cssi/SciSciGPT-SciSciNet huggingface dataset:
Managing Growth to Achieve Efficient Coordination in Large Groups

Previous experiments using the minimum-effort coordination game reveal a striking regularity-large groups never coordinate efficiently. Given the frequency with which large real-world groups, such as firms, face similarly difficult coordination problems, this poses an important question: Why do we observe large, successfully coordinated groups in the real world when they are so difficult to create in the laboratory? This paper presents one reason. The experiments show that, even though efficient coordination does not occur in groups that start off large, efficiently coordinated large groups can be "grown." By starting with small groups that find it easier to coordinate, we can add entrants-who are aware of the group's history-to create efficiently coordinated large groups. This represents the first experimental demonstration of large groups tacitly coordinated at high levels of efficiency.
Investor sentiment and the stock market’s reaction to monetary policy

This paper shows that monetary policy decisions have a significant effect on investor sentiment. The effect of monetary news on sentiment depends on market conditions (bull versus bear market). We also find that monetary policy actions in bear market periods have a larger effect on stocks that are more sensitive to changes in investor sentiment and credit market conditions. Overall, the results show that investor sentiment plays a significant role in the effect of monetary policy on the stock market.
Design Limits and Dynamic Policy Analysis

This paper characterizes the frequency domain properties of feedback control rules in linear systems in order to better understand how different policies affect outcomes frequency by frequency. We are especially concerned in understanding how reductions of variance at some frequencies induce increases in variance at others. Tradeoffs of this type are known in the control literature as design limits. Design limits are important in understanding the full range of effects of macroeconomic stabilization policies. We extend existing results to account for discrete time bivariate systems with rational expectations. Application is made to the evaluation of monetary policy rules.
American Exceptionalism in Consumer Arbitration

“American exceptionalism” has been used to reference the United States’ outlier policies in various contexts, including its love for litigation. Despite Americans’ reverence for their “day in court,” their zest for contractual freedom and efficiency has prevailed to result in U.S. courts’ strict enforcement of arbitration provisions in both business-to-business (“B2B”) and business-to-consumer (“B2C”) contracts. This is exceptional because although most of the world joins the United States in generally enforcing B2B arbitration under the New York Convention, many other countries refuse or strictly limit arbitration enforcement in B2C relationships due to concerns regarding power imbalances and public enforcement of consumer protections. The resulting clash in arbitration policy has left consumers in cross-border cases uncertain whether they must abide by arbitration clauses in an increasingly global marketplace.
Internationalized Production in Developed and Developing Countries and in Industry Sectors

Internationalized production, that is, production in a country controlled by firms based in another country, grew from about 4.5% of world output in 1970 to over 7% in 1995. The importance of internationalized output fell substantially in developing countries until around 1990 but has been been increasing since then, especially in the 'transition' countries, where it has grown from less than $100 million in 1977 to over $25 billion in 1994. The petroleum sector was the one with the highest share of internationalized production in the 1970s, but that share has declined sharply, especially in the developing countries, where important operations were nationalized. Manufacturing is now the sector in which internationalized production plays the largest role, the internationalized share rising from under 12% to more than 16% in 1990. That share was probably considerably larger in 1995, given the increase in the absolute value of internationalized output by more than a third from 1993 to 1995. Outside of petroleum and manufacturing, internationalized production was of little importance. For the world as a whole, the internationalized share was about 3« percent in 1990. However, if the trend in U.S.-owned production is an indication, the role of internationalized production in this sector may be changing; the share in total production of U.S. foreign affiliates in developing countries of a broad service sector including trade and finance rose from 6% in 1977 to 18% in 1995.
Waiving Federal Sovereign Immunity in Original Actions Between States

There are tremendous disparities between high stakes original actions between states before the U.S. Supreme Court, where there is no waiver of federal sovereign immunity, and other types of cases in the lower courts, where a plethora of immunity waivers allow states and other parties to seek relief from the federal government for Fifth Amendment takings, unlawful agency action, and tort claims. Federal actions or omissions are often at the heart of the dispute, and federal involvement may be crucial for purposes of providing an equitable remedy to the state parties, but there is no reliable mechanism for bringing the federal government to an original action before the Supreme Court. This article shows how federal sovereign immunity stands in the way of comprehensive resolution of interstate water rights and highlights the need for reforms to facilitate meaningful participation by the United States. In particular, it investigates the merits of a waiver of federal sovereign immunity in original actions between the states. Although federal immunity is a staple of our nation’s jurisprudence, it has no constitutional basis and it serves little purpose in this context. The article concludes that a congressional waiver of federal sovereign immunity would be appropriate and would have few downsides, at least in the case of original actions between states before the U.S. Supreme Court.
Risk Adjustment and Trading Strategies

