cssi/SciSciGPT-SciSciNet huggingface dataset:
A Mistake of Natural Law: Sir William Blackstone and the Anglican Way

It is said that no book on the common law surpasses the importance of Sir William Blackstone’s Commentaries on the Laws of England. But it is also said that the Commentaries is of questionable merit, with aspects of it downright incoherent. The most fundamental element of the Commentaries to attract this disparaging characterization is its discussion and use of what it usually calls “the law of nature” — and what we these days usually call “natural law.” Does the Commentaries perpetrate a mistake — actually many mistakes — of natural law? This article answers that it is not the Commentaries, but rather its critics that perpetrate mistakes of natural law. The mistakes arise from the expectation that Blackstone’s natural law would take after Thomas Aquinas’s (or even Christopher St. German’s) natural law. But readers of the Commentaries who allow Blackstone his own way with natural law will find it a valuable treatment that animates the whole. Blackstone’s natural law owes much to two influences, Roman law and the Anglican Church. The second influence is the more distinctive and guides Blackstone’s response to the first. Both led Blackstone to view the natural law as an order immanent in human law, an order especially prominent within the common law. Seen in this light, natural law provides the foundation for the Commentaries and a foundation for understanding law in our own day.
Debt, deficits, and age-specific mortality

Abstract This paper develops an overlapping agents model with age-specific mortality rates. The analytical framework also nests Blanchard's (1985, Journal of Political Economy 82, 1095–1117) “perpetual youth” model as a special, though perhaps not realistic, case. With age specific mortality rates, youth is “fleeting.” Using standard hyperbolic functions, the model with fleeting youth is able to closely replicate the empirical relation between age and mortality. The steady-state model is used to examine the comparative implications of deficit finance, and age-specific mortality is shown to alter the non-Ricardian properties of the model.
Homeownership counseling performance: How can it be measured?

Abstract Homeownership counseling encompasses several educational activities. Early approaches focused on reducing the risk of default and foreclosure among participants in government‐assisted mortgage programs, but more recent approaches have focused on increasing homeownership opportunities among low‐income and minority households. Unfortunately, little is known about the effectiveness of these approaches in terms of the number of new homeowners and the mitigation of default risk. To address that gap, this article presents a theoretical and methodological framework to evaluate counseling efforts. A successful counseling program is defined as one that assists a household with a low long‐term probability of ownership in buying a home and reducing its default risk. We concede that the methodological requirements for evaluating counseling are somewhat restrictive. However, if we establish an evaluation procedure using these goals as a framework, we can more accurately determine the effects of counseling on ...
The Trump Administration's Assault on California's Global Climate Leadership

The Trump Administration is taking direct aim at California's global leadership on climate change. The U.S. Environmental Protection Agency (EPA) is proposing to revoke the most effective tool California has to exercise climate leadership: its special authority under federal law to regulate tailpipe emissions more stringently than the federal government. California's use of this authority has led to the invention of automotive technology now standard around the world, including the catalytic converter. The state also used this power in 2002 to enact the globe's first greenhouse gas standards for automobiles. If the Trump Administration succeeds in revoking California's authority, California will find it very difficult to meet its ambitious 2030 greenhouse gas target. The attack on the state's authority will also undermine other states’ efforts to cut their greenhouse gas emissions as well as conventional air pollutants, since thirteen states follow California's standards in whole or in part. And the Trump Administration's revocation will undercut California's role as a green technology innovator by eliminating the strongest regulatory signal the state sends to automotive entrepreneurs. The last result is perhaps the most pernicious of all, because the state's role as a green technology leader has the capacity to help reduce greenhouse gas emissions around the world.
Government Ownership of Banks

We assemble data on government ownership of banks around the world. The data show that such ownership is large and pervasive, and higher in countries with low levels of per capita income, backward financial systems, interventionist and inefficient governments, and poor protection of property rights. Higher government ownership of banks in 1970 is associated with slower subsequent financial development and lower growth of per capita income and productivity. This evidence supports “political” theories of the effects of government ownership of firms. THIS PAPER DISCUSSES A NEGLECTED ASPECT of financial systems of many countries: government ownership of banks. It shows that such ownership is pervasive around the world, and has had significant consequences for economic and financial development. There are two broad views of the government’s participation in financial markets. The first, basically optimistic, “development” view is associated with Alexander Gerschenkron ~1962!, who focuses on the necessity of financial development for economic growth. Gerschenkron argues that privately owned commercial banks have been the crucial vehicle of channeling savings into industry in several industrializing countries in the second half of the 19th century, especially Germany. However, in some countries—most conspicuously Russia—economic institutions were not sufficiently developed for private banks to play the crucial development role. “The scarcity of capital in Russia was such that no banking system could conceivably succeed in attracting sufficient funds to finance a large scale industrialization; the standards of honesty in business were so disastrously low, the general distrust of the public so great, that no bank could have hoped to attract even such small capital funds as were available, and no bank could have successfully engaged in long term credit policies in an economy where fraudulent bankruptcy had been almost elevated to the rank of a general business practice” ~Gerschenkron ~1962! ,p . 19 !. In such countries, the government could step in and, through its financial institutions, jump start both financial and eco
Gateway To Justice: Constitutional Claims To Actual Innocence

