cssi/SciSciGPT-SciSciNet huggingface dataset:
The Triumph of Gay Marriage and the Failure of Constitutional Law

The Supreme Court's much anticipated invalidation of gay marriage bans improved the personal lives of millions of ordinary Americans. It made the country a more decent place. Even Chief Justice Roberts, at the conclusion of his otherwise scathing dissent, acknowledged that the decision was a cause for many Americans to celebrate.But although the Chief Justice thought that advocates of gay marriage should "by all means celebrate today's decision," he admonished them "not [to] celebrate the Constitution." The Constitution, he said, "had nothing to do with it".Part I of this article quarrels with the Chief Justice's assertion that the Constitution "had nothing to do with it." It argues that it is the dissenting justices, rather than their colleagues in the majority, who have ignored the traditions of American Constitutional law.Part II argues that the Chief Justice is exactly right when he says that we should celebrate the Obergefell decision, but not the Constitution, but he is right for reasons that he, himself, would disagree with. The Court's decision marks a partial and flawed but nonetheless important advance toward inclusion and decency. The majority's opinion, replete with invocations of the supposedly binding force of constitutional obligation, belittling of the large and growing number of Americans who are unmarried, and mischaracterization of the nature of the movement for gay rights, is exclusionary, reactionary, and authoritarian. Even as the Court demonstrates its (concededly limited) capacity to advance the cause of social justice, it unwittingly also demonstrates the failure of constitutional law to serve its core purpose of providing a just ground for cooperation among people who disagree about fundamentals.A brief conclusion discusses the implications of this failure.
Regulation by Adaptive Management—Is It Possible?

The history of environmental law provides as good of an example as any other field in regulatory law of how successful prescriptive regulation has been at meeting public policy objectives and how difficult it will be to extend that experience much further into the future. For decades so-called “commandand-control” regulation has picked the low-hanging fruit—in environmental law, for example, it has targeted emissions from smokestacks and discharge pipes, disposal of wastes in landfills, transportation of hazardous chemicals, and similar discrete, easily-identified sources of environmental harm. Even the most conservative cost-benefit analyses confirm that many of these initiatives were smashing successes.1 Our nation’s air
B PHYSICS AT THE DØ EXPERIMENT AT FERMILAB

We discuss recent B physics results from the DO experiment at Fermilab. The results presented here use data sets with integrated luminosities ranging from ~ 200–440 pb-1, collected at the Tevatron, between April 2002 and August 2004, at a center-of-mass energy of collisions of 1.96 TeV.
Why Firms Mandate ISO 14001 Certification

Thousands of facilities worldwide have certified to International Organization for Standardization (ISO) 14001, the international environmental management system standard, and previous research typically has studied these certification decisions at the facility level. However, significant anecdotal evidence indicates that firms may have a strong role, and if so, prior studies may be drawing inappropriate conclusions about the rationale for ISO 14001 certification. Drawing on institutional theory and the resource-based view of the firm, this study offers a conceptual framework that explains why parent companies would mandate—rather than simply encourage—their operational units to certify to ISO 14001. The framework is tested using survey data of corporate environmental managers. The results show that firms have a central role in nearly half of all facility-level certifications and that firms that mandate ISO 14001 endure greater external pressures and have stronger complementary resources and capabilities ...
Justice Rehnquist and the Dismantling of Environmental Law

Chief Justice William H. Rehnquist was uniquely situated to have a profound impact on the development of federal environmental law - both because of the overlap of his tenure with the development of the field of environmental law and because of his four-decade tenure on the U.S. Supreme Court, more than one-half of which was as Chief Justice. Before his death on September 3, 2005, Rehnquist heard the vast majority of the Court`s environmental cases during the modern environmental era, penning opinions in 25% of them, and affording him an opportunity to shape environmental law, especially during its formative years, that no Justice is likely to match. This Article discusses how Justice (and then Chief Justice) Rehnquist interpreted federal constitutional and public law in the opinions he wrote in environmental cases. It concludes that Rehnquist`s environmental opinions reflect a three tiered agenda. First, if a case involved a constitutional or statutory property rights question, Justice Rehnquist almost always chose to protect property rights over competing environmental concerns. Second, in the absence of a property rights issue, Rehnquist almost always decided cases so as to protect state sovereignty, sometimes but not invariably with pro-environmental results. Third, in cases lacking a property rights or state sovereignty component, he almost always decided them in a way that curtailed federal power, and with it, the effectiveness of environmental law. The Article, which is part of a larger ongoing study of Justice Rehnquist`s environmental law jurisprudence, explores the extent to which Justice Rehnquist's three-tiered approach has already weakened environmental law and whether that approach is likely to contribute to further diminishment of effective environmental protection under the pollution control and natural resource management legislation in the future.
Schooling in the Shadow of Death Youth Agency and HIV/AIDS in Zambia

