cssi/SciSciGPT-SciSciNet huggingface dataset:
Rank and file employees and the discovery of misreporting: The role of stock options

Abstract We find that firms grant more rank and file stock options when involved in financial reporting violations, consistent with managements’ incentives to discourage employee whistle-blowing. Violating firms grant more rank and file options during periods of misreporting relative to control firms and to their own option grants in non-violation years. Moreover, misreporting firms that grant more rank and file options during violation years are more likely to avoid whistle-blowing allegations. Although the Dodd-Frank Act (2010) offers financial rewards to encourage whistle-blowing, our findings suggest that firms discourage whistle-blowing by giving employees incentives to remain quiet about financial irregularities.
Some anomalous evidence regarding market efficiency

The efficient market hypothesis has been widely tested and, with few exceptions, found consistent with the data in a wide variety of markets: the New York and American Stock Exchanges, the Australian, English, and German stock markets, various commodity futures markets, the Over-theCounter markets, the corporate and government bond markets, the option market, and the market for seats on the New York Stock Exchange. Yet, in a manner remarkably similar to that described by Thomas Kuhn in his book, The Structure of Scientific Revolutions, we seem to be entering a stage where widely scattered and as yet incohesive evidence is arising which seems to be inconsistent with the theory. As better data become available (e.g., daily stock price data) and as our econometric sophistication increases, we are beginning to find inconsistencies that our cruder data and techniques missed in the past. It is evidence which we will not be able to ignore. The purpose of this special issue of the Journal of Financial Economics is to bring together a number of these scattered pieces of anomalous evidence regarding Market Efficiency. As Ball (1978) points out in his survey article: taken individually many scattered pieces of evidence on the reaction of stock prices to earnings announcements which are inconsistent with the theory don’t amount to much. Yet viewed as a whole, these pieces of evidence begin to stack up in a manner which make a much stronger case for the necessity to carefully review both our acceptance of the efficient market theory and our methodological procedures.
The Strange History of Adult Adoptee Access to Original Birth Records

In the late 1940s and early 1950s, contemporary accounts reported that most states had sealed adoption court records completely but, typically, had sealed original birth certificates from all persons except adult adoptees. Through the 1950s influential experts recommended that original birth certificates remain available to adult adoptees, while birth and court records otherwise be closed to all persons except upon court order. In 1960 the laws in some 40 percent of the states still permitted adult adoptees to inspect them, but between 1960 and 1990 all but a handful of the rest of the states closed the birth records to adult adoptees. Since then a number of states have passed laws providing adult adoptees access to formerly sealed birth certificates. This article summarizes the authors research on and analysis of the complex history of the states sealing these records and now beginning to reopen them to the adult adoptees whose births they record. (Correction and update: Delaware and Illinois provide a right of access to all adult adoptees, qualified by a possibility of a birth parent vetoe. At least eight states, including Nebraska, have recognized a right of access prospectively, which is also subject to birth parents vetoes. Since the publication of the article, New Hampshire, Maine, and Rhode Island have joined Alabama, Oregon, and Tennessee in restoring access to original birth certificates to adult adoptees.)
Bottomless Bowls: Why Visual Cues of Portion Size May Influence Intake

WANSINK, BRIAN, JAMES E. PAINTER, AND JILL NORTH. Bottomless bowls: why visual cues of portion size may influence intake. Obes Res. 2005;13:93–100. Objective: Using self-refilling soup bowls, this study examined whether visual cues related to portion size can influence intake volume without altering either estimated intake or satiation. Research Methods and Procedures: Fifty-four participants (BMI, 17.3 to 36.0 kg/m 2 ; 18 to 46 years of age) were recruited to participate in a study involving soup. The experiment was a between-subject design with two visibility levels: 1) an accurate visual cue of a food portion (normal bowl) vs. 2) a biased visual cue (self-refilling bowl). The soup apparatus was housed in a modified restaurant-style table in which two of four bowls slowly and imperceptibly refilled as their contents were consumed. Outcomes included intake volume, intake estimation, consumption monitoring, and satiety. Results: Participants who were unknowingly eating from self-refilling bowls ate more soup [14.7 8.4 vs. 8.5 6.1 oz; F(1,52) 8.99; p 0.01] than those eating from normal soup bowls. However, despite consuming 73% more, they did not believe they had consumed more, nor did they perceive themselves as more sated than those eating from normal bowls. This was unaffected by BMI. Discussion: These findings are consistent with the notion that the amount of food on a plate or bowl increases intake because it influences consumption norms and expectations and it lessens one’s reliance on self-monitoring. It seems that people use their eyes to count calories and not their stomachs. The importance of having salient, accurate visual cues can play an important role in the prevention of unintentional overeating.
Monotonicity in direct revelation mechanisms

