cssi/SciSciGPT-SciSciNet huggingface dataset:
The predictive power of investment and accruals

We test whether investment explains the accrual anomaly by splitting total accruals into investment-related and “nontransaction” accruals, items such as depreciation and asset write-downs that do not represent new investment expenditures. The two types of accruals have very different predictive power for firm performance, not just for future earnings but also for future cash flow and stock returns. Most importantly, nontransaction accruals have the strongest negative predictive slopes for earnings and stock returns, contrary to the predictions of the investment hypothesis. A long-short portfolio based on nontransaction accruals has a significant average return of 0.71 % monthly from 1972 to 2010 and remains profitable at the end of the sample when returns on other accrual strategies decline. Our results suggest that nontransaction accruals are the least reliable component of accruals and show that a significant portion of the accrual anomaly cannot be explained by investment.
Firm and industry influences on the value of growth options

Strategy research on real options has emphasized the need to understand better the sources of the option value of the firm.We begin to address this issue by assessing the relative importance of fir...
Understanding the Advice of Commissions-Motivated Agents: Evidence from the Indian Life Insurance Market

Abstract We conduct a series of field experiments to evaluate the quality of advice provided by life insurance agents in India. Agents overwhelmingly recommend unsuitable, strictly dominated products that provide high commissions to the agent. Agents cater to the beliefs of uninformed consumers, even when those beliefs are wrong. We also find that agents appear to focus on maximizing the amount of premiums (and therefore their commissions) that customers pay, as opposed to focusing on how much insurance coverage customers need. A natural experiment requiring disclosure of commissions for a specific product results in agents recommending alternative products with high commissions but no disclosure requirement. A follow-up agent survey sheds light on the extent to which poor advice reflects both the commission incentives and agents’ limited product knowledge.
Guiding Through the Fog: Financial Statement Complexity and Voluntary Disclosure

Abstract A growing literature documents that complex financial statements negatively affect the information environment. In this paper, we examine whether managers use voluntary disclosure to mitigate these negative effects. Employing cross-sectional and within-firm designs, we find a robust positive relation between financial statement complexity and voluntary disclosure. This relation is stronger when liquidity decreases around the filing of the financial statements, is stronger when firms have more outside monitors, and is weaker when firms have poor performance and greater earnings management. We also examine the relation between financial statement complexity and voluntary disclosure using two quasi-natural experiments. Employing a generalized difference-in-differences design, we find firms affected by the adoption of complex accounting standards (e.g., SFAS 133 and SFAS 157) increase their voluntary disclosure to a greater extent than unaffected firms. Collectively, these findings suggest managers use voluntary disclosure to mitigate the negative effects of complex financial statements on the information environment.
Thurgood Marshall: The Lawyer As Judge

Justice Marshall recognized that the greatest threat to reliable fact-finding emanates from the prosecutor's unique and decisive role in the adversary system, and his ability to control the adjudication process. A lengthy footnote is not necessary to support the premise with which many persons, hardened by the realities of the criminal justice system, are acutely familiar: that the prosecutor's suppression of favorable evidence is pervasive, frequently willful, and probably accounts for as many miscarriages of justice as any other single factor.The system of criminal guilt-finding, as we know it today, is a far cry from Justice Marshall's vision of a process that mandates fair dealing by prosecutors. But his practical wisdom, gained as a lawyer who battled in the trenches of justice, will always be accessible to stimulate the conscience of those government officials who care to do the right thing.
The Mix and Scale of Factors with Irreversibility and Fixed Costs of Investment

Abstract When factors of production can be adjusted costlessly, the mix of factors can be considered separately from their scale. We examine factor choice and utilization when investment is irreversible and subject to a fixed cost, so that the capital stock is a quasi-fixed factor that is adjusted infrequently and by discrete amounts. We derive and analyze analytic approximations for optimal investment behavior, and show how the quasi-fixity of capital eliminates the dichotomy between factor mix and scale. We show that the quasi-fixity of capital can give rise to labor hoarding, even when labor is a purely flexible factor.
Performance‐Based Regulation and Regulatory Regimes: The Saga of Leaky Buildings

Regulatory reformers have widely endorsed greater use of a performance-based approach to regulation that defines objectives in terms of desired outcomes. The appeal of the performance-based approach is as much about introducing a regime that overcomes problems of overly rigid rules and inflexible enforcement as it is about regulating for results. The case of leaky buildings in New Zealand provides a cautionary tale of a flawed performance-based regulatory regime. It allowed for flexibility without sufficient accountability and in so doing showed the Achilles’ heel of performance-based regulation.
Strategy, priority-setting, and municipal capital budget reform: Three cases from the great recession