Blind faith in the justice system might lead one to assume that a trial in which constitutional rights are preserved would necessarily result in a just verdict. In other words, if a court protects the accused’s constitutional rights, then no innocent man will ever be wrongly convicted. As a result of new technology (especially DNA testing), however, it is well recognized that innocent men and women are recurrently incarcerated and convicted even in the absence of factual or constitutional error. For the first time in history, the Supreme Court of the United States has come close to recognizing this reality. On August 17, 2009, Troy Anthony Davis’s freestanding innocence claim, unattached to any constitutional error or unreasonable application of federal law, was remanded by the United States Supreme Court to the Georgia district court for hearing and determination. The Supreme Court, however, did not release the district court from the restrictions of the Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA), which requires Davis to show that the state court adjudication was based
Revisions to US labor market data and the public’s perception of the economy

Using the monthly “Employment Situation” reports for 1994–2013, this paper studies the revisions to US employment data. The paper shows that the first press release underestimates net job creation in expansions and overestimates it in downturns. The “errors” in reporting the data on the labor market can distort the public’s perception about the stance of the labor market and have some political consequences. This is well reflected by the finding that the job approval rating of President Obama, the index of consumer confidence, and the economic conditions index of Gallup have all been responding to the initial news on the US labor market as they were published in the Employment Situation reports.
Reconstructing the Software License

This article analyzes the legitimacy of the software license as a institution of governance for computer programs. The question of the open source license is used as a starting point. Having conducted a broader inquiry into the several possible bases for the legitimacy of software licensing in general, the article argues that none of the grounds on which software licensing in general rests are sound. With respect to open source software in particular, the article concludes that achieving a legitimate institutional form for the goals that open source proponents have set for themselves may require looking beyond licensing as such.
Punishing Bad Brokers: Self-Regulation and FINRA Sanctions

Regulation of the broker-dealer industry by a self-regulatory organization (SRO) is an integral part of the federal regulatory scheme under the Securities Exchange Act of 1934 (the Exchange Act). As a result, the Financial Industry Regulatory Authority (FINRA), the sole SRO for U.S. broker-dealers, plays an important role in protecting investors, especially retail investors, and bolstering investor confidence in the securities industry and capital markets. Suppose a retail investor believes that the sales representative of the brokerage firm with whom she has an account (colloquially, her “broker”) has abused her trust and caused her financial loss. The investor likely wants to recover her losses and to see the broker punished. FINRA, and not the U.S. Securities and Exchange Commission (the SEC), is the regulator that primarily addresses her concerns, the first through its arbitration forum and the second through its disciplinary proceedings. FINRA is the “cop on the beat.” In 2012 FINRA brought approximately 1500 disciplinary actions against broker-dealer firms and associated persons, imposed fines of more than $68 million, and
When Does a Platform Create Value by Limiting Choice

We present a theory for why it might be rational for a platform to limit the number of applications available on it. Our model is based on the observation that even if users prefer application variety, applications often also exhibit direct network effects. When there are direct network effects, users prefer to consume the same applications to benefit from consumption complementarities. We show that the combination of preference for variety and consumption complementarities gives rise to (i) a commons problem (to better satisfy their individual preference for variety, users have an incentive to consume more applications than the number that maximizes joint utility); (ii) an equilibrium selection problem (consumption complementarities often lead to multiple equilibria, which result in different utility levels for the users); and (iii) a coordination problem (lacking perfect foresight, it is unlikely that users will end up buying the same set of applications). The analysis shows that the platform can resolve these problems and create value by limiting the number of applications available. By limiting choice, the platform may create new equilibria (including the allocation that maximizes users' utility); eliminate equilibria that give lower utility to the users; and reduce the severity of the coordination problem faced by users.
How large do multi-region models need to be?

