cssi/SciSciGPT-SciSciNet huggingface dataset:
Product market competition and conditional conservatism

Based on pooled cross-sectional analysis, we find a robust positive relation between product market competition and conditional accounting conservatism. We also find evidence of an inter-temporal increase in conditional conservatism following industry deregulation and increased antitrust case filings. Distinguishing further between two dimensions of competition, we find conditional conservatism is greater when there is a higher threat of new entrants as well as stiff existing competition. Moreover, we find these results largely hold for industry followers as opposed to industry leaders, suggesting that strategic considerations shape the extent to which product market competition affects conditional conservatism.
The Effects of Regulatory Scrutiny on Tax Avoidance: An Examination of SEC Comment Letters

ABSTRACT: This study examines the tax avoidance behavior of firms prior to the issuance, and following the resolution, of SEC tax comment letters. We find that firms that appear to engage in greater tax avoidance are more likely to receive a tax-related SEC comment letter. We also find that firms receiving a tax-related SEC comment letter, relative to firms receiving a non-tax comment letter, subsequently decrease their tax avoidance behavior consistent with an increase in expected tax costs. Additionally, we document evidence consistent with other firms that do not receive a comment letter reacting to multiple publicly disclosed tax-related comment letters within their industry by increasing their reported GAAP ETR, consistent with an indirect effect of regulatory scrutiny on certain types of tax avoidance.
The Social Security Early Entitlement Age in a Structural Model of Retirement and Wealth

Abstract A structural life cycle model of retirement and wealth attributes retirement peaks at both ages 62 and 65 to Social Security rules and wide heterogeneity in time preferences. Those with high discount rates often retire at 62. They have few assets and heavily value lost benefits from working after 62, largely ignoring potential increases in later benefits. Declining actuarial adjustments beginning at 65 induce those with low discount rates to retire at 65. Raising the Social Security early entitlement age to 64 induces 5% of the population to delay retiring, shifting the retirement spike from 62 to 64.
Structural Bias and the Need for Substantive Review

One of the fundamental debates in corporate law pits the authority of the board of directors to make business decisions without judicial interference against the accountability of directors to shareholders for their decisions. The business judgment rule attests to the value ascribed to authority by providing only limited judicial review for claims of breach of the duty of care, while the entire fairness test demonstrates the value ascribed to accountability by providing far more exacting scrutiny for claims of breach of the duty of loyalty. In cases involving structural bias, however, neither doctrine is appropriate. Whenever the interests of directors are in conflict with those of shareholders, there is a justifiable concern that directors will pursue their own interests instead of those of shareholders. The interposition of "disinterested" directors is helpful but inadequate because no directors are truly disinterested; at the very least, all directors are inherently interested in issues of accountability. In certain situations involving structural bias, the courts have developed intermediate standards of review for breach of fiduciary duty, but these standards are inadequate. This article proposes and defends a standard that draws upon the insights of both the business judgment rule and the entire fairness test. The proposed standard calls for a moderate review of the merits of directors' decisions in cases involving structural bias. A review of the substantive merit of directors' decisions is necessary to guard against possible abuse by conflicted directors (whether conscious or unconscious), but such review must be limited in order to afford directors sufficient latitude for the exercise of business judgment. Only such an approach can provide the appropriate balance between directorial authority and accountability.
The costs of closing failed banks: : A structural estimation of regulatory incentives

We estimate a dynamic model of the decision to close a troubled bank. Regulators trade off an aversion to closing banks against the risk that allowing a bank to continue will raise the eventual costs to the deposit insurance fund. Using a conditional choice probability approach, we estimate the costs associated with closing banks, both in direct costs to the insurance fund and in other costs perceived by regulators, either social or personal. We find that delayed closures were driven by a desire to defer costs, an aversion to closing the largest and smallest troubled banks, and political influence.
Do non-strategic sanctions obey the law of demand? The demand for punishment in the voluntary contribution mechanism

Abstract The prospect of receiving a monetary sanction for free riding has been shown to increase contributions to public goods. We ask whether the impulse to punish is unresponsive to the cost to the punisher, or whether, like other preferences, it interacts with prices to generate a conventional demand curve. In a series of experiments, we randomly vary the cost of reducing the earnings of other group members following voluntary contribution decisions. In our design, new groups are formed after each interaction and no subject faces any other more than once, so there is no strategic reason to punish. We nonetheless find significant levels of punishment, and we learn that both price and the extent to which the recipient's contribution is below the group mean are significant determinants of the quantity of punishment demanded. Moreover, punishment is mainly directed at free riders even when it costs nothing to the punisher.
Testing errors, supplier segregation, and food safety

