cssi/SciSciGPT-SciSciNet huggingface dataset:
Strategic price complexity in retail financial markets

Abstract There is mounting empirical evidence to suggest that the law of one price is violated in retail financial markets: there is significant price dispersion even when products are homogeneous. Also, despite the large number of firms in the market, prices remain above marginal cost and may even rise as more firms enter. In a non-cooperative oligopoly pricing model, I show that these anomalies arise when firms add complexity to their price structures. Complexity increases the market power of the firms because it prevents some consumers from becoming knowledgeable about prices in the market. In the model, as competition increases, firms tend to add more complexity to their prices as a best response, rather than make their disclosures more transparent. Because this may substantially decrease consumer surplus in these markets, such practices have important welfare implications.
Does Say‐on‐Pay Matter? Evidence from Say‐on‐Pay Proposals in the United States

We investigate the effect of say-on-pay (SOP) proposals on changes in executive and director compensation. Relative to non-SOP firms, SOP firms’ total compensation to CEOs does not significantly change after the proposal. However, the mix of compensation does change—companies move away from using cash compensation toward more incentive compensation, offsetting the reduction in bonus. Further, the mix of compensation of non-CEO executives changes similarly to that of CEOs. Compensation to directors of SOP firms increases less than non-SOP firms. Firms whose CEOs are well compensated, especially with cash-based compensation, are most likely to receive a proposal.
His master’s voice: H.L.A. Hart and Lacanian discourse theory

H.L.A. Hart’s jurisprudence seems antithetical to Jacques Lacan’s psychoanalysis. Professor Schroeder argues that, in fact, Hart’s concept of law has surprising similarities to Lacan’s ‘discourse of the Master’. Both reject a command theory of law: subjects do not obey law out of fear. Moreover, both insist that the authority of law is completely independent from its content.
Money held for moving stars: Talent competition and corporate cash holdings

Abstract Exploiting reforms of state covenants-not-to-compete laws to capture exogenous variation in barriers to compete for talent, I show that firms increase cash holdings when talent competition intensifies. The effect is concentrated among firms for which talent is more important and in industries relying more on knowledge-based competitive advantages. Furthermore, greater financial strength enables a firm to gain local talent market share at the expense of rivals, leading to superior product market performance. Supporting the idea that firms build up stronger financial positions to remain competitive in the labor market, these findings highlight corporate liquidity as a strategic variable to retain and attract mobile talent.
A column generation algorithm for nonlinear programming

An algorithm using column generation and penalty function techniques is presented. A linear program with a uniformly bounded number of columns, similar to the restricted master in generalized programming, is used to reduce the number of constraints included in forming a penalty function. The penalty function is used as a Lagrangian in an unconstrained subproblem.
Dynamic Limited Dependent Variable Modeling and U.S. Monetary Policy

I estimate, using real-time data, a forward-looking monetary policy reaction function that is dynamic and that also accounts for the fact that there are substantial restrictions in the period-to-period changes of the Fed’s policy instrument. I …nd a substantial contrast between the periods before and after Paul Volcker’s appointment as Fed Chairman in 1979, both in terms of the Fed’s response to expected in‡ation and in terms of its response to the (perceived) output gap: In the pre-Volcker era the Fed’s response to in‡ation was substantially weaker than in the Volcker-Greenspan era; conversely, the Fed seems to have been more responsive to real activity in the pre-Volcker era than later.
A model of microfinance with adverse selection, loan default, and self‐financing

Purpose – The purpose of this paper is to analyze a market for microfinance in a region of a developing nation in which all projects are either of high or low quality. There is adverse selection because only borrowers know whether their project is of high or low quality but the microfinance institutions (MFIs) do not. The MFIs are competitive, risk neutral, and they offer loan contracts specifying the amount to be repaid only if a borrower's project makes a profit. Otherwise, this borrower defaults on his contract.Design/methodology/approach – A game theoretic model is used that explicitly accounts for adverse selection and then a study is made of the trinity of adverse selection, loan default, and self‐financing.Findings – First, in the pooling equilibrium, a borrower with a low‐quality business project will obtain positive expected profit. In contrast, this borrower will obtain zero expected profit in the separating equilibrium. Second, for small enough values of the probability p that a business projec...
The Politics of Monetary Policy

Abstract In this paper we critically review the literature on the political economy of monetary policy, with an eye on the questions raised by the recent financial crisis. We begin with a discussion of rules versus discretion. We then examine the issue of the central bank’s independence (CBI) both in normal times and in times of crisis. Then we review the literature of electoral manipulation of policies. Finally we address international institutional issues concerning the feasibility, optimality, and political sustainability of currency unions in which more than one country shares the same currency. A brief review of the Euro experience concludes the paper.
Dynamic Monitoring and Control of Irreversible Chronic Diseases with Application to Glaucoma