I examine three recent cases where local governments changed their processes for selecting capital projects. The central question is whether these changes institutionalized a more “strategic” outlook in capital improvement planning and budgeting for these jurisdictions? The findings suggest that local governments can set capital priorities strategically, but that the process of implementing those reforms must be adaptable to changing political circumstances. These findings add to the limited literature on the political, administrative, and other challenges that local governments must confront when reforming their capital improvement planning and budgeting processes.
Not Such a Party Pooper: An Attempt to Accommodate (Many of) Professor Quinn's Concerns About Therapeutic Jurisprudence Criminal Defense Lawyering

This Article responds to Professor Mae C. Quinn's critique of the author's piece, Therapeutic Jurisprudence and the Rehabilitative Role of the Criminal Defense Lawyer, published in a 2005 symposium issue of the St. Thomas Law Review. This Reply Article suggests that Professor Quinn has badly misread or distorted the author's St. Thomas article. This Article takes serious issue with her characterization of the author's work, contends that the author and Professor Quinn are closer on many issues than her critique suggests, and points out areas of agreement and disagreement. Therapeutic Jurisprudence can be incorporated into the role of the criminal defense lawyer and, as a simple "add-on," it can be transformative of criminal law practice. I have had a very interesting—but, at the same time, frustrating— dialogue with Professor Quinn. It began when she sent a draft of her article to which I am now responding. In an email message, I replied that I thought she had (unintentionally) constructed a "strawperson," and had then proceeded skillfully to tear it down. I tried to explain why what Professor Quinn thought I was saying was not actually what I said or proposed—that, despite some obvious differences, we were, in fact, much closer on many issues than she had suggested. Her response was puzzling to me. Basically, she responded, "Nape, that's not what you're saying!" My reaction to that reminded me of an incident that happened in San Juan to my friend, Tony, who, accompanied by his mother, attended the funeral of a family friend. Arriving a bit late, not atypical for Tony, he entered during the eulogy. The priest spoke of the deceased's fine character, of what a terrific father and husband he had been, of * 2007, David B. Wexler, Lyons Professor of Law and Professor of Psychology, University of Arizona, and Professor of Law and Director, International Network on Therapeutic Jurisprudence, University of Puerto Rico. The author may be contacted at DavidBWexlerlaryahoo.corn.
Padilla v. Kentucky: A New Chapter in Supreme Court Jurisprudence on Whether Deportation Constitutes Punishment for Lawful Permanent Residents?

In this Article, I argue that the deportation of lawful permanent residents on account of a criminal conviction is punitive, and therefore enhanced constitutional protections must be afforded to lawful permanent residents during removal proceedings. To support this argument I rely, in part, on the Supreme Court’s recent decision in Padilla v. Kentucky. The Padilla Court held that counsel must inform a client when a plea carries the risk of deportation. The Court’s analysis throughout the decision is groundbreaking in its recognition of the modern day realities of deportation—specifically the growing relationship between the immigration and criminal justice systems and the ways in which criminal convictions and deportation have become enmeshed over the years. The Court’s
Sparse Linear Models and l1−Regularized 2SLS with High-Dimensional Endogenous Regressors and Instruments

We explore the validity of the 2-stage least squares estimator with l_{1}-regularization in both stages, for linear regression models where the numbers of endogenous regressors in the main equation and instruments in the first-stage equations can exceed the sample size, and the regression coefficients are sufficiently sparse. For this l_{1}-regularized 2-stage least squares estimator, finite-sample performance bounds are established. We then provide a simple practical method (with asymptotic guarantees) for choosing the regularization parameter. We show that this practical method can produce an l_{2}-consistent 2SLS estimator whose rate of convergence can be made as arbitrarily close as the scaling of our finite-sample performance bounds under quite standard conditions.
Deconstructing Corporate Governance: Absolute Director Primacy