Given the connectedness of most states with their neighbors, any economic analysis of changes in a state's policy needs to account for the interdependence between states. We examine in how much detail one needs to model the factor and commodity flows between states, and how much, if anything, is lost in the aggregation of neighboring states into larger regions. We develop nine dynamic multi-region general equilibrium models of the United States, with different aggregations of states (a two-region model, a 7-region model, and a full 51-region model) and different assumptions regarding intermediate inputs. We examine the same policy change with these nine models and find that all nine models suggest very similar economic effects of the policy change in the first year. Our overall conclusion is that small and highly aggregate models are not necessarily any less accurate than larger models.
Strategic Cross-Trading in the U.S. Stock Market*

We model and test for the role of heterogeneously informed, strategic multi-asset speculation for cross-price impact—the impact of trades in one asset on the prices of other (even unrelated) assets—in the U.S. stock market. Our investigation of the trading activity in New York Stock Exchange (NYSE) and National Association of Securities Dealers Automated Quotation System (NASDAQ) stocks between 1993 and 2004 reveals that, consistent with our model, (1) daily order imbalance in one industry or random stock has a significant, persistent, and robust impact on daily returns of other (even unrelated) industries or random stocks; (2) cross-price impact is often negative; and (3) both direct (i.e., an asset's own) and absolute (i.e., unsigned) cross-price impact are smaller when speculators are more numerous, greater when market-wide dispersion of beliefs is higher, and greater among stocks dealt by the same specialist.
The Rise of an Academic Doctorate in Law: Origins Through World War II

The rise of the academic doctorate in law (a degree most U.S. scholars have either ignored or deprecated) is an important chapter in the story of law's coming of age as an academic discipline in the first half of the 20th century. Drawing in part on continental European models, the architects of the degree shaped it into a vehicle for training a new class of law teachers, producing research into the nature and functioning of the legal system, and spreading emerging conceptions of law to a broader national audience. Notable among these conceptions were the "sociological jurisprudence" of Harvard's Roscoe Pound and the Legal Realism of Columbia and Yale. This "missionary" function, however, was in tension with the implication of advanced scholarly work inherent in the degree's name, and ultimately helped set the stage for the doctorate's decline after World War II. While today it is much more common for U.S. law teachers to have pursued doctoral study in a discipline other than law, a U.S. doctorate in law is an increasingly attractive credential for foreign-trained lawyers who hope to teach in their home countries. This article is the first installment of a larger study that traces how U.S. legal education borrowed practices from overseas to create the degree, digested and modified them to suit the needs of a rapidly evolving legal system, then redirected the flow of ideas elsewhere. As such, the study is a story of the coming of age of U.S. legal education not just at home, but on a world stage.
Business Groups in Emerging Markets: A Survey and Analysis

Research in the economics, finance, and management literature has sought to describe the predominance of business groups using an economic lens for decades. Yet, theory still falls short of explain...
Dispelling the Misconceptions Raised by the Davis Dissent

This article argues that the Supreme Court’s majority opinion in Davis v. Monroe County Board of Education did not do enough to explicitly assuage the dissenters’ concerns and aims to do so itself. Davis permitted liability for school districts that purposely ignore instances of student-on-student sexual harassment that deprived a student of the opportunity for education. The three issues raised by the dissent were federalism, whether the conduct at issue is sexual harassment, and First Amendment concerns about the aggressor’s speech being protected. In response, I argue that the majority opinion does not violate federalism principles, the harassment qualifies as sex discrimination, and the harassers’ First Amendment privileges are unlikely to be in jeopardy.
Another theory of nonprofit corporations.

This article considers parts of Professor Henry Hansmann’s rationale for the existence of nonprofits. He sees no reason to distinguish donors and customers, for both in fact enter into an exchange. This article argues that the distinction between donors and customers is critical, and that the contract failure model is therefore seriously flawed. It distinguishes two types of nonprofit corporations - those structured to satisfy donors' needs ("donative nonprofits") and those structured to satisfy customers' needs ("mutual benefit nonprofits"). This dichotomy suggests a very different nonprofit corporation law than the one urged by Hansmann. Once the concept of contract failure is limited to donors, it can be refined to serve as part of the rationale for donative nonprofits. Refining the concept of contract failure reveals, however, that it confuses the analysis of mutual benefit nonprofits, which actually solve a different problem for customers and thus require a different corporate structure.This article places the discussion in context by outlining the purposes of a nonprofit corporation law, summarizes the Hansmann, or "contract failure," theory, and develops an alternative theory and contrasts it with the Hansmann thesis, considering first the donative nonprofits and then the mutual benefit nonprofits.
Some remarks on uniformly regular Riemannian manifolds

