cssi/SciSciGPT-SciSciNet huggingface dataset:
What Fuels the Boom Drives the Bust:Regulation and the Mortgage Crisis

The weakly regulated independent mortgage companies (IMCs) had a vastly disproportional contribution to the expansion in risky credit during the mortgage boom and to the ensuing foreclosure crisis. We exploit a quasi-experimental setting, created by the inconsistency of state lender regulations between banks and IMCs and their heterogeneity across states, to isolate the impact of regulation on lending standards using county-pairs straddling state borders. We find that weaker state regulation of IMCs is associated with a sharper expansion of IMCs, particularly in risky high-yield loans, which were also of worse quality in the weakly regulated states, based on subsequent delinquency.
Short‐ and Long‐Term Effects of Multimarket Trading

Abstract We analyze both short- and long-term effects of multimarket trading by examining the entries of multiple markets in three actively traded Exchange Traded Funds (DIA, QQQ, and SPY). Using a time series analysis, we follow the market evolution of these ETFs with regard to order flow fragmentation, trading activity, trading costs, volatility, price efficiency, and price impact. We find that large scale entries, mainly the NYSE, improve overall market quality while small scale entries have ambiguous effects. We find evidence that the competition effect dominates the fragmentation effect over a long-term horizon. Market fragmentation is associated with declines in trading costs. We also present evidence against the view that multimarket trading harms price efficiency and increases price volatility. Additionally, we find that the order handling rules help mitigate the fragmentation effect and facilitate the competition effect. JEL Classification: G14; G18 Key Words: Exchange Traded Funds, Multimarket Trading, Competition, Fragmentation, Consolidation
Preserving privacy when sharing distributed transactional data

The need to preserve privacy when sharing data across organizations has been recognized as an important issue. In the context of transactional data, privacy is usually preserved by explicitly hiding sensitive information prior to sharing. Often, the data to be shared is stored in a distributed manner by the data owner, where the database is horizontally partitioned to reflect the firms operations in different locations or regions. In such situations, the owner must consider hiding sensitive patterns not only in the consolidated database but also patterns that occur within each partition of the distributed database. We present an Integer Programming (IP) formulation for minimizing data distortion to a distributed database while hiding sensitive patterns. The formulation can become large for distributed databases with multiple partitions and the IP may not be solvable. For such situations, we propose three alternative procedures - Procedure A, Procedure B and Procedure Hybrid - that exploit the distributed nature of the data to decompose the larger problem into a series of smaller problems. We examine the performance of these procedures using computational experiments. The major findings are: i) problems of sizes that cannot be solved to optimality can be solved by these three procedures easily; ii) the differences between the solutions obtained from either Procedure A or Procedure B and the optimal solutions are quite small; and iii) the hybrid procedure, which incorporates in its formulation commonalities between the solutions provided by the other two procedures, is able to obtain solutions that are even closer to the optimal.
Devaluation and Monetary Policy in Developing Countries: A General Equilibrium Model for Economies Facing Financial Constraints

The short-run response of output to devaluation and monetary policies is investigated for economies where firms are constrained to finance in advance their working capital by borrowing solely from domestic banks. It is shown that in contrast with traditional theories, but in accordance with recent theoretical and empirical analyses for developing countries, an anticipated devaluation or an anticipated decrease in the level of the exogenous component of money might result in a short-run output contraction even if prices fully adjust to clear markets. In addition, the paper analyses how output responds when a devaluation is unanticipated or when agents cannot distinguish between temporary and permanent monetary shocks.
Volatility can be detrimental to option values

Abstract The value of digital options (both European and American types) can have an inverse-U shape relationship with the volatility of the underlying process! This seemingly counterintuitive proposition is driven by a particular feature of Martingale processes bounded from below (including the geometric Brownian motion (GBM) process). We show that in such processes a higher variance parameter may reduce the probability mass of realizations above the expected value. When the volatility approaches infinity, the probability of hitting a barrier above the mean goes to zero. Our finding is in contrast to the common belief that a higher volatility always increases all option values. Digital options are observed in a variety of economic applications, including mortgage tax, emission fines, venture capital, and credit risk models.
A pawn in someone else's game?: The cognitive, motivational, and paradigmatic barriers to women's excelling in negotiation