We assess the profitability of momentum strategies using a stochastic discount factor approach. In unconditional tests, approximately half of the strategies’ profitability is explained. In conditional tests we see a further slight decline in profits. We argue that the risk of these strategies should be increasing in the market risk premium. Empirically, while their risk measures estimated relative to the stochastic discount factor behave as predicted, market betas do not; thus capital asset pricing model (CAPM)-like benchmarks may lead to incorrect inferences. Given that our nonparametric risk adjustment explains roughly half of momentum strategy profits, we cannot rule out the possibility of residual mispricing. A large number of empirical articles document the ability of investors to achieve abnormal returns through the use of simple trading strategies based on historical returns. Recently Jegadeesh and Titman (1993) show that, over intermediate horizons of 3–12 months, a portfolio that purchases past winners and sells past losers has a positive abnormal return. The evidence that such a “momentum” strategy exhibits abnormal performance has received a great deal of attention. Some authors have proposed risk-based explanations of these apparent profits [see, e.g., Fama and French (1996)], but to date, the evidence that the returns of these strategies are related to identifiable risk measures is mixed. In response, several articles have proposed new theories to explain, among other stylized facts, momentum strategy profits. These articles rely on psychological factors; for example, Barberis, Shleifer, and Vishny (1998) build a model which assumes factors such as representativeness and conservatism, while Daniel, Hirshleifer, and Subramanyam (1998) rely on overconfidence and self-attribution. In this article we reassess the risk-based explanations for the profitability of momentum trading strategies by measuring these profits against a nonparametric benchmark. The motivation for this analysis is straightforward.
Liquidity, leverage, and Lehman: A structural analysis of financial institutions in crisis

Abstract This paper presents a flexible, lattice-based structural credit risk model that uses equity market information and a detailed depiction of a financial institution’s liability structure to analyze default risk. The model is applied to examine the term structure of default probabilities for Lehman Brothers prior to its demise. The results indicate, as early as March, that the firm would likely lose access to external capital within two years. The model can be used as both a diagnostic tool for the early detection of financial distress and a prescriptive tool for addressing the sources of risk in large, complex financial institutions.
Agency costs of stakeholders and capital structure: international evidence

Purpose – This paper examines relationship between bargaining powers of creditors as well as employees and financial leverage across countries. The purpose of this paper is to explore roles of creditors and employees in capital structure decisions under different legal and political regimes across countries.Design/methodology/approach – Using country‐level creditor rights index and labor rights index as a proxy for bargaining powers of creditors and employees, respectively, the author addresses the interaction between creditors as well as employees and shareholders. The paper tests the impact of employee rights and creditor rights on capital structure across countries.Findings – The author finds a positive relationship between employee rights and firms' use of debt and a negative relationship between creditor rights and firm debt ratio.Social implications – The paper provides a new perspective to interpret international variation in financial leverage in the world. The results obtained from this paper hel...
Foreign Demand for Domestic Currency and the Optimal Rate of Inflation

We characterize the Ramsey optimal rate of inflation in a model with a foreign demand for domestic currency. In the absence of such demand, the model implies that the Friedman rule—deflation at the real rate of interest—is optimal. We show analytically that in the presence of a foreign demand for domestic currency, this result breaks down. Calibrated versions of the model deliver optimal annual rates of inflation between 2% and 10%. The domestically benevolent government imposes an inflation tax to extract resources from the rest of the world in the form of seignorage revenue.
What do potential jurors know about police interrogation techniques and false confessions

Psychological police interrogation methods in America inevitably involve some level of pressure and persuasion to achieve their goal of eliciting confessions of guilt from custodial suspects. In this article, we surveyed potential jurors about their perceptions of a range of psychological interrogation techniques, the likelihood that such techniques would elicit a true confession from guilty suspects, and the likelihood that such techniques could elicit a false confession from innocent suspects. Participants recognized that these interrogation techniques may be psychologically coercive and may elicit true confessions, but believed that psychologically coercive interrogation techniques are not likely to elicit false confessions. The findings from this survey study indicate that potential jurors believe that false confessions are both counter- intuitive and unlikely, even in response to psychologically coercive interrogation techniques that have been shown to lead to false confessions from the innocent. This study provides empirical support for the idea that expert witnesses may helpfully inform jurors about the social science research on psychologically coercive interrogation methods and how and why such interrogation techniques can lead to false confessions. Copyright © 2009 John Wiley & Sons, Ltd.
Comprehensive Land Use Planning: Learning How and Where to Grow

