cssi/SciSciGPT-SciSciNet huggingface dataset:
Does external pressure explain recent results for molecular clouds

The recent paper by Heyer et al. indicates that observations of size, linewidth and column density of interstellar clouds do not agree with simple virial equilibrium (SVE) as a balance between gravitational and kinetic energies in the sense that the clouds either have too much kinetic energy or too little mass to be bound. This may be explained by violation of SVE as suggested by Dobbs et al., by observational underestimation of the masses as suggested by Heyer et al. or by an external pressure acting as an additional confining force as suggested earlier by Heyer et al. The data of Heyer et al. cannot be explained with a single value for the external pressure, but if different clouds in the sample have different external pressures in the range of Pe/k= 104–107 cm−3 K, then most of the clouds could be in pressure-bounded virial equilibrium. In this paper we discuss two consequences of the external pressure. First, we show that the observational data are consistent with the hypothesis that most clouds are at a critical mass for dynamical stability determined solely by the pressure. Above this mass a cloud is unstable to gravitational collapse or fragmentation. Secondly, we show that the external pressure modifies the well-known size–linewidth relationship first proposed by Larson so that the proportionality is no longer constant but depends on the external pressure.
The Politics of Incivility

The Flemish painter, Pieter Bruegel, portrayed in his artwork men relieving themselves, cripples begging, and peasants toiling — as well as butchery and the gallows. In his masterful work, The Civilizing Process, Norbert Elias revealed how the “late medieval upper class” had not yet demanded, as later generations would, that “everything vulgar should be suppressed from life and therefore from pictures.” For centuries now, defining incivility has been intimately connected with social rank, class status, political hierarchy, and relations of power. The ability to identify and sanction incivility has been associated with positions of political privilege — and simultaneously has constituted and reinforced political power. This remains true today: defining incivility in political discourse continues to be a political strategy that is deeply embedded in relations of power. In the aftermath of the Tucson shootings, there have been renewed calls for greater civility in our political discourse. Although I view civil discourse generally as the wiser course of action, I recognize that it is inevitably a political strategy that comes more easily to those who already have an audience that is listening or a professional position that affords them greater access to the media and to listeners. I personally prefer an ethic of civility and truth-telling, but am deeply conscious that this may reflect a certain privilege, and that same privilege chastens me from urging others to be more civil in their discourse. It suggests that we should be cautious about telling others how they should speak.
Does the Eighth Amendment Punishments Clause Prohibit Only Punishments That Are Both Cruel and Unusual

There is a great struggle in the United States between proponents of the death penalty and death penalty abolitionists who believe that the practice is cruel and even unconstitutional. Although the punishment of death is enshrined in the Fifth and Fourteenth Amendments of the Constitution, the Supreme Court seems to have followed its moral compass in chipping away at the death penalty because of the cruelty of the practice. The Court’s struggle between the text of the Constitution and its moral inclinations in the death penalty context has resulted in an inconsistent and confusing Eighth Amendment Punishments Clause jurisprudence. While attempting to maintain neutrality on the topic and thus relying almost exclusively on assessing the unusualness of a practice through a purportedly objective assessment of state legislative action, the Court seems to have covertly injected into the equation its subjective views as to what punishments are unconstitutionally cruel. This tension between an objective measure of unusualness and a subjective assessment of cruelty has led the Court to make inconsistent statements about whether the Punishments Clause prohibits only punishments that are both cruel and unusual, or rather prohibits both cruel punishments and unusual punishments. This Article goes where no other has, identifying and exploring this important question. After tracing the history of the Eighth Amendment, analyzing the Court’s early interpretations of the prohibition on “cruel and unusual punishments,” and parsing the text of the Punishments Clause, the Article concludes that the Clause prohibits only punishments that are both cruel and unusual and that each of these  Assistant Professor of Law, Southern Methodist University, Dedman School of Law. The author thanks Guy-Uriel Charles, Richard Frase, Kristin Hickman, Heidi Kitrosser, Alexandra Klass, William McGeveran, Kevin Reitz, Dan Schwarcz, Michael Tonry, and the rest of the University of Minnesota Law School faculty for their helpful comments and suggestions. The author also thanks the faculty of the SMU Dedman School of Law for their assistance and support, as well as Loren Wells and the rest of the Washington University Law Review editorial board and staff for their helpful comments and editorial assistance. Washington University Open Scholarship 568 WASHINGTON UNIVERSITY LAW REVIEW [VOL. 87:567 components of the Clause should thus be independently assessed. While this interpretation may narrow the scope of the Amendment, it allows for further innovations in humane methods of punishment and revives the federalist foundation of this nation that the Court’s current jurisprudence has stifled.
Long‐Term Fiscal Sustainability in Advanced Economies