This article explores how Zambian youth encounter HIV/AIDS in their schools and communities, and presents ways in which they demonstrate their agency in creating new language, identities, and self-conceptions in response to these encounters. Utilizing qualitative onterviews participant observation, and student diaries, this study suggests that the role and delivery of schooling must be re-examined given high teacher mortality, teacher misinformation, and young people's exposure to the disease outside of schools. Students' diverse experiences in and outside of school shape their knowledge and beliefs about HIV/AIDS in a time when all social institutions in Zambia have been affected by the disease.
Race Bias and the Importance of Consciousness for Criminal Defense Attorneys

The problems of racial bias pervade the criminal justice system. In this paper a subject that is not much talked about -- the issue of how racial bias affects defense attorneys and the need for defense attorneys to acknowledge implicit and explicit racial biases as a matter of practice -- is examined. Specifically, the paper covers problems of racial bias when defense attorneys make assumptions about (1) their clients, and (2) veniremen during voir dire.
To Cloak the Within: Protecting Employees from Personality Testing

Employees and job applicants are often subjected to personality tests that seek sensitive, internal information. These tests can intrude on individual privacy simply by their inquisition, and disclosure of their results can pigeonhole and stigmatize people. The work of sociologist Erving Goffman offers insights into the nature of these harms. Furthermore, the personality tests often do not reliably and accurately measure personality traits, and employers may not have accurately identified traits that enhance performance in specific jobs. Current legal structures, including the federal and state constitutions and the Americans with Disabilities Act, may apply to such tests, but are inadequate to protect privacy. An effective legal structure would recognize these potential harms of personality testing and restrict employers from using them, requiring employers to justify the particular use of a test and limiting permissible tests to those that have demonstrated reliability and validity and have been shown to accurately predict improved job performance in the specific position sought to be filled. Furthermore, such a structure should require employers to maintain the confidentiality of the test results, and hold accountable employers who fail to comply with these privacy-protecting provisions.
All That Glitters: The Effect of Attention and News on the Buying Behavior of Individual and Institutional Investors

We test and confirm the hypothesis that individual investors are net buyers of attention-grabbing stocks, e.g., stocks in the news, stocks experiencing high abnormal trading volume, and stocks with extreme one-day returns. Attention-driven buying results from the difficulty that investors have searching the thousands of stocks they can potentially buy. Individual investors do not face the same search problem when selling because they tend to sell only stocks they already own. We hypothesize that many investors consider purchasing only stocks that have first caught their attention. Thus, preferences determine choices after attention has determined the choice set.
Does China’s middle class think and act democratically? Attitudinal and behavioral orientations toward urban self-government

In the West, the middle class has been considered a potent agent of the sociopolitical transition toward democracy and the cornerstone of democratic rule. Does a middle class in China think and act democratically and hence serve as the harbinger of democratic change in that country? This study attempts to answer this critical question by examining the attitudinal and behavioral orientations of middle-class individuals toward grassroots self-government in urban China. It is based on data collected from a representative-sample survey conducted in Beijing. The findings indicate that China’s middle class expects grassroots self-government to be formed in a democratic way; yet the middle class is critical of the currently-implemented self-government system because it is not organized as democratically as they expect, and therefore the middle class is less likely to participate in the system. These findings have significant implications for the role of the Chinese middle class in the democratization of China.
Two-step two-stage least squares estimation in models with rational expectations

Abstract The paper develops a two-step estimator for use in rational-expectations models with autocorrelated residuals and predetermined, but not strictly exogenous, instruments. The estimator extends the applicability of McCallum's (1976) error-in-variablesapproach to estimating such models, and is asymptotically efficient in a class of intrumental-variables estimators. As an application we use instrumental-variables techniques to estimate Taylor's (1979) rational-expectations macroeconomic model of the United States.
Do Institutional Investors Prefer Near-Term Earnings over Long-Run Value?*

This paper examines whether institutional investors exhibit preferences for near-term earnings over long-run value and whether such preferences have implications for firms' stock prices. First, I find that the level of ownership by institutions with short investment horizons (e.g., “transient” institutions) and by institutions held to stringent fiduciary standards (e.g., banks) is positively (negatively) associated with the amount of firm value in expected nearterm (long-term) earnings. This evidence raises the question of whether such institutions myopically price firms, overweighting short-term earnings potential and underweighting long-term earnings potential. Evidence of such myopic pricing would establish a link through which institutional investors could pressure managers into a short-term focus. The results provide no evidence that high levels of ownership by banks translate into myopic mispricing. However, high levels of transient ownership are associated with an over- (under-) weighting of near-term (long-term) expected earnings, and a trading strategy based on this finding generates significant abnormal returns. This finding supports the concerns that many corporate managers have about the adverse effects of an ownership base dominated by short-term-focused institutional investors.
Import Protection Bias