To manage chronic disease patients effectively, clinicians must know (1) how to monitor each patient (i.e., when to schedule the next visit and which tests to take), and (2) how to control the disease (i.e., what levels of controllable risk factors will sufficiently slow progression). Our research addresses these questions simultaneously and provides the optimal solution to a novel linear quadratic Gaussian state space model. For the objective of minimizing the relative change in state over time (i.e., disease progression), which is necessary for managing irreversible chronic diseases while also considering the cost of tests and treatment, we show that the classical two-way separation of estimation and control holds. This makes a previously intractable problem solvable by decomposition into two separate, tractable problems while maintaining optimality. The resulting optimization is applied to the management of glaucoma. Based on data from two large randomized clinical trials, we validate our model and demonstrate how our decision support tool can provide actionable insights to the clinician caring for a patient with glaucoma. This methodology can be applied to a broad range of irreversible chronic diseases to devise patient-specific monitoring and treatment plans optimally.
Globally Speaking - Honoring the Victims' Stories: Matsuda's Human Rights Praxis

Globally speaking, international law and the vast majority of domestic legal systems strive to protect the right to freedom of expression. The United States’ First Amendment provides an early historical protection of speech — a safeguard now embraced around the world. The extent of this protection, however, varies among states.The United States stands alone in excluding countervailing considerations of equality, dignitary, or privacy interests that would favor restrictions on speech. The gravamen of the argument supporting such American exceptionalism is that free expression is necessary in a democracy. Totalitarianism, the libertarian narrative goes, thrives on government control of information to the detriment of freedom and liberty. It is thus of paramount importance to have “uninhibited, robust, and wide-open” debate. This approach places free speech above other equally significant constitutional values, such as racial, sexual, and sexual-orientation equality and privacy.Internationally, a dramatically different approach is the norm. Most societies balance freedom of speech against other rights in a manner that does not deify expression. Unlike in the United States, where the right to free speech is virtually unqualified, in other democratic societies speech is but one of the many rights protected. In these other societies, speech may be limited if other rights, such as the right to racial equality or the right to privacy, are negatively affected.In her work, Public Response to Racist Speech: Considering the Victim’s Story, Professor Matsuda provides a compelling counter-narrative to the absolutist First Amendment canon that infuses the United States’ jurisprudence. Her vision strongly aligns with the international jurisprudential method and offers a preferable model because it includes myriad democratic values.This Essay begins by utilizing real stories to tease out the differences in various approaches to freedom of expression from around the world. The Essay reviews the divergent approaches and then reveals the stories’ outcomes, along with providing critical commentary. It concludes by urging the adoption of a new approach, one that honors the victims’ stories.
Option prices under Bayesian learning: implied volatility dynamics and predictive densities

Abstract This paper shows that many of the empirical biases of the Black and Scholes option pricing model can be explained by Bayesian learning effects. In the context of an equilibrium model where dividend news evolve on a binomial lattice with unknown but recursively updated probabilities we derive closed-form pricing formulas for European options. Learning is found to generate asymmetric skews in the implied volatility surface and systematic patterns in the term structure of option prices. Data on S&P 500 index option prices is used to back out the parameters of the underlying learning process and to predict the evolution in the cross-section of option prices. The proposed model leads to lower out-of-sample forecast errors and smaller hedging errors than a variety of alternative option pricing models, including Black–Scholes and a GARCH model.
Asymmetric Learning in Repeated Contracting: An Empirical Study

Abstract This paper uses a unique panel data set of an insurer's transactions with repeat customers. Consistent with the asymmetric learning hypothesis that repeated contracting enables sellers to obtain an informational advantage over their rivals, I find that the insurer makes higher profits in transactions with repeat customers who have a good claims history with the insurer, the insurer reduces the price charged to these repeat customers by less than the reduction in expected costs associated with such customers, and repeat customers with bad claim histories are more likely to flee their record by switching to other insurers.
In search of WTO trade effects: Preferential trade agreements promote trade strongly, but unevenly