With the Great Recession leaving nearly all advanced economies with substantially higher debt–gross domestic product ratios, this paper re-evaluates the long-term fiscal sustainability of these economies based on current estimates of their current-policy fiscal trajectories. Through measuring fiscal imbalance, we find that for many countries, short-term fiscal measures such as the debt–gross domestic product ratio and current budget deficits as a share of gross domestic product bear little relationship to the sustainability of policy. The longer-term challenges these countries face are related much more to the future fiscal challenge of growing primary deficits, associated with the cost of providing pensions and health care in the face of growing old-age dependency ratios. While focusing on managing the short-term debt burden may help avoid crises like the one being played out in Greece, attention and policy actions must eventually turn to the longer-term fiscal problem.
Non-standard rates of convergence of criterion-function-based set estimators for binary response models

Summary This paper establishes consistency and non-standard rates of convergence for set estimators based on contour sets of criterion functions for a semi-parametric binary response model under a conditional median restriction. The model can be partially identified due to potentially limited-support regressors and an unknown distribution of errors. A set estimator analogous to the maximum score estimator is essentially cube-root consistent for the identified set when a continuous but possibly bounded regressor is present. Arbitrarily fast convergence occurs when all regressors are discrete. We also establish the validity of a subsampling procedure for constructing confidence sets for the identified set. As a technical contribution, we provide more convenient sufficient conditions on the underlying empirical processes for cube-root convergence and a sufficient condition for arbitrarily fast convergence, both of which can be applied to other models. Finally, we carry out a series of Monte Carlo experiments, which verify our theoretical findings and shed light on the finite-sample performance of the proposed procedures.
Disentangling moral hazard and adverse selection in private health insurance

Moral hazard and adverse selection create inefficiencies in private health insurance markets and understanding the relative importance of each factor is critical for addressing these inefficiencies. We use claims data from a large firm which changed health insurance plan options to isolate moral hazard from plan selection, estimating a discrete choice model to predict household plan preferences and attrition. Variation in plan preferences identifies the differential causal impact of each health insurance plan on the entire distribution of medical expenditures. Our estimates imply that 53% of the additional medical spending observed in the most generous plan in our data relative to the least generous is due to adverse selection. We find that quantifying adverse selection by using prior medical expenditures overstates the true magnitude of selection due to mean reversion. We also statistically reject that individual health care consumption responds solely to the end-of-the-year marginal price.
Explaining Diversities in Age-Specific Life Expectancies and Values of Life Saving: A Numerical Analysis

To what extent can life protection account for observed diversities in age-specific life expectancies across individuals and over time? We provide answers via calibrated simulations of a life-cycle model where life’s end is stochastic, and age-specific mortality hazards are endogenous outcomes of life protection, set jointly with life insurance and annuities. Our model links mortality hazards and values of life saving (VLS) as “dual variables”, and offers new insights about the measurement of VLS. Life protection is estimated to account for non-trivial portions of observed levels and inequalities in life expectancies and empirical estimates of VLS by age and education, and over time.
Market Competition, Earnings Management, and Persistence in Accounting Profitability Around the World

We examine how cross-country differences in product, capital, and labor market competition, as well as earnings management affect mean reversion in accounting return on assets. Using a sample of 48,465 unique firms from 49 countries, we find that accounting returns mean revert faster in countries where there is more product and capital market competition, as predicted by economic theory. Country differences in labor market competition and earnings management are also related to mean reversion in accounting returns—but the relation varies with firm performance. Country labor competition increases mean reversion when unexpected returns are positive but slows it when unexpected returns are negative. Accounting returns in countries with higher earnings management mean revert more slowly for profitable firms and more rapidly for loss firms. Thus earnings management incentives to slow or speed up mean reversion in accounting returns are accentuated in countries where there is a high propensity for earnings management. Overall, these findings suggest that country factors explain mean reversion in accounting returns and are therefore relevant for firm valuation.
Evolutionary stability of discrimination under observability

Abstract We study the evolution of preferences under perfect and almost perfect observability in symmetric 2-player games. We demonstrate that if nature can choose from a sufficiently general preference space, which includes preferences over outcomes that may depend on the opponent's preference-type, then, in most games, only discriminating preferences (treating different types of opponents differently in the same situation) can be evolutionary stable and some discriminating types are stable in a very strong sense in all games. We use these discriminating types to show that any symmetric outcome which gives players more than their minmax value in material payoffs (fitness) can be seen as equilibrium play of a player population with such strongly stable preferences.
Prioritizing Justice: Combating Corporate Crime from Task Force to Top Priority