Diagnostic tests provide valuable information to buyers about credence attributes such as food safety and GMO content. Errors in testing, however, can mislead buyers and lead to problems such as adverse selection. The ability to segregate suppliers who can deliver safe food from suppliers who cannot depends on the accuracy of the test procedure. In this article we examine the effect of test sensitivity, specificity, and sampling error on the ability to segregate safe and unsafe suppliers. We find that there is a maximum level of error below which unsafe suppliers are deterred from accepting a utility maximizing buyer's bid price. The maximum error depends on the probability that a supplier's production is unsafe and the cost of producing an unsafe lot, among other things. Understanding this relationship makes it possible to design contracts and government regulations that discourage unsafe suppliers from trading.
The Impact of Simulations on Higher-Level Learning

Often, political science, public policy, and public administration course objectives include statements regarding increasing responsible citizenship, developing a continued interest in public affai...
Managers and their not-so rational decisions

Abstract Today's corporate environment requires managers to be excellent decision makers. Their ability to make fast, widely-supported, and effective decisions will, in large part, shape the performance of their firms. In this article, we describe two cognitive systems that influence decision making. System 1 refers to a process that is fast, effortless, and intuitive. System 2 is a slow, controlled, and rule-governed decision-making process. Both are important to a wide variety of managerial decisions, and they interact with each other. There are, however, a number of forces at work that hinder the effectiveness of these processes. For example, we know from prospect theory that managers are unwilling to incur loss, so much so that they often make irrational decisions based on a small probability that they could avoid such loss. Another example, the escalation of commitment, explains why managers may continue to dedicate resources to failed projects. We describe these and other biases, with a view toward helping managers better understand the problems of decision making and improve the effectiveness of their decisions.
Legal protection for domestic violence victims: a guide for the treating physician.

The staggering dimensions of the problem of domestic violence have been well documented. Women and children are overwhelmingly the victims. They come from all racial, ethnic, religious, and social-economic groups and from all age levels and educational backgrounds. Battering by a spouse or intimate partner is the single largest cause of injury to women in the United States, greater than car accidents, rapes, and muggings combined. Each year, more than one million women seek medical treatment for injuries inflicted by a husband, ex-husband, or boyfriend. Studies estimate that 22% to 35% of women who visit emergency rooms do so for injuries directly inflicted by an intimate partner or for symptoms related to the stress of living in an abusive relationship.Effective and appropriate intervention includes developing protocols to identify victims, acknowledging the cause of their injuries. and providing them with information about legal and community resources. This article provides an overview of the civil and criminal law remedies available to victims of domestic violence in Maryland. Understanding both the benefits and limitations of the legal system's response to victims can help physicians provide appropriate follow-up information to patients and help prevent further injuries.
Disability Rights, Welfare Law

This article asks how disability rights ideas can be reconciled with—and might transform—the law of public assistance. The social model of disability forms the basis of most disability rights thinking. This model recognizes that impairments do not by themselves disable, but disability instead arises from a dynamic between a person’s physical and mental conditions and society’s environmental and attitudinal barriers: Paraplegia does not cause disability but for stairs, curbs, and human attitudes that limit accessibility. The social model focuses on changing the environment; its close corollary, the civil rights approach to disability, looks to anti-discrimination law to remove limits on opportunity created by society’s physical places and prevailing attitudes. The Americans with Disabilities Act embodies the civil rights approach, but it has not been successful in lifting people with disabilities out of poverty; many people with disabilities continue to need public welfare to live. This reality has led some writers to propose abandoning the emphasis on civil rights in disability law and returning to an emphasis on welfare and related interventions that typically entail a medical or charity orientation toward disability. This article strikes out in a different direction, arguing that the civil rights approach, when thoughtfully applied, supports continued disability-specific welfare programs, and further that it supports various improvements in the law of public welfare: more in-kind assistance programs; adjustment of disability benefits qualification standards to give more attention to the disabling effects of stigma; adoption of partial disability benefits programs and reduced means testing; changes in non-disabilityrelated welfare; expanded universal benefits; and a Disabled Worker Tax Credit. This article compares the reforms envisioned by a nuanced application of the civil rights approach with ideas about welfare derived from principles of reciprocity, universal vulnerability, and international human rights.
Utilitarianism and Horizontal Equity: The Case for Random Taxation