Land use in this country is determined by zoning ordinances adopted by local governments. Their provisions dictate the types of uses to which land may be put, the density at which development may happen, the height, size and shape of buildings, and the mix of commercial, residential, public and other land uses in each locality. Zoning is a key method by which society encourages the development of jobs and housing, protects natural resources and the environment, and defines the character of its communities.
The Rule of Law and Legal Pluralism in Development

After decades of disappointing progress in building the rule of law in societies that suffer from poorly functioning legal systems, the development community has turned its attention to legal pluralism. Legal pluralism is a prominent feature in many development contexts, with both negative and positive implications for the rule of law. The negative questions revolve around whether or to what extent the presence of multiple coexisting legal forms hampers or detracts from efforts to build the rule of law. The positive questions revolve around whether alternative legal forms in situations of legal pluralism might satisfy rule of law functions that failing state legal systems are unable to provide. This essay explores these questions.
Impacts of the Indonesian Economic Crisis: Price Changes and the Poor

The recent financial crisis in Indonesia has resulted in dramatic price increases. Using very recent data, we investigate whether these price increases have impacted the cost-of-living of poor households in a disproportionately harsh way. We find that the poor have indeed been hit hardest. Just how hard the poor have been hit, though, depends crucially on where the household lives, whether the household is in a rural or urban area, and just how the cost-of-living index is computed. What is clear is that the notion that the very poor are so poor as to be insulated from international shocks is simply wrong. Rather, in the Indonesian case, the very poor appear the most vulnerable.
Theories and Models of Corporate Governance

This essay is a brief historical survey of the leading models of the corporation in American legal theory, with emphasis on the contemporary theory of contractarianism. "Corporate governance" is often said to chiefly concern the "internal" governance of corporations: that is, the relationship among the participants in the corporate enterprise. "Internal" governance is sometimes distinguished from "external" regulation of the nominally "private" business corporation by the state. But the internal and external relationships are intertwined and not mutually exclusive. Thus, even as the contemporary legal discourse on corporate governance purports to focus on internal matters, it advances arguments regarding the extent to which internal relationships are, and should be, structured by private claimants, and the extent to which they are, or should be, structured externally by the state. These issues are often framed in terms of a debate over the "nature" or "essence" of the corporation. Recurring questions include who "owns" the corporation, whether a corporation is an "artificial" phenomenon created by state fiat or a "natural" byproduct of human interaction, whether the corporation is an entity separate from its constituent individuals, and why decision-making authority is concentrated in professional managers. The shifting answers to these questions are presented as justifications for, or critiques of, the existing corporate governance regime, but can also be seen as shorthand for unspoken normative assumptions about the respective roles of the group, the state, and the individual.
The Present Value Model of Rational Commodity Pricing

Supported by the National Science Foundation. Supported by M.I.T.'s Center for Energy Policy Research.
Flipping out about the flip: All hype or is there hope?

Abstract The flipped classroom was founded on student-centered pedagogy, with the idea that students retain more information by using active learning techniques during class compared to sitting in a lecture-based course. We implement a randomized experiment to quantify the effect of flipping on the learning outcomes of economics students. We compare standardized exam scores of students who experienced a flipped classroom to those who experienced a traditional classroom in principles of microeconomics courses. OLS regression results show that, following a negative adjustment period, students who experienced the flipped classroom scored significantly higher on midterm and final exams than did the control group. The magnitude of these effects suggests improvements in the students’ scores of a lower bound of two-thirds to an entire a letter grade.
Do Fed Forecast Errors Matter

There is a large literature evaluating the forecasts of the Federal Reserve by testing their rationality and measuring the size of their forecast errors. There is also a substantial literature and debate on the impact of the Feds monetary policy on the economy. We know little, however about the impact of the Feds forecast errors on economic outcomes. This paper constructs a measure of a forecast error shock for the Federal Reserve based on the assumption that the Fed follows a forward-looking Taylor rule. Given the effort the Fed puts towards producing forecasts that do not have an endogenous error component, we treat the Feds forecast errors as a shock, analogous to a monetary policy shock. Our shock, however, is different in that it is completely unintended by the monetary authority rather than simply unanticipated by the public. We follow Romer and Romer (2004) and investigate the effect of the forecast error shock on output and price movements. Our results suggest that although the absolute magnitude of the forecast error shock is large, the impact of the shock on the macroeconomy is quite small. This finding is robust across a range of different specifications. The maximum impact suggests a decline of less than 0.3 percent of real GDP and less than 0.4 percent of GDP deflator in response to a 100 basis point contractionary forecast error shock.
Belief-Overkill in Political Judgments