Abstract This paper studies a standard screening problem where the principal's allocation rule is multi-dimensional, and the agent's private information is a one-dimensional continuous variable. Under standard assumptions, that guarantee monotonicity of the allocation rule in one-dimensional mechanisms, it is shown that the optimal allocation will be non-monotonic in a (weakly) generic sense once the principal can use all screening variables. The paper further gives conditions on the model's parameters that guarantee that non-monotonic allocation rules will be optimal.
Contexts of reception, post-disaster migration, and socioeconomic mobility

Current theories conceptualize return migration to New Orleans after Hurricane Katrina as an individual-level assessment of costs and benefits. Since relocation is cost prohibitive, return migration is thought to be unlikely for vulnerable populations. However, recent analyses of longitudinal survey data suggest that these individuals are likely to return to New Orleans over time despite achieving socioeconomic gains in the post-disaster location. I extend the “context of reception” approach from the sociology of immigration and draw on longitudinal data from the Resilience in the Survivors of Katrina Project to demonstrate how institutional, labor market, and social contexts influence the decision to return. Specifically, I show how subjective comparisons of the three contexts between origin and destination, perceived experiences of discrimination within each context, and changing contexts over time explain my sample’s divergent migration and mobility outcomes. I conclude with implications for future research on, and policy responses to, natural disasters.
Central Bank Financial Strength, Transparency, and Policy Credibility

A central bank is financially strong if it possesses resources sufficient to attain its fundamental policy objective(s). Once endowed with those resources, relations between government and central bank should be designed so that significant changes in central bank financial strength do not occur unless necessitated by changes in policy objectives. The level of strength required depends on the array of policy objectives (for example, the exchange rate regime) as well as the constraints and risks presented by the operational environment. Attaining credibility is facilitated if the public can easily determine the financial strength of the bank, yet for a variety of reasons this is often difficult. Transparency requires institutional arrangements that ensure the central bank generates profit in most states of the world, is subject to strict ex post independent audit, and transfers regularly all profits, after provisions, to the treasury.
Personal Jurisdiction and Corporate Groups: Daimlerchrysler AG v Bauman

(2013). Personal Jurisdiction and Corporate Groups: Daimlerchrysler AG v Bauman. Journal of Private International Law: Vol. 9, No. 3, pp. 431-448.
A model of trust in quality and North–South trade

Abstract Why do some countries produce higher quality goods than other countries? This paper suggests that one reason is self-perpetuating reputations, modelling the idea with a Klein–Leffler reputation model embedded in a general equilibrium model of trade. Reputation differences are particularly interesting because reputation is a form of “social capital”. Like product differentiation, it can explain why countries might trade even if their technologies and endowments are identical, why firms could profit from exports even if the foreign price is no higher than the domestic one, and why governments like to have “high-value” sectors. Ideally, a developing country would shift its own producers to a high-quality equilibrium; if that is not possible, the next best thing is to import experience goods and substitute to home production of goods for which reputation is not important.
Undoing the powerful anti-takeover force of staggered boards

Abstract We examine cases where managers announce an intention to de-stagger their boards via proxy proposals or board action. The literature has established the staggered board as the most consequential of all takeover defenses and one that destroys wealth. Thus, dismantling staggered boards benefits shareholders. We study the wealth effects and motives behind this change in governance within a conditional event study. We find that de-staggering the board creates wealth and that shareholder activism is an important catalyst for pushing through this change. Moreover, in the period preceding Sarbanes–Oxley, investor reaction indicates a perception that de-staggering firms are more likely to be takeover targets.
The Attrition of Rights Under Parole

Author(s): Jacobi, Tonja; Richardson, L Song; Barr, Gregory | Abstract: We conduct a detailed doctrinal and empirical study of the adverse effects of parole on the constitutional rights of both individual parolees and the communities in which they live. We show that parolees’ Fourth, Fifth and Sixth Amendment rights have been eroded by a multitude of punitive conditions endorsed by the courts. Punitive parole conditions actually increase parolees’ vulnerability to criminal elements, and thus likely worsen recidivism. Simultaneously, the parole system broadly undermines the rights of nonparolees, including family members, cotenants, and communities. We show that police target parolee-dense neighborhoods for additional Terry stops, even when income, race, population, and single- family status are accounted for. Furthermore, police take advantage of the permissive parole search jurisprudence, conducting more searches and arrests of both parolees and their nonparolee neighbors. Combined, this analysis shows that parole institutionalizes individuals and margin
Earnings management and cross listing: Are reconciled earnings comparable to US earnings?