Rodrik (1995) notes that trade regimes tend to be biased towards import protection, while the standard political economy models either yield no prediction on the bias of the trade regime or predict, counterfactually, a bias towards the export sector. This constitutes an important shortcoming in the political economy of trade literature. In this paper, the Grossman and Helpman (1994) “Protection for Sale” model is extended by adding government expenditure. This expenditure may be financed via a combination of tariff revenue and a distorting wage tax. In addition to the government expenditure, export subsidies need to be financed either via tariff revenue or a distorting wage tax. With this addition, plausible values of the model's parameters yield import protection bias.
The performance of female hedge fund managers

Using data for the period 1994–2013, we examine the return and risk-taking behavior of hedge funds having at least one female portfolio manager and funds that have all female portfolio managers. Funds with all female managers perform no differently than all male-managed funds and have similar risk profiles. For single-style funds, those with mixed teams of both genders underperform male-only funds on both a raw and risk-adjusted basis, although mixed funds incur less risk and their Sharpe ratios do not differ. For funds of funds, both all-female and mixed funds have similar performance to male-managed funds. We then consider the failure rate across all fund styles. Funds with at least one female manager fail at higher rates, driven by difficulty in raising capital—these funds are smaller and are less likely to be closed to new investment. Surviving funds with at least one female manager have better performance than male-managed surviving funds, consistent with the idea that female managers need to perform better for their funds to survive. Yet, female-managed surviving funds have fewer assets under management than surviving male-managed funds. Using media mentions as a proxy for investor interest, female-managed funds receive proportionately less attention. Our results suggest that there are no inherent differences in skill between female and male managers, but that only the best performing female managers manage to survive.
Uniqueness of a Furstenberg system

Given a countable amenable group $G$, a Folner sequence $(F_N) \subseteq G$, and a set $E \subseteq G$ with $\bar{d}_{(F_N)}(E)=\limsup_{N \to \infty} \frac{|E \cap F_N|}{|F_N|}>0$, Furstenberg's correspondence principle associates with the pair $(E,(F_N))$ a measure preserving system $(X,\mathcal{B},\mu,(T_g)_{g \in G})$ and a set $A \in \mathcal{B}$ with $\mu(A)=\bar{d}_{(F_N)}(E)$, in such a way that for all $r \in \mathbb{N}$ and all $g_1,\dots,g_r \in G$ one has $\bar{d}_{(F_N)}(g_1^{-1}E \cap \dots \cap g_r^{-1}E)\geq\mu((T_{g_1})^{-1}A \cap \dots \cap (T_{g_r})^{-1}A)$. We show that under some natural assumptions, the system $(X,\mathcal{B},\mu,(T_g)_{g \in G})$ is unique up to a measurable isomorphism. We also establish variants of this uniqueness result for non-countable discrete amenable semigroups as well as for a generalized correspondence principle which deals with a finite family of bounded functions $f_1,\dots,f_{\ell}: G \rightarrow \mathbb{C}$.
Equity Price Pressure from the 1998 Reduction in the Capital Gains Holding Period

This paper provides evidence consistent with shareholders' personal tax incentives affecting stock prices and trading volume. On June 24, 1998, the marginal tax rate on capital gains was reduced from 28 percent to 20 percent for individual investors holding shares between 12 and 18 months. This study compares firms whose initial public shareholders immediately benefited from the reduction to other IPO firms. The sample of immediately affected firms recorded mean, incremental, one‐day stock price declines of −1.3 percent amid heavy trading. The results are consistent with capital gains tax planning constraining investment portfolio management. When the constraint was lifted, enough shareholders sold that prices moved. The results imply that despite increasingly liquid capital markets, transaction costs remain large enough to prevent investors from entering the market immediately and fully offsetting downward price pressure from individual capital gains tax management.
An evaluation of the impact of social presence through Group size and the use of collaborative software on Group member "Voice" in face-to-face and computer-mediated task Groups

Firms that are trying to stay competitive in the current business environment often require the use of groups. The popularity of group work is tied to the promise of improved productivity via the pooling of information, knowledge, and skills. In recent years, group work has been expanded to virtual or distributed environments. However, there are questions about how aspects of group work-specifically group size and social presence-impact group members' ability to voice opinions. This study examines groups of two sizes in three distinct social presence settings: face-to-face, face-to-face using collaborative software, and virtual using collaborative software. This study finds that both group size and social presence affect individual instrumental voice, value-expressive voice, and the group interaction process. The results show that by increasing social presence through the use of collaborative software, it is possible to lessen the negative impact of increasing group size. These results should be of interest to the increasing number of organizations that are implementing virtual group environments.
The Role of Science in the Uruguay Round and NAFTA Trade Disciplines