Abstract The literature measuring the effects of WTO membership on trade flows has produced remarkably diverse results. Rose (2004) reports a wide range of empirical specifications that produce no WTO effects. Tomz et al. (2007) use Rose's data but include de facto WTO membership, to find positive WTO trade effects. Rose (2005) also produced positive WTO trade effects after accounting for the diverse trade effects produced by individual preferential trade agreements (PTAs). When Subramanian and Wei (2007) emphasize general equilibrium trade effects by controlling for multilateral resistance, they find strong WTO trade effects only for industrialized countries. Subramanian and Wei (2007), however, account neither for unobserved heterogeneity among trading partners, nor for differences in trade effects across PTAs (which could inflate WTO estimates). We unify the Rose, Tomz et al., and Subramanian and Wei specifications in one comprehensive approach that minimizes omitted variable bias to show that all specifications produce one consistent result: WTO effects on trade flows are not statistically significant, while PTAs produce strong but uneven trade effects. Extending the gravity model to address specific avenues in which WTO may have affected trade flows, we find that WTO membership boosts trade prior to PTA formation and increases trade among proximate developing countries (at the expense of distant trade). An augmented gravity model that accounts for WTO terms-of-trade theory shows that countries with greater incentives to bargain for tariff reductions before WTO accession experience positive and significant subsequent WTO trade effects.
Public finance texts cannot justify government taxation: A critique

In virtually all economic sub-disciplines, practitioners of the dismal science are exceedingly desirous of avoiding normative concerns, at least in principle. These are seen, and rightly so, as extremely treacherous. Being only human, they do sometimes stray off the path of positive analysis; but when they fall off the wagon in this manner, i f at all, i t is done relatively cautiously, and infrequently. There is one blatant exception to this general rule, however, and that is the field of public finance. Here, in sharp contrast to the usual practice, not only is normative economics embraced, it is done so with alacrity, and without apology. That is, most textbooks on the subject start off with one or several chapters which attempt to justify taxation on moral, efficiency, and other grounds. This occurs in no other field.
Parental Attention Deficit Disorder

This essay considers the moral status of certain practices that aim to enhance offspring traits. I develop an objection to offspring enhancement that draws on an account of the role morality of parents. I work out an account of parental ethics by reference to premises about child development and to observations about parenting culture in the United States. I argue that excellence in parenthood consists in a dual responsibility both to guide children toward the good life and to accept them as they are. I conclude that prenatal manipulation of healthy and normal characteristics in human offspring fails to balance the dispositional extremes of control and restraint to which many parents today are susceptible. I apply this account of good parenting to the challenging case of height enhancement for short but otherwise healthy children. Finally, I reply to objections, first, about the phenomenology of bearing normative obligations to people who do not yet exist and, second, about the moral logic of criticizing embryo selection in the context of assisted reproduction when we accept child selection in the context of adoption.
Endogenous free trade agreements and the multilateral trading system

I evaluate in this paper the impact of free trade areas (FTAs) on the world trading system. I use an oligopolistic-political-economy model where the external tariffs of FTA members, as well as the decision to form FTAs, are endogenously determined. In this context, I show that FTAs are primarily beneficial to the multilateral trading system. This conclusion is based, first, upon the finding that FTAs induce their member governments to lower their external tariffs, and to do so deeply enough to enhance trade even between FTA members and non-members. While this ensures gains for the latter, in general FTA members may not gain. I show, however, that governments will endorse only welfare-improving arrangements, in spite of their political motivations; as a result, FTA members benefit from ratified arrangements as well. Finally, I find that FTAs, by reducing the role of special interests criteria in governments' trade regime decisions, also tend to enhance support for further liberalization at the multilateral level.
Procedural transparency and the credibility of election surveys

Abstract The success and influence of survey-based electoral research is fueling the ambitions of survey analysts and producers. As a result, many new forms and uses of survey data are emerging. These new activities bring with them important questions about credibility. I address several of these questions by discussing common practices in the production and analysis of election surveys. I contend that the continuation of some of these practices threatens the credibility of individual studies and, in some cases, the election-oriented survey enterprise as a whole. In all of these cases, however, I argue that a commitment to increased transparency about analytic and/or production decisions can enhance credibility. In the process, I provide suggestions and examples of how transparency can be increased.
Business Networks, Corporate Governance, and Contracting in the Mutual Fund Industry

Business connections can mitigate agency conflicts by facilitating efficient information transfers, but can also be channels for inefficient favoritism. I analyze these two effects in the mutual fund industry and find that fund directors and advisory firms that manage the funds hire each other preferentially based on the intensity of their past interactions. I do not find evidence that stronger board-advisor ties correspond to better or worse outcomes for fund shareholders. These results suggest that the two effects of board-management connections on investor welfare—improved monitoring and increased potential for collusion—balance out in this setting. THE U.S. MUTUAL FUND INDUSTRY manages more than $12 trillion on behalf of 44% of American households. 1 While the importance of the industry has increased steadily since its regulation by the Investment Company Act of 1940, it still faces a fundamental principal-agent problem. In particular, the investment advisory firms that manage mutual funds’ money do not have the same incentives as the fund shareholders: Advisory firms’ profit is generated by collecting management fees, which are typically a percentage of assets under management, whereas investors’ profit is generated by funds earning high returns. Recognizing this conflict of interests, the 1940 Act required that mutual funds have boards of directors that are elected by shareholders and responsible for monitoring and negotiating with the management on behalf of investors. However, the effectiveness of boards as fiduciaries has recently been questioned. Voicing the concerns of fund investors, in June 2004 the Securities and Exchange Commission (SEC) demanded that mutual fund boards disclose more information regarding the selection of the advisory firms that manage the funds’ money and the setting of management fees. The concern expressed in the SEC’s
Between the Ceiling and the Floor: Making the Case for Required Disclosure of High-Low Agreements to Juries