Abstract We compare US firms’ earnings with reconciled earnings for cross-listed non-US firms. Non-US firms’ earnings exhibit more evidence of smoothing, greater tendency to manage towards a target, lower association with share price and less timely recognition of losses. Firms from countries with weaker investor protection show more evidence of earnings management, suggesting that SEC regulation does not supplant the effect of local environment. There is more evidence of earnings management for firms reconciling to US GAAP than for those preparing local accounts in accordance with US GAAP, but both show more evidence of earnings management than US firms.
K3 Surfaces Associated with Curves of Genus Two

It is known ([10, 27]) that there is a unique K3 surface X which corresponds to a genus 2 curve C such that X has a Shioda-Inose structure with quotient birational to the Kummer surface of the Jacobian of C. In this paper we give an explicit realization of X as an elliptic surface over ℙ 1 with specified singular fibers of type II* and III*. We describe how the Weierstrass coefficients are related to the Igusa-Clebsch invariants of C.
Generalized Gaussian Mechanism for Differential Privacy

Assessment of disclosure risk is of paramount importance in data privacy research and applications. The concept of differential privacy (DP) formalizes privacy in probabilistic terms and provides a robust concept for privacy protection. Practical applications of DP involve development of DP mechanisms to release data at a pre-specified privacy budget. In this paper, we generalize the widely used Laplace mechanism to the family of generalized Gaussian (GG) mechanism based on the $l_p$ global sensitivity of statistical queries. We explore the theoretical requirement for the GG mechanism to reach DP at prespecified privacy parameters, and investigate the connections and differences between the GG mechanism and the Exponential mechanism based on the GG distribution. We also present a lower bound on the scale parameter of the Gaussian mechanism of $(\epsilon, \delta)$ -probabilistic DP as a special case of the GG mechanism, and compare the utility of sanitized results in the tail probability and dispersion between the Gaussian and Laplace mechanisms. Lastly, we apply the GG mechanism in three experiments and compare the accuracy of sanitized results in the $l_1$ distance and Kullback-Leibler divergence, and examine the prediction power of a SVM classifier constructed with the sanitized data relative to the original results.
Citizen Journalism and the Reporter's Privilege

Follow this and additional works at: http://lawdigitalcommons.bc.edu/lsfp Part of the Communication Technology and New Media Commons, Computer Law Commons, Constitutional Law Commons, Evidence Commons, Intellectual Property Commons, Journalism Studies Commons, Law and Society Commons, Legal Writing and Research Commons, Politics Commons, Public Law and Legal Theory Commons, Science and Technology Commons, and the Science and Technology Studies Commons
From Prosecutorial to Reparatory: A Valuable Post-Conflict Change of Focus

For the last two decades, criminal trials have occupied center stage in the international community’s panoply of responses to mass atrocities. Although it is often observed that a variety of transitional justice measures serve a variety of valuable ends, the international community views criminal trials as the centerpiece response to mass violence, the gold standard of transitional justice mechanisms. The elevated status of prosecutions is reflected in the resources and energy that the international community devotes to international criminal justice: In the last two decades, international courts and tribunals spent nearly $6 billion to prosecute fewer than 300 offenders. This article assumes that prioritizing criminal justice in this way is normatively appropriate as a theoretical matter, but after engaging in a functional analysis, the article concludes that the international community should re-prioritize. In particular, it should divert energy and resources away from prosecutions and toward financial reparations for victims. The analysis proceeds as follows: Part I determines that international criminal tribunals confront near-disabling challenges in enforcement, fact-finding, and selectivity, challenges that render them unable at this point in time to carry out a sufficient number of prosecutions sufficiently well. Part II considers whether the international community could more effectively compensate victims and concludes that it could. Part III then explores whether the greater efficacy of reparations justifies a large-scale change of focus from the prosecutorial to the reparatory. It concludes that it does, in part because reparations are themselves tremendously valuable to victims, but more importantly because the international community was overly ambitious in its focus on international criminal justice and now needs to retrench. The field of international criminal law currently is in crisis, and the best way to preserve its viability in the decades to come is to reduce its scope, minimize its importance, and pursue wholeheartedly a post-conflict mechanism that can be carried out effectively.
Equilibrium Welfare and Government Policy with Quasi-geometric Discounting

Abstract We consider a representative–agent equilibrium model where the consumer has quasi-geometric discounting and cannot commit to future actions. We restrict attention to a parametric class for preferences and technology and solve for time-consistent competitive equilibria globally and explicitly. We then characterize the welfare properties of competitive equilibria and compare them to that of a planning problem. The planner is a consumer representative who, without commitment but in a time-consistent way, maximizes his or her present-value utility subject to resource constraints. The competitive equilibrium results in strictly higher welfare than the planning problem whenever the discounting is not geometric. Journal of Economic Literature Classification Numbers: E21, E61, E91.
Family Drama: Dangling Inheritances and Promised Lands