The central theme of this article is the necessity for deference to decision-making processes of national regulatory authorities in the application of these new trade disciplines and the need for trade-based reviews of national regulatory measures to operate within clearly defined limits. Accordingly, this article first examines and summarized the relevant texts, including the original 1947 GATT, the Uruguay Round, and the NAFTA texts on standards. Next, the article considers the role of science in the standard-setting process with reference to the copious literature on this topic. Finally, the article takes up the difficult question of the application of the science-based trade disciplines in the Uruguay Round and NAFTA texts in the context of the quasi-adjudicatory trade agreement dispute settlement process.
Insider trading and share repurchases: Do insiders and firms trade in the same direction?

Abstract Signaling undervaluation is often considered a primary motive for repurchasing stock, but insider trading activity by repurchasing firms is not always consistent with undervaluation. Net insider buying and selling are both more frequent in quarters when firms are repurchasing non-trivial amounts of stock, with the odds of observing a repurchase the highest in quarters with net insider selling. In multinomial logit models, share repurchases associated with net insider selling are positively related to illiquidity, option exercises by insiders, and pre-repurchase returns and negatively correlated with industry-adjusted book to market ratios when compared to other repurchases. Hence, repurchases when insiders are selling stock are more likely done to support share prices or avoid dilution and are less likely undervaluation signals. We find that insider trades either validate or mitigate the undervaluation signal of the repurchase. Abnormal returns of repurchasing firms with net insider buying versus net insider selling in a given quarter are significantly higher for the quarter immediately after the repurchase and the three subsequent years. For repurchases accompanied by net insider selling, abnormal returns are negligible after only one year.
Customer information sharing among rival firms

Abstract The recent rapid growth of the Internet as a medium of communication and commerce, combined with the development of sophisticated software tools, are to a large extent responsible for producing a new kind of information: Databases with detailed records about consumers’ preferences. These databases have become part of a firm's assets, and as such they can be sold to third parties. This possibility has raised numerous concerns from consumer privacy advocates and regulators, who have entered into a heated debate with business groups and industry associations about whether the practice of customer information sharing should be banned, regulated, or left unchecked. This paper investigates the incentives of rival firms to share their customer-specific information and evaluates the welfare implications if such exchanges are banned, in the context of a perfect price discrimination model.
(Baby) M is for the many things: why I start with Baby M.

For several years now I have begun my first-year contracts course with the 1988 New Jersey Supreme Court case In the Matter of Baby M. In this essay, I want to explain why. I offer the explanation in the spirit of modest proselytizing, recognizing that many of us already have a favored method or manner into the course: some introductory questions we pose before leaping into (or over) the introductions already provided by the editors of the many excellent casebooks available. But I have found that Baby M works extremely well in ways that others may want to consider. It provides an introduction to all the central topics and themes typically covered in a contracts course, and it does so with just the right mixture of familiarity and intrigue. The familiarity is with the facts of the actual case (though the student memory shrinks with each passing year) and with the general structure of surrogacy arrangements. The intrigue develops as students glimpse that even the familiar is more complicated when viewed through a legal lens.
The Structural Case for Vertical Maximalism

standard of interpretive validity, but by the rules that necessarily govern our hierarchical federal court system."). 212 454 U.S. 370 (1982). 213 Id. at 375; see id. at 374-75 (admonishing the court of appeals for "having ignored, consciously or unconsciously, the hierarchy of the federal court system created by the Constitution and Congress"). 214 548 U.S. 331 (2006). 215 See id. at 353-55. 216 Id. at 353-54 (quoting Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177 (1803)) (emphasis added). 217 See Calabresi & Lawson, supra note 165, at 1023, 1030 (asserting that "any exercise of authority by" inferior federal courts, and any construction of federal law by state courts, must be subject to Supreme Court review); Caminker, supra note 36, at 835-37 (contending that the Court must have 'Jurisdiction sufficiently broad to provide general leadership in defining federal law"); Claus, supra note 165, at 64 (urging that "Congress can never... remove from the Supreme Court the ability to have ultimate judgment of Article III matters"); Pfander, supra note 165, at 1500-01 (asserting that it would raise "serious constitutional questions" if Congress sought to eliminate both the Court's appellate jurisdiction and its authority to supervise lower federal courts by issuing discretionary writs, such as mandamus); Pfander, supra note 167, at 236 (making a similar claim with respect to state courts). But see Edward A. Hartnett, Not the King's Bench, 20 CONST. COMMENT. 283, 314-15 (2003) (arguing that, "even if th[e] constitutional requirement of inferiority refers to" a 2009] THE STRUCTURAL CASE FOR VERTICAL MAXIMALISM 41 have also focused on what the hierarchical structure means for the lower courts, generally concluding that inferior federal and state courts have a constitutional duty to abide by Supreme Court
Blinded by the Light: Information Overload and Its Consequences for Securities Regulation