Parties are increasingly using high-low agreements to limit the risks of litigation. High-low agreements are contracts in which defendants agree to pay plaintiffs a minimum recovery in return for plaintiffs’ agreement not to execute on a jury award above a maximum amount. Currently no jurisdiction requires high-low agreements to be disclosed to the jury. This Note argues that disclosure should be required. It contends that non-disclosed high-low agreements are a type of procedu- ral contract modifying the jury’s core adjudicative function. Drawing on theories of procedural justice, it suggests that by usurping the jury’s role these agreements un- dermine the legitimacy of the judicial system. It contends that requiring disclosure would remedy these negative effects and that any unintended consequences attend- ant to disclosure could be mitigated by the court or by the parties.
(Un)Learning and (Mis)Education Through the Eyes of Bill Starbuck: An Interview With Pandora's Playmate.

William H. Starbuck began his academic career in the late 1950s as a doctoral student at the Carnegie Institute of Technology, working alongside Herb Simon, Jim March, and Dick Cyert. Bill retired ...
Research in accounting for income taxes

Abstract This paper comprehensively reviews the Accounting for Income Taxes (AFIT) literature. We begin by identifying four distinctive aspects of AFIT and briefly covering the rules surrounding AFIT. We then review the existing studies in detail and offer suggestions for future research. We emphasize the research questions that have been addressed (most of which relate to whether the tax accounts are used to manage earnings and whether the tax accounts are priced by equity market participants). We also highlight areas that have not received much research attention and that warrant future analysis.
Learning, Confidence and Option Prices

Abstract The option-market evidence suggests that investors are concerned with large downward moves in equity prices, which occur once every one to two years in the data. This evidence is puzzling because there are no concurrent jumps in macroeconomic fundamentals. I estimate a confidence-risk model where agents use a constant gain specification to learn about the unobserved expected growth from the cross-section of signals. While consumption shocks are Gaussian, investors’ uncertainty (confidence measure) is subject to jumps, which endogenously trigger jump risks in equity and option markets. The model provides a good fit to macroeconomic, equity, option, and forecast data.
FOREIGN EXCHANGE AND CROSS‐BORDER VALUATION

Should a corporate financial manager analyze a cross-border investment proposal from the perspective of the foreign currency or the home currency? The conventional wisdom among economists is that it doesn't matter–the valuation of an asset should be the same in one currency as in another, given the spot FX rate. This assertion implies that it is irrelevant whether we analyze an overseas investment's NPV in the home currency or the foreign currency, as long as we use consistent cross-border conversions. But what happens if managers' foreign exchange forecasts differ from the efficient markets forecast that is implicit in interest rates? In that case, as this article demonstrates through a series of examples, managers' FX forecasts can affect their investment, hedging, and financing decisions.
Disclosure of innovation activities by high-technology firms

Abstract This study investigates management incentive to disclose non-GAAP indicators concerning innovation in high-technology industries and the usefulness of the disclosure. As predicted, we find that firms increase disclosures of innovation when current earnings are less informative, or when future earnings are more uncertain. This finding is consistent with firms increasing disclosure in response to investor information demands when accounting data are less useful in assessing firm value. We also find that disclosures of innovation contain price-sensitive news. In addition, we find that disclosures of innovation are positively associated with the firm's future sales growth, profitability, and stock returns, after controlling for current performance and other factors known to influence future performance. This evidence is consistent with management disclosure conveying value-relevant information that is not reflected in current performance, but is predictive of future performance. © City University of ...
Review of the Satisfaction With Life Scale

The Satisfaction With Life Scale (SWLS) was developed to assess satis-faction with the respondent’s life as a whole. The scale does not assess satisfaction with life domains such as health or finances but allows subjects to integrate and weight these domains in whatever way they choose. Normative data are presented for the scale, which shows good convergent validity with other scales and with other types of assessments of subjective well-being. Life satisfaction as assessed by the SWLS shows a degree of temporal stability (e.g., 0.54 for 4 years), yet the SWLS has shown sufficient sensitivity to be potentially valuable to detect change in life satis-faction during the course of clinical intervention. Further, the scale shows discrim-inant validity from emotional well-being measures. The SWLS is recommended as a complement to scales that focus on psychopathology or emotional well-being because it assesses an individuals’ conscious evaluative judgment of his or her life by using the person’s own criteria.
The Depoliticization of Law