Microtheoretical models of the corporation which focus on corporate governance attempt to answer two deceptively simple, but fundamentally elusive questions: ‘Who are in control of the corporation?’ and ‘Whose interests ultimately control those in control of the corporation?’ Both questions remain partially unanswered within the models developed to date by corporate theoreticians. This Article proposes a radically new model: ‘absolute director primacy.’ Existing microtheoretical models conceive that we only need to—and, indeed, can—determine the controlling interests guiding corporate decisionmaking in order to prove the existence of control over the decisionmaking latitude of corporate boards. The absolute director primacy model reverses this thinking: The corporate board—as the privatesector equivalent of a modern Leviathan—has absolute and infinite decisionmaking latitude in order to control the business and affairs of the corporation. Nothing within corporate law provides any meaningful modicum of predictive ability regarding director behavior ex ante or director accountability ex post. As a result, model-immanent explanations of the phenomenon of general investor confidence pre-investment in the face of absent director accountability post-investment become logically impossible. Thus, the absolute director primacy model not only posits a complete absence of ex-post director accountability but accepts the complete ex-ante indeterminability of director decisionmaking. Accordingly, the absolute director primacy model further posits that largely unexplained and currently unaccounted-for protolegal variables control both director behavior and the microtheoretical models of the firm that attempt to explain and predict such behavior. I. Opening Sketches 342 II. Microtheoretical Models of the Firm 361 A. Plotting Models Within Microdichotomies 362 1. The Shareholder Primacy Model 365 2. The Contractarian Model 380 * Associate Professor of Law, Western New England College School of Law. LL.B., Free University of Berlin School of Law, 1996. LL.M., University of Connecticut School of Law, 1997. I am grateful for generous financial support from the Western New England College School of Law, and for helpful comments and support from Taylor Flynn, Eric Gouvin, Barbara Noah, and all of the participants at the Western New England College School of Law Faculty Forum. All errors are mine. 342 BROOK. J. CORP. FIN. & COM. L. [Vol. 5 3. The Team Production Model 387 4. The Director Primacy Model 393 B. An Absolute Director Primacy Model 395 III. Closing Sketches 398 Aut tace, aut loquere meliora silentio. [Be silent unless to speak is better than silence.] —Salvator Rosa (1615-73), Self Portrait (National Gallery, London)
Echo Chambers in Investment Discussion Boards.

We examine the quality of information and communication in online investment discussion boards. We show that positivity bias and skewed risk/reward assessments, exacerbated by the insular nature of the community and its social structure, contribute to underperforming investment advice and unnecessary trading. Discussion post sentiment has negligible correlation with future stock market returns, but does have a positive correlation with trading volumes and volatility. Our trading simulations show that across different timeframes, this misinformation leads 50-70% of users to underperform the market average. e then examine social structure in communities, and show that the majority of market sentiment is produced by a small number of community leaders, and that many members actively resist negative sentiment, thus minimizing viewpoint diversity. To improve generated information content in online investment communities, we suggest designing to increase diversity of opinion, minimize friction around incorporating new information, and provide performance feedback for self-correction.
Optimality of the fastest available server policy

We give sufficient conditions under which a policy that assigns customers to the Fastest Available Server, labeled FAS, is optimal among nonidling policies in queueing models with multiple independent Markov-modulated Poisson arrival processes and heterogeneous parallel exponential servers with server-dependent service rates. The criteria are to minimize the long-run average cost per unit time and the expected present value of the costs. We obtain results for loss and delay queueing models with finite- or infinite-capacity buffers under a first-come-first-served priority scheme. We analyze the robustness of the cost structure assumptions that are invoked in the proof of FAS optimality.
Anomalies in Intentional Tort Law

Under tort law's modern theoretical paradigm, all intentional torts are governed by three basic principles: (1) intent is a necessary and sufficient basis for holding someone liable; (2) each intentional tort must violate its own specific behavioral rule; and (3) all intentional torts require proof of the defendant's fault. Together, these principles appear to make intentional tort law both unique and self-contained. The first principle justifies creating an intentional tort theory of recovery. The second principle distinguishes that theory from negligence, which bases liability on the fixed standard of reasonable care. The third principle separates intentional torts from the no-fault theory of strict liability. Of course, this jurisprudential scheme has always contained some rather obvious anomalies. For example, the concept of tortious intent, defined as scienter, includes behavior that clearly is not purposeful. In addition, the doctrine of transferred intent creates a legal fiction that artificially shifts intent from one person to another. More discretely, the mistake doctrine imputes intent to persons whose conduct clearly is not intentional. Until now, these anomalies have been viewed as rather trivial blemishes on an otherwise healthy corpus juris. In this article, however, I show that the flaws in intentional tort law are far greater in number, and far more serious, than previously thought. Indeed, they are so numerous and substantial, they actually undercut each of the law's three sustaining tenets. The truth, I argue, is that intent is never a sufficient basis for imposing liability. Instead, liability is always based on the negligence concept of reasonableness. Since unreasonableness is presumed from intent, proof of fault is not necessarily required. Rather, all intentional torts actually impose a form of strict liability. From these observations, I conclude that tort law's modern theoretical superstructure requires more than the slight renovation currently undertaken by the ALI in the Restatement (Third) of Torts. Instead, it requires a total paradigm shift. Thus, in my Conclusion and Proposal, I suggest one possible option for change: a theoretical paradigm - based on the concept of reasonableness - which not only captures the spirit of intentional tort law, but also eliminates its most enervating anomalies.
Parent inheritance, founder expertise, and venture strategy: Determinants of new venture knowledge impact ☆