This paper establishes that, far from being able to derive the principle of horizontal equity from utilitarianism, the principle is actually in- consistent with utilitarianism in a variety of circumstances. We derive conditions under which (a) it is optimal to impose random tax schedules (ex post randomization) ; and (b) it is optimal to randomize the tax schedules imposed on a set of otherwise identical individuals (ex ante randomization). The implications for optimal tax theory are discussed. More generally, it is shown that there are a number of potentially important economic situations with which the principle of horizontal equity may be inconsistent not only with utilitarianism but even with Pareto optimality.
Emerging market benefits, investability and the rule of law

Abstract We revisit the Barry, Peavy and Rodriguez (1998) paper and investigate the underlying source of emerging market performance benefits. We classify stocks according to their investability and legal origin. Emerging markets continue to represent the performance benefits they had during the Barry et al. (1998) period by providing not only return enhancement but primarily risk-reduction. More specifically, we find that an investor can achieve greater benefits by focusing on a limited set of emerging markets with a French civil law foundation and that are moderately investable stocks.
Global Multisourcing Strategy: The Emergence of a Supplier Portfolio in Services Offshoring

In today's global services outsourcing arena, increasing numbers of companies adopt “multisourcing,” that is, they select and combine information technology (IT) and business services from multiple providers. The literature on IT outsourcing and supply chain management has identified critical tradeoffs involved in increasing the number of suppliers and has strongly recommended focusing on a handful of strategic partners to balance these tradeoffs. Committing to a few strategic partners, however, may prevent a firm from discovering new suppliers, or even supply regions. Such missed opportunities may be particularly limiting in the context of offshoring professional services, which has exhibited rapid changes in supplier markets in the last decade. Thus, firms may want to engage in a more intensive multisourcing in services. If they do so, their success will depend on a global sourcing process that effectively addresses the critical tradeoffs involved. To explore how a global sourcing process can support multisourcing, we conducted a qualitative longitudinal case study of a large financial services institution that developed a varied global supply base to obtain offshore professional services. Our analysis results in a theory that emphasizes (i) advantages of a multiple provider strategy in rapidly changing global supply markets; (ii) the critical role of middle managers in enabling continuous innovation in the supplier structure; and (iii) the importance of the global sourcing process combining top–down and bottom–up decision making in multisourcing.
The economics of intrapreneurial innovation

Abstract We present a model of employee–firm interaction in which private intrapreneurial activity competes with the basic activity of the firm. The parent firm lacks ownership over any new asset created through intrapreneurial activity, but asset complementarity gives it an advantage over outsiders in the auction to develop the asset. We show that a firm might tolerate or even encourage intrapreneurial activity if the complementarity is high and the innovation environment is favourable. Contrary to intuition, higher complementarity may lead to lower innovation levels. We present some empirical evidence in support of the model's predictions.
Search, Antitrust, and the Economics of the Control of User Data

This article is a case for reorienting many antitrust investigations -- and more generally regulatory approaches -- to focus on how control of personal data by corporations can entrench monopoly power in an economy shaped increasingly by the power of "big data." The core source of value being delivered to advertisers by a company like Google (as with many "new media" companies) is the ability to target users with ads because of its dominant control of databases of user personal data. As section II of this article will argue, what is largely missed in analyses defending Google from antitrust action is how that ever expanding control of user personal data and its critical value to online advertisers creates an insurmountable barrier to entry for new competition. And, contra the idea that Google just inherited that business advantage through its innovation in search engine technology, section III of this article will detail how Google has aggressively expanded its control of user data through expanding into new product sectors to collect additional user data with the intent to use its presence in those other markets to reinforce its core search advertising monopoly. Beyond the general expansion into tied markets for user data, Google’s "bad acts" have included multiple violations of the law through invading user privacy in pursuit of control of user data. In section IV, the article proposes remedies that can address Google’s dominance in three major ways, separately and in combination: (1) reduce Google’s control of overall user data, (2) create a real market for user data by empowering users, and (3) impose public interest obligations on Google to restrain damage to consumer welfare. In section V, the article concludes by noting how issues raised by the article present some fundamental challenges to the Chicago School approach, including highlighting how the lock-in of monopoly in online markets calls for earlier intervention in technology markets and a much broader recognition of how expanding information asymmetry due to data mining undermines the hope that the market itself will curb monopoly abuses in the economy.
An Analytic Expression for the Distribution of the Generalized Shiryaev–Roberts Diffusion