Advocates of the privatization of law often assume that unless law springs from some act of agreement, some express or implicit social contract by which individuals consent to be bound, it is nothing more than force. In this Article, I argue that this is a false dilemma. Although law is rarely grounded in consent, this does not imply that law necessarily gives some individuals command over others. Law can arise through a process of evolution. When this is the case, those subject to law are indeed bound, but not by the will of any particular human beings. Although this depoliticized law is inherently coercive, it is not inherently a vehicle for domination. This Article argues that such a system of depoliticized law is consistent with the ideal of the rule of law, and, in fact, is free market law, when that phrase is properly understood.
Stochastic Skew in Currency Options

Abstract We analyze the behavior of over-the-counter currency option prices across moneyness, maturity, and calendar time on two of the most actively traded currency pairs over the past eight years. We find that, on any given date, the conditional risk-neutral distribution of currency returns can show strong asymmetry. This asymmetry varies greatly over time and often switches signs. We develop and estimate a class of models that captures this stochastic skew behavior. Model estimation shows that our stochastic skew models significantly outperform traditional jump-diffusion stochastic volatility models both in sample and out of sample.
From Independence to Politics in Financial Regulation

S TAVROS G ADINIS Assistant Professor U NIVERSITY OF C ALIFORNIA , B ERKELEY S CHOOL OF L AW
The Delisting Bias in Hedge Fund Databases

As is well known, hedge fund databases suffer from various types of serious biases. While many of these biases have been addressed, the delisting bias is much more difficult to control. In this article, the authors use information from three hedge fund databases to provide direct estimates of this bias. Based on the fact that funds delisted in one database often continue to report returns to another, they estimate the delisting bias is at least 35 bps per annum. Their analysis also provides estimates of frequencies and average losses for different delisting reasons. The delisting bias largely explains the puzzling differences between the performance of the direct hedge fund investments and that implied by funds of hedge funds. The authors estimate that the performance of hedge fund indices should be adjusted downward by about 50 bps to account for the delisting bias.
Professor Bainbridge and the Arrowian Moment: A Review of The New Corporate Governance in Theory and Practice

The New Corporate Governance in Theory and Practice, a new book by Stephen Bainbridge, pulls together the leading arguments for director primacy that Bainbridge has made in a series of articles. In his core argument, Bainbridge uses theoretical work by Kenneth Arrow to explain the attractions of the separation of ownership and control with a centralized hierarchy headed by a board of directors. Bainbridge posits that achieving an optimal trade-off between authority and accountability is the central problem of corporate law. He uses a key passagefrom Arrow to argue that in making this trade-off, lawmakers should always make a presumption in favor of preserving managerial authority. This article examines Bainbridge's argument, and shows that he does not succeed in justifying this presumption. Arrow's argument persuasively shows why rules that lead to constant review of all board decisions would effectively eliminate board authority, and that this would be unattractive. None of the major proaccountability reform proposals currently in play, however, comes even close to eliminating board authority. Arrow's argument cannot tell us whether reform in favor of somewhat more accountability at the expense of some loss in authority, but far from a total loss in authority, is a good idea or not. That is, Bainbridge's use of Arrow does not help us determine the wisdom of current reform proposals. Bainbridge's attempt to use Arrow thus falls short of his target. Bainbridge has other, less original, arguments which supplement his core argument for board authority. This article considers the leading supplementary arguments as well, and also finds them wanting. The article ultimately moves beyond a critique of Bainbridge to argue more affirmatively for greater accountability for boards. *Professor and Associate Dean for Academic Affairs, University of Minnesota Law School. I thank Claire Hill, Paul Rubin, participants at the Midwestern Law and Economics Association annual conference, and especially Stephen Bainbridge for helpful comments on an earlier draft. DELAWARE JOURNAL OF CORPORATE LAW
Dark energy as double N-flation – observational predictions