Women's relatively worse performance in negotiation is often cited as an explanation for gender differences in advancement and pay within organizations. We review key findings from the past twenty years of research on gender differences in negotiation. Women do underperform relative to men in negotiation, but only under limited circumstances, which means the performance gap is unlikely due to lesser skills on their part. The barriers between women and negotiation excellence are of three types: cognitive, motivational, and paradigmatic. Cognitive barriers stem from negative stereotypes about women's negotiating abilities. Motivational barriers stem from desire to prevent women negotiators from excelling in a masculine domain. Paradigmatic barriers stem from how negotiation is currently studied. We call for greater attention to motivational barriers and for changes to the negotiation paradigm. Women negotiators are not incompetent, and training them to negotiate more like men is not obviously the solution. In fact, women have greater concern for others than men do, and their cooperativeness elevates collective intelligence and enables ethical behavior. Under a new paradigm of negotiation, the value of these strengths could become more readily apparent. In particular, we advocate for greater attention to long-term relationships, subjective value, and relational capital, all of which may have important economic implications in real world negotiations.
The Game of Pleasant Diversion: Can We Level the Playing Field for the Disabled Athlete and Maintain the National Pastime, in the Aftermath of PGA Tour, Inc. v. Martin: An Empirical Study of the Disabled Athlete

Kenny Walker, a deaf football player; Jim Abbott, a one-handed professional baseball player; Tom Dempsey, a physically disabled professional football kicker; Brad Doty, a paralyzed auto racer; and Nick Ackerman, a wrestler with amputated legs, have all competed at the highest level of sports. Persons with mental illness, individuals who are blind, and students with hearing impairments are seeking an opportunity to compete in fair competition with their non-disabled competitors. Can this occur in a fair, open, and just manner between competing athletes?Does the Americans with Disabilities Act of 1990 ("ADA"), the landmark civil rights act protecting an individual with a physical or mental impairment, require leveling the playing field in order for the disabled athlete to compete fairly? Will we see two bounces in tennis at Wimbledon, four strikes at Yankee Stadium, enlarging the basketball rim during March Madness, or a head start for track and field athletes during the Olympics?Did Casey Martin, a professional golfer with Klippel-Trenaunay-Weber Syndrome, a degenerative circulatory condition affecting blood flow, who was permitted by the United States Supreme Court to use a golf cart while his competition was required to walk during the PGA Tour, forever change the rules of the game? Will the ADA's reasonable accommodation provisions fundamentally alter the game? Can one level the playing field in sports without undermining the essence of athletic competition?In comparing and contrasting the level of competition ranging from little league baseball and neighborhood soccer leagues for children, to high school athletics, National Collegiate Athletic Association ("NCAA") college programs, and ultimately to professional and Olympic sports, is there room for the disabled athlete to compete fairly, openly, and equitably without disturbing the precious goal of fair competition? How does the ADA impact various levels of competition as the game evolves from a pleasing or amusing pastime for the young athlete to fierce competition by the elite athlete, particularly when it involves our national pastime?Empirical data provided in this Article is submitted to serve as a backdrop for purposes of elaboration and comparison. One hundred fifteen high school athletic directors in Virginia, Pennsylvania, and Maryland, and twenty-three college athletic programs were surveyed to elicit their opinions on the provision of accommodations to the disabled high school and college athlete in a variety of sports. Data was collected on the type of disability, the particular sport, and the nature of the accommodation permitted, as well as data on the denial of the accommodation, with explanations provided.
Controlling Investment Decisions: Depreciation- and Capital Charges

This paper examines a multiperiod principal-agent model in which a divisional manager has superior information regarding the profitability of an investment project available to his division. The manager also contributes to the periodic operating cash flows of his division through personally costly effort. We demonstrate that it is optimal for the principal to delegate the investment decision and to base the manager's compensation on the residual income performance measure. Our analysis points to a class of depreciation rules and to a particular capital charge rate which together ensure that a profitable (unprofitable) project makes a positive (negative) contribution to residual income in every period. As a consequence, the compensation parameters for each period can be chosen freely so as to address the moral hazard problems without impacting the manager's investment incentives.
Using Elasticities to Derive Optimal Income Tax Rates

This paper derives optimal income tax formulas using compensated and uncompensated elasticities of earnings with respect to tax rates. A simple formula for the high income optimal tax rate is obtained as a function of these elasticities and the thickness of the top tail of the income distribution. In the general non-linear income tax problem, this method using elasticities shows precisely how the different economic effects come into play and which are the key relevant parameters in the optimal income tax formulas of Mirrlees. The optimal non-linear tax rate formulas are expressed in terms of elasticities and the shape of the income distribution. These formulas are implemented numerically using empirical earning distributions and a range of realistic elasticity parameters.
Game Theory and Cold War Rationality: A Review Essay