A demanding system of mandatory disclosure, which has become more demanding in the wake of the Sarbanes-Oxley Act of 2002, makes up the core of the federal securities laws. Securities regulation is motivated, in large part, by the assumption that more information is better than less. After all, "sunlight is said to be the best of disinfectants; electric light the most efficient policeman." But sunlight can also be blinding. Two things are needed for a regulatory regime based on disclosure, such as the federal securities laws, to be effective. First, information has to be disclosed. Second, and often overlooked, is that the users of the information - for example, investors, securities analysts, brokers, and portfolio managers - need to use the disclosed information effectively. Securities regulation focuses primarily on disclosing information, and pays relatively little attention to how the information is used - namely, how do investors and securities market professionals search and process information and make decisions based on the information the securities laws make available? Studies making up the field of behavioral finance show that investing decisions can be influenced by various cognitive biases on the part of investors, analysts, and others. This Article focuses on a related concern: information overload. An extensive psychology literature shows that people can become overloaded with information and make worse decisions with more information. In particular, studies show that when faced with complicated tasks, such as those involving lots of information, people tend to adopt simplifying decision strategies that require less cognitive effort but that are less accurate than more complex decision strategies. The basic intuition of information overload is that people might make better decisions by bringing a more complex decision strategy to bear on less information than by bringing a simpler decision strategy to bear on more information. To the extent that investors, analysts, and other capital market participants are subject to information overload, the model of mandatory disclosure that says more is better than less may be counterproductive. This Article considers the phenomenon of information overload and its implications for securities regulation, including the possibility of scaling back the mandatory disclosure system.
Analyzing the role of non-practicing entities in the patent system

Currently, there is an important debate about the role of non-practicing entities in patent litigation. People are asking: what are the costs and benefits associated with NPE litigation? Are they too high, too low, or just right? This paper makes two contributions to the discussion. First, we review a recent study, The Direct Costs of NPE Disputes, by James Bessen and Michael J. Meurer. The study presents new data on the litigation costs and settlement expenses incurred by a subset of defendants in NPE cases. Some of their findings are provocative, but we find their methodology to be deficient in several respects, which limits the usefulness of the data and thus the implications that can be drawn from them. We also offer suggestions for future research on NPEs, including data collection and analysis. Second, we argue that the study asks the wrong question. The debate should be reframed to focus on the merits of the lawsuits, including patent system changes focusing on reducing transaction costs (e.g., lawyers’ fees) in patent litigation, instead of focusing solely on whether the patent holder is a non-practicing entity. Draft Dated: July 25, 2012 Assistant Professor of Law, Chicago–Kent College of Law. ** Professor and H. Ross & Helen Workman Research Scholar, University of Illinois College of Law. We would like to thank Colleen Chien, John Golden, Robert Greenspoon, Edward Lee, Adam Mossoff, Lee Petherbridge, Michael Risch, and Christopher Seaman for their comments and suggestions on prior drafts of this paper.
Changes in Firm Pension Policy: Trends Away from Traditional Defined Benefit Plans

In light of the recent concerns regarding the solvency of Social Security’s Old-Age, Survivors and Disability Insurance (OASDI), private pensions may play an increasingly important role in retirement welfare of US retirees. However, the private pension landscape has evolved in ways that may result in lower private pension wealth for retirees. One recent such phenomenon involves the conversion of traditional defined benefit pension plans to cash balance plans, which results in lower pension benefits for many workers. In this study, I investigated how characteristics of the firm’s workforce influenced whether the firm converted their traditional pension plan to a cash balance plan and how these characteristics related to the firm’s pension plan policy more generally. Using the Longitudinal Employer-Household Data and pension plan data from the Department of Labor/Internal Revenue Service and the Pension Benefit Guaranty Corporation, I found little evidence of workforce age distribution effects on the likelihood of DB plan conversion to a cash balance plan in the 1990s. More generally, I consistently found positive associations between firms with older and more female workforces and defined contribution plans during the same time.
Keeping the Schools Open While the Troops are Away: Regime Type, Interstate War, and Government Spending

