cssi/SciSciGPT-SciSciNet huggingface dataset:
Community and Custom in Property

Community custom has played a limited but important role in the law of property. In addition to a few major historic examples such as mining camp rules and whaling, property law sometimes relies on community custom, for example in adverse possession, nuisance law, and beach access. This Article proposes an informational theory of custom in property law. Custom is subject to a communicative tradeoff in the law: all else being equal, informationally demanding customs require an audience with a high degree of common knowledge. General customs already known throughout society do not require much extra publicity from the law, and the law can easily draw on such customs. By contrast, customs that vary by community raise the question of the need for processing by non-expert audiences, i.e., outgroup dutyholders and government officials. This tradeoff helps explain the differential receptiveness to various customs and the process by which they are formalized if they are adopted into the law. The information-cost theory suggests that enthusiasts and skeptics of custom have both tended to ignore this process. The theory is then applied to some suggestive evidence from grazing customs and the pedis possessio doctrine in mining law, under which miners have pre-discovery rights to the spot being worked. Finally, the information-cost theory of custom sheds some light on the history and controversies over the numerus clausus (standardization and limitation of the set of basic property forms) and on the question of baselines of property entitlements in the law of takings.
Renegotiation of cash flow rights in the sale of VC-backed firms

Abstract Incomplete contracting theory suggests that venture capitalist (VC) cash flow rights, including liquidation preferences, could be subject to renegotiation. Using a hand-collected data set of sales of Silicon Valley firms, we find common shareholders do sometimes receive payment before VCs’ liquidation preferences are satisfied. However, such deviations from VCs' cash flow rights tend to be small. We also find that renegotiation is more likely when governance arrangements, including the firm's choice of corporate law, give common shareholders more power to impede the sale. Our study provides support for incomplete contracting theory, improves understanding of VC exits, and suggests that choice of corporate law matters in private firms.
The Aggregate Effects of Decentralized Knowledge Production: Financial Bloggers and Information Asymmetries in the Stock Market

New media have markedly enhanced individuals' capacity to produce and disseminate original knowledge; however, the literature has not extensively examined the broad effects of such decentralized production processes. This study thus focuses on a unique context—the stock market—in which it is possible to test the aggregate impact of blog-based information production. Using data on 150 top financial bloggers and stock returns from the S&P 500, this study supports the hypothesis that financial blogging activity diminishes harmful information asymmetries between key market investors. This study thus adds to the “media effects” literature, highlights the societal relevance of bloggers, and shows how economic concepts and financial market settings can be employed for powerfully testing communication theories.
CONTRIBUTIONS AND ELECTIONS WITH NETWORK EXTERNALITIES

This paper develops a model of campaign contributions and electoral competition. Contributors have separable preferences over policy and the electoral success of the candidate they support, as in influence buying. Policy preferences are single peaked over a single policy dimension. A candidate's chances of victory are increasing in the relative size of her war chest. In equilibrium, potential contributors balance incentives to donate to a candidate that is desirable on policy grounds and ensuring that they back the likely winner. With exogenous candidate positions, we find conditions under which, in equilibrium, contributors donate to the candidate that is less desirable on policy grounds solely because they consider the candidate viable. We also find that there is a degree of indeterminacy, wherein multiple equilibria inducing different lotteries over the final policy often exist. With endogenous candidate locations, we find that while median policies are always supportable as equilibrium, it is often the case that any pair of candidate locations is supportable in equilibrium. These results suggest that in settings with substantial influence buying, median policy interests may not be represented.
Mens rea for sexual abuse: the case for defining the acceptable risk

The persistence of strict criminal liability for child sexual abuse is attributable, at least in part, to the shortcomings of the existing alternatives, namely, the recklessness and criminal negligence standards. These two standards require juries to define the acceptable level of risk on a case-by-case basis. Juries are ill-equipped to make this calculation in sexual abuse cases, however, and their efforts to do so almost invariably are skewed by evidence of the victim's unchastity. This Article first explores the shortcomings of the recklessness and criminal negligence standards in this setting, and then attempts to develop a viable alternative. Under the proposed alternative, the legislature, not the jury, would define the acceptable risk of sexual imposition. It would calculate this invariant probability threshold in much the same way that juries calculate the acceptable risk in recklessness and criminal negligence cases-by assigning values to the gravity of the potential harm and to the social utility of the conduct. Under this scheme, the jury would be responsible only for deciding whether the risk of sexual imposition exceeded this invariant probability threshold in the defendant's case.
Understanding the “numbers game”