This paper reviews Hartog’s 2012 book, Someday All this will be Yours: A History of Inheritance and Old Age. Relying on case documents from trial courts in New Jersey in the early twentieth century, Hartog tells the rich stories behind these cases. The cases involve claims by family members, usually sons or daughters, who were promised inheritances in exchange for taking care of an aged parent. Sometimes those promises are enforced and sometimes not. The stories behind the cases, and Hartog’s observations about them. should be of interest to teachers and scholars of wills, trusts, and estates.
Crimea and the International Legal Order

Putin's exploitation of the tension between the principles of non-intervention and self-determination is in the tradition of great-power interaction with international law. But Russia's interpretation sets dangerous precedents.
On the Reception of Haavelmo’s Econometric Thought

The significance of Haavelmo’s “The Probability Approach in Econometrics” (1944), the foundational document of modern econometrics, has been interpreted in widely different ways. Some regard it as a blueprint for a provocative (but ultimately unsuccessful) program dominated by the need for a priori theoretical identification of econometric models. Others focus more on statistical adequacy than on theoretical identification. They see its deepest insights as unduly neglected. The present article uses bibliometric techniques and a close reading of econometrics articles and textbooks to trace the way in which the economics profession received, interpreted, and transmitted Haavelmo’s ideas. A key irony is that the first group calls for a reform of econometric thinking that goes several steps beyond Haavelmo’s initial vision; the second group argues that essentially what the first group advocates was already in Haavelmo’s “Probability Approach” from the beginning.
Public Support for the European Parliament

The study of the European Parliament (EP) is motivated in large part by its central role in the democratic legitimacy of the European Union (EU). Public support for the EP is important to this legitimacy. At a fundamental level, a parliament designed to represent citizens ought to enjoy public respect and support and, in this study, I examine whether EU citizens vary systematically in their support for the EP. Based on regression analysis of Eurobarometer survey data, I demonstrate that EU citizens differ in their support for the EP based on their considerations of the current scope of EU governance, their appraisal of EU membership, their sense of European political identity, and their level of satisfaction with national democracy. These results have implications for how institutional reforms may shape public support for and the legitimacy of the EU.
Payment for Environmental Services: Estimating Demand Within a Tropical Watershed

ABSTRACT The long-term success of payment for environmental services (PES) schemes depends on adequate demand for services and sustainable financing. We examine the viability of using locally financed payments to protect watershed services in rural eastern Costa Rica. Using dichotomous choice contingent valuation, we measure households' willingness to pay higher water bills for a local PES programme to adjust upstream land use practices to protect downstream water quality. We found that every income segment of the local population of water-users exhibited significant demand and willingness to finance the PES programme to protect local water quality.
The ex ante real rate and inflation premium under a habit consumption model

Abstract This paper analyzes and quantifies ex ante components of bond yields – real rate of returns and risk premiums – from observed prices of nominal and indexed bonds in the United Kingdom from 1983 to 2000. The estimation uses an asset pricing framework based on a habit consumption model together with a joint formulation of consumption growth and inflation. Nominal yields carry a time-varying inflation premium that is significant throughout the period, increasing in the bond's maturity and contributing up to 25 basis points to yearly nominal yields. The analysis allows the extraction of the ex ante real rate from indexed bonds by properly taking into account both the incomplete indexation on these instruments and the inflation premium embedded in the nominal bonds.
How to Protect Future Generations Using Tax-Base Restrictions

This paper studies how to protect future generations from expropriation and to induce optimal investment in intergenerational public goods (IPGs), by introducing constitutional restrictions on the tax base. The type of tax-base restrictions that we consider places limits on the tax instruments that the government can use to raise revenue, but not on the level of expenditures or debt. We show that the introduction of a constitutional amendment requiring that IPGs and debt be financed with land taxes makes intergenerational expropriation impossible and, for many cases of interest, induces optimal investment in IPGs. We also show that a weaker constitutional amendment requiring that IPGs be financed with land taxes, but imposing no restrictions on how to finance the debt, has a positive impact on IPGs, but not on expropriation. The paper also studies the political feasibility of these reforms. We show that the first reform is not politically feasible since it hurts current generations, but the weaker reform can induce a Pareto improvement. (JEL D1, D7,
Neutral Law and Eurocentric Lawmaking : A Postcolonial Analysis of the U.N. Convention on the Rights of the Child

This is a post-colonial study of the state practice of the parties to the UN Convention on the Rights of the Child. The most ratified treaty in the World, only the United States and Somalia are non ...
What is Special about the Roles of Underwriter Reputation and Market Activities in Initial Public Offerings