A genealogical theory of new venture creation posits that “parent” firm routines are transferred to “progeny” ventures founded by the former employees of these parents. This study examines how the knowledge available to a venture from its parent firms and individual founders, as well as its initial technological direction, influences its own creation of impactful knowledge. We argue that new knowledge creation involves the recombination of underlying knowledge elements and hypothesize that the degree to which the venture's knowledge domain overlaps with the parents' knowledge has positive, but diminishing effects on the impact of knowledge created by the venture. We also predict that the breadth of founders' personal knowledge has a positive effect, but that the divergence between individual founders' and parent firm's knowledge domains has a negative effect on the creation of impactful knowledge by the venture. We test our predictions using a sample of 219 biotechnology ventures founded over the eleven year period 1990–2000 and tracked through 2010. Our results contribute to the entrepreneurship, knowledge creation, and genealogical literatures.
Estimating the New Keynesian Phillips Curve: A Vertical Production Chain Approach

It has become customary to estimate the New Keynesian Phillips Curve (NKPC) with GMM using a large instrument set that includes lags of variables that are ad hoc to the model. Researchers have also conventionally used real unit labor cost (RULC) as the proxy for real marginal cost, even though it is difficult to support its significance. This paper introduces a new proxy for the real marginal cost term as well as a new instrument set, both of which are based on the micro foundations of the vertical chain of production. I find that the new proxy, based on input prices as opposed to wages, provides a more robust and significant fit to the model. Instruments that are based on the vertical chain of production appear to be both more valid and relevant towards the model.
The Impact of Neuroscience on Health Law

Advances in neuroscience have implications for criminal law as well as civil and regulatory law, including health, disability, and benefit law. The role of the behavioral and brain sciences in health insurance claims, the mental health parity debate, and disability proceedings is examined.
What’s Driving the New Economy?: The Benefits of Workplace Innovation

The current economic recession in the United States has challenged the sustainability of the so-called New Economy productivity miracle. This paper introduces the idea that, in addition to investment in information technology, changing workplace organization has been a significant component of the turnaround in productivity growth in the U.S. during the 1990s. Using a nationally representative sample of U.S. businesses surveyed in 1993 and 1996, we examine the relationship between workplace innovations and establishment productivity to assess the potential endurance of strong labor productivity growth into the future. Our work goes beyond measuring the impact of computers on productivity and examines how other types of workplace innovation such as self-managed teams, incentive pay, and employee voice are related to labor productivity. These practices could explain a large part of the movement in multi-factor productivity in the United States over the period 1993-1996. We also show how these results are affected by the union status of a firm. While European countries have invested in varying degrees in information technology, these results suggest additional dimensions to the recent productivity growth in the US that may well have implications for productivity growth potential in Europe.
The State of Macro

For a long while after the explosion of macroeconomics in the 1970s, the field looked like a battlefield. Over time, however, mainly because facts do not go away, a largely shared vision both of fluctuations and of methodology has emerged. Not everything is fine. Like all revolutions, this one has come with the destruction of some knowledge, and it suffers from extremism and herding. None of this is deadly, however. The state of macro is good.
Approximate greedy clustering and distance selection for graph metrics

In this paper, we consider two important problems defined on finite metric spaces, and provide efficient new algorithms and approximation schemes for these problems on inputs given as graph shortest path metrics or high-dimensional Euclidean metrics. The first of these problems is the greedy permutation (or farthest-first traversal) of a finite metric space: a permutation of the points of the space in which each point is as far as possible from all previous points. We describe randomized algorithms to compute $(1+\varepsilon)$-approximate greedy permutations of any graph with $n$ vertices and $m$ edges in expected time $O\bigl(\varepsilon^{-1}(m+n)\log n\log(n/\varepsilon) \bigr)$. We also present an algorithm that computes a $(1+\varepsilon)$-approximate greedy permutations of points in high-dimensional Euclidean spaces in expected time $O(\varepsilon^{-2} n^{1+1/(1+\varepsilon)^2 + o(1)})$. Additionally we describe a deterministic algorithm to find exact greedy permutations of any graph with $n$ vertices and treewidth $O(1)$ in worst-case time $O(n^{3/2}\log^{O(1)} n)$.The second problem we consider is distance selection: given $k \le \binom{n}{2}$, we are interested in computing the $k$th smallest distance in the given metric space. We show that for planar graph metrics one can approximate this distance, up to a constant factor, in near linear time.
Reconciling the off-net cost pricing principle with efficient network utilization