Abstract Two well-known stylized facts on earnings management are that the earnings surprise distribution has a discontinuity at zero, and that positive earnings surprises are associated with positive abnormal returns. We link these two facts in a model of the earnings management decision in which the manager trades off the capital market benefits of meeting earnings benchmarks against the costs of manipulation. We develop a new structural methodology to estimate the model and uncover the unobserved cost function. The estimated model parameters yield the percentage of manipulating firms, magnitude of manipulation, noise in manipulation, and sufficient statistics to evaluate proxies for identifying firms suspected of manipulation. Finally, we use the Sarbanes–Oxley Act as a policy experiment and find that by increasing costs, the Act reduced equilibrium earnings management by 36%. This reduction occurred despite an increase in benefits, consistent with the market rationally becoming less skeptical of firms that just meet benchmarks.
Policing Hatred: Police Bias Units and the Construction of Hate Crime

Much of the scholarly debate about hate crime laws focuses on a discussion of their constitutionality under the First Amendment. Part of larger empirical study of police methods of investigating hate crimes, this Note attempts to shift thinking in this area beyond the existing debate over the constitutionality of hate crime legislation to a discussion of how low-level criminal justice personnel, such as the police, enforce hate crime laws. This Note argues that, since hate crimes are an area in which police have great discretion in enforcing the law, their understanding of the First Amendment and how it relates to their job is important to the impact that hate crime legislation has in the community. Additionally, research on the enforcement of hate crime laws may inspire further investigation of the broad discretion police officers currently possess in all areas of law.
Staying Public: Institutional Investors in U.S. Capital Markets

This essay questions the ascendance of U.S. private capital markets. Data on capital formation over the past decade (before the Panic of 2008) cast doubt on the story of capital users increasing their relative reliance on private capital. Further, the investment rules (and cultures) under which institutional investors operate suggest that private capital has only a limited pool from which to draw. Institutional investors, which collectively hold more than three-fourths of U.S. capital market investments, have not moved significantly from public trading markets to private trading markets. Rather than “going private,” they have “stayed
SOX: Unintended dilemmas for auditing

The Sarbanes-Oxley Act of 2002 brought widespread changes to U.S. financial reporting. Companies now must report on internal control deficiencies. There are criminal penalties for false certification of financial reports. The new Public Company Accounting Oversight Board was established. And audit committees have enhanced responsibilities. Considered in isolation, these reforms appear to improve the quality of financial information and increase public confidence. But when considered as a whole—in the context of practical application—some unanticipated effects are causing audit dilemmas. And they may damage the quality of financial information. © 2006 Wiley Periodicals, Inc.
The Family and the Market — Redux

The relationship between the family and the market has long been an issue of contention in Western societies. Since the 1970s, that relationship has required renegotiation as women, who had performed the great majority of caretaking work, have entered the workforce in increasing numbers. At the same time, women’s movement into the workplace and the changes in public policy that have accompanied it have spurred significant scholarly commentary over how the family-market relationship should be reconstructed. This Article argues against one possible approach to this reconstruction, in which the state withdraws barriers between the family and the market that support families’ caretaking and human development activities. Under this approach, which by and large has been adopted in public policy in the United States, women’s movement into the role of breadwinner has been accompanied by decreased state support for caretaking and human development, in the belief that market forces should properly determine how these activities are conducted. This Article argues that the market is the wrong tool to use to “distribute” these activities. Doing so is not only resulting in an unjust distribution of these activities among and within families, it is causing serious harm, not only to society’s most vulnerable citizens, but also to the polity as a whole. The proper role of the state, this Article argues, is to buffer caretaking and human development activities from market forces in order to ensure the wellbeing of individuals, families, and society.
Adolescent depression and educational attainment: results using sibling fixed effects

This paper contributes to the literature on the relationship between adolescent depression and educational attainment in several ways. First, while cross-sectional data are normally used, this paper uses longitudinal data in order to defend against the potential of reverse causality. Second, this is the first paper in the literature to control for sibling-fixed effects in examining the relationship between adolescent depressive symptoms and human capital accumulation. Importantly, this eliminates omitted factors such as family and neighborhood characteristics common to siblings that affect both depressive symptoms and educational attainments (e.g. neighborhood crime, and family resources). Third, this paper examines the effects of both an indicator and scale of depressive symptoms and finds important associations with these depressive symptoms and human capital accumulation. Though the results cannot be given a causal interpretation, the findings show a negative relationship between depressive symptoms and years of schooling. The relationship appears to be driven primarily through increasing the chances of dropping out but may have small impacts on the likelihood of college attendance (conditional on high school graduation). In particular, preferred estimates suggest that a standard deviation increase in depressive symptoms is associated with a 25-30% increase in the likelihood of dropping out.
The Price of Abuse: Intel and the European Commission Decision