We propose a simple model for dark energy useful for comparison with observations. It is based on the idea that dark energy and inflation should be caused by the same physical process. As motivation, we note that Linde's simple chaotic inflation V = 1/2m 2 φ 2 produces values of n s = 0.967 and r = 0.13, which are consistent with the Wilkinson Microwave Anisotropy Probe (WMAP) 1σ error bars. We therefore propose V = 1/2m 2 2 φ 2 2 + 1/2m 2 1 φ 2 1 with m 1 ~ 10 -5 and m 2 ≤ 10 -60 , where c = 1 = ħ and the reduced Planck mass is set to unity. The field φ 1 drives inflation and has damped by now (φ 1.0 = 0), while φ 2 is currently rolling down its potential to produce dark energy. Using this model, we derive the formula δω(z) = w(z) + 1 = δω 0 (H 0 /H(z)) 2 via the slow-roll approximation. Our numerical results from exact and self-consistent solution of the equations of motion for φ 2 and the Friedmann equations support this formula, and it should hold for any slow-roll dark energy. Our potential can be easily realized in N-flation models with many fields, and is easily falsifiable by upcoming experiments - for example, if Linde's chaotic inflation is ruled out. But if r values consistent with Linde's chaotic inflation are detected then one should take this model seriously indeed.
Trade, Technology and Human Capital: Stylised Facts and Quantitative Evidence

Stylised evidence on trade, total factor productivity (TFP) and skill intensity of the labour force is presented. Features emerging as salient are: growing trade in technology-intensive products from the industrialised nations to the relatively laggard nations leads to embodied technology diffusion; the technology-intensive sectors have larger shares of skilled workers; countries experiencing TFP growth usually have higher levels of educational attainment; also, the skilled labour payment share for a sector is positively associated with that sector’s regional trade share. These facts together help explain why endowment of more skilled labour facilitates absorption of technology ferried via trade.
Organizational Enablers for NPD Portfolio Selection

Despite substantial research that advocates the “right” portfolio of new product development initiatives for the firm, one important aspect has been overlooked: Creating a portfolio of new product development initiatives is not equivalent to choosing from a menu of initiatives. Rather, these initiatives are defined by and within the organization. Thus, portfolio selection rests upon two challenges: 1) the cross-functional nature of collaborative tasks; and 2) the role of explicit and implicit incentives on innovative outcomes. This paper explores how these factors ultimately determine the initiatives an organization pursues. We abstract a new product development organization as two functional managers who report to senior management and analyze the strategic interactions between all three stakeholders. Senior management decides whether to empower the functional managers to define the initiative and how to reward them contingent on the outcome. We evaluate how the asymmetry of information regarding each function's capability, and the explicit and implicit rewards and penalties imposed on the functional managers affect the upfront resource allocation. We find a profound effect of the information asymmetry: the set of initiatives the firm deems profitable is reduced, thus impeding the organization's potential to innovate. To counter such a shortcoming, senior management may optimally misalign the objectives of the stakeholders.
Who should abate carbon emissions?: An international viewpoint

Abstract We review the optimal pattern of carbon emission abatements across countries in a simple multi-country world. We model explicitly (with the model in Chichilnisky, 1993b) the fact that the atmosphere is a public good. Within this framework we establish conditions for it to be necessary for optimality that the marginal cost of abatement be the same in all countries. These conditions are quite restrictive, and amount to either ignoring distributional issues between countries or operating within a framework within which lump-sum transfers can be made between countries. These results have implications for the use of tradeable emission permits, which as normally advocated will lead to the equalization of marginal abatement costs across countries. The observation that the atmosphere is a public good implies that we may need to look at a Lindahl equilibrium rather than a Walrasian equilibrium in tradeable permits.
Propensity Score Matching in Accounting Research

ABSTRACT: Propensity score matching (PSM) has become a popular technique for estimating average treatment effects (ATEs) in accounting research. In this study, we discuss the usefulness and limitations of PSM relative to more traditional multiple regression (MR) analysis. We discuss several PSM design choices and review the use of PSM in 86 articles in leading accounting journals from 2008–2014. We document a significant increase in the use of PSM from zero studies in 2008 to 26 studies in 2014. However, studies often oversell the capabilities of PSM, fail to disclose important design choices, and/or implement PSM in a theoretically inconsistent manner. We then empirically illustrate complications associated with PSM in three accounting research settings. We first demonstrate that when the treatment is not binary, PSM tends to confine analyses to a subsample of observations where the effect size is likely to be smallest. We also show that seemingly innocuous design choices greatly influence sample composi...
Proving Fair Use: Burden of Proof as Burden of Speech

Courts have created a burden of proof in copyright that chills protected speech. The doctrine of fair use purports to ensure that copyright law does not trample rights of speakers whose expression employs copyrighted material. Yet those speakers face a burden of proof that weighs heavily in the fair use analysis, where factual inquiries are often subjective and speculative. Failure to satisfy the burden means severe penalties, which prospect quickly chills the free exercise of speech that constitutes a fair use. The fair-use burden of proof is repugnant to the fair use purpose. Today, copyright holders are exploiting the burden with Internet efficiency against individual fair users. This Article therefore proposes that the burden of proof should lie with copyright holders.
Household Debt: Facts, Puzzles, Theories, and Policies