This article examines the interaction between underwriter reputation and market activities during the initial public offering (IPO) process. Underwriter reputation is a significant determinant of premarket underwriter activities, weakly related to aftermarket price stabilization activities, and unrelated to issuer returns. Premarket underwriter activities are a significant determinant of issue-date returns and aftermarket underwriter activities but are unrelated to longer-run returns. Aftermarket underwriter activities are significantly related to longer-run returns. The results suggest that simultaneous consideration of underwriter reputation and market activities is important if proper inferences about the IPO process and investor returns are to be drawn. Copyright 2002 by the University of Chicago.
A Conceptual Model for the Integrated Policy Framework

In the Mundell-Fleming framework, standard monetary policy and exchange rate flexibility fully insulate economies from shocks. However, that framework abstracts from many real world imperfections, and countries often resort to unconventional policies to cope with shocks, such as COVID-19. This paper develops a model of optimal monetary policy, capital controls, foreign exchange intervention, and macroprudential policy. It incorporates many shocks and allows countries to differ across the currency of trade invoicing, degree of currency mismatches, tightness of external and domestic borrowing constraints, and depth of foreign exchange markets. The analysis maps these shocks and country characteristics to optimal policies, and yields several principles. If an additional instrument becomes available, it should not necessarily be deployed because it may not be the right tool to address the imperfection at hand. The use of a new instrument can lead to more or less use of others as instruments interact in non-trivial ways.
Can’t the PTO Get a Little Respect?

The decisions and proceedings of the U.S. Patent and Trademark Office (“PTO”) are at least implicitly at issue in every patent infringement lawsuit filed in federal court. Nonetheless, this Article argues that federal courts adjudicating patent cases systematically refuse to give the PTO the deference that courts usually give to the decisions and proceedings of federal administrative agencies. In such areas as patent invalidity, inequitable conduct, and stays pending reexamination, courts simply ignore or refuse to apply general principles of administrative deference. This Article further argues that courts’ lack of deference to the PTO can be explained (though not justified) by a deep judicial skepticism about the quality and pace of PTO decision-making. © 2012 Joshua L. Sohn. † Associate, Quinn Emanuel Urquhart & Sullivan, L.L.P. J.D., Harvard Law School (2006); A.B., Stanford University (2003). I would like to thank Jeffrey Harris, Christopher Lanese, Eugene Novikov, Matthew Stephenson, and the staff of the Berkeley Technology Law Journal for their comments and suggestions. The opinions expressed herein are my own and should not be taken to represent those of the Quinn Emanuel law firm or its attorneys. 1604 BERKELEY TECHNOLOGY LAW JOURNAL [Vol. 26:1603
Leading Indicator Variables, Performance Measurement, and Long‐Term Versus Short‐Term Contracts

In this article we develop a multiperiod agency model to study the role of leading indicator variables in managerial performance measures. In addition to the familiar moral hazard problem, the principal faces the task of motivating a manager to undertake “soft” investments. These investments are not directly contractible, but the principal can instead rely on leading indicator variables that provide a noisy forecast of the investment returns to be received in future periods. Our analysis relates the role of leading indicator variables to the duration of the manager's incentive contract. With short-term contracts, leading indicator variables are essential in mitigating a holdup problem resulting from the fact that investments are sunk at the end of the first period. With long-term contracts, leading indicator variables will be valuable if the manager's compensation schemes are not stationary over time. The leading indicator variables then become an instrument for matching the future investment return with the current investment expenditure. We identify conditions under which the optimal long-term contract induces larger investments and less reliance on the leading indicator variables as compared with short-term contracts. Under certain conditions, though, the principal does better with a sequence of one-period contracts than with a long-term contract.
The efficiency of international information flow: Evidence from the ETF and CEF prices

Abstract While similar in their trading and organization, closed-end funds (CEFs) and exchange-traded funds (ETFs) differ in their liquidity and ease of arbitrage. We compare their price transmission dynamics using a sample of funds that invest in foreign securities and are most likely to show the deficiencies in the manner in which they process information. Our analysis shows that ETF returns are more closely related to their portfolio returns than are CEF returns. However, both fund types underreact to portfolio returns but overreact to domestic stock market returns. A simple trading strategy using these results is profitable with roundtrip trading costs less than 1.38% for CEFs and 0.71% for ETFs.
Ambiguity about Ambiguity: An Empirical Inquiry into Legal Interpretation