The May 13, 2009 decision by the European Commission (A¢â‚¬A“ECA¢â‚¬Â ) holding that Intel violated Article 82 of the Treaty of Rome and should be fined a record amount and prohibited from engaging in certain conduct, set off a predictable four part chorus of denunciation.
The Impact of Mass Shootings on Gun Policy

Abstract There have been dozens of high-profile mass shootings in recent decades. This paper presents three main findings about the impact of mass shootings on gun policy. First, mass shootings evoke large policy responses. A single mass shooting leads to a 15% increase in the number of firearm bills introduced within a state in the year after a mass shooting. This effect increases with the extent of media coverage. Second, mass shootings account for a small portion of all gun deaths, but have an outsized influence relative to other homicides. Third, when looking at bills that were actually enacted into law, the impact of mass shootings depends on the party in power. The annual number of laws that loosen gun restrictions doubles in the year following a mass shooting in states with Republican-controlled legislatures. We find no significant effect of mass shootings on laws enacted when there is a Democrat-controlled legislature, nor do we find a significant effect of mass shootings on the enactment of laws that tighten gun restrictions.
Looking for a Few Good Philosopher Kings: Political Gerrymandering as a Question of Institutional Competence

The redistricting season is about to begin in full swing, and with it will come renewed calls for the federal courts, and particularly the U. S. Supreme Court, to aggressively review the work of the political branches. This is an intriguing puzzle. Since the early 1960’s, the federal courts have regulated questions of politics aggressively. They have done this even in the face of difficult questions of political representation. The courts have taken sides, to be sure, but these can only be described as acts of volition and will, not constitutional law. The leading case is Reynolds v. Sims. This is when the Supreme Court ultimately divorced these political questions from the constitutional text. Moving forward, Reynolds informs all subsequent case law within the Law of Democracy. If the Court can decide Reynolds as it does, it can decide anything. But this is not true for political gerrymandering questions. What explains this hesitation on the part of the justices? This Essay answers this important question. Understanding the justices as strategic actors, this Essay conjectures that the Court removes itself as an institutional player in the gerrymandering debate because the redistricting process left alone tilts to conservative policies and outcomes. More generally, this Essay argues that scholarly calls for judicial intervention demand the existence of philosopher kings to choose amongst myriad theories of representation. These are calls, in effect, for an activist judicial role in an area that demands judicial deference. At the very least, this is an area that demands comparative institutional analysis. This is something we seldom see.
Half‐lives of Deviations from PPP: Contrasting Traded and Nontraded Components of Consumption Baskets

The paper examines the convergence question by contrasting the half-lives of deviations from purchasing power parity (PPP) across traded and nontraded goods in an exchange rate model with sticky prices. In particular, empirical results show that in most cases the half-lives of PPP deviations for traded goods are shorter than those for total consumption and for nontraded goods.
Learning to Coordinate in Social Networks

We study a dynamic game in which short-run players repeatedly play a symmetric, strictly supermodular game whose payoffs depend on a fixed unknown state of nature. Each short-run player inherits the beliefs of his immediate predecessor in addition to observing the actions of the players in his social neighborhood in the previous stage. Because of the strategic complementary between their actions, players have the incentive to coordinate with others and learn from them. We show that in any Markov Bayesian equilibrium of the game, players eventually reach consensus in their actions. They also asymptotically receive similar payoffs despite initial differences in their access to information. We further show that, if the players’ payoffs can be represented by a quadratic function, then the private observations are optimally aggregated in the limit for generic specifications of the game. Therefore, players asymptotically coordinate on choosing the best action given the aggregate information available throughout...
International Norms in Constitutional Law

Whether the Supreme Court should look to international law in deciding constitutional issues depends largely on what is meant by "looking to" international law. Some international norms are legally binding on American courts, either because we have agreed to follow them by adopting treaties or because they form part of the federal common law. I certainly agree that the Supreme Court, like the rest of us, ought to obey these aspects of international law. But the role of international norms in American courts has recently attracted attention for a different reason. In Lawrence v. Texas the Supreme Court, overruling Bowers v. Hardwick, struck down a statute that prohibited anal and oral sex between members of the same sex, on the ground that the statute violated the due process clause of the Fourteenth Amendment. In the course of the opinion, the Court cited a number of authorities, including a ruling by the European Court of Human Rights, in Dudgeon v. United Kingdom, that had invalidated similar laws. Other recent Supreme Court cases have made reference to decisions by international tribunals and other international norms, and Supreme Court justices, in their extracurricular writings, have championed the practice. Since nobody asserts that these rulings are legally binding on American courts, the Court's recent practice raises the question of why we should pay any attention to them.
Democracy and institutions in postcolonial Africa

