves...
Privatization, State Capitalism, and State Ownership of Business in the 21st Century

This study summarizes the economic and political developments relating to privatization, state capitalism, and state ownership of business since 2000 and then surveys the extensive recent research examining these issues empirically. Through the early 21st century, there was an unambiguous global trend towards reducing government ownership of business enterprise, but this trend has since at least been slowed, and perhaps even reversed. We discuss the factors that have promoted a global resurgence of state ownership, then define and analyze the new ideology labeled â€œstate capitalism.â€ Recent research examines whether privatization improves the operating and financial performance of divested companies, as well as when, where and how governments decide to privatize individual companies and how these sales are priced. All the performance studies surveyed document significant improvements after companies are divested. Recent academic and professional research categorizes and evaluates various types of state owners; examines determinants of the level of state ownership; studies how state ownership impacts the valuation of corporate assets and examines the relative efficiency of state versus private ownership; and assesses how state ownership impacts corporate financial policies, especially capital investment. This research highlights that different types of state owners have very different impacts on corporate value and performance, and that state ownership generally has a significant, and mostly pernicious, impact on corporate investment and financial policies. The separate effect of state ownership on corporate valuation is less clear-cut. This survey also summarizes recent empirical research examining the relationship between state ownership of business assets and financial markets and institutions, and also surveys the literature examining political connections between politicians and corporate managers. Sovereign wealth fund research yields essentially benign findings, but almost all studies examining state-owned banking show that state ownership reduces banksâ€™ efficiency. All the financial markets and institutions studies examined highlight the distortive effects and economic costs of bailouts and guarantees, and almost all the political connections studies find that these connections are privately beneficial but socially costly. Finally, the research surveyed here convinces the author that â€œstate capitalismâ€ is an essentially failed model.
A Paradox in Overcriminalization

Given that one of the central roles of political philosophy and criminal theory is illuminating the borders of justified state punishment, the modern crisis of overcriminalization is a painful defeat. Generations of legal theory, grounded in liberalism, has done little to stem the tide of criminal law and the explosion of criminal punishment. One notable island of decriminalization has been the retreat of criminal punishment surrounding marijuana consumption. With the combination of medical marijuana regimes, reduction of punishment, and halting steps toward full decriminalization, marijuana stands in stark contrast to the highly visible war on drugs that has driven much contemporary overcriminalization. This piece argues that opponents of overcriminalization have much to learn from the functional decriminalization of marijuana. Marijuana decriminalization has not been successful because of a swing in public attitudes about marijuana use. Rather, decriminalization is possible because advocates can marshal agreement across philosophical starting points, bringing both liberals and nonliberals into consensus. This groundswell demonstrates that legal theorists concerned about containing state power must look beyond liberal theories. Most importantly, this example reveals that legal theorists interested in turning back the tide of overcriminalization must do more than wait for areas of Rawlsian overlapping consensus; they must reach out to generate consensus with Rawlsian conjecture by viewing law not only from the liberal vantage point but from the nonliberal9s perspective as well.
Unstable Politics: Fiscal Space and Electoral Volatility in the Indian States

What explains variations in electoral volatility? The authors argue that fiscal space—availability of financial resources to enact policy initiatives and provide public programs—possessed by govern...
The Difficulties of Democratic Mercy

Introduction 1679 I. Forgiveness, Mercy, and Excuse 1681 II. The Limits of International Examples 1684 III. Mercy at Home 1689 IV. Democratic Mercy? 1699
Structuring a Market-Oriented Federal Eco-Information Policy

Information disclosure and labeling policies have been touted as promising tools for addressing environmental problems. These market-oriented approaches seek to use consumer choice to ameliorate environmental effects. In theory, such information enables consumers to account for external costs in their decisionmaking. This article highlights the challenges of pursuing eco-information policies, highlighting the complexity of environmental costs and benefits as well as consumers' cognitive limitations. Based on these challenges, the article offers a comprehensive institutional choice and policy design framework for using information to better environmental protection.
ROLE OF COMMODITY FUTURES MARKET IN SPOT PRICE STABILIZATION, PRODUCTION AND INVENTORY DECISIONS WITH REFERENCE TO INDIA