We consider the quickest change-point detection problem where the aim is to detect the onset of a pre-specified drift in “live”-monitored standard Brownian motion; the change-point is assumed unknown (nonrandom). The topic of interest is the distribution of the Generalized Shryaev–Roberts (GSR) detection statistic set up to “sense” the presence of the drift. Specifically, we derive a closed-form formula for the transition probability density function (pdf) of the time-homogeneous Markov diffusion process generated by the GSR statistic when the Brownian motion under surveillance is “drift-free”, i.e., in the pre-change regime; the GSR statistic’s (deterministic) nonnegative headstart is assumed arbitrarily given. The transition pdf formula is found analytically, through direct solution of the respective Kolmogorov forward equation via the Fourier spectral method to achieve separation of the spacial and temporal variables. The obtained result generalizes the well-known formula for the (pre-change) stationary distribution of the GSR statistic: the latter’s stationary distribution is the temporal limit of the distribution sought in this work. To conclude, we exploit the obtained formula numerically and briefly study the pre-change behavior of the GSR statistic versus three factors: (a) drift-shift magnitude, (b) time, and (c) the GSR statistic’s headstart.
In Praise of Parochialism: The Advent of Local Environmental Law

This Article explains the role that local governments have assumed in protecting the environment, explores the means by which they have obtained their authority to do so, and discusses how this enhanced municipal role should influence environmental and land use policy at the federal and state level. Part I! reviews federal efforts to control nonpoint source pollution, and identifies the constraints on federal action. Among these constraints is the national understanding that the power to control the private use of land is a state prerogative, one that has been delegated, in most states, to local governments. Part III describes how the traditional authority of localities to control land use has evolved to incorporate environmental protection standards, and how local land use agencies apply and enforce those standards. In Part IV, the various methods that state legislatures and courts have used to delegate and expand the authority of local governments to protect the environment are explored, explained, and analyzed. This Part demonstrates that the importance of controlling environmental degradation at the local level has led states to expand the range of matters that may be regulated under traditional land use authority, home rule powers, and special purpose statutes. Part V summarizes empirical research regarding local environmental laws and provides detailed illustrations of the various types of protections that municipalities have adopted. Part VI makes the case that local governments, despite their much-lamented limitations, should be full partners of the state and federal governments in the critical matter of environmental protection. Part VII argues that the advent of local environmental law is a natural and healthy response of the legal system to environmental exigencies, precipitated in part by the inertia experienced at the federal level, and that it is time to change federal and state policy to reinforce and utilize this powerful new grass-roots force.
Cross-country variations in capital structures: The role of bankruptcy codes

Abstract We investigate the impact of bankruptcy codes on firms’ capital-structure choices. We develop a theoretical model to identify how firm characteristics may interact with the bankruptcy code in determining optimal capital structures. A novel and sharp empirical implication emerges from this model: that the difference in leverage choices under a relatively equity-friendly bankruptcy code (such as the US’s) and one that is relatively more debt-friendly (such as the UK’s) should be a decreasing function of the anticipated liquidation value of the firm’s assets. Using data on the US and the UK over the period 1990–2002, we subject this prediction to both parametric and non-parametric tests, using different proxies for liquidation values and different measures of leverage. In support for the theory, we find that our proxies for liquidation value are both statistically and economically significant in explaining leverage differences across the two countries. In contrast, many of the other factors that are known to affect within-country leverage (e.g., size) cannot explain differences in leverage across countries.
Nanotechnology and society: the evolution of risk perceptions.

A meta-analysis of surveys about public perceptions of the risks and benefits associated with nanotechnology suggests that further research is needed to help us better understand and, perhaps, inform public attitudes to nanotechnology.
Usefulness of fair values for predicting banks’ future earnings: evidence from other comprehensive income and its components

This paper examines whether fair value adjustments included in other comprehensive income (OCI) predict future bank performance. It also examines whether the reliability of these estimates affects their predictive value. Using a sample of bank holding companies, we find that fair value adjustments included in OCI can predict earnings both 1 and 2 years ahead. However, not all fair value-related unrealized gains and losses included in OCI have similar implications. While net unrealized gains and losses on available-for-sale securities are positively associated with future earnings, net unrealized gains and losses on derivative contracts classified as cash flow hedges are negatively associated with future earnings. We also find that reliable measurement of fair values enhances predictive value. Finally, we show that fair value adjustments recorded in OCI during the 2007–2009 financial crisis predicted future profitability, contradicting criticism that fair value accounting forced banks to record excessive downward adjustments.
Scanning dynamic competitive landscapes: a market-based and resource-based framework