Africa has seen a steady rise in democracy since the end of the Cold War. This paper investigates two possible implications of democratization in African countries: better economic growth through improved institutions and less civil conflict through increased political participation. Instrumental variables regressions are estimated with the spatial lag of democracy. This instrument varies over time, allowing for consideration of country fixed effects in IV regressions. Large positive impacts of institutions on economic growth and of political participation on reducing civil conflict are found in IV regressions with fixed effects. Further estimates show that both growth and civil violence effects may be driven by civil liberties.
An Empirical Examination of Information Barriers to Trade in Insurance

This paper uses direct evidence to evaluate whether asymmetric information is a barrier to trade in the largest market for private insurance in the world: life insurance. We report several findings that seem difficult to reconcile with the conventional theory of insurance under asymmetric information. We conjecture that sellers may know their costs of production better than consumers in this market, as in those for most other products.
Excessive Dollar Debt: Financial Development and Underinsurance

We propose that the limited financial development of emerging markets is a significant factor behind the large share of dollar-denominated external debt present in these markets. We show that when financial constraints affect borrowing and lending between domestic agents, agents undervalue insuring against an exchange rate depreciation. Since more of this insurance is present when external debt is denominated in domestic currency rather than in dollars, this result implies that domestic agents choose excessive dollar debt. We also show that limited financial development reduces the incentives for foreign lenders to enter emerging markets. The retarded entry reinforces the underinsurance problem.
Optimal inattentive length in macroeconomic models

Abstract This paper proposes an approximate solution of firm's optimal inattentive length in a standard macroeconomic model. The approximate solution conceptually fits a sticky-information model better, and predicts empirically more plausible inattentive length than the one proposed by Reis [Reis, R., 2006. Inattentive producers, Review of Economic Studies 73, 793–821].
TOWARDS A PROGRAM FOR FINANCIAL STABILITY

Abstract Fifty years ago Milton Friedman published a book entitled A Program for Monetary Stability . In it he outlined a number of suggestions for the conduct of monetary and fiscal policies that he thought would contribute to monetary stability and pari passu to price stability and a greater degree of output/employment stability. In this paper I review some of his policy prescriptions in light of the financial and economic crisis of 2007–2009. From the perspective of financial development the world today is much different from the world that Friedman knew in the late 1950s. In what way would his policy recommendations have to be modified to account for these changes in financial development? To stabilize the banking system we argue that his proposal for 100 percent reserve banking merits serious consideration in current policy discussions. To stabilize asset markets we propose two policies that Friedman would not likely endorse. The first is to reinstate selective credit controls in the areas of the securities markets, the real estate market, and various commodity markets. The second policy designed to dampen excessive variability in the stock market is for the Central Bank to carry out some open market operations in an index fund of equities.
Great Expectations?! Assortment Size, Expectations, and Satisfaction

Abstract Recent research challenges the idea that greater choice is always desirable, showing that larger assortments can increase choice deferral and switching. The current research demonstrates that even when consumers make a purchase, the same item may generate lower satisfaction when chosen from a larger rather than a smaller assortment. The authors explain this effect in terms of an expectation-disconfirmation mechanism. When assortments are small, consumers have low expectations about their ability to match their preferences. As assortment sizes increase, so do consumers' expectations of the degree of preference match they can achieve. Subsequently, consumers may experience greater negative expectation disconfirmation or less positive expectation disconfirmation when a chosen item comes from a larger rather than a smaller set. Either less positive or more negative disconfirmation leads to lower choice satisfaction. The results from three studies support this expectation-based process and establish t...
The Effect of Mandatory Financial Statement Disclosures of Tax Uncertainty on Tax Reporting and Collections: The Case of FIN 48 and Multistate Tax Avoidance

ABSTRACT: This study investigates the effect of accounting measurement and disclosure requirements on multistate income tax avoidance. The proliferation of sophisticated state tax planning techniques combined with the complexity of varying state tax regimes make multistate taxation an area rampant with uncertainty. The accounting standards contained in FASB Interpretation No. 48 (FIN 48) require firms to record and disclose liabilities for uncertain income tax benefits based on a more-likely-than-not merit threshold of each tax position, assuming tax authorities have full information. Theoretical work and initial practitioner claims suggested that the accounting standards would increase reported tax expense and tax payments. Consistent with this, we find that both firm-level state income tax expense and aggregate state-level income tax collections increased surrounding adoption of FIN 48, providing evidence of the association between mandatory financial reporting disclosures and tax compliance behavior. J...
Market Mechanisms in Online Peer-to-Peer Lending