When people tend toward a political decision, such as voting for the Republican Party, they are often attracted to this decision by one issue, such as the party’s stance on abortion, but then they come to see other issues, such as the party’s stand on taxes, as supporting their decision, even if they would not have thought so in the absence of the decision. I demonstrate this phenomenon with opinion poll data and with an experiment done on the World Wide Web using hypothetical candidates. For the hypothetical candidates, judgments about whether a candidate’s position on issue A favors the candidate or the opponent are correlated with judgments about other positions taken by the candidate (as determined from other hypothetical candidates). This effect is greater in those subjects who rarely make conflicting judgments, in which one issue favors a candidate and another favors the opponent. In a few cases, judgments even reverse, so that a position that is counted as a minus for other candidates becomes a plus for a favoredcandidate. Reversals in the direction of a candidate’s position are more likely when the candidate is otherwise favored. The experiment provides a new kind of demonstration of “beliefoverkill,” the tendency to bring all arguments into line with a favored conclusion.
A Unified Theory and Test of Extended Immediate Deterrence

We present a unified theory and test of extended immediate deterrence—unified in the sense that we employ our theoretical deterrence model as our statistical model in the empirical analysis. The theoretical model is a straightforward formalization of the deterrence logic in Huth (1988) and Huth and Russett (1984), coupled with private information concerning utilities. Our statistical analysis suggests that the attacker and defender’s decisions are influenced by the balance of forces, nuclear weapons, defender-protege military alliances, arms transfers, and trade, as well as the regime types of those involved. Many of these findings contradict previous research by Huth (1988) and Huth and Russett (1988). We find that many of the variables involved in the deterrence calculus are nonmonotonically linked to the probability of deterrence success or war. We illustrate the results with case studies of the Soviet-Japanese dispute over Manchukuo (1937‐1938) and the Berlin Blockade (1948).
Subjective Performance Measures in Optimal Incentive Contracts

Objective measures of performance are seldom perfect. In response, incentive contracts often include important subjective components that mitigate incentive distortions caused by imperfect objective measures. This paper explores the combined use of subjective and objective performance measures in (respectively) implicit and explicit incentive contracts. Naturally, objective and subjective measures often are substitutes, sometimes strikingly so: we show that if objective measures are sufficiently close to perfect then no implicit contracts are feasible (because the firm’s fallback position after reneging on an implicit contract is too attractive). We also show, however, that objective and subjective measures can reinforce each other: if objective measures become more accurate then in some circumstances the optimal contract puts more weight on subjective measures (because the improved objective measures increase the value of the ongoing relationship, and so reduce the firm’s incentive to renege). We also analyze the use of subjective weights on objective performance measures, and provide case-study evidence consistent with our analyses.
Unitary Executive Theory and Exclusive Presidential Powers

In their book, The Unitary Executive, Steven Calabresi and Christopher Yoo offer important and compelling evidence of a broad and longstanding understanding by Presidents and Congresses in favor of an exclusive presidential power to remove government officials. In doing so, the authors’ primary goal is to bolster unitary executive theory with historical evidence. But they have a second, more subtle goal: to disassociate unitary executive theory from the theories of presidential powers invoked by the administration of George W. Bush. In this essay, I suggest that this attempt to save unitary executive power theory from the Bush Administration is not likely to succeed.
Mean reversion in stock prices: Evidence and Implications

Abstract This paper investigates transitory components in stock prices. After showing that statistical tests have little power to detect persistent deviations between market prices and fundamental values, we consider whether prices are mean-reverting, using data from the United States and 17 other countries. Our point estimates imply positive autocorrelation in returns over short horizons and negative autocorrelation over longer horizons, although random-walk price behavior cannot be rejected at conventional statistical levels. Substantial movements in required returns are needed to account for these correlation patterns. Persistent, but transitory, disparities between prices and fundamental values could also explain our findings.
Social and Economic Rights? Lessons from South Africa