Heterogeneity among rivals implies that each firm faces a unique competitive set, despite overlapping market domains. This suggests the utility of a firm-level approach to competitor identification and analysis, particularly under dynamic environmental conditions. We take such an approach in developing a market-based and resource-based framework for scanning complex competitive fields. By facilitating a search for functional similarities among products and resources, the framework reveals relevant commonalities in an otherwise heterogeneous competitive set. Beyond its practical contribution, the paper also advances resource-based theory as a theory of competitive advantage. Most notably, we show that resource substitution conditions not only the sustainability of a competitive advantage, but the attainment of competitive advantage as well. With equifinality among resources of different types, the rareness condition for even temporary competitive advantage must include resource substitutes. It is not rareness in terms of resource type that matters, but rareness in terms of resource functionality. Copyright © 2003 John Wiley & Sons, Ltd.
Financial Openness and Productivity

Summary Financial openness is often associated with higher rates of economic growth. We show that the impact of openness on factor productivity growth is more important than the effect on capital growth. This explains why the growth effects of liberalization appear to be largely permanent, not temporary. We attribute these permanent liberalization effects to the role financial openness plays in stock market and banking sector development, and to changes in the quality of institutions. We find some indirect evidence of higher investment efficiency post-liberalization. We also document threshold effects: countries that are more financially developed or have higher quality of institutions experience larger productivity growth responses. Finally, we show that the growth boost from openness outweighs the detrimental loss in growth from global or regional banking crises.
"Obvious to try": a proper patentability standard in the pharmaceutical arts?

Pharmaceutical research often entails making small modifications to candidate drug molecules—modifications that might be deemed “obvious to try”—and then studying the largely unpredictable, yet critical, resulting biological effects. Recognizing this characteristic unpredictability, the U.S. Court of Appeals for the Federal Circuit has traditionally upheld the patentability of obvious-to-try pharmaceutical inventions. This approach has been challenged, however, by the U.S. Supreme Court’s 2007 decision in KSR International Co. v. Teleflex Inc. This Note reviews the history of the obvious-to-try test and considers the Federal Circuit’s post-KSR inconsistency regarding obviousness in the pharmaceutical arts. This Note argues that KSR does not permit courts to deny the patentability of a pharmaceutical invention simply because it would have been obvious to try.
The impact of changes in bank ownership structure on the allocation of capital: International evidence

Abstract A new wave of bank privatizations in the past decade has significantly changed the ownership structure of banking systems around the world. This paper explores how these changes affect the allocation of capital within countries. Increases in domestic blockholder ownership of banks adversely affect the allocation of capital through increased lending activity to less productive industries and to those with less dependence on external finance. This result is more pronounced in countries with higher levels of corruption. I find some evidence that foreign presence improves capital allocation efficiency by increasing lending to more productive industries, primarily in common law countries.
Square Peg In A Round Hole: Government Contractor Battlefield Tort Liability and the Political Question Doctrine

Recent assertions of the political question doctrine by battlefield contractor defendants in tort litigation have brought new life to the doctrine while raising new questions. The lawsuits stem from incidents in both Iraq and Afghanistan and include plaintiffs ranging from local nationals suing contract interrogators and interpreters, to contract employees suing another contractor following insurgent attacks, to U.S. service members suing contractors after vehicle and airplane crashes. The lawsuits involve tort claims, which on their face do not conjure up images of a constitutional power struggle, but in at least fifteen cases thus far contractor defendants have asserted the political question doctrine as a defense. The political question doctrine addresses whether the judiciary should review government action or decisions and yet contractors are asserting the doctrine in cases where the government is not a named party and has remained conspicuously silent. This article analyzes the confused application of the political question doctrine to battlefield related contractor tort litigation and proposes a methodology to bring clarity to future decisions. Absent a more rigid analytical approach by the judiciary and a change in the government's attitude, the confusion surrounding the political question doctrine and the inconsistency of its application to the inevitable future contractor cases will only grow.
Sourcing for the base of the pyramid: Constructing supply chains to address voids in subsistence markets

Substantial work has described downstream distribution systems for subsistence markets, but little is known about how upstream supply chains support these efforts. We suggest that a multinational corporation (MNC) entering these markets must resolve the institutional voids in product, labor, and capital markets, as well as address issues of regulatory ambiguities and the lack of contracting mechanisms that exist at the raw material, manufacturing, distribution, and marketing stages of the supply chain. We analyze the nature of these voids and their challenges, map them onto the value chain, discuss their interconnections, and suggest that they do not impact all firms equally. We provide examples from the food, beverage, and textile industries of how four firms have addressed institutional voids in constructing their supply chains. We conclude by providing implications, both across the value chain and regarding the trade-offs of partnering with non-profit agencies. Our analysis highlights the importance of going beyond the broad impact of the institutional environment to understanding its more nuanced and multi-faceted effect on supply chains.
Seasoned Equity Offerings, Valuation and Timing: Evidence from 1980's and 1990's