Online peer-to-peer lending P2P lending has emerged as an appealing new channel of financing in recent years. A fundamental but largely unanswered question in this nascent industry is the choice of market mechanisms, i.e., how the supply and demand of funds are matched, and the terms price at which transactions will occur. Two of the most popular mechanisms are auctions where the "crowd" determines the price of the transaction through an auction process and posted prices where the platform determines the price. While P2P lending platforms typically use one or the other, there is little systematic research on the implications of such choices for market participants, transaction outcomes, and social welfare. We address this question both theoretically and empirically. We first develop a game-theoretic model that yields empirically testable hypotheses, taking into account the incentive of the platform. We then test these hypotheses by exploiting a regime change from auctions to posted prices on one of the largest P2P lending platforms. Consistent with our hypotheses, we find that under platform-mandated posted prices, loans are funded with higher probability, but the preset interest rates are higher than borrowers' starting interest rates and contract interest rates in auctions. More important, all else equal, loans funded under posted prices are more likely to default, thereby undermining lenders' returns on investment and their surplus. Although platform-mandated posted prices may be faster in originating loans, auctions that rely on the crowd to discover prices are not necessarily inferior in terms of overall social welfare. This paper was accepted by Chris Forman, information systems.
What ERISA Means by “Equitable”: The Supreme Court’s Trail of Error in Russell, Mertens, and Great-West

In a pair of cases decided by 5-4 majorities (Mertens, 1993; Great-West, 2002) interpreting the scope of remedy for wrongdoing under ERISA, the Supreme Court construed the statute's grant of "appropriate equitable relief" to prevent the victims of ERISA-prohibited conduct from being compensated for consequential injury. The Court read ERISA's authorization of "appropriate equitable relief" to have disinterred the law/equity division from the era before the two systems were fused in the 1930s, and the Court treated equity as not having awarded monetary relief. As a consequence, lower courts have held ERISA to preclude remedy in a host of situations in which wrongful plan administration (almost always in violation of ERISA's fiduciary rules) has caused expense, physical harm, or other suffering. This Article explains why and how the Court's interpretation of ERISA remedy law went wrong, beginning with the Court's earlier encounter with the field in Russell (1985). The main theme is that the reach of trust-law principles in ERISA is far deeper and more controlling than the opinions in Mertens and Great-West allow. When federalizing the administration of pension and employee benefit plans in ERISA, Congress made a deliberate choice to subject these plans to the pre-existing regime of trust law rather than to invent a new regulatory structure. In this dimension, ERISA is federal trust law. Congress intended ERISA remedy law to replicate the core principles of trust remedy law in the regulation of pension and benefit plans, including the long-familiar make-whole standard of trust remedy law.
A note on modeling the criminal choice problem

In this paper we show that neither Becker nor Brown and Reynolds provide a proper description of the failure state in the criminal choice problem. A more satisfactory specification is provided which yields the Becker and Brown and Reynolds formulations as special cases.
RETHINKING THE ROLE OF CLINICAL TRIAL DATA IN INTERNATIONAL INTELLECTUAL PROPERTY LAW: THE CASE FOR A PUBLIC GOODS APPROACH

This article describes the growth and consequences of new intellectual property rights given to pharmaceutical developers, and it advocates treating clinical trials as a public good. Although the soaring cost of clinical trials is well known and discussed, too little attention is given to the underlying rationale for allowing drug developers to recoup their costs through the new intellectual property rights provided in multilateral, regional, and bilateral agreements. Known in the US as "market exclusivity" and in Europe as "data exclusivity," these rights prohibit would-be generic producers from obtaining regulatory approval based on the original producers' undisclosed test data. Market and data exclusivity is codified in US and European domestic law as well as the North American Free Trade Agreement (NAFTA) and, to a lesser degree, the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Market and data exclusivity is binding an increasing number of developing countries via Free Trade Agreements (FTAs), which hinder developing countries from manufacturing generic drugs. At a minimum, negotiators should replace the norm of exclusive control over data with a liability rule, or take and pay rule, in which generic manufacturers can use original manufacturers' clinical trial data in exchange for reasonable compensation. A more fundamental solution requires questioning the status quo of proprietary clinical trial data. The conventional wisdom is that market and data exclusivity, and drug developers' consequent ability to limit competition from generics above and beyond patent protection, are a necessary incentive for drug developers to fund ever more expensive clinical trials. Clinical trial data, however, are public goods that will be undersupplied and over protected so long as private actors provide them. Moreover, manufacturers have an incentive to present clinical trial data so that they support regulatory approval at the expense of public health. Although liability rules are better than the status quo, they would not resolve the problem of treating a public good as proprietary. Governments should thus oversee and fund clinical trials as the public good that they are. Clinical tests should be awarded to the most qualified scientists through a competitive process, financed in part with the decrease in drug costs to governmental health care programs and in part with drug developers' contributions, selected to maximize social benefit, and made global via intergovernmental bodies to maximize social return. This would reduce the cost of redundant investigations to the global public health system, lower supply costs to drug consumers, and lower the breakeven point for investment in research to discover new drugs.
Changes in gender distribution among accounting academics