Inadequate law enforcement against corporate criminals appears to have created perverse incentives leading to an economic crisis — this time in the context of the subprime mortgage crisis. Prioritizing Justice proposes institutional reform at the Department of Justice (DOJ) in pursuing corporate crime. Presently, corporate crime is pursued nationally primarily through the DOJ Financial Fraud Enforcement Task Force and other task forces, the DOJ Criminal Division Fraud Section, and the individual U.S. Attorneys' Offices. Rather than a collection of ad hoc task forces that seek to coordinate policy among a vast array of offices and agencies, a Corporate Crimes Division should be created as a permanent base in the DOJ to combat the relentless waves of corporate criminality. The Corporate Crimes Division would more efficiently investigate and prosecute crimes of national and multinational corporations spanning multiple districts, and pursue a coordinated national policy that affirms the commitment of the DOJ to fight large-scale corporate crime which costs taxpayers billions of dollars, frustrates financial markets, increases the cost of capital to honest businesses, and undermines citizens' confidence in the rule of law. Given the cost of corporate crime, creating the division would promote superior institutional design that should yield substantial benefit.
Has the European union achieved a single pharmaceutical market

This paper explores price differences in the European Union (EU) pharmaceutical market, the EU's fifth largest industry. With the aim of enhancing quality of life along with industry competitiveness and R&D capability, many EU directives have been adopted to achieve a single EU-wide pharmaceutical market. Using annual 1994-2003 data on prices of molecules that treat cardiovascular disease, we examine whether drug price dispersion has indeed decreased across five EU countries. Hedonic regressions show that over time, cross-country price differences between Germany and three of the four other EU sample countries, France, Italy and Spain, have declined, with relative prices in all three as well as the fourth country, UK, rising during the period. We interpret this as evidence that the EU has come closer to achieving a single pharmaceutical market in response to increasing European Commission coordination efforts.
Mere quibbles: Bagus and Howden’s critique of the theory of free banking

Despite its title, Philipp Bagus and David Howden’s critique of The Theory of Free Banking does more than merely “quibble” with that book’s arguments; their criticisms of those arguments are such as to suggest that the very foundation upon which my defense of free banking rests is deeply flawed. Here, I defend my work against Bagus and Howden’s criticisms, by showing that they rest upon careless or disingenuous readings of my arguments and a poor grasp of basic monetary economics.
Opening Pandora's box: studying the accuracy of managers' perceptions

Both researchers and managers depend on the accuracy of managers' perceptions. Yet, few studies compare subjective with ‘objective’ data, perhaps because it is very difficult to do well. These difficulties also muddy interpretations of results. On one hand, studies suggest that managers' perceptions may be very inaccurate. On the other hand, the observed errors in managerial perceptions may arise from research methods instead of managers. Because perceptual data are so significant for both researchers and managers, researchers need to understand both the potential contaminants of perceptual research and the determinants of perceptual errors and biases. This article reviews studies of the accuracies of managers' perceptions, points out hazards in such research, and suggests various ways to improve studies of perceptions. The suggestions encompass improvements in gathering more valid subjective data, locating more appropriate ‘objective’ data, finding appropriate respondents, and using statistical methods that provide accurate and reliable estimates with small samples.
Jumps, cojumps, and efficiency in the spot foreign exchange market

Abstract I identify intraday jumps and cojumps in exchange rates controlling for volatility patterns and relate these events to pre-scheduled macroeconomic news and market conditions. Event study results show that preceding jump and cojump events, exchange rate quote volume, illiquidity, signed order flow, and informed trades are at heightened levels revealing that jump events are consistent with rational dealer quoting behavior. Following jump and cojump events, quote volume and return variance remain at heightened levels while illiquidity, informed trade, and signed order flow remain at depressed levels providing evidence that order flow following jump events is largely uninformed liquidity provision.
The Right to Speak, the Right to Hear, and the Right Not to Hear: The Technological Resolution to the Cable/Pornography Debate

The advent of cable television presented a new opportunity to consider the competing interests on each side of the free speech/pornography debate. This Article attempts to construct an analysis that will be consistent with Supreme Court teaching on how government, under the first amendment, may constitutionally regulate legal obscenity, particularly in the name of protecting those who wish to avoid exposure to such material. The Article shows how, unlike earlier battles over technology and pornography, cable television presented the novel opportunity to have a technological rather than a censorial solution to this difficult problem.
Under Arrest: Immigrants' Rights and the Rule of Law