This essay reviews new histories of the role of game theory and rational decision making in shaping the social sciences, economics among them, in the postwar period. The recent books The World the Game Theorists Made by Paul Erickson and How Reason Almost Lost Its Mind: The Strange Career of Cold War Rationality by Paul Erickson, Judy Klein, Lorraine Daston, Rebecca Lemov, Thomas Sturm, and Michael Gordin raise a number of complex historical questions about the interconnections among game theory, utility theory, decision theory, optimization theory, information theory, and theories of rational choice. Moreover, the contingencies of time, place, and person call into question the usefulness of economists' linear narratives about the autonomous and progressive development of modern economics. The essay finally reflects on the challenges that these issues present for historians of recent economics.
The Corporation as Insider Trader

With regard to issuer purchases, some of the traditional policy rationales against insider trading do not apply or apply with less force. Nevertheless, courts, commentators, and the SEC have all stated or assumed that a public corporation violates rule 10b-5 by buying its own shares in the market based on material, nonpublic information. In rule 10b-5 cases involving face-to-face transactions, several circuit courts have ruled that the company may not purchase its own stock based on material information not known to the seller. No good reason exists not to apply these precedents to stock market trades by issuers, especially because block trades blur the distinction between face-to-face transactions and stock market trades. Some decisions involving face-to-face transactions have relied on a fiduciary duty running from the corporation to the seller. Although this duty has some appeal, it is unsupported by traditional state law fiduciary duty analysis. The company can act only through its board of directors, officers, employees, and other agents. These actors are obligated to act in the best interests of the corporation, which may not coincide with the best interests of an individual shareholder transacting business with the company. Under rule 10b-5, the most compelling reason for issuer insider trading liability may simply be that no strong reason exists to distinguish the corporation from a corporate insider, i.e., an employee or independent contractor. Such an insider has a Chiarella/Dirks classical relationship with the innocent shareholder on the other side of the insider trade because of a mutual relationship with the issuer. When an issuer trades on material, nonpublic information, innocent shareholders have a classical relationship with the corporation because of their investment. In other words, the relationship between the issuer and one of its shareholders is, if anything, closer than the relationship between an employee/independent-contractor and a shareholder.
Path Data in Marketing: An Integrative Framework and Prospectus for Model Building

Many data sets, from different and seemingly unrelated marketing domains, all involve paths---records of consumers' movements in a spatial configuration. Path data contain valuable information for marketing researchers because they describe how consumers interact with their environment and make dynamic choices. As data collection technologies improve and researchers continue to ask deeper questions about consumers' motivations and behaviors, path data sets will become more common and will play a more central role in marketing research. To guide future research in this area, we review the previous literature, propose a formal definition of a path (in a marketing context), and derive a unifying framework that allows us to classify different kinds of paths. We identify and discuss two primary dimensions (characteristics of the spatial configuration and the agent) as well as six underlying subdimensions. Based on this framework, we cover a range of important operational issues that should be taken into account as researchers begin to build formal models of path-related phenomena. We close with a brief look into the future of path-based models, and a call for researchers to address some of these emerging issues.
From Dispute to Decision: Suing Polluters in China*

This article traces a civil environmental lawsuit from dispute to decision to explore how environmental law works, as well as how lawyers and litigants try to work the law. Detailing ground-level encounters with a legal system promoted and carefully watched by political elites offers a fresh perspective on the ways the past 30 years of legal reforms have affected the experience of China's court users. Amid accounts of financial stress, lawyer–client tensions and the hunt for elite allies, what emerges is a story of variation. Although plaintiffs and lawyers agree that environmental cases are hard and wringing concessions out of polluters requires remarkable persistence, the process sometimes creaks forward so that appraisals are conducted on time, help is solicited and compensation won. How Chinese courts work (and how well they work) depends on local circumstances, an insight that suggests that disaggregating expansive concepts like rule of law is a helpful way to explore complexity instead of glossing over it.
The role of corporate board structure in attracting foreign investors

Abstract A long-recognized phenomenon in capital markets is the underinvestment in foreign equity securities, known as equity home bias. Our study examines the effect of board independence on the firm's ability to attract foreign equity capital. After accounting for potential endogeneity, we document that U.S. and non-U.S. foreign investors exhibit a strong preference for firms with more independent corporate boards. Further, our analysis indicates that the positive relation between board independence and foreign ownership is significantly stronger in countries with less developed legal institutions and poor external protection of investor rights. We suggest that it is in these countries that firm-determined characteristics such as independent boards can be most beneficial in attracting capital. We also find that institutional investors are more responsive to the impact of independent corporate boards than are other types of investors.
Can probability theory deal with entrepreneurship

The Austrian theory of entrepreneurship emphasizes the importance of epistemic heterogeneity and the unlistability of the set of all possibilities. A similar concern with what has been called “the art of choosing the space of possibilities” is an important part of Bayesian model selection. Both Austrian and Bayesian authors view the common knowledge assumption as an unrealistic and unnecessary restriction. This coincidence of concerns leads to a joint theory of entrepreneurship. Three important benefits result from this merger: (1) the ability to use Itti & Baldi’s Bayesian theory of surprise to empirically measure radical surprise and improve the Betrand competition model as a consequence, (2) dealing with the unlistability problem, and (3) better understanding why the emergence of common knowledge is always the outcome of a social process rather than an inherent consequence of “rationality”.
Do subsidiaries of foreign MNEs invest more in R&D than domestic firms?