We establish the equivalence between the family of closed uniformly regular Rie- mannian manifolds and the class of complete manifolds with bounded geometry. In 2012, H. Amann introduced a class of (possibly noncompact) manifolds, called uniformly reg- ular Riemannian manifolds. Roughly speaking, an m-dimensional Riemannian manifold (M,g) is uniformly regular if its differentiable structure is induced by an atlas such that all its local patches are of approximately the same size, all derivatives of the transition maps are bounded, and the pull-back metric of g in every local coordinate is comparable to the Euclidean metric gm. The precise definition of uniformly regular Riemannian manifolds will be presented in Section 2 below. In this article, the concept of closed manifolds refers to manifolds without boundary, not necessar- ily compact. The main objective of this short note is to prove that the family of closed uniformly regular Riemannian manifolds coincides with the class of complete manifolds with bounded ge- ometry in the following sense. A closed uniformly regular Riemannian manifold is geodesically complete, has positive injectivity radius, and all covariant derivatives of the curvature tensor are bounded. The second and third conditions are usually referred to as of bounded geometry. The precise definitions of positive injectivity radius and bounded geometry will be given later in this introductory section.
Carbon Capture by Fossil Fuel Power Plants: An Economic Analysis

For fossil fuel power plants to be built in the future, carbon capture and storage (CCS) technologies offer the potential for significant reductions in carbon dioxide (CO2) emissions. We examine the break-even value for CCS adoptions, that is, the critical value in the charge for CO2 emissions that would justify investment in CCS capabilities. Our analysis takes explicitly into account that the supply of electricity at the wholesale level (generation) is organized competitively in some U.S. jurisdictions, whereas in others a regulated utility provides integrated generation and distribution services. For either market structure, we find that emissions charges near $30 per tonne of CO2 would be the break-even value for adopting CCS capabilities at new coal-fired power plants. The corresponding break-even values for natural gas plants are substantially higher, near $60 per tonne. Our break-even estimates serve as a basis for projecting the change in electricity prices once carbon emissions become costly. CCS capabilities effectively put an upper bound on the increase in electricity prices resulting from carbon regulations, and we estimate this bound to be near 30% at the retail level for both coal and natural gas plants. In contrast to the competitive power supply scenario, however, these price increases materialize only gradually for a regulated utility. The delay in price adjustments reflects that for regulated firms the basis for setting product prices is historical cost, rather than current cost. This paper was accepted by Gerard P. Cachon, accounting.
What Do Juvenile Offenders Know About Being Tried as Adults? Implications for Deterrence

An underlying assumption in the nationwide policy shift toward transferring more juveniles to criminal court has been the belief that stricter, adult sen- tences will act as either a specific or general deterrent to juvenile crime. With respect to general deterrence—whether transfer laws deter would-be offenders from committing crimes—it is important to examine whether juveniles know about transfer laws, whether this knowledge deters criminal behavior, and whether juveniles believe the laws will be enforced against them. The current study is one of the first to examine juveniles' knowledge and perceptions of transfer laws and criminal sanctions. We interviewed 37 juveniles who had been transferred to criminal court in Georgia, obtaining quantitative as well as qualitative data based on structured interviewed questions. Four key findings emerged. First, juveniles were unaware of the transfer law. Second, juveniles felt that awareness of the law may have deterred them from committing the crime or may deter other juveniles from committing crimes, and they suggested practical ways to enhance juveniles' awareness of transfer laws. Third, the juveniles generally felt that it was unfair to try and sentence them as adults. Finally, the consequences of committing their crime were worse than most had imagined, and the harsh consequences of their incarceration in adult facilities may have had a brutalizing effect on some juveniles. The implications for general and spe- cific deterrence are discussed.
Being here: Ethical territoriality and the rights of immigrants

In this Article, I examine a normative idea of territoriality which I call ethical territoriality. By ethical territoriality, I mean the conviction that rights and recognition should extend to all persons who are territorially present within the geographical space of a national state simply by virtue of that presence. I start by briefly reprising a claim I have developed elsewhere — that territorialism is preferable, on liberal democratic grounds, to status-based approaches to immigrants’ rights. Here, though, I set out to interrogate the logic of ethical territoriality itself. I ask why the mere fact of a person’s territorial presence should serve as the basis for rights and recognition. Further, even conceding that it should, I ask how this commitment is to be operationalized. What is the scope of the territory in which presence figures so significantly in normative terms, and who, precisely, gets access to presence in that territory? My purpose in this Article is to get beyond the status vs. territorial presence-as-basis-for-membership dispute in the immigration debates and to begin a (self-) critical discussion of the ethical territorial commitment itself.
Strategic reactions in corporate tax planning