While the existing literature has focused on whether firms issue equity when they are overvalued, this paper examines whether there was a better time to issue seasoned equity when the valuation of a firm's shares might have been even more favorable. Using three valuation approaches, the findings suggest that: (1) the valuation of firms issuing seasoned equity is the most favorable at the time of the offering and (2) the estimated valuation errors are significantly related to the probability that firms will undertake a seasoned equity issue. These results are consistent with firms optimizing the timing of the seasoned equity offering so as to take maximum possible advantage of misvaluation of their shares.
Expertise and Advocacy in Animal-Welfare Decision Making: Considerations for a Veterinary Curriculum in Animal Welfare

An animal-welfare curriculum for veterinary students should provide learning opportunities in the application of veterinary expertise to patient management and animal-welfare policy. Real-life and hypothetical cases are presented that can allow students to develop their personal-values statement about animal welfare, explore the interaction of facts and values in deciding on a course of action, and understand the unique obligations and authority they will have as veterinarians.
Time-Inconsistent Portfolio Investment Problems

The explicit results for the classical Merton optimal investment/consumption problem rely on the use of constant risk aversion parameters and exponential discounting. However, many studies have suggested that individual investors can have different risk aversions over time, and they discount future rewards less rapidly than exponentially. While state-dependent risk aversions and non-exponential type (e.g. hyperbolic) discountings align more with the real life behavior and household consumption data, they have tractability issues and make the problem time-inconsistent. We analyze the cases where these problems can be closely approximated by time-consistent ones. By asymptotic approximations, we are able to characterize the equilibrium strategies explicitly in terms of the corrections to solutions for the base problems with constant risk aversion and exponential discounting. We also explore the effects of hyperbolic discounting under proportional transaction costs.
The EU’s Romance with Specialized Adjudication

In this editorial for the International Review of Intellectual Property and Competition Law, the EU’s recent moves to specialize adjudication of patent disputes and to set up a standing tribunal for investor-state dispute settlement are examined from the standpoint of experience in the US with the Federal Circuit.The final publication is available at Springer via http://dx.doi.org/
A STURDY ROGUE

In the reign of Elizabeth P David Oakley would have been classified by the law as "a sturdy rogue," or perhaps, "an idle vaga­ bond,"2 and these labels would have fixed Oakley to his social sta­ tion as assuredly as the "welfare queen"3 label defines the place of poor, unmarried, unemployed mothers today. Rogues and vagabonds in sixteenth century England were hardly neutral social types. The words themselves, connoting an insouciant, almost smirking, violation of good social order, conveyed an attitude of defiance of work norms that if allowed to spread unchecked might spawn rebellion among the male members of the laboring classes. The Crown and Parliament's fear of the deviant behavior of rogues and vagabonds prompted them to adopt the earliest mea­ sures in our legal history to classify and stigmatize by statute such behavior.4 These measures, not at all coincidentally, included the precursors of the parental support statute that brought Oakley to the attention of the Wisconsin Supreme Court.s Additionally, that
Spurious Trend and Cycle in the State Space Decomposition of a Time Series with a Unit Root

Abstract Recent research has proposed the state space (SS) framework for decomposition of GNP and other economic time series into trend and cycle components, using the Kalman filter. This paper reviews the empirical evidence and suggests that the resulting decomposition may be spurious, just as detrending by linear regression is known to generate spurious trends and cycles in nonstationary time series. A Monte Carlo experiment confirms that when data are generated by a random walk, the SS model tends to indicate (incorrectly) that the series consists of cyclical variations around a smooth trend. The improvement in fit over the true model will typically appear to be statistically significant. These results suggest that caution should be exercised in drawing inferences about the nature of economic processes from the SS decomposition.
A mixed index approach to identifying hedonic price models