The discussion is broken down into four parts. First, I will review some basic historical points and terminology. Second, I will describe some of the government's immigration enforcement policies following the comprehensive immigration reform ("CIR") debate and the human consequences and concerns behind such policies. Third, I will describe the relevant legal authorities for arresting and detaining noncitizens. Finally, I will provide some recommendations for moving forward.
Conflict Between Declared Roma Minority Rights and European Practice: Why the Legal Framework Doesn’t Work in Reality

Roma in Europe continue to be victims of racial discrimination, xenophobia and intolerance. Despite formal-legal efforts and declarations from the European Union, the European Council and EU member states where large numbers of Roma reside, real shifts have yet to occur. This article will attempt to elucidate the factors underlying the actual lack of improvement or even stagnation of Roma and to determine who is responsible for the situation in Europe, where a policy of publicly declared concern for Roma rights appears side by side with blatant violations. Cases of the systematic persecution and degradation of the Roma minority will be highlighted, as will the question of the political obligation to protect human rights on the levels of the individual states, the European Union (EU) and the European Court of Human Rights (ECtHR). This article will present the declarative ‘European’ stance on discrimination towards Roma on the one hand and the actual discrimination that occurs outside the framework of projects and programs in some European states on the other. Despite the efforts that have been made, Roma issues are still entrenched in the national, regional and local levels of political, legal, economic and social-educational structures.
Too Much of a Good Thing: When Charitable Gifts Augment Victim Compensation

This article examines certain tensions between charity law and tort law, and the interface of between charitable giving and public disaster relief programs that draw upon tort law concepts. It does so by exploring the conflict between: (a) the restrictions that charity law imposes on the use of charitable assets to assist injury victims; and (b) tort law's approach to compensating injury victims who received charitable gifts. Specifically, it examines tort law's application of the collateral source rule to charitable gifts that provide victims with more resources than needed to relieve their financial distress. To illustrate this phenomenon, the article describes the interaction between money distributed to the victims of the September 11th terrorist attacks and the money distributed to them by the September 11th Victim Compensation Fund. The Fund's administrators decided to ignore any charitable gifts already already distributed to 911 victims when setting their awards from the Fund. This article criticizes this approach and instead contends that any charitable surplus - i.e., that part of the charitable gift not needed to relieve the financial distress of 911 victims - be directed to other related charitable purposes.
Do managers listen to the market

Abstract There are competing theories as to whether managers learn from stock prices. Dye and Sridhar (2002), for example, argue that capital markets can be better informed than the firm itself, while Roll [Roll, R., 1986, “The hubris hypothesis of corporate takeovers,” Journal of Business 59, 97–216.] argues managers may ignore market signals due to hubris. In this paper, we examine whether managers listen to the market in making major corporate investments, and whether agency costs and corporate governance mechanisms help explain managers' propensity to listen. We find that, on average, managers listen to the market: they are more likely to cancel investments when the market reacts unfavorably to the related announcement. Further, we find mixed evidence consistent with the notion that managers' propensity to listen is related to agency costs. We find that firms tend to listen to the market more when more of their shares are held by large blockholders, and when their CEOs have higher pay-performance sensitivities.
Financial Options in the Real World: An Economic and Tax Analysis

Many of the consequences of issuing and purchasing options on publicly traded property have been well understood since Black and Scholes developed a model for option pricing. No model of options, however, provides an accurate economic analysis of the actual transactions that issuers and purchasers engage in when options are bought and sold. One consequence of this gap in understanding is that the rules for taxing options remain poorly developed. This article provides a transactional analysis of option sales for the first time. It demonstrates that while all options have as one component a swap of variable risks or returns on the underlying property for a fixed payment, “in-the-money” options contain, in addition, a simple forward transfer of the benefits and correlative burdens of a part of the underlying property that is equivalent to a forward sale of that part. Commentators have not identified this embedded forward sale because the payment arrangement between the parties to the option transaction masks it; however, a comparison of option prices derived under the Black-Scholes model and the theoretical prices of such forwards demonstrates that the transactions are identical. The analysis also illuminates the relationships between options and other common financial transactions, such as collars, and it permits a clear assessment of the advantages and disadvantages of possible tax rules for financial options.
A Dynamic Model of Price Discrimination and Inventory Management at the Fulton Fish Market

Abstract We estimate a dynamic profit-maximization model of a fish wholesaler who can observe consumer characteristics, set individual prices, and thus engage in third-degree price discrimination. Simulated prices and quantities from the model exhibit the key features observed in a set of high quality transaction-level data on fish sales collected at the Fulton Fish Market. The model's predictions are then compared to the case in which the wholesaler must post a single price to all retailers. We find the added revenue the wholesaler receives from price discriminating to be small.
Bootstrap-Based Improvements for Inference with Clustered Errors