Abstract Despite the growing involvement of multinational enterprises (MNEs) in foreign-based research and development (RD however, they have similar internal R&D investments compared to domestic firms. These findings support the notion that the transfer of technology and knowledge from other parts of the MNE acts as a substitute for the purchase of external R&D while internal R&D acts as a complement to the technology and knowledge transferred from other parts of the MNE.
THE INFORMAL SECTOR: AN EQUILIBRIUM MODEL AND SOME EMPIRICAL EVIDENCE FROM BRAZIL

We test implications of a simple equilibrium model of informality using a survey of 48,000+ small firms in Brazil. In the model, agents' ability to manage production differs and informal firms face a higher cost of capital and limitation on size, although these informal firms avoid tax payments. As a result, informal firms are managed by less able entrepreneurs, are smaller, and employ a lower capital–labor ratio. The model predicts that the interaction of an index of observable inputs to entrepreneurial ability and formality is positively correlated with firm size, which we verify in the data. Using the model, we estimate that informal firms in our dataset faced at least 1.3 times the cost of capital of formal firms.
Watergate, Multiple Conspiracies, and the White House Tapes

On January 1, 1975, John Mitchell, former United States Attorney General, John Ehrlichman, former Chief White House Assistant for Domestic Affairs, H.R. Haldeman, former White House Chief of Staff, and Robert Mardian, former Assistant Attorney General, were convicted of conspiracy1 for their involvement in what is generally known as “Watergate.”2 The Watergate conspiracy trial, presided over by Judge John Sirica, had run from October 1, 1974 until December 27, 1974. The trial included the in-court testimony of most of the figures involved in the Watergate scandal,4 and the playing of thirty of the “White House tapes.”5 The purpose of this Symposium article is to discuss whether the evidence presented at the Watergate trial is better understood as evidence of multiple conspiracies, as argued by two of the defendants,6 or as a single conspiracy as argued by the prosecution. The article first will set forth the law on multiple conspiracies and apply that law to the evidence presented at the Watergate conspiracy trial. The article will then discuss whether the admission into evidence of certain White House tapes premised on the single conspiracy view may have prejudiced any of the convicted defendants.
Seeking safety: The relation between CEO inside debt holdings and the riskiness of firm investment and financial policies.

Abstract CEO inside debt holdings (pension benefits and deferred compensation) are generally unsecured and unfunded liabilities of the firm. Because these characteristics of inside debt expose the CEO to default risk similar to that faced by outside creditors, theory predicts that CEOs with large inside debt holdings will display lower levels of risk-seeking behavior ( Jensen and Meckling, 1976 ). Consistent with the theoretical predictions, we find a negative association between CEO inside debt holdings and the volatility of future firm stock returns, R&D expenditures, and financial leverage, and a positive association between CEO inside debt holdings and the extent of diversification and asset liquidity. Collectively, our results provide empirical evidence suggesting that CEOs with large inside debt holdings prefer investment and financial policies that are less risky.
Transparency and liquidity uncertainty in crisis periods

Abstract We document, for a global sample, that firms with greater transparency (based on accounting standards, auditor choice, earnings management, analyst following and forecast accuracy) experience less liquidity volatility, fewer extreme illiquidity events and lower correlations between firm-level liquidity and both market liquidity and market returns. Results are robust to numerous sensitivity analyses, including controls for endogeneity and propensity matching. Results are particularly pronounced during crises, when liquidity variances, covariances and extreme illiquidity events increase substantially, but less so for transparent firms. Finally, liquidity variance, covariance and the frequency of extreme illiquidity events are all negatively correlated with Tobin's Q.
A Least Squares Procedure for Benefit Segmentation with Conjoint Experiments

A popular procedure for benefit segmentation based on conjoint experiments has been to estimate individual-level part worths and then form nonoverlapping clusters of consumers with similar estimate...
Near-Optimal Compressed Sensing Guarantees for Total Variation Minimization