How and why do regime type and interstate war affect government spending? We argue that a political leader allocates scarce resources between social and military expenditures as a function of their relative efficiency in securing her political survival. We derive four hypotheses concerning how mobilization for and demobilization from interstate war affects government spending differently in democratic and autocratic regimes. Compared to democracies, autocracies should increase military spending to a greater degree during wartime and decrease military spending to a greater extent following a war. Autocracies also should cut social spending more during an interstate war and increase social spending more during the process of demobilization from war than democracies. Our analyses of all states in the international system from 1950 to 2001 yield support for our hypotheses.
Explaining the Importance of Public Choice for Law

Many top elected and appointed federal officials can recall days of outlining for their IL torts and contracts classes and being cold called in criminal law. JD holders include the president and vice president, as well as six of the fifteen cabinet members.1 More than half of the current members of the US Senate hold law degrees, as do more than a third of the members of the House of Representatives.2 Many more lawyers (or former lawyers) head administrative agencies.3 At the state level, many governors and state legislators also have legal backgrounds.4 Though members of the judiciary are not required to hold law degrees, nearly all do at the state and federal levels.5 These decision makers play an important role in the function of law within society. Law is dynamic, as law shapes behavior. Behavior also shapes law. Public choice can help us to understand this dynamic behavior. At its core, public choice is the use of economics to understand political science. Public choice thus addresses various opportunities for and constraints on behavior in public life in a manner akin to how economics does so in private life (the market). Public choice also assumes rational actors who maximize their
Restorative Justice: What Is It and Does It Work?

This article reviews the now extensive literature on the varied arenas in which restorative justice is theorized and practiced—criminal violations, community ruptures and disputes, civil wars, regime change, human rights violations, and international law. It also reviews—by examining empirical studies of the processes in different settings—how restorative justice has been criticized, what its limitations and achievements might be, and how it might be understood. I explore the foundational concepts of reintegrative shaming, acknowledgment and responsibility, restitution, truth and reconciliation, and sentencing or healing circles for their transformative and theoretical potentials and for their actual practices in a variety of locations—family abuse, juvenile delinquency, criminal violations, problem-solving courts, indigenous-colonial-national disputes, ethnic and religious conflicts, civil wars, and liberation struggles. Restorative justice, which began as an alternative model of criminal justice, seekin...
Global Newton Method for stochastic games

Abstract The Global Newton Method for games in normal form and in extensive form is shown to have a natural extension to computing Markov-perfect equilibria of stochastic games.
Copyright as Entry Policy: The Case of Digital Distribution

The point of entry of a new product or new service is especially important for a successful economy. Entry creates the possibility of fresh competition with existing products. At least as important, we know that new products have been a critical source—if not the critical source—of new value, for both consumers and shareholders. In this paper, I want to consider how copyright law influences entry in digital distribution of music and video. The subject encompasses past and current successes in distribution—cable TV and the VCR—current and recent controversies—Napster and the pending cases addressing its successors—as well as possible next steps in distribution, such as web radio, interactive music services and the digital video recorder. Much of the relevant distribution entry policy is set through copyright law. With some frequency, copyright law has important competition consequences, but the relevant inquiries in copyright may not track the issues that are of interest to competition law. Copyright law entry policy reflects an amalgam of statutory interventions—as part of the restructuring of the copyright statute in 1976 and then subsequently in a series of quite context-specific tailored statutes—and judge-made copyright law addressing third-party liability for copyright infringement and the doctrine of copyright misuse. The copyright statutes reflect substantial path dependence, as well as the play of powerful interests. Fluke exclusions, such as that for sound recordings, result in the Digital Performance Right in
Transaction Attributes and Customer Valuation

AbstractDynamic customer targeting is a common task for marketers actively managing customer relationships. Such efforts can be guided by insight into the return on investment from marketing interventions, which can be derived as the increase in the present value of a customer’s expected future transactions. Using the popular latent attrition framework, one could estimate this value by manipulating the levels of a set of nonstationary covariates. The authors propose such a model that incorporates transaction-specific attributes and maintains standard assumptions of unobserved heterogeneity. They demonstrate how firms can approximate an upper bound on the appropriate amount to invest in retaining a customer and demonstrate that this amount depends on customers’ past purchase activity—namely, the recency and frequency of past customer purchases. Using data from a business-to-business service provider as their empirical application, the authors apply the model to estimate the revenue the service provider los...
Investor Horizon and CEO Horizon Incentives