Abstract We find that firms’ tax planning exhibits strategic reactions: firms respond to changes in their industry-competitors’ tax planning by changing their own tax planning in the same direction. We document evidence of these strategic reactions in two distinct research settings that entail an exogenous increase and decrease in competitors’ tax planning. We also find evidence that strategic reactions stem from concerns about appearing more tax aggressive than industry competitors, some evidence that they stem from firms learning from the tax planning of their industry competitors, and no consistent evidence that they stem from leader-follower dynamics.
Is Targeted Tax Competition Less Harmful than its Remedies

Some governments have recently called for international accords restricting the use of preferential taxes targeted to attract mobile tax bases from abroad. Are such agreements likely to discourage tax competition or conversely cause it to spread? We study a general model of competition for multiple tax bases and establish conditions for a restriction on preferential regimes to increase or decrease tax revenues. Our results show that restrictions are most likely to be desirable when tax bases are on average highly responsive to a coordinated increase in tax rates by all governments, and when tax bases with large domestic elasticities are also more mobile internationally. Our analysis allows us to reconcile the apparently contradictory results of the previous literature.
The Effect of Framing Actuarial Risk Probabilities on Involuntary Civil Commitment Decisions

Despite a proliferation of actuarial risk assessment instruments, empirical research on the communication of violence risk is scant and there is virtually no research on the consumption of actuarial risk assessment. Using a 2 × 3 Latin Square factorial design, this experiment tested whether decision-makers are sensitive to varying levels of risk expressed probabilistically and whether the framing of actuarial risk probabilities is consequential for commitment decisions. Consistent with research on attribute framing, in which describing an attribute in terms of its complement leads to different conclusions, this experiment found that the way actuarial risk estimates are framed leads to disparate commitment decisions. For example, risk framed as 26% probability of violence generally led decision-makers to authorize commitment, whereas the same risk framed in the complement, a 74% probability of no violence, generally led decision-makers to release. This result was most pronounced for moderate risk levels. Implications for the risk communication format debate, forensic practice and research are discussed.
No Compromise: Political Consequences of Moralized Attitudes ⇤

Evolutionary, neuroscientific, and cognitive perspectives in psychology have converged on the idea that some attitudes are moralized—a distinctive characteristic. Moralized attitudes reorient behavior from maximizing gains to adhering to rules. Here, I examine a political consequence of this tendency. In four studies drawing data from a variety of sources, I measure attitude moralization and examine how it relates to approval of political compromise. I find that moralized attitudes lead citizens to oppose compromises, punish compromising politicians, and even pay a monetary cost to obstruct political opponents’ gain. These patterns emerge on social and economic issues alike and have implications for understanding political polarization.
Immigration, Economic Disadvantage, and Homicide A Community-level Analysis of Austin, Texas

In this article, the effect of recent immigration on homicide rates across city of Austin, Texas census tracts is examined. Since 1980, Austin's recent immigrant population increased by more than 580% across the metropolitan area and it is now considered a "pre-emerging" immigrant gateway city to the United States. Therefore the changing population dynamics in Austin provide an excellent opportunity to study the effect of recent immigration on homicide. After controlling for structural predictors of homicide and correcting for spatial autocorrelation, our findings indicate that recent immigration is not associated with homicide.
Linear-quadratic term structure models Toward the understanding of jumps in interest rates.

Abstract We study linear-quadratic term structure models with random jumps in the short rate process where the jump arrival rate follows a stochastic process. Empirical results based on the US data show that incorporating stochastic jump intensity significantly improves model fit to the dynamics of both interest rate and volatility term structure. Our results also show that jump intensity is negatively correlated with interest rate changes and the average size is larger on the downside than upside. Examining the relation between jump intensity and macroeconomic shocks, we find that at monthly frequency, jumps are neither triggered by nor predictive of changes in macroeconomic variables. At daily frequency, however, we document interesting patterns for jumps associated with information shocks.
Endowment Effects in Contests

We design an experiment to test if the manner in which subjects receive the endowment has any bearing on the amount of overbidding in contests. We find that overbidding is significantly higher when subjects are given a large per-experiment endowment rather than when the endowment is given per-period. Risk-aversion and non-monetary utility of winning play important roles in explaining our findings.
Conditional value-at-risk for general loss distributions

Abstract Fundamental properties of conditional value-at-risk (CVaR), as a measure of risk with significant advantages over value-at-risk (VaR), are derived for loss distributions in finance that can involve discreetness. Such distributions are of particular importance in applications because of the prevalence of models based on scenarios and finite sampling. CVaR is able to quantify dangers beyond VaR and moreover it is coherent. It provides optimization short-cuts which, through linear programming techniques, make practical many large-scale calculations that could otherwise be out of reach. The numerical efficiency and stability of such calculations, shown in several case studies, are illustrated further with an example of index tracking.
What is a Business Crime