The purpose of this study is to examine the current developments in the distribution of men and women in accounting academia, including university faculty positions and in leadership roles in the American Accounting Association (AAA). The study also reviews women's participation in the accounting practice field. The proportion of faculty positions held by women has increased in all academic ranks. The proportion of AAA leadership positions held by women has increased, such as regional vice presidents and membership on editorial boards. However, even with these increases, a much lower proportion of women hold senior academic ranks and leadership positions in the AAA. Perhaps, if the trend continues, women will account for a higher proportion of these academic roles in the future, but due to the different perspectives on work-life balance and other gender-related differences, women may choose to hold a lower proportion of these roles.
Why Care About Mass Incarceration

Advocates for less punitive crime policies in the United States face long and dispiriting odds. The difficulty of the challenge becomes clear if we compare our criminal justice outcomes with those of other nations: We lock up more people, and for longer, than anyone else in the world. We continue to use the death penalty long after Europe abandoned it, we are the only country in the world to lock up juveniles for life, and we have prisoners serving fifty-year sentences for stealing videotapes from Kmart.1 Our courts offer little relief: the German Constitutional Court prohibits a sentence of life without parole for murder while the U.S. Supreme Court upholds the same sentence for possession of a pound and a half of cocaine.2 Our appetite for vengeance sometimes seems insatiable: politicians make careers out of being tough on crime, only to lose elections to those who are yet tougher;3 Alabama sheriffs deny food to inmates to turn a profit;4 jokes about raping prisoners are part of popular culture.5
A theory of liberal churches

Abstract There is a counterintuitive gap in the club theory of religion. While it elegantly accounts for the success of strict sectarian religious groups in recruiting members and maintaining commitment, it is less satisfactory when attempting to account for groups requiring neither extreme nor zero sacrifice. Moderate groups are always a suboptimal choice for rational, utility maximizing agents within the original representative agent model. The corner solutions of zero and absolute sacrifice, however, are rarely observed empirically compared to the moderate intermediate. In this paper, we extend the original model to operate within an agent-based computational context, with a distribution of heterogeneous agents occupying coordinates in a two dimensional lattice, making repeated decisions over time. Our model offers the possibility of successful moderate groups, including outcomes wherein the population is dominated by moderate groups. The viability of moderate groups is dependent on extending the model to accommodate agent heterogeneity, not just within the population of agents drawn from, but heterogeneity within groups. Moderate sacrifice rates mitigate member free riding and serve as a weak screening device that permits a range of agent types into the group. Within-group heterogeneity allows agents to benefit from the differing comparative advantages of their fellow members.
Credit Risk and Disaster Risk

Abstract Credit spreads are large, volatile, and countercyclical, and recent empirical work suggests that risk premia, not expected credit losses, are responsible for these features. Building on the idea that corporate debt, while fairly safe in ordinary recessions, is exposed to economic depressions, this paper embeds a trade-off theory of capital structure into a real business cycle model with a small, exogenously timevarying risk of economic disaster. The model replicates the level, volatility and cyclicality of credit spreads, and variation in the corporate bond risk premium amplifies macroeconomic fluctuations in investment, employment, and GDP. (JEL E13, E22, E23, E24, E32, E44, G32)
Introduction: Property and Language, or, the Ghost of the Fifth Panel

In this introductory lecture to the "Symposium on The Properties of Carol Rose," the author discusses a panel topic that dropped away from the original program plan, that is, "Property and Language." She argues that though formally missing from the symposium, modes of language and communication - understood broadly as symbols, stories, and pictures - are critical to the understanding of property, since so much of property consists of the signaling of claims and responses to those signals. She further argues that language and communication in property can act as a bridge between the humanities and law-and-economics in the study of law more generally. She then examines some communicative issues that appear in the symposium's other topics - commons and the public domain; nature; takings; and gifts, bargains and power.
Through what mechanisms do protected areas affect environmental and social outcomes