Abstract Researchers have increasingly realized the need to account for within-group dependence in estimating standard errors of regression parameter estimates. The usual solution is to calculate cluster-robust standard errors that permit heteroskedasticity and within-cluster error correlation, but presume that the number of clusters is large. Standard asymptotic tests can over-reject, however, with few (five to thirty) clusters. We investigate inference using cluster bootstrap-t procedures that provide asymptotic refinement. These procedures are evaluated using Monte Carlos, including the example of Bertrand, Duflo, and Mullainathan (2004). Rejection rates of 10% using standard methods can be reduced to the nominal size of 5% using our methods.
Discussion of investor protection and analysts’ cash flow forecasts around the world

DeFond and Hung [DeFond, M., & Hung, M. (2007). Review of Accounting Studies, 12 (this issue)] test the conjecture whether financial analysts, due to demand-side pressure, compensate for the limited usefulness of reported earnings by issuing cash flow forecasts. They find that analysts supplement their earnings forecasts more frequently with cash flow forecasts in countries where antidirector rights and legal enforcement quality are poor. In my discussion, I examine their hypothesis development and empirical research design and try to extend their arguments to a time-series setting. As it turns out, the paper’s main contention critically hinges on two assumptions: (1) investors’ unsatisfied demand for accounting information and (2) their willingness to rely on cash flow forecasts as valuable information signals. The descriptive validity of these assumptions in an international context is a priori not obvious. I then test whether substantial changes in investor protection and/or earnings quality relate to changes in the frequency of cash flow forecasts. My analyses show that analysts’ propensity to issue cash flow forecasts increases after the first prosecution under insider trading laws, after non-U.S. firms have cross-listed their shares on a U.S. exchange, or after firms have voluntarily replaced their domestic accounting standards with IFRS or U.S. GAAP. Thus, I conclude that the reasoning behind the levels results does not simply extend to a changes setting.
Places not Cases?: Re‐thinking the Probation Focus*

Abstract: John Augustus, the ‘first probation officer’, carried a caseload assigned by the court. And ever since, this way of organising the probation officer's accountability has dominated the profession. To be sure, there are plenty of probation officers who do not carry caseloads, but probation officers who ‘work the line’ do so around an assignment of specific cases. This tradition has considerable implications for the professional identity of the probation officer and the day-to-day work-styles the job generates. Recently, however, a growing movement of innovation has arisen in probation work which takes probation's focus away from the caseload: partnerships, restorative justice, community crime prevention, and so forth. Research repeatedly shows us that probationers' residences are concentrated in certain locations – typically certain more-or-less well identified neighbourhoods. This fact suggest that an alternative way of organising line work of probation officers would be by place rather than case. This article explores the rationale for such a shift in probation officer work, and it speculates about the benefits that might accrue to the profession from taking such a step. Potential problems are also identified.
Treating the New European Disease of Consumer Debt in a Post-Communist State: The Groundbreaking New Russian Personal Insolvency Law

This Article examines the tumultuous transition from restrictive Communism to the debt-fueled consumer economy of modern Russia. In particular, it surveys Russia’s legal response to severe debt distress, situating it in the context of nearly 1000 years of historical development. Effective 1 October 2015, Russia has finally joined most of its European neighbors in adopting a personal bankruptcy law, with characteristics that reflect both evolving international best practices and a series of lessons not learned. This Article offers the first detailed exposition in English of the two steps forward represented by this new law, as well as an evaluation of the one step back that will likely result when Russia experiences the same challenges with personal insolvency procedures that its European neighbors have faced in recent years. The analysis in this Article contributes to a deeper understanding of modern Russian law and society by tracing the striking emergence of a massive consumer debt problem only a few years after the fall of Communism, along with the development of a solution that is largely consistent with European norms but remains in many respects uniquely Russian.
The impact of terms of trade shocks on a small open economy: A stochastic analysis

Abstract The impact of a change in the terms of trade on the economic performance of a small economy is analyzed. Both the effects of unanticipated shocks and changes in the mean and variance of the probability distributions generating these disturbances are discussed. In all cases, the key element determining the adjustment is the effect on the rate of growth of real wealth, to which, in equilibrium, all other real quantities are directly tied. Conditions for the Harberger-Laursen-Metzler effect to hold are considered. The impact of these changes on economic welfare, as measured by expected discounted utility of the representative agent, is also addressed. (JEL F41, F43).
The Sunset of "Quality Control" in Modern Trademark Licensing