Abstract The off-net-cost pricing principle argues that under a broad range of environments a positive “access” charge paid by originating networks to interconnected terminating networks would cause retail on-net usage rates to be set equal to their off-net counterparts, and that these rates would fully reflect the access charge. However, other work provides reasonable conditions under which on-net usage rates will not reflect access charges, but would be set to induce the social surplus maximizing level of on-net usage. This paper harmonizes these two apparently opposing results by showing that retail usage rates depend on two effects. One is a rent seeking effect on the part of networks and the other is an efficient utilization effect. In models in which the rent seeking effect is more important, on-net usage rates will tend to equal their off-net counterparts and incorporate the access charge. In models in which the efficient utilization effect matters more, on-net usage rates will not equal their off-net counterparts and will tend to promote efficient on-net utilization.
Getting Queer Priorities Straight: How Direct Legal Services Can Democratize Issue Prioritization in the LGBT Rights Movement

Part of the Civil Rights and Discrimination Commons, Constitutional Law Commons, Criminal Law Commons, Criminal Procedure Commons, Disability Law Commons, Education Law Commons, Environmental Law Commons, Family Law Commons, Fourteenth Amendment Commons, Fourth Amendment Commons, Health Law Commons, Housing Law Commons, Human Rights Law Commons, Immigration Law Commons, Juveniles Commons, Labor and Employment Law Commons, Law and Society Commons, Law Enforcement and Corrections Commons, Legal History, Theory and Process Commons, Legislation Commons, Litigation Commons, Other Law Commons, Public Law and Legal Theory Commons, Sexuality and the Law Commons, Social Welfare Law Commons, and the Women Commons
Speculation and the Term Structure of Interest Rates

We develop and estimate a tractable equilibrium term structure model populated with rational but heterogeneously informed traders that take on speculative positions to exploit what they perceive to be inaccurate market expectations about future bond prices. The speculative motive is an important driver of trading volume. Yield dynamics due to speculation are (1) statistically distinct from classical term structure components due to risk premiums and expectations about future short rates and are orthogonal to public information available to traders in real time and (2) quantitatively important, accounting for a substantial fraction of the variation of long maturity U.S. bond yields. Received May 12, 2014; editorial decision May 10, 2016 by Editor Pietro Veronesi.
Competence and commitment: employer size and entrepreneurial endurance

Most entrepreneurs emanate from established firms, but the impact of these employment histories on entrepreneurial outcomes is poorly understood. We argue that work experiences in the prior firm shape both the entrepreneur's competence in and commitment to the entrepreneurial role. We focus on the effects of employer size on the prospective entrepreneur, and argue that employer size has a negative effect on both entrepreneurial competence and commitment. This implies that entrepreneurs from small firms should have superior economic performance and, for a given level of performance, be less likely to exit entrepreneurship. We find support for these predictions in analyses of entrepreneurs in a unique data set characterizing the Danish labor market. Copyright 2011 The Author 2011. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved., Oxford University Press.
Toward More Effective Risk Disclosure for Technology-Enhanced Investing

This paper considers the relationship between increased technological sophistication in investing and the quality of risk disclosure by issuers. For a variety of reasons, the need for high quality risk disclosure may well increase in a noisier informational enviroment, thus prompting the question of whether we have an adequate policy for when issuers must disclose known risks. While the prevailing standards under the Securities Act may well be adequate, there is no coherent policy under the Securities Exchange Act -- a troublesome thought given the increasing emphasis on '34 Act disclosures in an era of shelf registration, integrated disclosure, etc. The paper proposes that the SEC develop a requirement that EDGAR files be updated promptly to reflect changes in the companies "risk discussion and analysis" -- a narrative discussion of prevailing material investment risks known to management. At the same time, the SEC must then recognize a privilege of nondisclosure of risk-related information (e.g., bad news) that would likely cause a significant competitive injury through the exposure of a business strategy, plan or secret. Such a balanced policy would be a notable improvement on the existing standards -- for instance, the half-truth doctrine, the duty to update and the duty to correct -- which are highly uncertain and indeterminate, and do not explicitly recognize any competitive injury privilege.
Should your firm invest in cyber risk insurance

Abstract Firms have increasingly been turning to cyber risk insurance in order to better manage cyber threats and any resulting legal liability from data breaches. But how useful is this tactic? Herein, I analyze the impact of cyber attacks on firms, some of the applicable U.S. law shaping private sector responses to data breaches, and the extent to which cyber risk insurance helps mitigate the cyber threat. Ultimately, I argue that firms must take a proactive stance toward managing cyber attacks—not only for their wellbeing, but also to enhance overall cybersecurity and help secure critical national infrastructure.
Concealing campus sexual assault: An empirical examination.