ABSTRACT: We examine the relation between shareholder investment horizon and chief executive officer (CEO) horizon incentives derived from compensation contracts. We find that influential incumbent shareholders provide managers with short-horizon incentives to maximize current firm value when these shareholders plan to sell their stock. Specifically, we use the initial public offering (IPO) setting in which venture capitalists (VCs) represent short-horizon, controlling investors with strong selling incentives after the IPO. We predict and find that VCs' short-term incentives influence CEO's annual horizon incentives following the IPO. At the same time, institutional monitoring limits the influence of VCs on annual, short-horizon incentives. To preempt this disciplining by market participants, VCs grant equity prior to the IPO that correspond with their short-horizons and result in shorter portfolio horizon incentives for the CEO after the IPO. We also document a positive relation between long-run abnormal...
Clearinghouses as Liquidity Partitioning

To reduce the risk of another financial crisis, the Dodd-Frank Act requires that trading in certain derivatives be backed by clearinghouses. Critics mount two main objections: a clearinghouse shifts risk instead of reducing it; and a clearinghouse could fail, requiring a bailout. This Article’s observation that clearinghouses engage in liquidity partitioning answers both. Liquidity partitioning means that when one of its member firms becomes bankrupt, a clearinghouse keeps a portion of the firm’s most liquid assets, and a matching portion of its short-term debt, out of the bankruptcy estate. The clearinghouse then applies the first toward immediate repayment of the second. Economic value is created because creditors within the clearinghouse are paid much more quickly, and other creditors are paid no less quickly, than they would be otherwise. The rapid cash payouts for clearinghouse members reduce illiquidity and uncertainty in the financial sector, the main causes of contagion in a crisis. And because the clearinghouse holds only liquid assets, it avoids the maturity mismatch between short-term liabilities and long-term assets that characterizes the balance sheets of many financial institutions. A clearinghouse therefore is much less likely than its members to fail during a crisis. To ensure that clearinghouses remain stable and systemically valuable, rulemakers should require clearing of a wide variety of derivatives contracts, but should limit clearinghouse membership to dealer firms.
Why We Learn Nothing from Regressing Economic Growth on Policies

Government use policy to achieve certain outcomes. Sometimes the desired ends are worthwhile, and sometimes they are pernicious. Cross-country regressions have been the tool of choice in assessing the effectiveness of policies and the empirical relevance of these two diametrically opposite views of government behavior. When government policy responds systematically to economic or political objectives, the standard growth regression in which economic growth (or any other performance indicator) is regressed on policy tells us nothing about the effectiveness of policy and whether government motives are good or bad.
Incentives for Quality Through Endogenous Routing

We study how rework routing together with wage and piece-rate compensation can strengthen incentives for quality. Traditionally, rework is assigned back to the agent who generates the defect (in a self-routing scheme) or to another agent dedicated to rework (in a dedicated routing scheme). In contrast, a novel cross-routing scheme allocates rework to a parallel agent performing both new jobs and rework. The agent who passes quality inspection or completes rework receives the piece rate paid per job. We compare the incentives of these rework-allocation schemes in a principal-agent model with embedded quality control and routing in a multiclass queueing network. We show that conventional self-routing of rework cannot induce first-best effort. Dedicated routing and cross-routing, however, strengthen incentives for quality by imposing an implicit punishment for quality failure. In addition, cross-routing leads to workload-allocation externalities and a prisoner's dilemma, thereby creating the greatest incentives for quality. Firm profitability depends on demand levels, revenues, and quality costs. When the number of agents increases, the incentive effect of cross-routing reduces monotonically and approaches that of dedicated routing.
Valuing Laws as Local Amenities