Most scholarship on statutory interpretation discusses what courts should do with ambiguous statutes. This paper investigates the crucial and analytically prior question of what ambiguity in law is . Does a claim that a text is ambiguous mean the judge is uncertain about its meaning? Or is it a claim that ordinary readers of English, as a group, would disagree about what the text means? This distinction is of considerable theoretical interest. It also turns out to be highly consequential as a practical matter. To demonstrate, we developed a survey instrument for exploring determinations of ambiguity and administered it to nearly 1,000 law students. We fi nd that asking respondents whether a statute is “ambiguous” in their own minds produces answers that are strongly biased by their policy preferences. But asking respondents whether the text would likely be read the same way by ordinary readers of English does not produce answers biased in this way. This discrepancy leads to important questions about which of those two ways of thinking about ambiguity is more legally relevant. It also has potential implications for how cases are decided and for how law is taught.
Multinational Firms, Technology Diffusion and Trade

Abstract Attempts to add multinational firms to the ‘new’ trade theories generate predictions about direct investment dramatically at odds with the facts. A failure to treat internalization adequately seems responsible at least in part. Empirical evidence also indicates a close association between multinational firms and knowledge capital; we exploit this to examine the role of internalization and its relation to locational factors. We model a firm which must choose between costly exporting and the possible dissipation of its knowledge capital by producing abroad. The paper examines the choice between exporting, licensing, and acquiring a subsidiary in this environment. We analyze the cost and technology parameters that support alternative modes of serving the foreign market, and we describe the international equilibrium that jointly determines the pattern of specialization and the market mode. We find that similarities in relative factor endowments may promote direct investment.
Lifting the Veil: An Analysis of Pre-trade Transparency at the NYSE

We study pre-trade transparency by looking at the introduction of NYSE’s OpenBook service that provides limit-order book information to traders off the exchange floor. We find that traders attempt to manage limit-order exposure: They submit smaller orders and cancel orders faster. Specialists’ participation rate and the depth they add to the quote decline. Liquidity increases in that the price impact of orders declines, and we find some improvement in the informational efficiency of prices. These results suggest that an increase in pre-trade transparency affects investors’ trading strategies and can improve certain dimensions of market quality. THE PROLIFERATION OF NEW EXCHANGES and trading platforms in the United States and abroad brings to the forefront many issues in market design. Should a market have at its core an electronic limit-order book? What possible roles can market makers play? What information should market participants observe about order flow and prices? These issues have implications for investor trading strategies, specialist behavior, market liquidity, the informational efficiency of prices, and ultimately for investor welfare. We investigate a key feature of market design: transparency, or the ability of market participants to observe information in the trading process. Our focus is on a particular form of transparency: the ability of market participants to observe the pending trading interests of other participants, or in other words, the content of the limit-order book. Knowledge about buying and selling interest can be used both to refine one’s inference about the value of a
The Procedural Foundation of Substantive Law

The substance-procedure dichotomy is a popular target of scholarly criticism because procedural law is inherently substantive. This article argues that substantive law is also inherently procedural. I suggest that the construction of substantive law entails assumptions about the procedures that will apply when that substantive law is ultimately enforced. Those procedures are embedded in the substantive law and, if not applied, will lead to overor under-enforcement of the substantive mandate. Yet the substance-procedure dichotomy encourages us to treat procedural systems as essentially fungible—leading to a problem of mismatches between substantive law and unanticipated procedures. I locate this argument about the procedural foundation of substantive law within a broader discussion of the origin and status of the substanceprocedure dichotomy.
Charity as a Substitute for Reputation: Evidence from an Online Marketplace

Consumers respond positively to products tied to charity, particularly from sellers that are relatively new and hence have limited alternative means for assuring quality. We establish this result using data from a diverse group of eBay sellers who “experiment” with charity by varying the presence of a donation in a set of otherwise matched product listings. Most of charity’s benefits accrue to sellers without extensive eBay histories. Consistent with charity serving as a quality signal, we find fewer customer complaints among charity-intensive sellers.
Scalia’s Legacy: Originalism and Change in the Law of Standing

Perhaps no single Justice fashioned as many changes to the law of standing as that most gifted originalist, Antonin Scalia. It was Justice Scalia who first deployed twentieth century standing rules to invalidate a citizen suit provision; who promoted the prudential rule against the adjudication of generalized grievances to constitutional status; who pressed to constitutionalize the adverse-party rule; who reconfigured informer litigation to preserve the injury-in-fact requirement; and who recently re-packaged the Court’s old prudential standing doctrine as a merits-based inquiry into the plaintiff’s statutory right to sue. That he has done so much to re-work modern litigation in the name of fidelity to the workways of eighteenth century lawyers “in the English courts at Westminster” testifies to his considerable rhetorical skills. In this essay, I evaluate Justice Scalia’s contributions to this important body of jurisdictional law and then step back to consider his legacy.
The clan and the corporation: Sustaining cooperation in China and Europe