This study tests whether there is substantial undercounting of sexual assault by universities. It compares the sexual assault data submitted by universities while being audited for Clery Act violations with the data from years before and after such audits. If schools report higher rates of sexual assault during times of higher regulatory scrutiny (audits), then that result would support the conclusion that universities are failing to accurately tally incidents of sexual assault during other time periods. The study finds that university reports of sexual assault increase by approximately 44% during the audit period. After the audit is completed, the reported sexual assault rates drop to levels statistically indistinguishable from the preaudit time frame. The results are consistent with the hypothesis that the ordinary practice of universities is to undercount incidents of sexual assault. Only during periods in which schools are audited do they appear to offer a more complete picture of sexual assault levels on campus. Further, the data indicate that the audits have no long-term effect on the reported levels of sexual assault, as those crime rates return to previous levels after the audit is completed. This last finding is supported even in instances when fines are issued for noncompliance. The study tests for a similar result with the tracked crimes of aggravated assault, robbery, and burglary, but reported crimes show no statistically significant differences before, during, or after audits. The results of the study point toward 2 broader conclusions directly relevant to policymaking in this area. First, greater financial and personnel resources should be allocated commensurate with the severity of the problem and not based solely on university reports of sexual assault levels. Second, the frequency of auditing should be increased, and statutorily capped fines should be raised to deter transgressors from continuing to undercount sexual violence. The Campus Accountability and Safety Act, presently before Congress, provides an important step in that direction. Language: en
How Much Justice Can We Afford?: Defining the Courts' Roles and Deciding the Appropriate Number of Trials, Settlement Signals, and Other Elements Needed to Administer Justice

This article discusses how the U.S. court system can function optimally given declining trial rates and the limited resources available. The question of how much justice we can afford is a challenge that becomes more difficult as budgets fall behind the increasing demand for and cost of court services. Presumably most analysts would agree that courts should try cases when appropriate - and help litigants find just resolutions without trial when it is not needed. The courts' ability to provide trials in some cases is possible only if the vast majority of other cases are not tried. This article provides background about the federal district courts' workload and financial situation and then identifies courts' goals for satisfying litigants' and society's interests in the courts. Based in part on input from federal court clerks, this article discusses benefits and problems caused by declining trial rates and analyzes possible strategies for dealing with those problems. These strategies include ensuring that litigants have a real choice of disputing procedures including trial, routinely collecting and disseminating data on negotiation and settlement, designing court facilities to fit realities of litigation, reforming legal education to reflect the realities of legal practice, making judging more attractive to judges, and expanding courts' roles in promoting local dispute resolution systems.
State and Local Tax Policy: Challenging the Use of Tax Credits and Other Incentives

A recent Sixth Circuit case challenged the validity under the Commerce Clause of the U.S. Constitution of an Ohio income tax credit. Although the Supreme Court overruled the decision on May 15, holding that the plaintiffs in the case did not have standing to challenge the incentives in federal court, the ruling did little to quell the debate concerning the constitutionality of the credits in question. While the Supreme Court ruling was not unanticipated, many observers were hoping for a more definitive resolution to the issue. As it stands, the Supreme Court decision leaves open the critical question of the constitutionality of incentives like that offered by the state of Ohio. Tax credits and other incentives offered by the states and local municipalities have been used as part of an economic development strategy, often to recruit or retain business activity within the borders. While some of these subsidies may be subject to challenge under notions of uniformity of equity, in this paper we argue that it ...
Residential Mobility and Mortgages

Abstract Mortgage applications are a detailed and accurate source of household information that is verified by underwriters, making it a more accurate data source than self-reported survey answers. This paper discusses how mortgage data can be applied to areas of economics outside mortgage finance. As a supplement to variables from the application form, the self-selection of mortgage points is used to infer expected mobility. A duration model of housing spells is estimated, and the points indicator is shown to be highly significant in predicting mobility for low loan-to-value borrowers. The findings demonstrate the potential fruitfulness of using this new data source.
p‐Selmer growth in extensions of degree p

There is a known analogy between growth questions for class groups and for Selmer groups. If $p$ is a prime, then the $p$-torsion of the ideal class group grows unboundedly in $\mathbb{Z}/p\mathbb{Z}$-extensions of a fixed number field $K$, so one expects the same for the $p$-Selmer group of a nonzero abelian variety over $K$. This Selmer group analogue is known in special cases and we prove it in general, along with a version for arbitrary global fields.
On the Value and Determinants of the Interest Tax Shields