TABLE OF CONTENTS I. INTRODUCTION 1274 II. THE HEDONICAPPROACH 1280 A. How the Equilibrating ProcessWorks 1281 B. More Complex Laws 1290 1. Laws that Affect Production Costs, Product Demand, and Labor Productivity or Supply 1291 2. Laws that Affect Supply of or Demand for Housing 1293 3. Laws that Exclusively Benefit Longtime, Pre-Law Residents 1297 C. How Informative Is the Hedonic Measure? 1298 1. Limitations 1298 (a) Limitations Common to the Conventional Approach 1298 (b) Limitations Addressed by Refinements 1301 (c) Fundamental Limitations 1307 2. Alternatives to Hedonic Measure 1309 3. Advantages of the Hedonic Approach 1311 III. EMPIRICAL EXAMPLES 1313 A. Data 1313 1. Housing Prices 1313 2. Wages 1314 3. Laws 1314 B. Empirical Model 1317 C. Interpretation of Preliminary Results 1317 IV. CONCLUSION 1330 I. INTRODUCTION The value of a law to a jurisdiction can be judged by the extent to which it either raises short-run housing prices and lowers short-run wages or raises the long-run, aggregate value of residential land in that jurisdiction. (1) This may seem an odd way to assess the welfare effect of a law. After all, higher housing prices and lower wages are thought to be bad outcomes, not good ones. But the proper way to understand these changes is as signals of positive outcomes, not as positive outcomes themselves. They indicate that something good has happened in the community. Housing prices go up because more people want to live there. Wages go down because more people want to work there. Phrased more formally, higher housing prices and lower wages are how markets ration an attractive local public good or amenity. Indeed, the increase in housing prices combined with the reduction in wages provides a measure of how much people are willing to give up to enjoy the amenity. In the long run, the supply of houses and jobs may increase in response to the rise in housing prices and fall in wages, but the maximum amount of land available to residential development is constant. Therefore, people's willingness to pay eventually settles into the aggregate value of residential land in the jurisdiction. Conventional economic thinking recognizes this when it comes to estimating the social value of a new park or a better school. The same logic, I argue here, applies when the local public good (2) is anything from a better tort system to smarter rules regarding capital punishment. This is, of course, not the standard practice. Under the conventional approach, the welfare effect of a law would be measured by evaluating the law's effect on specific related behaviors. For example, a three-strikes law would be evaluated by its effect on homicides; (3) a unilateral divorce law by its impact on rates of domestic violence (4) or divorce; (5) and a tort reform by its impact on insurance payments (6) and accidents. (7) These are certainly sensible metrics for judging the laws at issue. But each has significant shortcomings relative to measuring the welfare effect of a law by its impact on housing prices and wages or on long-run land values, an approach I call the "hedonic" approach to valuation of a law. …
Multiple growth regimes – Insights from unified growth theory

Abstract Unified growth theory uncovers the forces that contributed to the existence of multiple growth regimes and the emergence of convergence clubs. It suggests that differential timing of take-offs from stagnation to growth segmented economies into three fundamental regimes: slow growing economies in a Malthusian regime, fast growing countries in a sustained growth regime, and economies in the transition between these regimes. In contrast to existing research that links regime switching thresholds to critical levels of income or human capital, UGT associates them with critical changes in the rates of technological progress, population growth, and human capital formation.
Salience and the severity versus the certainty of punishment

Abstract A common presumption, supported by some empirical evidence, is that the certainty of punishment is a more effective deterrent than the severity of punishment. In rational decision making models of crime, this presumption implies that offenders must be risk-seeking. Some scholars claim that this and other anomalous implications are caused by the exclusion of various behavioral considerations in theoretical analyses. This article investigates whether a model in which criminals over-weigh probabilities attached to more salient payoffs (as the term is used by Bordalo, Gennaioli, and Shleifer in a series of influential articles) performs better than simple expected utility theory in explaining criminal behavior that is more responsive to the certainty than the severity of punishment. The analysis reveals that the answer is negative unless the probability of punishment is unreasonably high. This finding suggests that we should exercise caution in incorporating salience – a la Bordalo et al. – in models of criminal behavior.
Community participation and representation in genetic studies: testing the application of fundamental ethical principles.

Recent advances in the Human Genome Project (HGP) and its promise for the betterment of human health has escalated public consciousness about the science of genetics as well as concern about possible misuse of information garnered from this field. However, it is important to emphasize that neither genetics nor its associated and undesirable ideology of eugenics is new. In fact, eugenics was well established by the close of the 19th century, most influenced by the interpretation of Mendel's famous breeding experiments. Foremost in these explications were the works of biologist Charles Davenport in the United States and the "Victorian polymath" Francis Galton. Basing his theories on Mendel's work, Davenport applied a reductionist approach to explain a wide variety "of human conditions and behaviors from mental retardation and epilepsy to alcoholism and poverty." Galton believed "that much human weakness and misery arose ineluctably from the germ line." This ideology, based largely on the over-simplification and misinterpretation of scientific information, persisted in much of Western culture and was firm in the minds of many scientists and non-scientists in the United States in the 1920s and 1930s. The philosophy reached its lowest point at the hands of the Third Reich, whose atrocities ultimately lead to the establishment of the Nuremberg Code in 1947, the moment generally regarded as marking the beginnings of modern bioethics. The Nuremberg Code is a set of ten principles designed to protect human research subjects by emphasizing consent of the subject and placing much of the responsibility on investigators. Its principles, particularly the first, "The voluntary consent of the human subjectis absolutely essential," set in motion the subsequent establishment of a series of international and United States guidelines and regulations primarily concerned with the protection of individual research subjects. It is this focus on the individual, not groups or populations, that challenges the application of existing regulations and their core ethical principles to genetic studies. This article focuses on the application of these regulations, their core ethical principles, and the challenges of applying them towards studies more likely to be concerned with populations than individuals.