Over the last millennium, the clan and the corporation have been the loci of cooperation in China and Europe respectively. This paper examines –analytically and historically –the cultural and institutional co-evolution that led to this bifurcation. We highlight that groups with which individuals identify are basic units of cooperation. Such loyalty groups in‡uence institutional development because intra-group moral commitment reduces enforcement cost implying a comparative advantage in pursuing collective actions. Loyalty groups perpetuate due to positive feedbacks between morality, institutions, and the implied pattern of cooperation.
What is the effect of an additional dollar of IPO proceeds

Abstract We examine the effect of IPO proceeds on post-IPO liquidity and market monitoring. To do so we exploit variation in the amount of proceeds raised that is unrelated to firm size and manager decisions using an instrumental variable approach. We find that marginal increases in IPO proceeds lead to large increases in liquidity, analyst coverage, and institutional ownership in the first two years a firm is public. Increases in IPO proceeds also lead to more frequent follow-on offerings and longer survival as a public firm. We find evidence that immediate shocks to ownership dispersion represent one plausible channel through which changes in IPO proceeds affect long-run liquidity and market monitoring. Overall, our findings support the theoretical liquidity and market quality benefits associated with reductions in ownership concentration.
The Performance of Corporate Bond Mutual Funds: Evidence Based on Security-Level Holdings

This is the first study of corporate bond mutual fund performance that examines detailed security-level holdings and returns. The new database allows us to decompose the costs and benefits of active management. In contrast to prior research on equity funds that shows evidence of stock-selection ability, we do not find evidence consistent with bond fund managers, on average, being able to select corporate bonds that outperform other bonds with similar characteristics. We find neutral to weakly positive evidence of ability to time corporate bond characteristics. Overall results show that the costs of active management on average appear larger than the benefits.
Pressure to Manage Ratios and Willingness to Do So: Evidence From Nonprofit Managers:

We survey 200 nonprofit executives to investigate the pressure they experience to manage so-called efficiency ratios, and their reactions to that pressure. Specifically, we investigate whether mana...
On statistical uncertainty in nested sampling

Nested sampling has emerged as a valuable tool for Bayesian analysis, in particular for determining the Bayesian evidence. The method is based on a specific type of random sampling of the likelihood function and prior volume of the parameter space. I study the statistical uncertainty in the evidence computed with nested sampling. I examine the uncertainty estimator from Skilling and introduce a new estimator based on a detailed analysis of the statistical properties of nested sampling. Both perform well in test cases and make it possible to obtain the statistical uncertainty in the evidence with no additional computational cost.
The behavior of currencies during risk-off episodes

Abstract Episodes of increased global risk aversion, also known as risk-off episodes, have become more frequent and severe since 2007. During these episodes, currency markets exhibit recurrent patterns, as the Japanese yen, Swiss franc, and U.S. dollar appreciate against other G-10 and emerging market currencies. The pattern of these moves can be explained by a combination of fundamental factors, such as the nominal interest rate, the international investment position and measures of exchange rate misalignment, and market-liquidity factors, such as bid-offer spreads and restrictions on international capital flows. We also find that currency performance in a risk-off episode has become more related to a currency's yield and relationship to broader risks in recent years.
Green Diesel: Finding a Place for Algae Oil

The prospect of obtaining domestically-produced biodiesel from algae has attracted wide investor interest. Although many analysts predict that economic production is five to ten years away, the production process involves such a wide range of environmental and land use issues that it is not premature to begin thinking about the kinds of places in which “green biodiesel” could be efficiently made in the United States. Our land use and environmental laws were all drafted by people who never imagined the possibility that huge volumes of algae would be an important energy resource; nor could they have known that the location of algae farms would be dependent on a wide range of factors including terrain, climate and neighboring uses. This essay is a very preliminary examination of the potential legal issues posed by this potentially valuable resource.
Land Tenure and Rental in Western Sudan

Abstract This paper reports on aspects of land tenure in western Sudan, especially the nature of tenure insecurity and the functioning of the land rental market. The active land rental market accounted for about one-third of cultivated land. Patterns of land rental transactions, and tests of the importance of insecurity in renting land, where the owner may not be able to reclaim land rented out, do not support the presumption that rental markets perform poorly. The role of the sheikh as administrator of village land, and the claims of large landowners to vast tracts, are, however, important political problems that must be resolved before attempts at ‘rationalizing’ land tenure.
Firm vertical boundaries, internal capital markets, and firm performance