Consider the problem of reconstructing a multidimensional signal from an underdetermined set of measurements, as in the setting of compressed sensing. Without any additional assumptions, this problem is ill-posed. However, for signals such as natural images or movies, the minimal total variation estimate consistent with the measurements often produces a good approximation to the underlying signal, even if the number of measurements is far smaller than the ambient dimensionality. This paper extends recent reconstruction guarantees for two-dimensional images x ∈ ℂN2 to signals x ∈ ℂNd of arbitrary dimension d ≥ 2 and to isotropic total variation problems. In this paper, we show that a multidimensional signal x ∈ ℂNd can be reconstructed from O(s dlog(Nd)) linear measurements y = Ax using total variation minimization to a factor of the best s-term approximation of its gradient. The reconstruction guarantees we provide are necessarily optimal up to polynomial factors in the spatial dimension d.
"Partial-Birth Abortion" Is Not Abortion: Carhart II's Fundamental Misapplication of Roe

In explaining his constitutional objection to Wisconsin's partial-birth abortion ban, Judge Richard Posner stated: We . . . do not doubt that if in the course of a normal labor the mother asked her obstetrician to kill the baby in the birth canal and he did so, the state could criminalize this act as infanticide. . . . But [in a partial-birth abortion] . . . there is no issue of infanticide, of killing a live baby that is half-born. Posner thus contrasts killing during "normal labor" with partial-birth abortion. The former can be constitutionally prohibited, but the latter cannot. Why the distinction? Because to Posner the former involves "killing a live baby that is half-born," whereas the latter does not. This Article will show that Judge Posner is correct to assert that killing a baby in the midst of the birth process is not constitutionally protected. The Supreme Court in Roe v. Wade strongly implied that the abortion right is not this broad, and Judge Posner instinctively agrees. But Judge Posner is wrong to say that partial-birth abortion does not kill "a live baby that is half-born." This Article will demonstrate that the partial-birth procedure in fact does kill a baby during its birth. Ban proponents have therefore been correct in their long-standing argument that the partial-birth procedure is not really an abortion. Consequently, Roe, properly understood, is inapplicable to partial-birth abortion bans. Courts, however, including the United States Supreme Court in Carhart II, have nonetheless routinely used Roe/Casey's analytical framework to evaluate bans. This common mistake completely undermines current partial-birth abortion jurisprudence. The rational basis test, not Roe/Casey, is the proper evaluative tool. Using the correct standard could very well have significant consequences for future challenges to the Federal Ban and to the bans of the various states.
Economic resilience to transportation failure: a computable general equilibrium analysis

This study develops and applies a multimodal computable general equilibrium (CGE) framework to investigate the role of resilience in the economic consequences of transportation system failures. Vulnerability and economic resilience of different modes of transportation infrastructure, including air, road, rail, water and local transit, are assessed using a CGE model that incorporates various resilience tactics including modal substitution, trip conservation, excess capacity, relocation/rerouting, and service recapture. The linkages between accessibility, vulnerability, and resilience are analyzed. The model is applied to the transportation system failures in the aftermath of Hurricane Katrina to illustrate its capabilities. The analytical framework, however, has broader applications and can provide insights for resource allocations to enhance emergent responses to unexpected events and to improve resilient design of transportation infrastructure systems.
On the Unimportance of Machinery

Abstract Economists and economic historians tend to use the terms capital and machinery interchangeably, even though machinery rarely consitutes one-fifth and sometimes is as little as one-tenth of a nation's reproducible tangible assets. This habit can distort the way economists think and talk about important issues. In economic history, disproportionate attention to machinery helps explain why the “Habakkuk” debate, which has now spanned several decades, has been premised on the need to rationalize empirical regularities the opposite of those in need of explanation. In manufacturing and, indeed, in the economy in the aggregate, the United States was less, not more capital intensive than Britain in 1860.
E Pluribus Unum-Out of Many, One: Why the United States Needs a Single Financial Services Agency

The United States needs to consolidate the over 115 existing state and federal agencies that regulate banking, securities and insurance firms and their products and services into a single, federal financial services agency; a U.S. Financial Services Agency (“US FSA”). The US FSA would be able to more effectively regulate the U.S. financial services industry than the existing regulatory regime. The current U.S. financial regulatory regime suffers from a range of problems, including an inability to anticipate and plan for future financial crises, an inability by regulators to quickly adapt to market innovations and developments, inconsistent regulations for financial products and firms that are competitors in the market, and the capture of agencies focused on a single sector of the financial services industry by the firms that they regulate. In addition, the U.S. financial regulatory regime is one of the most expensive in the world, costing 12 times more than the United Kingdom’s regime and 86 times more than Germany’s regime. The US FSA would eliminate or significantly reduce these problems, as well as provide more cost effective and transparent regulation of the financial services industry than is available under the current system.
Polyhedral Methods for Adaptive Choice-Based Conjoint Analysis