We use a dynamic model of the firm to ascertain both the value and the determinants of the debt tax shields. For a representative U.S. firm, we find that the value of the interest tax shields represents less than 5 % of firm value, and it varies considerably across U.S. industries. Our results also show that this component of firm value behaves counter-cyclically over the business cycle. Finally, besides the interest rate on debt and the corporate income tax rate, we find that the curvature of the production function is one of the main determinants of the tax advantage of debt.
Herd Behaviour and Cascading in Capital Markets: a Review and Synthesis

We review theory and evidence relating to herd behaviour, payoff and reputational interactions, social learning, and informational cascades in capital markets. We offer a simple taxonomy of effects, and evaluate how alternative theories may help explain evidence on the behaviour of investors, firms, and analysts. We consider both incentives for parties to engage in herding or cascading, and the incentives for parties to protect against or take advantage of herding or cascading by others.
Steady-state size distributions for collisional populations:: analytical solution with size-dependent strength

Abstract The steady-state population of bodies resulting from a collisional cascade depends on how material strength varies with size. We find a simple expression for the power-law index of the population, given a power law that describes how material strength varies with size. This result is extended to the case relevant for the asteroid belt and Kuiper belt, in which the material strength is described by 2 separate power laws—one for small bodies and one for larger bodies. We find that the power-law index of the small body population is unaffected by the strength law for the large bodies, and vice versa. Simple analytical expressions describe a wave that is superimposed on the large body population because of the transition between the two power laws describing the strength. These analytical results yield excellent agreement with a numerical simulation of collisional evolution. These results will help to interpret observations of the asteroids and KBOs, and constrain the strength properties of those objects.
Commitment and Welfare

Abstract The standard approach to welfare analysis under dynamically inconsistent preferences is to assume that the welfare of an individual is maximized if he can commit to his initial goal. We study a potential rationale for such welfare analysis. In some prominent, well-studied examples with intertemporal tradeoffs (like the choice between investing in a project now or later, doing an unpleasant task now or procrastinating it until later, and eating a cake), we find that the commitment allocation can multiself Pareto dominate the non-cooperative equilibrium allocation if the number of time-dated selves exceeds a low threshold. While a common concern with behavioral welfare analysis is that the later selves of an individual are unfairly hurt as a result of committing the individual to his initial goal, our findings indicate that this concern may be more relevant for settings where the number of sequential choices is very low.
Cost-Effectiveness Measurement in Development : Accounting for Local Costs and Noisy Impacts

As evidence from rigorous impact evaluations grows in development, there have been more calls to complement impact evaluation analysis with cost analysis, so that policy makers can make investment decisions based on costs as well as impacts. This paper discusses important considerations for implementing cost-effectiveness analysis in the policy making process. The analysis is applied in the context of education interventions, although the findings generalize to other areas. First, the paper demonstrates a systematic method for characterizing the sensitivity of impact estimates. Second, the concept of context-specificity is applied to cost measurement: program costs vary greatly across contexts -- both within and across countries -- and with program complexity. The paper shows how adapting a single cost ingredient across settings dramatically shifts cost-effectiveness measures. Third, the paper provides evidence that interventions with fewer beneficiaries tend to have higher per-beneficiary costs, resulting in potential cost overestimates when extrapolating to large-scale applications. At the same time, recall bias may result in cost underestimates. The paper also discusses other challenges in measuring and extrapolating cost-effectiveness measures. For cost-effectiveness analysis to be useful, policy makers will require detailed, comparable, and timely cost reporting, as well as significant effort to ensure costs are relevant to the local environment.
The use of equity grants to manage optimal equity incentive levels

Abstract We predict and find that firms use annual grants of options and restricted stock to CEOs to manage the optimal level of equity incentives. We model optimal equity incentive levels for CEOs, and use the residuals from this model to measure deviations between CEOs’ holdings of equity incentives and optimal levels. We find that grants of new incentives from options and restricted stock are negatively related to these deviations. Overall, our evidence suggests that firms set optimal equity incentive levels and grant new equity incentives in a manner that is consistent with economic theory.
Research for sale: Determinants and consequences of paid-for analyst research☆

Abstract I examine the determinants and market impact of paid-for coverage using a hand-collected sample of paid-for reports over 1999–2006. More than five hundred publicly listed US companies paid for analyst coverage since 1999. Yet little is known about the informational consequences of this analyst research. Firms with greater uncertainty, weaker information environments, and low turnover are more likely to buy coverage as they have the most to gain from analyst coverage but are unlikely to attract sell-side analysts. Despite the inherent conflicts of interest, I find paid-for reports have information content for investors based on 2-day abnormal returns. After the initiation of coverage, companies experience an increase in institutional ownership, sell-side analyst following, and liquidity. In addition, the results are strongest for the fee-based research firm with ex ante policies that reduce potential conflicts of interest.
Aspects of the optimal management of exchange rates