Do social and economic rights belong in a democratic constitution? Skeptics have wondered whether it is possible to constitutionalize such rights without imposing an untenable managerial responsibility on courts. In an extraordinary decision, the Constitutional Court of South Africa has provided a new approach to social and economic rights, one that respects the fact of limited resources while also requiring governmental attention to basic needs. This new approach might be called an administrative law model of constitutional rights. It contains considerable promise, because it recognize rights to reasonable programs, rather than to protection of each individual, a path that might well be beyond governmental capacities.
Functional equivalence between intertemporal and multisectoral investment adjustment costs

Abstract Two types of adjustment cost specifications coexist in macroeconomic models with investment: intertemporal adjustment costs which involve a nonlinear substitution between capital and investment in capital accumulation, and multisectoral costs which are captured by a nonlinear transformation between consumption and investment. This paper demonstrates a functional equivalence between these two specifications. One surprising result is that an increase in multisectoral adjustment costs can be equivalent to a decrease in intertemporal adjustment costs, depending upon the size of the intertemporal costs. We then observe that the functional equivalence implies a problem in identifying the two types of adjustment costs and show ways to solve the problem.
Solving coordination failure with "all-or-none" group-level incentives

Coordinating activity among members is an important problem faced by organizations. When firms, or units within firms, are stuck in bad equilibria, managers may turn to the temporary use of simple incentives—flat punishments or rewards—in an attempt to transition the firm or unit to a more efficient equilibrium. We investigate the use of incentives in the context of the “minimum-effort,” or “weak-link,” coordination game. We allow groups to reach the inefficient equilibrium and then implement temporary, flat, “all-or-none” incentives to encourage coordination on more efficient equilibria. We vary whether incentives are positive (rewards) or negative (penalties), whether they have substantial or nominal monetary value, and whether they are targeted to a specific outcome (the efficient equilibrium) or untargeted (apply to more than one outcome). Overall, incentives of all kinds are effective at improving coordination while they are in place, but there is little long-term persistent benefit of incentives—once incentives are removed, groups tend to return to the inefficient outcome. We find some differences between different kinds of incentives. Finally, we contrast our results to other recent work demonstrating greater long-term effectiveness of temporary incentives.
Diagnosing discrimination: stock returns and CEO gender

A vast labor literature has found evidence of a “glass ceiling,” whereby women are under-represented among senior management. A key question remains the extent to which this reflects unobserved differences in productivity, preferences, prejudice, or systematically biased beliefs about the ability of female managers. Disentangling these theories would require data on productivity, on the preferences of those who interact with managers, and on perceptions of productivity. Financial markets provide continuous measures of the market's perception of the value of firms, taking account of the beliefs of market participants about the ability of the men and women in senior management. As such, financial data hold the promise of potentially providing insight into the presence of mistake-based discrimination. Specifically, if female-headed firms were systematically under-estimated, this would suggest that female-headed firms would outperform expectations, yielding excess returns. Examining data on S&P 1500 firms over the period 1992–2004 I find no systematic differences in returns to holding stock in female-headed firms, although this result reflects the weak statistical power of our test, rather than a strong inference that financial markets either do or do not under-estimate female CEOs. (JEL: J7, G14, J44)
Negative hedging: Performance sensitive debt and CEOs' equity incentives

We examine the relation between chief executive officers’ equity incentives and their use of performance-sensitive debt contracts. These contracts require higher or lower interest payments when the borrower’s performance deteriorates or improves, thereby increasing expected costs of financial distress while making a firm riskier to the benefit of option holders. We find that managers whose compensation is more sensitive to stock volatility choose steeper and more convex performance pricing schedules, while those with high delta incentives choose flatter, less convex pricing schedules. Performance pricing contracts therefore seem to provide a channel for managers to increase firms’ financial risk to gain private benefits.
Compartmentalising gold prices

Deriving a functional form for a series of prices over time is difficult. It is common to assume some linearly estimable form for prediction purposes. While this can produce accurate short run forecasts it fails to identify longer trends and patterns that may exist in financial data. Particularly troublesome is the potential for chaotic behaviour which can look like standard autocorrelation. Also, components of a price’s behaviour may not be linear or may be unable to be structured well in a stationary series. Recently, more research has been devoted to whether or not a series of prices exhibits deterministic behaviour, instead of some type of Brownian Motion (regular or fractal). This research suggests that some time series data may pass typical tests for randomness where randomness does not exist. Given the breadth of current research, the most logical and reasonable beginning assumption for modeling a time series is that data probably exhibit both deterministic and random components. This paper will make use of the techniques of spectral analysis and the Hurst Exponent to measure the level of long-run dependence in the price data of gold. This technique will allow for the separation and quantification of how large the deterministic and random components of gold prices are.
Secular Evolution and the Morphological Transformation of Cluster and Field Galaxies