Abstract The authors propose and test a new “polyhedral” choice-based conjoint analysis question-design method that adapts each respondent’s choice sets on the basis of previous answers by that respondent. Polyhedral ’interior-point” algorithms design questions that quickly reduce the sets of partworths that are consistent with the respondent’s choices. To identify domains in which individual adaptation is promising (and domains in which it is not), the authors evaluate the performance of polyhedral choice-based conjoint analysis methods with Monte Carlo experiments. They vary magnitude (response accuracy), respondent heterogeneity, estimation method, and question-design method in a 4 × 23 experiment. The estimation methods are hierarchical Bayes and analytic center. The latter is a new individual-level estimation procedure that is a by-product of polyhedral question design. The benchmarks for individual adaptation are random designs, orthogonal designs, and aggregate customization. The simulations sugges...
What Drives Sell-Side Analyst Compensation at High-Status Investment Banks?

We use proprietary data from a major investment bank to investigate factors associated with analysts’ annual compensation. We find compensation to be positively related to “All-Star” recognition, investment-banking contributions, the size of analysts’ portfolios, and whether an analyst is identified as a top stock picker by the Wall Street Journal. We find no evidence that compensation is related to earnings forecast accuracy. But consistent with prior studies, we find analyst turnover to be related to forecast accuracy, suggesting that analyst forecasting incentives are primarily termination based. Additional analyses indicate that “All-Star” recognition proxies for buy-side client votes on analyst research quality used to allocate commissions across banks and analysts. Taken as a whole, our evidence is consistent with analyst compensation being designed to reward actions that increase brokerage and investment-banking revenues. To assess the generality of our findings, we test the same relations using compensation data from a second high-status bank and obtain similar results.
A randomized controlled trial of cognitive-behavioral therapy for generalized anxiety disorder with integrated techniques from emotion-focused and interpersonal therapies.

Objective: Recent models suggest that generalized anxiety disorder (GAD) symptoms may be maintained by emotional processing avoidance and interpersonal problems. Method: This is the first randomized controlled trial to test directly whether cognitive-behavioral therapy (CBT) could be augmented with the addition of a module targeting interpersonal problems and emotional processing. Eighty-three primarily White participants (mean age 37) with a principle diagnosis of GAD were recruited from the community. Participants were assigned randomly to CBT plus supportive listening (n 40) or to CBT plus interpersonal and emotional processing therapy (n 43) within a study using an additive design. Doctoral-level psychologists with full-time private practices treated participants in an outpatient clinic. Using blind assessors, participants were assessed at pretreatment, posttreatment, 6-month, 1-year, and 2-year follow-up with a composite of self-report and assessor-rated GAD symptom measures (the Penn State Worry Questionnaire; T. J. Meyer, M. L. Miller, R. L. Metzger, & T. D. Borkovec, 1990; Hamilton Anxiety Rating Scale; M. Hamilton, 1959; assessor severity rating; State–Trait Anxiety Inventory-Trait Version; C. D. Spielberger, R. L. Gorsuch, R. Lushene, P. R. Vagg, & G. A. Jacobs, 1983) as well as with indices of clinically significant change. Results: Mixed models analysis of all randomized participants showed very large within-treatment effect sizes for both treatments (CI [.40, .28], d 1.86) with no significant differences at post (CI [.09, .07], d .07) or 2-year follow-up (CI [.01, .01]), d .12). There was also no statistical difference between compared treatments on clinically significant change based on chi-square analysis. Conclusions: Interpersonal and emotional processing techniques may not augment CBT for all GAD participants. Trial Registry name: Clinical Trials.gov, Identifier: NCT00951652.
Fictions of medical minds: Victorian novels and medical epistemology.

Victorian mental science led both scientists and nonscientists to consider whether between reason and emotion, thinking and feeling there exists a third type of thought, "thinking without thinking," that can serve as an epistemological alternative to reasoned thought. Drawing on physiological theories of mental reflex action, mid-nineteenth-century scientists made the startling claim that the mind performs some of its most complicated, innovative, and creative work mechanically. In probing the realities, possibilities, and dangers of nondeliberate thought, Victorian novelists turned to the emphasis on "experience" in medical practice as a possible model for integrating tacit knowledge into a theory of learning and action. Today, bolstered by work in cognitive science on the central role of nondeliberate thought in complex as well as everyday decisions, the concept of "thinking without thinking" is again gaining recognition in terms that echo the nineteenth-century insistence on "unconscious cerebration" as a positive and pragmatic problem-solving mode.
Slavery, Reconstruction, and Bureaucratic Capacity in the American South