To develop effective protected area policies, scholars and practitioners must better understand the mechanisms through which protected areas affect social and environmental outcomes. With strong evidence about mechanisms, the key elements of success can be strengthened, and the key elements of failure can be eliminated or repaired. Unfortunately, empirical evidence about these mechanisms is limited, and little guidance for quantifying them exists. This essay assesses what mechanisms have been hypothesized, what empirical evidence exists for their relative contributions and what advances have been made in the past decade for estimating mechanism causal effects from non-experimental data. The essay concludes with a proposed agenda for building an evidence base about protected area mechanisms.
Why Russian Peasants Remain in Collective Farms: A Household Perspective on Agricultural Restructuring

This paper seeks to understand what motivates collective farm employees-share-holders to remain in collective structures rather than exercise their legally sanctioned right to leave with land and property shares. On the basis of a 1999 survey of 181 collective farm households and analysis of regional agricultural policies in Leningrad and Saratov oblasts, the paper examines divergent overt and covert benefits that employees derive from association with market-oriented versus less reformed collective agricultural producers. The paper relates the structure of employee incentives to regional-level agricultural policies and to the divergent effects these policies have on the depth and pattern of structural transformations of agricultural production. Journal of Economic Literature, Classification Numbers: O18, Q10, Q15. 5 figures, 15 tables, 38 references.
A note on budget balance under interim participation constraints: the case of independent types

We provide a simple proof of the equivalence between ex ante and ex post budget balance constraints in Bayesian mechanism design with independent types when participation decisions are made at the interim stage. The result is given an interpretation in terms of efficient allocation of risk.
The Optimal Conduct of Monetary Policy with Interest on Reserves

In a world with interest on reserves, the central bank has two distinct tools that it can use to raise the short-term policy rate: it can either increase the interest it pays on reserve balances, or it can reduce the quantity of reserves in the system. We argue that by using both of these tools together, and by broadening the scope of reserve requirements, the central bank can simultaneously pursue two objectives: it can manage the inflation-output tradeoff using a Taylor-type rule, and it can regulate the externalities created by socially excessive shortterm debt issuance on the part of financial intermediaries. (JEL E43, E52, E58, G21)
Bayesian and Frequentist Inference in Partially Identified Models

A large sample approximation of the posterior distribution of partially identified structural parameters is derived for models that can be indexed by a finite-dimensional reduced form parameter vector. It is used to analyze the dierences between frequentist confidence sets and Bayesian credible sets in partially identified models. A key dierence is that frequentist set estimates extend beyond the boundaries of the identified set (conditional on the estimated reduced form parameter), whereas Bayesian credible sets can asymptotically be located in the interior of the identified set. Our asymptotic approximations are illustrated in the context of simple moment inequality models and a numerical illustration for a two-player entry game is provided.
Article 2B as Legal Software for Electronic Contracting - Operating System or Trojan Horse

The proposed draft of Article 2B of the Uniform Commercial Code can be thought of as akin to a complex computer software suite which seeks to dominate a market by offering all things to all people. The author suggests, however, that Article 2B's electronic contracting rules interoperate poorly with existing digital signature laws, and with some forms of electronic commerce. The author also questions whether Article 2B is the proper means to enact controversial rules that ordinarily would make consumers liable for fraudulent uses of their digital signatures by third parties. After considering Article 2B's potential interaction with existing digital signature laws, state consumer laws and liability rules, and the practices of Certificate Authorities, the author suggests that Article 2B still contains several bugs in its code and is therefore still not
Loan Syndication and Credit Cycles

Cyclicality in the supply of business credit has been the focus of a considerable amount of research. This cyclicality can stem from shocks to borrowers’ collateral, which affect firms’ ability to raise capital if agency and information problems are significant (Ben S. Bernanke and Mark Gertler 1989). Or it can stem from shocks to bank capital, which affect the supply of bank loans if agency and information problems limit the ability of banks to raise additional capital (Bernanke 1983). Both of these channels may have been at work during the financial crisis that started in 2007. Ran Duchin, Oguzhan Ozbas, and Berk A. Sensoy (2010) show that firms with more collateral were better able to withstand the contraction in credit, and Victoria Ivashina and David Scharfstein (2010) show that reductions in bank capital had an adverse effect on lending. In this paper, we examine cyclicality in the supply of credit in the context of modern forms of banking, often referred to as the “originateto-distribute” model. In particular, we are interested in the role of syndicated lending. In traditional bank lending—the focus of most models of banking—banks originate and hold loans on their balance sheets. This exposes banks to risk but provides them with strong incentives to screen and monitor borrowers (Douglas W. Diamond 1984). Over the last 20 years, however, the development and growth of the syndicated loan market has enabled a bank to originate a loan but retain only a fraction of it. On average, the originating bank (or “lead bank”) retains about a third of each syndicated loan and sells the remaining share to a syndicate of investors, which includes banks and institutional investors such as pension funds, mutual funds, hedge funds, and sponsors of structured Loan Syndication and Credit Cycles
The search for economics talent: Doctoral completion and research productivity