Borrowing decisions affect most households, with large stakes and implications for research subfields as varied as macroeconomics and industrial organization. I review theoretical and empirical work on household debt: its prevalence, level, growth, and composition, as well as various measures of consumer choice and market (in)efficiency, elasticities, and prices, including new evidence on how borrowing heterogeneity affects the distribution of the opportunity cost of consumption. I also discuss opportunities and challenges in policy evaluation. A key takeaway is that puzzles abound, and I highlight numerous avenues for further research.
The Coming Paradigm Shift in Forensic Identification Science

Converging legal and scientific forces are pushing the traditional forensic identification sciences toward fundamental change. The assumption of discernible uniqueness that resides at the core of these fields is weakened by evidence of errors in proficiency testing and in actual cases. Changes in the law pertaining to the admissibility of expert evidence in court, together with the emergence of DNA typing as a model for a scientifically defensible approach to questions of shared identity, are driving the older forensic sciences toward a new scientific paradigm.
Has the Fed been a failure

As the 100th anniversary of the 1913 Federal Reserve Act approaches, we assess whether the nation’s experiment with the Federal Reserve has been a success or a failure. Drawing on a wide range of recent empirical research, we find the following: (1) The Fed’s full history (1914 to present) has been characterized by more rather than fewer symptoms of monetary and macroeconomic instability than the decades leading to the Fed’s establishment. (2) While the Fed’s performance has undoubtedly improved since World War II, even its postwar performance has not clearly surpassed that of its undoubtedly flawed predecessor, the National Banking system, before World War I. (3) Some proposed alternative arrangements might plausibly do better than the Fed as presently constituted. We conclude that the need for a systematic exploration of alternatives to the established monetary system is as pressing today as it was a century ago.
One tool, many languages: language-parametric transformation with incremental parametric syntax

We present a new approach for building source-to-source transformations that can run on multiple programming languages, based on a new way of representing programs called incremental parametric syntax. We implement this approach in Haskell in our Cubix system, and construct incremental parametric syntaxes for C, Java, JavaScript, Lua, and Python. We demonstrate a whole-program refactoring tool that runs on all of them, along with three smaller transformations that each run on several. Our evaluation shows that (1) once a transformation is written, little work is required to configure it for a new language (2) transformations built this way output readable code which preserve the structure of the original, according to participants in our human study, and (3) our transformations can still handle language corner-cases, as validated on compiler test suites.
The intertemporal allocation of consumption: theory and evidence

Abstract Liquidity constraints and, more generally, inperfections in credit markets, can be extremely important for the intertemporal allocation of consumption and have received a substantial amount of attention in the theoretical and empirical literature on consumption. In the first part of the paper I review the reasons why liquidity constraints are important. Unfortunately, for several reasons, it is not easy to test for the presence of liquidity constraints. Aggregation issues preclude the use of aggregate time series data for such a purpose. Test based on micro data, however, are complicated by serious identification problems. If a simple equilibrium model does not fit some data set, one can change the assumptions about the opportunity set available to the economic agents or the specification of their preferences. For instance, empirical evidence that detects excess sensitivity of consumption to income could be explained by liquidity constraints or by nonseparability between consumption and leisure. However, the available evidence shows that it is possible to find flexible specifications of preferences that fit consumption movements at businesscycle frequencies. I also present simulation evidence that shows that from many plausible parameter configurations, liquidity constraints are likely to be relevant only for a small proportion of economic agents. In the last part of the paper I present new evidence on the relevance of liquidity constraints based on debt-holding data. The data indicate that the demand for debt of individuals is more likely to be liquidity constrained and is less elastic to changes in the interest rate.
Materiality and change: Challenges to building better theory about technology and organizing

Researchers have had difficulty accommodating materiality in voluntaristic theories of organizing. Although materiality surely shapes how people use technologies, materiality's role in organizational change remains under-theorized. We suggest that scholars have had difficulty grappling with materiality because they often conflate the distinction between the material and social with the distinction between determinism and voluntarism. We explain why such conflation is unnecessary and outline four challenges that researchers must address before they can reconcile the reality of materiality with the notion that outcomes of technological change are socially constructed.
The Ideal of Liberty: A Comment on Michael H. v. Gerald D.