Criminal prosecution has been used with increasing frequency recently in connection with a variety of business failures and other financial offenses. Indeed, it appears that there are few such offenses that cannot be prosecuted criminally even though they also give rise to civil remedies. While some such offenses seem to be quite serious frauds, others seem to be as minor as getting the accounting rules wrong. Thus, the question addressed in this essay is how to define a business crime and what should be the proper role of criminal prosecution in connection with business offenses. I start with the proposition that we should criminalize conduct only when lesser remedies do not work to deter the offense. I then describe the array of private civil remedies available, ranging from simple compensatory damages to punitive damages to class actions and derivative actions and find that there are few business offenses that cannot be well addressed by these devices. I conclude that as a general matter private civil remedies are much more efficient at addressing business and financial crimes. The expansion of criminal prosecution may be due to some extent to problems with the way civil remedies work in practice, but for the most part it is difficult to explain except as a result of failure to understand the role of criminal law and to define financial crimes with any precision.
The Effect of the Social Mismatch between Staff Auditors and Client Management on the Collection of Audit Evidence

ABSTRACT: This study provides both survey and experimental evidence to consider how social interactions between staff-level auditors and client management may affect staff auditors' perceptions and influence their decisions regarding the collection of audit evidence. During fieldwork, staff-level auditors have extensive interaction with client management. Survey evidence suggests that these staff-level auditors are often “mismatched” with client management, in terms of their experience, age, and accounting knowledge. Experimental results indicate that staff-level auditors may reduce the extent to which they collect evidence to avoid these interactions. Finally, the use of email communication with client management helped to mitigate the reduction in evidence collected caused by avoiding in-person interactions. Interestingly, when not collecting all the evidence, approximately half of the participants documented their findings in a vague or inappropriate manner, which would likely reduce the likelihood tha...
Learning through the Grapevine: The Impact of Noise and the Breadth and Depth of Social Networks

We study how communication platforms, or a society more generally, can improve social learning without censoring or fact-checking messages. We analyze learning as a function of social network depth (how many times information is relayed) and breadth (the number of relay chains accessed). Noise builds up as depth increases, so learning requires greater breadth. We characterize sharp thresholds for breadths above which receivers learn fully and below which they learn nothing. However, slight uncertainty about the noise structure can destroy learning even in arbitrarily broad networks. Learning can be restored by capping depth or, if that is not possible, limiting breadth (e.g., by capping the number of people to whom someone can forward a given message). Although it reduces total communication, limiting breadth increases the fraction of received messages originating closer to the receiver, thereby increasing the signal to noise ratio. We also extend our model to study learning from message survival when people are more likely to pass messages with one conclusion than another. We find that as depth grows, all information comes from either the total number of messages received or their content, but the learner does not need to pay attention to both. Thus, a forwarding cap for the policymaker is robust to whether receivers are fully Bayesian or naive and simply count relative rates of messages they receive.
Conservative financial reporting, debt covenants, and the agency costs of debt☆

Abstract Considerable research has documented the role of debt covenants and conservative financial accounting in addressing agency conflicts between lenders and borrowers. Beatty, A., Weber, J., and Yu, J. [2008. Conservatism and debt. Journal of Accounting and Economics, forthcoming] document interesting, but mixed, findings on the relation between debt covenants and conservative accounting, and the extent to which the two contracting mechanisms act as substitutes or complements. In this paper, I discuss the economic roles of financial reporting, debt covenants, and conservatism within the debt contracting environment, and attempt to fit BWY's findings within this context.
Medical commerce, physician entrepreneurialism, and conflicts of interest.

Is medical commerce a recent phenomenon? Does it distort the patient–physician relationship? Are investor-owned firms the main source of medical commercialism? I contend that medicine has generally been commerce in the United States, that medical commerce is a problem when it creates or worsens physicians' conflicts of interest, and that these conflicts thrive in nonprofit organizations as well as in investor-owned firms. I provide a historical sketch to show that physician entrepreneurialism, rather than commerce generally, is the main source of physicians' conflicts of interest.Thanks are due to Jerome P. Kassirer, Albert R. Jonsen, and Joseph Fins for helpful comments on a draft. The history and themes herein are further developed in a book I am now writing, titled Medical Profession, Market and State in France, the United States and Japan.
Thirty years of shareholder activism: A survey of empirical research☆