Abstract This paper shows that the choice of the optimal exchange-rate regime depends on the stochastic shocks affecting the economy. The higher the variance of real shocks, the larger the desirability of fixity of exchange rates. The desirability of exchange-rate flexibility increases the larger are the variances of the shocks to the demand for money, to the supply of money, to foreign prices, and to purchasing power parities. When the economy produces traded and non-traded goods the desirability of exchange-rate flexibility diminishes the higher is the relative share of non-traded goods and the lower are the elasticities of demand and supply of the two goods.
The Foreign Trade Antitrust Improvements Act: Do We Really Want to Return to American Banana?

The extra-territorial reach of the antitrust laws is subject to multiple constraints, including the Commerce Clause of the constitution, the text of the antitrust statutes, and a variety of policy considerations. At the beginning of the twentieth century, in the American Banana case, the Supreme Court severely limited the application of the antitrust laws to anti-competitive behavior beyond our shores. The next eighty years saw an expansion of their extra-territorial reach, by including within their coverage a range of foreign conduct which had domestic effects. However, confusion among the lower courts as to the extent of this coverage, as well as a concern about the application of American antitrust laws against exporters whose conduct principally affected competition in foreign markets, led to the passage in 1982 of the Foreign Trade Antitrust Improvements Act. FTAIA expressly excludes certain conduct from the antitrust laws, while maintaining the principle that they should continue to apply to import commerce and to foreign behavior having a domestic effect. In the intervening three decades, however, courts have given improperly broad readings to the FTAIA’s exclusionary provisions. The result has been to deny to American competitors and American consumers the appropriate level of protection afforded them by the antitrust laws. This Article reviews the history leading up to the passage of FTAIA and discusses its provisions. It then examines and critiques the judicial treatment FTAIA has received. It concludes that many of these decisions are wrong – both as a matter of statutory interpretation and as a matter of policy – and urges either a judicial redirection or legislative correction.
Technological Grounding: Enrolling Technology as a Discursive Resource to Justify Cultural Change in Organizations

In technologically grounded organizations, culture is bound tightly to the material characteristics of the technology that the organization manufactures, distributes, or services. Technological grounding helps explain why high-technology organizations often experience cultural integration problems following a merger. Examining the recent merger of US West and Qwest, this article analyzes how powerful actors strategically used the process of technological grounding to enroll a core technology to situate postmerger integration in technological terms, creating a discourse of inevitability that then justified publicly Qwest's cultural domination of US West.
The result of world powers in WTO: A cheap-talk game under different communication protocols

Abstract Official reports and case studies reveal that China experienced different means of communication with the world powers since it joined the World Trade Organization in 2001. In the first five years, China had public communication with both the United States and the European Union under the Transitional Review Mechanism. In 2006 a new means of communication, the China–US Strategic and Economic Dialogue, started to take effect. Reports show that the new mechanism has advanced the China–US relationship positively and productively. The difference between the two means of communication stimulates our study. We adopt a game theory model to examine the impact of different communication protocols on China's incentives to reveal information. We analyze a cheap-talk game between an informed agent and two uninformed principals who coordinate actions under two communication protocols: public and private communication. First, all equilibria under both means of communication are characterized. Information precision of the agent's equilibrium messages decreases with the principals' preference biases. Second, under private communication the agent communicates more informatively with one principal if she in effect reveals little information to the other. Under private communication there exists an informative equilibrium with asymmetric levels of information precision even when all equilibria under public communication are uninformative.
Moving to Greener Pastures? Multinationals and the Pollution Haven Hypothesis

Are multinationals flocking to pollution havens in developing countries? Using data from four developing countries (Cote d'Ivoire, Mexico, Morocco, and Venezuela), the authors examine the pattern of foreign investment. They find almost no evidence that foreign investors are concentrated in dirty sectors. They also examine the behavior of multinationals doing business in these four countries, testing whether there is any tendency for foreign firms to pollute more or less than their host country counterparts. To do this, they use consumption of energy and dirty fuels as a proxy for pollution intensity. They find that foreign plants in these four developing countries are significantly more energy-efficient and use cleaner types of energy than their domestic counterparts. The authors conclude with an analysis of US outbound investment between 1982 and 1994. They reject the hypothesis that the pattern of US foreign investment is skewed toward industries in which the cost of pollution abatement is high.