What is the meaning and content of the "liberty" protected by the due process clause of the fourteenth amendment? In Michael H. v. Gerald D.,' Justices Brennan and Scalia spelled out what at first blush appear to be sharply contrasting understandings of the meaning of liberty and of the substantive limits liberty imposes on state action.2 Justice Scalia argued that the "liberty" protected by a substantive interpretation of due process is only the liberty to engage in activities historically protected against state intervention by firmly entrenched societal traditions. I will sometimes call this the "traditionalist" interpretation of liberty. Justice Brennan, by contrast, argued for a much broader, and nominally more liberal, interpretation. The liberty protected by the fourteenth amendment, Brennan contended, means the liberty to enjoy those broad areas of life-such as parenthood, privacy, and sexuality-which have been identified as essential to liberty by the relevant judicial precedent of the liberal Warren and Burger Court era. I will sometimes call this the "precedential" interpretation. In this essay I will briefly argue that, appearances notwithstanding, Justice Brennan's precedential interpretation of liberty, no less than Justice Scalia's traditionalist one, is at its root deeply conservative. I will then argue that the best explanation for the conservatism of even this nominally "liberal" interpretation of liberty by an unquestionably liberal jurist is that it stems from the general need of all members of the Court-liberal as well as conservative-to interpret the Constitution in a way that vindicates the "jurisprudential virtues" of good judicial decision-making. Those virtues, I will suggest, are themselves conservative, and perhaps necessarily so. It is therefore not surprising that constitutional interpretations rendered by even the liberal Justices-such as Justice Brennan's interpretation of "liberty" in Michael H. -have conservative overtones and consequences. Second, I will suggest that the Justices' collective need to constrain interpretation by the ethical demands of the adjudicative
The Admissibility of Hearsay Evidence in New York State Sex Offender Civil Commitment Hearings After State v. Floyd Y. : Finding a Balance Between Promoting the General Welfare of Sexual Assault Victims and Providing Due Process of Law

In twenty states throughout the country, the government may petition for the civil commitment of detained sex offenders after they are released from prison. Although processes differ among the states, the government must generally show at a court proceeding that a detained sex offender both suffers from a mental abnormality and is dangerous and that this combination makes a detained sex offender likely to reoffend. At such court proceedings, both the government and the respondent will present evidence to either the court or the jury on these issues. As in most court proceedings, hearsay evidence is inadmissible at sex offender civil commitment hearings unless it meets sufficient indicia of reliability or fits within an established exception to the general rule against hearsay. On November 19, 2013, the New York State Court of Appeals determined that in sex offender civil commitment hearings, the best way to show that hearsay evidence regarding uncharged crimes and/or dropped charges meets sufficient indicia of reliability is to require live confrontation of the declarant. This Note argues, however, that neither the U.S. Constitution nor New York State’s Civil Practice Law and Rules require live confrontation. In addition, live confrontation conflicts with the legislative intent of New York State’s sex offender civil commitment statute and is detrimental to the psychological well-being of victims of sexual assault.
The perils of relying on interested parties to evaluate scientific quality.

Recently, there has been a trend in both civil litigation and regulatory law to circumvent the scientific community’s collective judgment on the quality of individual studies with an adversarial process of evaluating scientific quality using interest groups. The Supreme Court’s Daubert v Merrell Dow Pharmaceuticals, Inc opinion and two recent “good science” laws passed by Congress adopt an adversarial process informed by affected parties for reviewing and screening scientific quality. These developments are unwise. Both theory and experience instruct that an adversarial, interest group‐dominated approach to evaluating scientific quality will lead to the unproductive deconstruction of science, further blur the distinction between policy and scientific judgments, and result in poor decisions because the courts and agencies that preside over these “good science” contests sometimes lack the scientific competency needed to make sound decisions. (Am J Public Health. 2005;95:S99‐S106. doi:10.2105/AJPH.2004.044792)
NEUTRINO FLAVOR GONIOMETRY BY HIGH ENERGY ASTROPHYSICAL BEAMS

It is shown how high energy neutrino beams from very distant sources can be utilized to learn about many properties of neutrinos such as lifetimes, mass hierarchy, mixing, minuscule pseudo-Dirac mass splittings and other exotic properties; in addition, the production mechanism of neutrinos in astrophysical sources can also be elucidated.
Steady the Course: Property Rights in Genetic Material

This paper defends the current legal regimes for the creation of property rights in the human genome and related forms of intellectual property. The basic trade-off of any system of intellectual property is the desire to spur innovation on the one hand while preventing the creation of blockades once patents are recognized. It argues that the creation of multiple patents not only increases the risk of blockade but creates the offsetting benefit of different ways to reach any business objective. The paper then reviews and rejects various strategies that may be used to both respect patent rights and undo blockades, including condemnation of patents and regimes of compulsory licenses. It also argues that the current rules on genomic patenting meet the general standards for valid patents, and concludes against many critics that the current system offers about the right mix between private rights and public access.