Conventional political economy models predict taxation will increase after franchise expansion to low-income voters. Yet, contrary to expectations, in ranked societies—where social status is a cleavage—elites can instead build cross-class coalitions to undertake a strategy of bureaucratic weakening to limit future redistributive taxation. We study a case where status hierarchies were particularly extreme: the post-Civil War American South. During Reconstruction, under federal oversight, per capita taxation was higher in counties where slavery had been more extensive before the war, as predicted by standard theoretical models. After Reconstruction ended, however, taxes fell and bureaucratic capacity was weaker where slavery had been widespread. Moreover, higher intrawhite economic inequality was associated with lower taxes and weaker capacity after Reconstruction in formerly high-slavery counties. These findings on the interaction between intrawhite economic inequality and pre-War slavery suggest that elites built cross-class coalitions against taxation where whites sought to protect their racial status.
Information Sharing in Supply Chains: An Empirical and Theoretical Valuation

We provide an empirical and theoretical assessment of the value of information sharing in a two-stage supply chain. The value of downstream sales information to the upstream firm stems from improving upstream order fulfillment forecast accuracy. Such an improvement can lead to lower safety stock and better service. Based on the data collected from a consumer packaged goods company, we empirically show that, if the company includes the downstream sales data to forecast orders, the improvement in the mean squared forecast error ranges from 7.1% to 81.1% across all studied products. Theoretical models in the literature, however, suggest that the value of information sharing should be zero for over half of our studied products. To reconcile the gap between the literature and the empirical observations, we develop a new theoretical model. Whereas the literature assumes that the decision maker strictly adheres to a given inventory policy, our model allows him to deviate, accounting for private information held by the decision maker, yet unobservable to the econometrician. This turns out to reconcile our empirical findings with the literature. These "decision deviations" lead to information losses in the order process, resulting in a strictly positive value of downstream information sharing. Furthermore, we empirically quantify and show the significance of the value of operations knowledge-the value of knowing the downstream replenishment policy. This paper was accepted by Serguei Netessine, operations management.
Fundamental properties of lower main-sequence stars

The field of exoplanet research has revitalized interest in M dwarfs, which have become favorite targets of Doppler and transit surveys. Accurate measurements of their basic properties such as masses, radii, and effective temperatures have revealed significant disagreements with predictions from stellar evolution theory in the sense that stars are larger and cooler than expected. These anomalies are believed to be due to high levels of activity in these stars. The evidence for the radius discrepancies has grown over the years as more and more determinations have become available; however, fewer of these studies include accurate determinations of the temperatures. The ubiquitous mass-radius diagrams featured in many new discovery papers are becoming more confusing due to increased scatter, which may be due in part to larger than realized systematic errors affecting many of the published measurements. A discussion of these and other issues is given here from an observer's perspective, along with a summary of theoretical efforts to explain the radius and temperature anomalies. (© 2013 WILEY-VCH Verlag GmbH & Co. KGaA, Weinheim)
To Groupon or Not to Groupon: The Profitability of Deep Discounts

We examine the profitability and implications of online discount vouchers, a relatively new marketing tool that offers consumers large discounts when they prepay for participating firms’ goods and services. Within a model of repeat experience good purchase, we examine two mechanisms whereby a discount voucher service can benefit affiliated firms: price discrimination and advertising. For vouchers to provide successful price discrimination, the valuations of consumers with access to vouchers must generally be lower than those of consumers who do not have access to vouchers. Offering vouchers tends to be more profitable for firms that are patient or relatively unknown, and for firms with low marginal costs. Extensions to our model accommodate the possibilities of firm price reoptimization and multiple voucher purchases. We find potential benefits of online discount vouchers to certain firms in certain circumstances, but vouchers are likely to increase firm profits under relatively narrow conditions.
The political economy of international trade and factor mobility

Abstract. Free trade in goods and factors is efficient. When we move away from economic theory and consider the policies actually followed by governments, we observe distortions being implemented both on goods and factors trades. It is natural then to question the relative merits of the two types of intervention, and the normative literature has provided only partial answers. We ask then why is the international flow of goods and factors not free, and the political economy literature has looked at the two issues only separately. In studying the determination of trade policy, a theoretical paradigm has emerged, focusing on the role of influence driven contributions. This approach has also found strong empirical support. The literature on the political economy of factor mobility, on the other hand, is fragmented. Distortions in labor and capital flows are typically the subject of different studies, and only recently a unified framework has been proposed. More work has to be done in this area as well as in integrating the political economy of trade and factor movements.
How could religious liberty be a human right