Abstract Recent literature suggests identifying house price hedonic regressions by using instrumental variables, spatial statistics, the borders approach, panel data, and other techniques. We present an empirical application of a mixed index model, first proposed by Bowden [Bowden, R.J., 1992. Competitive selection and market data: the mixed-index problem. The Review of Economic Studies 59(3):625–633.] to identify hedonic price regressions. We compare the performance of the mixed index model to a traditional hedonic model and to a hedonic model that includes characteristics of the buyer of each house. We find the mixed index model outperforms the other models based on bootstrap distributions of predicted housing values, prediction variance, and predicted policy effects. The mixed index model distributions are less skewed and kurtotic than the other models, suggesting it more closely satisfies the classical linear regression assumption of normally distributed errors. Compared to the mixed index model, the traditional hedonic overstates the importance of lot size and school quality to house price and understates the importance of environmental quality.
Local Government Reform as State Building: What the Polish Case Says About “Decentralization”

Poland has become one of the more decentralized states in Europe. Local governments now control a third of all public expenditures. They have also delivered the goods modernizing the country’s infrastructure and restructuring its schools. This success cannot be attributed to widespread civic engagement because decentralization in Poland was clearly a “revolution from above.” Nor can it be attributed to the implementation of rules typically thought to enhance accountability in decentralized polities because Polish local governments do not finance themselves, and many of their responsibilities remain poorly defined. Instead, Poland’s success is due to an array of institutions designed to train, professionalize, discipline, and empower newly elected local elites. These institutions suggest that creating effective local governments may lie less in “getting the rules right” or in empowering citizens to participate in their own governance, than in institutions that encourage local governments to monitor themselves while embedding them in the regulatory structure of the state.
Gubernatorial Endorsements and Ballot Measure Approval

Voters often make decisions on ballot measures with limited information. Research shows, however, that elite endorsements can help voters overcome their information deficiencies. Using survey experiments, we evaluate the effect of a gubernatorial endorsement on three recent ballot measures. We find that identifying the governor as a proponent of a particular measure has a significant effect on respondents' support for only one of the three ballot measures we examine: a highly publicized health initiative in 2000. For two lower profile referendums on bonds supporting higher education (in 2006) and roads (in 2011), a gubernatorial endorsement proved ineffective. These results hold even when we restrict our sample to respondents who are the most likely to be influenced by the treatment. As a result, we tentatively conclude that gubernatorial endorsements, while valuable to some voters, are highly conditional.
Overlapping Intellectual Property Doctrines: Election of Rights versus Selection of Remedies

Overlaps exist across various doctrines in federal intellectual property law. Software can be protected under both copyright law and patent law; logos can be protected under both copyright law and trademark law. Design patents provide a particular opportunity to consider the issue of overlap, as an industrial design that qualifies for design patent protection might also, in particular circumstances, qualify for copyright protection as well as function as protectable trade dress. When an overlap issue arises—that is, when an intellectual property rights holder asserts rights under more than one doctrine—the question then becomes how courts should respond. One response, of course, is that courts should do nothing, on the theory that the doctrines developed in a way that permit such overlapping rights, and so the courts should continue to enforce them. The opposing response is to argue that overlapping rights make it difficult for intellectual property users to determine the scope of another’s rights, particularly when those rights have different terms or limitations, and so the courts should require intellectual property owners to choose the right they want enforced at the outset. Neither response is entirely satisfying. Without some signal from Congress that it intended to limit the scope of intellectual property rights when overlaps occur, the imposition of restrictions by the courts simply to achieve predictability for users seems problematic. At the same time, courts should not be blind to the difficulties that doctrinal overlap pose for potential defendants and the temptation it presents to intellectual property owners to push for even stronger protection. * Class of 2014 Professor of Law, College of William & Mary, Marshall-Wythe School of Law. Many thanks to participants in Stanford Law School’s “Design Patents in the Modern World” conference (in particular, to commentator Graeme Dinwoodie) as well as participants in a faculty workshop at the University of Minnesota Law School for helpful comments. Thanks also to Patrick Berry and Stefan Oehrlein for research assistance, and to the staff of the Stanford Technology Law Review for thoughtful edits and suggestions. 240 STANFORD TECHNOLOGY LAW REVIEW [Vol. 17:239 This Article therefore proposes something of a middle ground. Courts should not require intellectual property owners to elect one form of protection at the outset. But they should be attentive to whether the right asserted in any litigation proceeding aligns with the harm claimed by the plaintiff and, relatedly, should try to devise remedies that address only those harms.
Teaching “The Wire”: Crime, Evidence, and Kids