Abstract We summarize and synthesize the results from 73 studies that examine the consequences of shareholder activism for targeted firms, and draw two primary conclusions. First, activism that adopts some characteristics of corporate takeovers, especially significant stockholdings, is associated with improvements in share values and firm operations. Activism that is not associated with the formation of ownership blocks is associated with insignificant or very small changes in target firm value. Second, shareholder activism has become more value increasing over time. Research based on shareholder activism from the 1980s and 1990s generally finds few consequential effects, while activism in more recent years is more frequently associated with increased share values and operating performance. These results are consistent with Alchian and Demsetz' (1972) argument that managerial agency problems are controlled in part by dynamic changes in ownership, and with Alchian's (1950) observation that business practices adapt over time to mimic successful strategies.
The Influence of Riparian Protection Measures on Residential Property Values: The Case of the Oregon Plan for Salmon and Watersheds

The Oregon Plan for Salmon and Watersheds encourages residential property owners to plant riparian buffers in an effort to reduce stream temperature and thus improve fish habitat. This study estimates the change in the value of streamside residential properties in response to planting a treed riparian buffer. A hedonic pricing analysis suggests that treed riparian buffers reduce the market value of stream-front residential property in the study area.
Deliberating While Voting: The Antecedents, Dynamics, And Consequences Of Talking While Completing Ballots In Two Vote-By-Mail States

An overlooked context for citizen deliberation occurs when voters discuss their ballots with others while completing them at home. Voting by mail (or “absentee voting”) creates an opportunity for informal deliberation in the midst of exercising a basic form of citizen power. We examined this understudied context by blending prior theory with qualitative observations of dyadic and small-group absentee voter discussions to identify common features of such talk, which range from cynical joking and speculation on election outcomes to observing norms of politeness and engaging in heated argument. The hypothesized antecedents and consequences of those behaviors were examined in a survey of 295 Washington and Oregon voters’ recollections of their ballot discussions. Results showed that pro-deliberative features of discussion were reported most often by voters with more formal education and political knowledge. Contrary to hypotheses, the strength of voters’ partisan identities bore no relation to deliberative behavior. Finally, the presence of key discussion features had many of the expected effects on voters’ confidence in ballot choices and their respect for the electoral process, particularly for those voters with less political knowledge.
The Collective Fiduciary

Can fiduciaries be made to serve public goals? The movement under the Patient Protection and Affordable Care Act (“ACA”) towards universal access to health insurance requires us to focus on the fiduciary relationships between large organizations providing access to healthcare and the populations they serve. These relationships have become a collective undertaking instead of a direct, personal relationship. In this Article, I introduce the concept of the collective fiduciary in response to the shift towards uniform, national goals in the realm of health insurance and healthcare. Only through a collective approach can we hold fiduciaries accountable for the welfare of many instead of one or a few individuals. While other scholars have focused on the individual whose fortunes or health are controlled by a fiduciary, this has made it difficult to collect information about fiduciary actions and obtain consistent and coherent decisions from fiduciaries. My argument here is that this is not a problem that can be fixed at the level of the individual fiduciary or individual beneficiary. I examine the expansion of the role of the fiduciary as a result of growing demand for private welfare benefits in the United States. My concern here is with the expansion of health insurance and the administration of health benefits. If patients are denied benefits, then they are effectively denied access to service providers. In a space where the government has been, until now, largely absent both by choice and because of a lack of agreement on policy direction, individual decisions by fiduciaries add up to the only large scale policy existing for private benefits. Fiduciaries can and will undo the goal of expanding access to healthcare under the ACA unless ERISA’s fiduciary regime (the example I focus on in this Article) is altered. Though I explore several possible solutions, I ultimately argue that fiduciary duties are only meaningful when denials of benefit claims are supervised and capped by government actors.
Efficient Tests of Stock Return Predictability

Abstract Conventional tests of the predictability of stock returns could be invalid, that is reject the null too frequently, when the predictor variable is persistent and its innovations are highly correlated with returns. We develop a pretest to determine whether the conventional t-test leads to invalid inference and an efficient test of predictability that corrects this problem. Although the conventional t-test is invalid for the dividend–price and smoothed earnings–price ratios, our test finds evidence for predictability. We also find evidence for predictability with the short rate and the long-short yield spread, for which the conventional t-test leads to valid inference.
Investor overlap and diffusion of disclosure practices