Introduction 342 I. Trademark Licensing Defined 348 II. History of Trademark Licensing and “Quality Control” .........351 A. The Debate on Licensing and Trademark Protection .....351 B. The Rule of Licensing With “Quality Control” 354 1. The rationale behind “quality control” 357 2. Evolution of the standard 360 III. Problems in the Application of “Quality Control” 364 A. Judicial Inconsistency in Defining “Quality Control”.......364 1. The dilemma of “adequate” control 368 2. Shifting focus on product quality? 371 B. Consequences of the Absence of a Clear Definition of “Quality Control” 374 IV. The Increasing Unsustainability of “Quality Control” 376 A. The Reality of Modern Trademark Licensing 377 1. Promotional licensing and (the lack of) “quality control” 380 2. Additional practices inconsistent with “quality control” 384
Competition and collusion with fixed output

In many industries, output is fixed by exogenous constraints, so firms compete by allocating a given stock of supplies between different markets. This paper shows that collusion in such industries leads firms to shift output from high-margin markets to low-margin markets. As a result, welfare is generally reduced although prices decrease in some markets and increase in others.
Failure of common knowledge of language in common-interest communication games

Abstract This paper explores higher-order uncertainty about message availability in communication games with perfectly aligned preferences. It can be impossible to achieve ex post efficiency in equilibrium even when it is mutual knowledge that the size of the set of available messages would be sufficient to convey all payoff-relevant information. There are equilibria that achieve ex post efficiency whenever a rich language condition is satisfied: the set of available messages is large relative to the sender's assessment of the number of information sets of the sender the receiver considers possible. Weaker conditions suffice if one adopts an ex ante perspective.
When does Competition Mitigate Agency Problems

Abstract This paper examines how the performance correlation of firms in an industry affects the degree to which product market competition mitigates agency problems. Consistent with theory, I find that in industries with high firm performance correlation, product market competition reduces the adverse effect of business combination (BC) laws on firm operating performance, while in industries with low performance correlation competition does not have such an effect. My results are robust to (i) the use of different measures of performance correlation, competition, and operating performance; (ii) excluding firms that are not exogenously affected by BC laws, (iii) dropping the years that are affected by the first-generation state antitakeover laws. I find similar results for stock prices when examining the stock market reactions to the first newspaper reports of BC laws. Overall, the disciplining effect of competition depends positively on an industry's performance correlation.
From Climate Change and Hurricanes to Ecological Nuisances: Common Law Remedies for Public Law Failures?

Over the past few years, there has been a minor renaissance in the use of common law actions, especially public and private nuisance, to address environmental problems like climate change that are not being adequately addressed by public law. Several federal court decisions, including Connecticut v. American Electric Power Company and the recently vacated Comer v. Murphy, appear, at first, to provide strong incentives for an even greater focus on common law to address a broad array of environmental problems, including “ecological nuisances.” However, the recent cases should not be viewed as fundamentally altering the role that common law actions play in protecting the environment and public health. The recent decisions removed some jurisdictional and standing barriers to common law actions, but many impediments remain. The primary impediment, which was not significantly affected by the recent decisions, is the difficulty of proving causation in the common law actions. The recent decisions may have made it easier to bring common law actions, but not necessarily to win them. To the extent that the recent decisions spark an increase in common law litigation to address some of the environmental problems that are not being addressed by public law, though, the litigation could spur legislative changes to the public law. Thus, the decisions could have a far greater impact on public law than on common law. This article explores the recent flurry of common law litigation and the impacts of the decisions on efforts to protect the environment through the common law and public law.
Governance indicators : where are we, where should we be going ?

Progress in measuring governance is assessed using a simple framework that distinguishes between indicators that measure formal rules and indicators that measure the practical application or outcomes of these rules. The analysis calls attention to the strengths and weaknesses of both types of indicators as well as the complementarities between them. It distinguishes between the views of experts and the results of surveys and assesses the merits of aggregate as opposed to individual governance indicators. Some simple principles are identified to guide the use and refinement of existing governance indicators and the development of future indicators. These include transparently disclosing and accounting for the margins of error in all indicators, drawing from a diversity of indicators and exploiting complementarities among them, submitting all indicators to rigorous public and academic scrutiny, and being realistic in expectations of future indicators.
Equity stakes and exit: An experimental approach to decomposing exit delay