Deep surveys conducted during the past decades have shown that galaxies in the distant universe are generally of more irregular shapes, and are disky in appearance and in their star formation rate, compared to galaxies in similar environments in the nearby universe. Given that the merger rate between z= 2 and the local universe is far from adequate to account for this observed morphological transformation rate, an internal mechanism for the morphological transformation of galaxies is to be sought, whose operation can be further aided by environmental factors. The secular evolution mechanism, especially with the discovery of a collisionless dissipation mechanism for stars within the secular evolution paradigm, has provided just such a framework for understanding the morphological evolution of galaxies across the Hubble time. In this paper we will summarize the past theoretical results on the dynamical mechanisms for secular evolution, and highlight new results in the analysis of the observational data, which confirmed that density waves in physical galaxies possess the kind of characteristics which could produce theaobserved rates of morphological transformation for both cluster and field galaxies.
The Rhetoric of Recognition

When a judicial system lacks impartial tribunals or procedures, a United States court must decline to recognize a foreign money judgment from that nation. This mandatory ground for nonrecognition has received considerable scholarly attention, most notably for its interplay with the doctrine of forum non conveniens in denying meaningful resolution of the claims of foreign plaintiffs. This article applies rhetoric to examine the judicial opinions at the trial and appellate levels that have addressed this ground in two high-profile toxic tort cases: the claims of Nicaraguans against several U.S. multinationals for pesticide exposure, and those of Ecuadorans against Chevron for harms related to petroleum operations. This rhetorical analysis reveals that trial courts have engaged in thorough analyses when applying the systemic inadequacy ground, but that the appellate courts have engaged in a number of tactics to avoid addressing it, thus exposing broader questions about justice and rule of law for all stakeholders.
Form and Substance in the Law of Counterinsurgency Damages

American-style damages payments have become one of the ways the twenty-first century U.S. military attempts to win the hearts and minds of civilians in war zones. In places like Afghanistan and Iraq, many American judge advocates are doing the work of personal injury lawyers and insurance company claims adjusters: using cash to settle civilian claims against the armed forces. In many ways, the use of damages law in the military campaign against terrorism takes part in an old American tradition of insisting that law is in the service of strategy. But a close examination of the law of foreign claims raises a deeper problem for the use of law as a non-lethal weapon in counterinsurgency contexts. Call it the dilemma of law and strategy. In the law of foreign claims, as the field is known, the relationship between legality and strategic advantage is often inverse. The more law-like the claims payment system, the less tactical flexibility soldiers have to deploy money as a weapon tailored to the terrain of the battlefield. The more flexible it is, the less law-like it tends to be. Commanders and claims officers in Afghanistan and Iraq seem to understand this much better than the official doctrine suggests. But in these theaters, the opposite problem has begun to come to the fore. Unconstrained tactical flexibility produces inconsistent determinations, and lawless inconsistency may be as strategically harmful as overly legalistic rigidity. The nub of the law-strategy dilemma is that legality is both a threat and an imperative.
On Transitory Earnings

The paper develops a concept of transitory earnings and contrasts this source of earnings to “core” (or recurring) earnings. It is shown that any two of the following three attributes of transitory earnings imply the third: (i) forecasting irrelevance with respect to next-period aggregate earnings, (ii) value irrelevance, and (iii) unpredictability. The paper makes the case that the current “dirty surplus” items make sense, especially if one expands the valuation perspective to also allow for agency considerations.
Interpretation: Legal Perspective

This article describes the Anglo-American law of evidence as it applies to forensic-science testimony interpreting the significance of a “match” to trace evidence. Keywords: trace evidence; random match probability; conditional probability; transposed conditional; likelihood; Bayes rule; prior probability; posterior probability; presumption of innovance; probative value
A model of investor sentiment

Abstract Recent empirical research in finance has uncovered two families of pervasive regularities: underreaction of stock prices to news such as earnings announcements, and overreaction of stock prices to a series of good or bad news. In this paper, we present a parsimonious model of investor sentiment, or of how investors form beliefs, which is consistent with the empirical findings. The model is based on psychological evidence and produces both underreaction and overreaction for a wide range of parameter values.
The Religion Clauses and the “Really New” Federalism