I develop and test an investor demand-driven explanation for why one firm’s change in voluntary disclosure behavior is emulated by some firms in the industry but not others. I focus on the overlap in institutional investor ownership between two firms as a mechanism by which a first-mover firm’s increase in disclosure prompts investors to seek a similar increase from a follower firm. Using 10-K market risk disclosures as my empirical setting, I find that a firm’s decision to follow a first mover in providing more quantitative information than is required by the SEC is positively associated with an increase in investor overlap from the prior year. I also find that the association is stronger for overlap in large institutional investors, consistent with their greater influence over managers, and for firms where investor uncertainty is high. This association is found after controlling for the herding effect documented in prior studies and after addressing potential endogeneity concerns. Overall, this evidence provides new insight into patterns of intra-industry disclosure behavior and highlights investor overlap as a communication channel and feedback mechanism that helps facilitate the diffusion of disclosure practices.
Defensive Medicine and Obstetric Practices

Using data on physician behavior from the 1979–2005 National Hospital Discharge Surveys (NHDS), I estimate the relationship between malpractice pressure, as identified by the adoption of noneconomic damage caps and related tort reforms, and certain decisions faced by obstetricians during the delivery of a child. The NHDS data, supplemented with restricted geographic identifiers, provides inpatient discharge records from a broad enough span of states and covering a long enough period of time to allow for a defensive medicine analysis that draws on an extensive set of variations in relevant tort laws. Contrary to the conventional wisdom, I find no evidence to support the claim that malpractice pressure induces physicians to perform a substantially greater number of cesarean sections. Extending this analysis to certain additional measures, however, I do find some evidence consistent with positive defensive behavior among obstetricians. For instance, I estimate that the adoption of a noneconomic damage cap is associated with a reduction in the utilization of episiotomies during vaginal deliveries, without a corresponding change in observed neonatal outcomes.
Central Bank Independence: Monetary Policies in Selected Jurisdictions (III)

A sufficient and appropriate degree of central bank independence is widely acknowledged to be necessary for the goal of achieving price stability. However, despite the levels of independence claimed to be enjoyed by several central banks, recent events indicate shifts in focus of monetary policy objectives by various prominent central banks. The impact of political and government influences on central banks' monetary policies has been evidenced from the recent financial crisis – and in several jurisdictions. Many central banks have adjusted monetary policies having been influenced by political pressures which have built up as a result of the recent crises. However such lack of absolute independence (from political spheres) could prove symbiotic in the sense that, despite the need for a certain degree of independence from political interference, certain events which are capable of devastating consequences, namely, a drastic disruption of the system's financial stability, need to be responded to as quickly and promptly as possible. Is it possible for a central bank with absolute independence to operate effectively – particularly given the close links between many central banks and their Treasury in several countries? It may be inferred that central banks' crucial roles in establishing a macro prudential framework provide the key to bridging the gap between macro economic policy and the regulation of individual financial institutions. This however, on its own, is insufficient – close collaboration and effective information sharing between central banks and regulatory authorities is paramount.
Summary of the United States Seminar on Our National Environmental Laws

This article summarizes the discussion that took place at a seminar we held in the United States which described and evaluated our nation's environmental protection laws. The purpose of that seminar was to draw from that experience lessons that should help us, and perhaps Argentina, as we both consider how to improve the laws that affect natural resource use and conservation in our countries.
Judicial Selection and the Religious Test Clause

The Constitution provides the political branches broad discretion to test the substantive ideologies of prospective federal judges as qualifications for judicial office. However, the Religious Test Clause limits political branch discretion to establish qualifications by providing that "[n]o religious Test shall ever be required as a Qualification for holding public office." Having no operational consensus regarding the Religious Test Clause's appropriate scope, the political branches have routinely considered judicial candidates' religious qualities without regard for constitutional implications. For most of the past century, religion influenced the judicial selection process - usually serving as a quiet tool for courting religious voters. With President George W. Bush's public announcement that he would only nominate judges who believe that our rights were derived from God and intense controversy regarding whether Senators unconstitutionally considered judicial candidates' religious affiliations and ideologies, religion's role is no longer quiet. Indeed, these controversies provoked members of both political parties to charge members of the opposite party with unconstitutionally manipulating religion in their judicial selection decisions. The superficial disjunct between the political branches' broad discretion and the Religious Test Clause's prohibition of religious tests as a qualification for office requires an analysis of the particular qualities of judicial candidates sufficiently religious to be considered beyond political branch scrutiny. I attempt to resolve the constitutional tension by distinguishing between the Religious Test Clause's appropriate prohibitions and the traditional sphere of ideological inquiry. After drawing these distinctions, I concludes that the Religious Test Clause should prohibit denominational and theological tests for judicial office while it should permit ideological inquiry regardless of possible religious motivation.