In this paper, we investigate how vertical relatedness between business segments affects capital allocation within internal capital markets. Using a battery of tests including exogenous reductions in import tariff rates, we show that investments tend to flow towards segments with better investment opportunities in firms with significant vertical relatedness between business segments. We also link internal capital allocations to operating performance by showing that the efficiency of internal capital allocations predicted by vertical integration is a significant determinant of firm productivity and operating profitability. Overall, we show that the corporate headquarters efficiently allocates resources across divisions in vertically integrated firms and that this superior capital allocation is one channel through which vertical integration impacts real outcomes of firms.
Teaching for Implementation: Designing Negotiation Curricula to Maximize Long‐Term Learning

Most negotiation students — and their instructors — aspire to develop negotiation skills that they can transfer to real-world contexts beyond the classroom. Instructors can maximize the likelihood of long-term learning through transfer-oriented curriculum design. Curriculum design elements likely to support lasting and flexible learning include (1) articulation of clear, performance-oriented goals; (2) careful selection of a range of learning activities tailored toward those goals, including activities that promote schema development and adjustment, activities that promote behavioral skill development, and activities that reinforce explicit theoretical understanding; (3) provision of multiple opportunities for constructive feedback from a variety of sources; and (4) the facilitation of self-reflection and metacognition.
Transaction costs and competition policy

Abstract This paper evaluates current antitrust policy in light of our current understanding of how transaction costs influence the ability of firms and consumers to deal with market power. The paper shows how the failure to consider transaction costs can lead to erroneous policy decisions. Many models employed today make simplifying assumptions about transaction costs that can lead to biased results in analyzing vertical and horizontal issues. The increased ability to monitor the effect of promotional behavior should cause us to reexamine whether free riding justifications, previously accepted as justifications for various vertical restrictions, still hold. Nash bargaining and Nash-in-Nash models raise concerns about the simplified assumptions assumed in which supposedly high transaction costs restrict the choice and form of the assumed competitive alternatives. The increasing importance of two-sided markets together with an understanding of transaction costs is needed to understand antitrust conduct in those markets. The recent Amex case is likely to lead to confused litigation in these types of markets. Finally, the establishment of property rights for a consumer to his or her data could fail to remedy antitrust concerns that certain dominant firms are immune to competition because consumers do not own their data unless that property right is limited so that consumers cannot exclusively sell their data to one firm.
Digital Rights and Wrongs: Intellectual Property in the Information Age

In 1999, Richard T. De George presented the first in this series of lectures on business ethics and information technology. De George built on his lecture to write a book on the topic. His chapter on intellectual property makes use of some important examples that are even more relevant today, now that corporations have taken to suing individuals—including individuals at this institution—for sharing music over the Internet. It is worth quoting De George at length: Last evening Joe taped the popular movie “Sound of Music” which was playing on one of the TV channels. He was away for the evening and intended to watch the movie when it better fit his schedule. This is both common and legal. He may tape as many programs and movies as he wishes for later viewing. His taped version is his to use, although the same movie is also available for rent or sale at the local video rental store. His friend, Richard, intended to tape the movie but by mistake set his VCR to the wrong channel, and hence taped some other program instead. When he learned this, he asked Joe if he could copy Joe’s tape. He reasoned that since it was legal for him to copy the movie directly from the TV, and he would have
Network Updating and Exploratory Learning Environment

This paper examines how the current relevance of social capital derived from a task-advice network affects an actor's exploratory learning environment. Building on Burt's (1992) structural holes hypothesis that a large, sparse task advice network enhances an actor's exploratory learning environment, I propose that such effects hold only when the direct and indirect network ties are composed of current network contacts (ones that have been updated since the last change in positions of an actor). Analyses of data from a sample of 230 salaried employees of a high-technology manufacturing corporation support my arguments. In addition to the focus of social capital research on network structure, therefore, this study emphasizes the time-contingent value of social capital.
Financial Reform : What Shakes It? What Shapes It?

What accounts for the worldwide advance of financial reforms in the last quarter century? Using a new index of financial liberalization, we find that influential events shook the policy status quo. Balance-of-payments crises spurred reforms, but banking crises set liberalization back. Falling global interest rates strengthened reformers, while new governments went both ways. The overall trend toward liberalization, however, reflected pressures and incentives generated by initial reforms that raised the likelihood of additional reforms, stimulated further by the need to catch up with regional reform leaders. In contrast, ideology and country structure had limited influence.
Optimal static quadratic hedging

We propose a flexible framework for hedging a contingent claim by holding static positions in vanilla European calls, puts, bonds and forwards. A model-free expression is derived for the optimal static hedging strategy that minimizes the expected squared hedging error subject to a cost constraint. The optimal hedge involves computing a number of expectations that reflect the dependence among the contingent claim and the hedging assets. We provide a general method for approximating these expectations analytically in a general Markov diffusion market. To illustrate the versatility of our approach, we present several numerical examples, including hedging path-dependent options and options written on a correlated asset.