The findings of this paper suggest that the allegation against futures market in India ‘that it distorts the spot market price and creates artificial scarcity by allowing unnecessary hoarding’, is a misconception. This paper finds out that there is a co-movement among futures price, production decision and the inventory decision. With the assumption that future market is monopolistically competitive, the paper finds that future price elasticity of production always being greater than or equal to one, an increase in profit by increasing price is not possible. Therefore, the doubt about its distorting effect on spot price can be ruled out. The suspicion about the increasing hoarding resulted from futures market can also be proved unjustified from results. Our results show that futures price elasticity of inventory is inversely related with the carrying cost. Therefore, an unnecessary hoarding will increase the carrying cost leading to a lower responsiveness of inventory to futures prices. This paper also finds out the effect of expected production shocks on futures price elasticity of supply. JEL classification # G130
Are all labor regulations equal? Evidence from Indian manufacturing

Taking advantage of variation across Indian states in labor reforms, this paper studies the economic effects of labor dispute resolution legislation ( DL ) and employment protection legislation ( EPL ) in the manufacturing sector. We find that laws that increase the cost of dispute resolution or employment protection substantially reduce registered sector employment and output, although the cost of industrial dispute regulation on output is larger. There is evidence of strong complementarities on labor laws: The output or employment costs of EPL are larger in states and periods where it is more difficult to resolve disputes, and not very important when such costs are low. Workers do not benefit from EPL or DL , as they do not increase the labor share or the wage bill, although EPL has a small positive effect on earnings per worker. Labor-intensive industries, such as textiles, are the hardest hit by amendments that increase employment protection while capital-intensive industries are the most affected by laws that increase the cost of labor dispute resolution. Journal of Comparative Economics 37 (1) (2009) 62–75.
A dynamic system characterization of road network node models

Abstract: The propagation of traffic congestion along roads is a commonplace nonlinear phenomenon. When many roads are connected in a network, congestion can spill from one road to others as drivers queue to enter a congested road. This paper considers the node model problem, which refers to methods for solving for cross-flows when roads meet at a junction. We present a simple hybrid dynamic system that, given a macroscopic snapshot of the roads entering an exiting a road, intuitively models the node’s throughflows over time. This dynamic system produces solutions to the node model problem that are equal to those produced by many popular node models without intuitive physical meanings. We also show how the earlier node models can be rederived as executions of our dynamic system. The intuitive physical description supplied by our system provides a base for control of the road junction system dynamics, as well as the emergent network dynamics.
Neither Evaders nor Apologists: A Reply to Professor Simon

This paper replies to portions of an article authored by Professor William Simon (The Kaye Scholer Affair: The Lawyer's Duty of Candor and the Bar's Temptations of Evasion and Apology, 23 Law & Soc. Inquiry 243 (1998)) in which he condemned the response of the organized bar to the Kaye, Scholer matter as irresponsibly "evasive" and "apologetic" because of the failure to come to grips with what Kaye, Scholer had done in connection with its representation of Charles Keating and Lincoln Savings & Loan, Irvine, California. The reply focuses on three themes. First, the unproved allegations brought against Kaye, Scholer by the Office of Thrift Supervision (OTS) were so unusual - interference with an examination, and the OTS's theory that Kaye, Scholer, by its conduct, became the alter ego of the client (and thereby assumed the client's responsibilities as a regulated entity) - and so unlikely to be repeated that detailed study was not likely to have been a particularly fruitful expenditure of the bar's time and resources. Second, the OTS's Notice of Charges alleged violations of widely accepted and well-understood professional obligations and, if proved, would have been unexceptionable. Third, the focus of the bar's concern, while also unique, was decidedly capable of repetition and potentially quite toxic to lawyers' abilities to stand up to governmental overreaching - namely, the assertion by an agency of the federal government of novel and dubious professional duties and the unprecedented freeze of an entire law firm's assets (including assets of partners completely innocent of any wrongdoing) that arguably compelled the firm to capitulate without an opportunity to defend itself against the allegations.
Berkemer Revisited: Uncovering the Middle Ground Between Miranda and the New Terry

Over the past twenty-five years, appellate courts have significantly expanded the scope of police authority to stop and frisk potential suspects without probable cause, a power originally granted to law enforcement by the Supreme Court in Terry v. Ohio. This development has led Terry’s once limited licensing of police searches to run into conflict with a defendant’s right against compulsory self-incrimination while in police custody, as articulated by Miranda v. Arizona. This Note explores the contours of this unforeseen collision between two core constitutional doctrines and the solutions generated by appellate courts to resolve the conflict. Courts today are generally divided as to whether Miranda should apply during a valid, but intrusive Terry stop. This Note argues that a distinct overlap now exists between Miranda and Terry; one that should compel courts to invoke Miranda where police detain and question a suspect in a manner analogous to custodial interrogation. However, this Note also stresses that courts should be vigilant in enforcing the public safety exception to Miranda, particularly in light of Terry’s inherent unpredictability and extemporaneous nature.