Despite evidence that delayed exit is a pervasive and consequential problem, relatively little is known about its causes. Moreover, the study of exit delay is confounded by the fact that behavioral theories arising in the literature on escalation of commitment and economic theories that incorporate option value both yield predictions that delay increases in sunk costs and uncertainty. We construct a laboratory experiment that enables us to compare the timing of participants’ exit decisions with optimal choices that incorporate option value in the absence of sunk costs. We show that receiving equity stakes – the actual cash flows of the enterprise and control rights over continuation – generates delay beyond the optimal exit point for participants allocated to unprofitable firms. While participants with equity stakes make decisions that are nearly optimal given their beliefs, their beliefs are significantly distorted relative to a control group that does not receive equity stakes. The pattern of distortion is consistent with confirmatory bias and motivated reasoning. More generally, we show that incentives affect decision making not only by affecting the payoffs of different outcomes but also by distorting information processing, which in turn affects how decision-makers sees the relative likelihood of different outcomes. This suggests that existing principal-agent models may be incomplete.
Ideologies, vested interest groups, and postal saving privatization in Japan

The privatization of Japan’s postal saving system has been a politically charged issue since it first started being debated in the late 1980s, and yet it provides a useful setting in which political economy of economic policy-making can be investigated empirically. Analyzing the pre-election survey of the House of Representatives candidates in 2003 and also the voting patterns of Liberal Democratic Party (LDP) members on a set of postal privatization bills in 2005, this paper asks why some politicians fiercely opposed (or supported) privatization. The econometric results show that multiple factors are important: the private interests of local postmasters and postal workers, politicians’ fundamental ideologies on the size and role of government, party disciplines and factional affiliations within the LDP. Legislative behavior on postal privatization in Japan, thus, turns out to be one case in which legislative behavior is more complex than any single theory predicts.
On Contractual Defaults and Experimental Law and Economics

Sloof et al.'s [2006] elegant study of default breach remedies illustrates both the potential and limitations of experimental law and economics (ELE). Potentially, the rigorous methodology of experimental economics can provide fully controlled tests of relationships among legally significant variables. Human behavior is context-dependent, however. The validity of ELE would therefore be limited if it were, for example, to disregard legal institutions and context in an automatic adherence to all conventions of experimental economics.
The Separation of Business and State

National scandals involving corporate fraud, political corruption, lobbyists, and campaign finance have called attention to worrisome dynamics: the decreasing power of natural persons relative to legal persons in the political process; and the erosion of civic or democratic values in favor of corporate values. Both dynamics relate to the vexing problem of money in politics. American political thought and constitutional structure offer much-needed guidance in the form of analogies and separationist logic. This Essay recasts the phenomenon of money in politics as a separation problem-that is, a problem of the private sphere of business overreaching into the public sphere of governance; in short, excessive entanglement. Once the problem is seen in this light, it is natural to search for insights in the two most significant separations in U.S. law: the separation of powers and the separation of church and state. An analysis of these earlier separations reveals that the forces at work today arise from the same perennial forces contemplated by the Founders: unreformed human nature, dominated by unenlightened self-interest and ideological passion, and factions which emerge as a collective manifestation of interest and passion. Relevant political philosophy from the first two separations helps define the contours of a third, that between business and state. Taken as analogies, the earlier separations help explain what is happening to politics and suggest a solution. Copyright © 2007 California Law Review, Inc. California Law Review, Inc. (CLR) is a California nonprofit corporation. CLR and the authors are solely responsible for the content of their publications. t Visiting Assistant Professor of Law, Duke University School of Law; Assistant Professor of Law, Roger Williams University School of Law; J.D. and LL.M., magna cum laude, Order of the Coif, Duke University School of Law; Thomas J. Watson Fellow; A.B., magna cum laude, Bowdoin College. For their insights on my most recent draft of this Essay, I thank James Boyle, Jedediah Purdy, and Zephyr Teachout. For comments on an early draft, I wish to thank Carl Bogus, Edward Eberle, Jorge Elorza, Jared Goldstein, Jonathan Gutoff, Diana Hassel, Colleen Murphy, Michael Yelnosky, and David Zlotnick. For excellent research assistance, I thank Katherine Johnston, Spencer Maguire, Christina Paradise, Craig Tavares, and Ana Wislocki. And for encouragement and inspiration, I am indebted to Kent Bicknell, Aileen Cartier, Thomas Kuhner, Allison Rogers, and Terry Tucker.
Self-Reflection within the Academy: The Absence of Women in Constitutional Jurisprudence

This article describes the problem of excluding women from any discussion of significance in the textbooks of core courses of legal education. It examines the role of women in history and concludes that there was significant involvement of women in major historical events that is shortchanged in legal education.
Justice Advanced: Comments on William Nelson’s Brown v. Board of Education and the Jurisprudence of Legal Realism