I have a confession: I have only watched Season 1 of The Wire, and it has been many years since I did that. Thus, both my knowledge and pedagogical use of the show are limited. What explanation can I offer for my failings? I am a Maryland native with family who resides in Baltimore City, or Charm City as it is affectionately called.1 I worked for several years as an assistant federal public defender in Baltimore City. Over time, I have seen the city evolve, and I have seen it chew up and spit out many good people and some not so good people. So, in the past, I told students who asked whether I had ever seen The Wire: “Why should I watch a fictional version of what I (painfully) experienced as reality?” Although it took many years after the series ended, I did eventually break down and watch Season 1.2 In doing so, I discovered that the show is an ideal source for exploration of issues arising in three courses I teach. To date, I have used portions of Season 1 as platforms for assessing students’ comprehension of the materials in these courses.
How Long Do Teacher Effects Persist

Previous findings from experimental and non-experimental studies have demonstrated that teachers differ in their effectiveness. In addition, evidence from non-experimental studies has indicated that teacher effects can last up to five years. This study used high-quality data from a four-year randomized experiment in which teachers and students were randomly assigned to classes to examine whether teacher effects on student achievement persist over time. Teacher effects are defined as teacher specific residuals adjusted for student and treatment effects. Findings indicate that the teacher effects are cumulative and observed not only in the current or the following grade, but they endure up to three years in early elementary grades. The findings also suggest that teacher effects are important and their additive effects on student achievement are as large as the additive effects of small classes. Finally, teacher effects are larger in reading than in mathematics.
A shelf-space optimization model when demand is stochastic and space-elastic

Abstract The more customer demand is impulse-driven, the more it is space-dependent and the more it is subject to variation. We investigate the corresponding problem of retail shelf-space planning when demand is stochastic and sensitive to the number and position of facings. We develop a model to maximize a retailer׳s profit by selecting the number of facings and their shelf position under the assumption of limited space. The model is particularly applicable to promotional or temporary products. We develop the first optimization model and solution approach that takes stochastic demand into account, since the current literature applies deterministic models for shelf-space planning. By the means of an innovative modeling approach for the case with space- and positioning effects and the conversion of our problem into a mixed-integer problem, we obtain optimal results within very short run times for large-scale instances relevant in practice. Furthermore, we develop a solution approach to account for cross-space elasticity, and solve it using an own heuristic, which efficiently yields near-optimal results. We demonstrate that correctly considering space elasticity and demand variation is essential. The corresponding impacts on profits and solution structures become even more significant when space elasticity and stochastic demand interact, resulting in up to 5% higher profits and up to 80% differences in solution structures, if both effects are correctly accounted for. We develop an efficient modeling approach, compare the model results with approaches applied in practice and derive rules-of-thumb for planners.
Positively Valued Fiat Money after the Sovereign Disappears: The Case of Somalia

Economists commonly appeal to sovereign powers to explain the acceptance of unbacked paper money at a positive value. The government accepts or compels taxes to be paid in the money (makes it publicly receivable) or compels creditors to accept it (grants and enforces legal tender status). Thus fiat money is thought to rely on enforcement of a literal fiat or decree. The case of Somalia defies such an account. Following the state’s collapse in 1991, unbacked paper Somali shillings continued to circulate at a positive value. We explain how historical acceptance, or “inertia,” can sustain the ongoing acceptance of unbacked money even in the absence of ongoing sovereign support. Although sovereign power might be necessary to launch a fiat standard, we conclude that it is not a necessary condition for its survival. JEL Classifications: B52, B53, C71, C73, D83, D85, E41, E42
Consumer preference not to choose: Methodological and policy implications

Residential consumers remain reluctant to choose new electricity suppliers. Even the most successful jurisdictions, four US states and other countries, have had to adopt extensive consumer education procedures that serve largely to confirm that choosing electricity suppliers is daunting. Electricity is not unique in this respect; numerous studies find that consumers are generally reluctant to switch brands, even when they are well-informed about product characteristics. If consumers prefer not to choose, opening regulated markets can reduce welfare, even for some consumers who do switch, as the incumbent can exploit this preference by raising price above the formerly regulated level. Policies to open markets might be successful even if limited to industrial and commercial customers, with residential prices based on those in nominally competitive wholesale markets.
Tacit Collusion with Low-Price Guarantees

Existing studies on low-price guarantees (LPGs) typically employ static models and the results are sensitive to modeling assumptions such as the type of guarantees, hassle costs and consumer heterogeneity. In contrast, we employ a fully dynamic model and show that LPGs robustly facilitate tacit collusion, by reducing a deviating firm’s immediate deviation profit. This difference of results is because in a static model, any equilibrium has to be immune from any deviation, including infinitesimal deviation. In a dynamic model, however, one can ignore infinitesimal deviations since firms never have an incentive for such deviations. 1I ntroduction manc_2316