It had been an axiom of contemporary Constitutional Law that once a provision of the Bill of Rights was "fully" incorporated, such as with the First Amendment, it established a Constitutional minimum. A State could provide, either by constitutional or statutory provision, additional protections to its citizens, so long as this did not create a conflict with other federal law. Another premise, until recently, was that the federal government had the ability by legislation to provide additional or enhanced rights to Americans, and that these rights applied uniformly to residents of all states. The application of these two principles - at least as applied to First Amendment and Equal Protection type rights - was relatively straightforward. The criteria for determining whether a government act violated the Establishment Clause would be applied to any government actor, whether at the federal, state or local level. The Free Exercise of Religion was protected from violations [defined as significant or substantial interference] by government. Actions by a government entity that might interfere with religious activity had to survive a strict scrutiny review, that is, a showing of a compelling government interest and a proof that restrictions were as narrowly tailored or least restrictive as possible. Discrimination by government based on race, and several other immutable traits, also had to sustain a strict Constitutional scrutiny. Other rights were protected by semi-strict scrutiny, or a hard rational basis [rational basis "with teeth"] review. If these protections were felt not to be adequate, Congress under public pressure could and did enact civil rights statutes, that provided additional national protections against discrimination by public or private players, first as to race, alienage, nationality, religion and gender, and then later as to disability and age. And states were also free to enact their own civil rights statutes providing additional protections, so long as they did not conflict with federal law or policy. These assumptions were challenged and now, seemingly inverted, by two Supreme Court decisions, most recently Gonzales v. O Centro Espirita Beneficente Uniao Do Vegetal. Civil rights protections for citizens now depend on whether the violations are by the federal government, the state government or local government. First, First Amendment protections - the Free Exercise of Religion, and the Wall of Separation between church and state have been limited. Next, federal statutes that provide additional protections are applied differently depending on the level of government. They apply fully to actions by federal officials. But states are free to apply under their own laws a more stringent set of standards for separation of church and state and also to pass neutral and general laws that restrict religious practices. This article will describe this evolution and particularly the new two-tier process of review under a revised concept of federalism, as indicated by O Centro.
Do Common Stocks Have Perfect Substitutes? Product Market Competition and the Elasticity of Demand for Stocks

Abstract Though common stocks are one of the most important assets in an economy, little is known about their demand curves. I estimate demand curves for 144 NYSE stocks using a unique data set of all orders, including off-equilibrium orders, during three months in 1990 and 1991. Connecting asset pricing with industrial organization, I find that stocks of firms in less competitive industries are more elastic because they have closer substitutes than stocks in more competitive industries. Tests that exploit the 1991 Gulf War shock and S&P 500 Index additions confirm these results.
Methods for computing marginal data densities from the Gibbs output

Abstract We introduce two estimators for estimating the Marginal Data Density (MDD) from the Gibbs output. Our methods are based on exploiting the analytical tractability condition, which requires that some parameter blocks can be analytically integrated out from the conditional posterior densities. This condition is satisfied by several widely used time series models. An empirical application to six-variate VAR models shows that the bias of a fully computational estimator is sufficiently large to distort the implied model rankings. One of the estimators is fast enough to make multiple computations of MDDs in densely parameterized models feasible.
Peacekeeping the Game

Political science students face the difficult challenge of understanding the obstacles to resolving intrastate conflict. Often, instructors will use negotiation-based role-playing simulations to model arduous discussions between the warring groups and intervening parties. However, the long-term challenges of directing peacebuilding and ensuring security are equally important parts of intrastate conflict resolution that remain unaddressed in current simulations. The design of simulations with board-game-like rules for teaching about intrastate conflict has also been unexplored. This paper lays out a new type of simulation with board-game-like rules that present realistic obstacles to students as they try to balance the various needs of their assigned state. A detailed discussion of the significance of each of the game rules and potential applications of the simulation is included.
Competitive dynamics of web sites

Abstract We present a dynamical model of web site growth in order to explore the effects of competition among web sites and to determine how they affect the nature of markets. We show that under general conditions, as the competition between sites increases, the model exhibits a sudden transition from a regime in which many sites thrive simultaneously, to a “winner-take-all market” in which a few sites grab almost all the users, while most other sites go nearly extinct. This is in agreement with recent measurements on the nature of electronic markets.
Public Sector Land Banking: A Decision Model for Local Governments