The Supreme Court’s landmark school desegregation decision in Brown v. Board of Education brings us face-to-face with how the world of race, law, caste, and the Supreme Court has changed since that time. Brown has contributed to a view that the courts are perhaps best equipped to handle the difficult issues. Whether that view will prove to be good law or good policy in the long run remains to be seen. Nonetheless, it does reflect the jurisprudential journey that took the Court from its previously indifferent position on minority rights towards that a protector of such rights.The evolution in the Court's judicial reasoning towards legal realism, as well as the shifting of racial mores in the broader society, played a role in bringing about Brown. It allowed the Court to take into consideration the impact of the legal history of race. In fact, Justice Warren gave short shrift to the framers' intentions under a jurisprudential legal realism, assuming one defines legal realism as a policy-oriented philosophy informed by newer developments of social and behavioral sciences.While the Brown Court followed and ratified changes in thinking that had already occurred among the nation’s intellectual and cultural pace-setters, the Court’s jurisprudence since that 1954 decision has been far more conservative. Brown made a difference because the advocates that urged desegregation and the Court that accepted their arguments tapped into the changed mood and needs of the nation. In doing so, they proved that they had learned the realist lesson well.
FIN 48, uncertainty and transfer pricing: (Im)Perfect together?

Abstract The nexus of Financial Accounting Standards Board Interpretation No. 48: Accounting for Uncertainty in Income Taxes (FIN 48) requirements and a company's transfer pricing practices has created significant reporting and disclosure issues for transnational corporations (TNC) in the United States and its major trading partners. Of interest are changes in TNC disclosures of uncertain tax positions and unrecognized tax benefits, both generally and specific to transfer pricing, and whether TNCs increased advance pricing agreement activities to mitigate transfer pricing-related uncertainty. This study found that FIN 48 implementation led to significant increases in the types and amount of information provided in annual report footnotes about the uncertain tax positions of TNCs, and the quantification of their related unrecognized tax benefits. FIN 48 increased both the quality and quantity of tax-related reporting in the annual reports of its adopters, making their transactions more transparent and understandable to the external users of their annual reports. FIN 48 also seems to have led to an increase in TNC interest in negotiating advance pricing agreements with their own and with related tax authorities in order to mitigate the effects of one of the largest and most uncertain tax positions, cross-border transfer pricing transactions.
Implicit Employment Contracts: The Limits of Management Reputation for Promoting Firm Productivity

Implicit employment contracts are a common way to motivate firm productivity but also require that employees trust management to be fair when allocating postproduction firm resources between employees and owners. We use an experiment to study the problem of motivating firm productivity, which depends on levels of owner investment and employee productive effort, when managers have an incentive to favor the owner's interests over those of the employee. Drawing on research in psychology and behavioral economics, we argue that reputation concerns can more effectively promote firm productivity when manager compensation is relatively insensitive to how much the owner is allocated after production occurs. Consistent with our predictions, we find that reputation concerns lead to greater firm productivity and higher payoffs for all firm members, but only when manager pay is relatively insensitive to the owner's ex post allocation. In addition to offering testable empirical implications, our theory and results are important because they can help explain why executive compensation is, in practice, surprisingly insensitive to owner returns.
Cooperative Localism: Federal-Local Collaboration in an Era of State Sovereignty

Direct relations between the federal government and local governments - what this article calls "cooperative localism" - play a significant and underappreciated role in areas of contemporary policy as disparate as homeland security, law enforcement, disaster response, economic development, social services, immigration, and environmental protection. Despite the ubiquity of this practice, a jurisprudential clash is looming that threatens this important facet of intergovernmental relations. Historically, courts have allowed local governments to invoke federal authority as a source of local autonomy, despite the prevailing view of local governments as powerless instrumentalities of the state. The Supreme Court is increasingly suggesting, however, that state control over local governments is a fundamental aspect of state sovereignty worthy of triggering judicial limits on federal power. When this confrontation comes to a head, limiting federal authority to empower local governments would be a mistake. This article instead proposes a new framework for conceptualizing federal empowerment of local governments that is not only consistent with the Court's contemporary view of federal structure, but in fact advances the goals the Court is seeking to achieve. The core concerns animating the Court's current move to devolve and decentralize power are forcefully served by enhancing the autonomy of local governments in the constitutional structure. In short, the very values of federalism on which the Court has relied to enhance state sovereignty provide a compelling localist grounding for the particular exercise of national power represented by cooperative localism.