Economists hold an annual talent search in which students from around the world apply to doctoral programs and economics departments. Top economics PhD programs seek candidates with the preparation, aptitude, drive, and creativity to become academic professionals whose research will advance the frontiers of the discipline. Admission committee members must judge students’ potential economic talent based on the evidence provided in the application folders, which includes standardized test scores, course selection and grades, quality of the undergraduate institution, fellow economists’ evaluations, and other relevant information. Due to the nonobservability of important characteristics, the admission committee’s task of matching opportunity with talent constitutes a signaling problem, as modeled by Michael A. Spence (1973). What information, then, credibly signals otherwise unobservable economics talent? Viewing quantitative Graduate Record Examination (GRE) scores as a proxy for ability, Ronald G. Ehrenberg and Panagiotis G. Mavros (1995) found that these scores failed to predict PhD completion or time-to-degree for 25 years of economics PhD students at Cornell University. Attributing that result to a poor proxy for ability, they recommended obtaining a richer set of information about a student’s “true ability” by using, for example, the quality of applicants’ undergraduate institution, information from letters of recommendation, and the graduate committee’s ranking. The Search for Economics Talent: Doctoral Completion and Research Productivity
A Test of Political Control of the Bureaucracy: The Case of Mergers

This paper tests a model of political control of the bureaucracy using a data set of mergers evaluated by the Federal Trade Commission between 1983 and 2000. The results support a sophisticated control model in which the President sets the agenda within the scope of policies acceptable to Congress. Changes in Presidential administration and in the composition of Congress can, but do not necessarily, affect merger policy. Instead, the shift in policy depends on how the institutions of the Presidency and Congress interact both in the previous and current periods.
A Balance Sheet Approach to Financial Crisis

The paper lays out an analytical framework for understanding crises in emerging markets based on examination of stock variables in the aggregate balance sheet of a country and the balance sheets of its main sectors (assets and liabilities). It focuses on the risks created by maturity, currency, and capital structure mismatches. This framework draws attention to the vulnerabilities created by debts among residents, particularly those denominated in foreign currency, and it helps to explain how problems in one sector can spill over into other sectors, eventually triggering an external balance of payments crisis. The paper also discusses the potential of macroeconomic policies and official intervention to mitigate the cost of such a crisis.
Internet cautions: Experimental games with internet partners

We report the results of experiments conducted over the internet between two different laboratories. Each subject at one site is matched with a subject at another site in a trust game experiment. We investigate whether subjects believe they are really matched with another person, and suggest a methodology for ensuring that subjects' beliefs are accurate. Results show that skepticism can lead to misleading results. If subjects do not believe they are matched with a real person, they trust too much: i.e., they trust the experimenter rather than their partner.
Have financial markets become more informative

Abstract The finance industry has grown, financial markets have become more liquid, information technology has been revolutionized. But have financial market prices become more informative? We derive a welfare-based measure of price informativeness: the predicted variation of future cash flows from current market prices. Since 1960, price informativeness has increased at longer horizons (three to five years). The increase is concentrated among firms with greater institutional ownership and share turnover, firms with options trading, and growth firms. Prices have also become a stronger predictor of investment, and investment a stronger predictor of cash flows. These findings suggest increased revelatory price efficiency.
Strategic Auditor Behavior and Going-Concern Decisions

This paper analyzes a game-theoretic model in which a client can potentially avoid a going-concern opinion and its self-fulfilling prophecy by switching auditors. Incumbent auditors are less willing to express a going-concern opinion the more credible the client's threat of dismissal and the stronger the self-fulfilling prophecy effect. Similarly, the client is more willing to switch auditors the more likely it is that auditors' reporting judgments will differ and the stronger the self-fulfilling prophecy effect. Further, with greater noise in the auditor's forecast of client viability, the auditor tends to express fewer going-concern opinions.