Local governments frequently face land banking decisions concerning real properties that they may acquire now in open market transactions or later via their power of eminent domain. After construction of a practical local government land banking example, a theoretically correct cash flow and cost-benefit analysis is presented. Then a buy-now or buy-later decision model is developed explaining when to exercise the free American Call Option provided to governments through their power of eminent domain.
The Power and the Process: Instructions and the Civil Jury

The form of the court's charge to the jury affects power relationships among judge and jury, trial and appellate courts, and plaintiffs and defendants. It also influences the role of the jury and the content of the underlying substantive law. Under current federal law, trial judges have virtually complete discretion in making decision about jury charge format, despite the important implications of that decision. This article demonstrates, by using examples, the ways in which the form of the jury charge can make a difference. It then argues that the general charge should remain the norm. This is true first for political reasons: the general charge best preserves the proper allocation of power between judge and jury and the jury's role as arbiter of community values. Second, the article argues that special verdicts are neither more accurate nor more efficient than general verdicts except under very limited circumstances. Third, the article argues that a change from the general verdict norm would cause an undesirable shift in procedural advantage from plaintiffs to defendants. The article concludes that FRCP 49 should be amended to provide that general verdicts should be used absent exceptional circumstances and to eliminate the current Rule 49(b) option of a general verdict accompanied by interrogatories. The civil jury is a vital and important institution that deserves our protection from "tort reform" -inspired changes; the general verdict best preserves the jury's historic role.
Trees Assembling Mann-Whitney approach for detecting genome-wide joint association among low-marginal-effect loci.

Common complex diseases are likely influenced by the interplay of hundreds, or even thousands, of genetic variants. Converging evidence shows that genetic variants with low-marginal-effects (LME) play an important role in disease development. Despite their potential significance, discovering LME genetic variants and assessing their joint association on high-dimensional data (e.g., genome-wide association studies) remain a great challenge. To facilitate joint association analysis among a large ensemble of LME genetic variants, we proposed a computationally efficient and powerful approach, which we call Trees Assembling Mann-Whitney (TAMW). Through simulation studies and an empirical data application, we found that TAMW outperformed multifactor dimensionality reduction (MDR) and the likelihood-ratio-based Mann-Whitney approach (LRMW) when the underlying complex disease involves multiple LME loci and their interactions. For instance, in a simulation with 20 interacting LME loci, TAMW attained a higher power (power=0.931) than both MDR (power=0.599) and LRMW (power=0.704). In an empirical study of 29 known Crohn’s disease (CD) loci, TAMW also identified a stronger joint association with CD than those detected by MDR and LRMW. Finally, we applied TAMW to Wellcome Trust CD GWAS to conduct a genome-wide analysis. The analysis of 459K single nucleotide polymorphisms was completed in 40 hours using parallel computing, and revealed a joint association predisposing to CD (p-value=2.763e-19). Further analysis of the newly discovered association suggested that 13 genes, such as ATG16L1 and LACC1, may play an important role in CD pathophysiological and etiological processes.
Bureaucratic Speech: Language Choice and Democratic Identity in the Taipei Bureaucracy

This article illuminates the social nature of bureaucratic practice by analyzing the everyday speech of bureaucrats in a polyglossic society. My ethnographic analysis shows how Taipei city government administrators mobilize ideologies associated with Taiwan's two primary languages, and stereotypes associated with bureaucracy, to undermine both. Instead, they present themselves as a postethnonational and postbureaucratic avant-garde of their new democracy. In doing so, they draw on local values and tropes of legitimation, which place a premium on the personalistic relations and social imbrication of government actors—relations that democracy, for all its potential to spawn dangerous chaos, is seen to facilitate. They represent their government employer not by claiming a superordinate status for it but by situating it as one participant within a complex of institutions, networks, and values. In illuminating both the internally and the externally social nature of government bureaucracy, I highlight the creative and progressive possibilities hidden within the drab government office.
Rounding-up in reported EPS, behavioral thresholds, and earnings management

Abstract Reported earnings per share (EPS) are frequently rounded to the nearest cent. This paper provides evidence that firms manipulate earnings so that they can round-up and report one more cent of EPS. Specifically, we examine the digit immediately right of the decimal in the calculated EPS number expressed in cents. Evidence is presented that firms are more likely to round-up when managers ex ante expect rounding-up to meet analysts’ forecasts, report positive profits, or sustain recent performance. Further investigation provides evidence that working capital accruals are used to round-up EPS.