A growing number of scholars think “religious liberty” is a bad idea. The unfairness objection is that singling out religion for special protection is unjust to comparable nonreligious conceptions of the good. The distraction objection asserts that religious liberty is a misleading lens: oppression sometimes occurs along religious lines, but the underlying conflicts often are not really about religious difference. Both objections are sound, but under certain conditions religious liberty should nonetheless be regarded as a right. Law is inevitably crude. The state cannot possibly recognize each individual’s unique identity-constituting attachments. It can, at best, protect broad classes of ends that many people share. “Religion” is such a class. Where it is an important marker of identity for many people, it is an appropriate category of protection.
BOUNDING WRONG‐WAY RISK IN CVA CALCULATION

A credit valuation adjustment (CVA) is an adjustment applied to the value of a derivative contract or a portfolio of derivatives to account for counterparty credit risk. Measuring CVA requires combining models of market and credit risk to estimate a counterparty's risk of default together with the market value of exposure to the counterparty at default. Wrong-way risk refers to the possibility that a counterparty's likelihood of default increases with the market value of the exposure. We develop a method for bounding wrong-way risk, holding fixed marginal models for market and credit risk and varying the dependence between them. Given simulated paths of the two models, a linear program computes the worst-case CVA. We analyze properties of the solution and prove convergence of the estimated bound as the number of paths increases. The worst case can be overly pessimistic, so we extend the procedure by constraining the deviation of the joint model from a baseline reference model. Measuring the deviation through relative entropy leads to a tractable convex optimization problem that can be solved through the iterative proportional fitting procedure. Here, too, we prove convergence of the resulting estimate of the penalized worst-case CVA and the joint distribution that attains it. We consider extensions with additional constraints and illustrate the method with examples.
Expert Mining and Required Disclosure

In the social sciences, "data mining" sometimes refers pejo ratively to the repetitive use of classical statistical methods to find "evidence" that results from only random variation.1 Vari ous aspects of evidence and civil-procedure law disincentivize data mining by expert witnesses in federal civil litigation. But as many authors have noted through the years, resourceful attor neys can do data mining's dirty work by hiring multiple experts, asking each to provide an expert report on the same issue, and then put on the stand only the one who provides the most favor able report.2 This practice is often referred to as "expert shop ping" or "witness shopping."3 To emphasize its analogousness to data mining, though, I will use the term "expert mining." Nothing in the Federal Rules of Evidence or the Federal Rules of Civil Procedure (jointly, "the Rules") prevents expert
Forensic accounting corporations’ codes of ethics and standards of practice – a comparison

This is the first study to critically compare the codes of ethics and standards of practice of forensic accounting corporations and whether forensic accountants understand the difference between the codes and standards. This study examines the extent to which forensic accountants are knowledgeable about forensic accounting corporations’ codes and standards, and whether they are able to differentiate the differences between them. A survey of 182 forensic accountants found that a significant number of forensic accountants did not investigate the codes and standards prior to receiving their certifications. The results further revealed that a significant number of forensic accountants incorrectly believe that the codes and standards are substantially similar when they are significantly different. This raises questions regarding forensic accountants’ investigative ability. It raises further questions concerning forensic accountants’ commitment to maintaining high ethical standards and standards of practice. The results suggest a need for reform within the forensic certification industry, for the establishment of an independent agency to monitor and accredit forensic accounting corporations and their certifications, or alternatively for state or federal regulations to enforce minimum standards for forensic accounting corporations and the certifications.
Disabilityqueer: Federal Disability Rights Protection for Transgender People

The Americans with Disabilities Act does not protect everyone. It notably excludes people with Gender Identity Disorder (GID), an impairment involving the misalignment between one’s anatomy and gender identity. Many would say this is as it should be — gender nonconforming people are not impaired and so they should not be covered by disability law. But this argument misapprehends the reason that GID was excluded from the ADA in the first place. GID was excluded from the ADA because, in 1989, a small handful of senators believed that gender nonconformity — like pedophilia, pyromania, and kleptomania — was morally harmful to the community. In the eleventh hour of a marathon floor debate, and in the absence of an organized transgender lobby, the ADA’s sponsors and disability rights advocates reluctantly agreed to sacrifice GID and nine other mental impairments in exchange for passage in the Senate. The fact that Congress went out of its way to exclude GID, along with nine mental impairments that involve some harm to oneself or others, sends a strong symbolic message: people with GID have no civil rights worthy of respect. The ADA is a moral code, and people with GID are its moral castaways. In 2008, when Congress decided to expand the ADA’s definition of “disability” to protect more people, things should have been different for people with GID. Sadly, they were not. Instead of removing the GID exclusion once and for all, Congress enshrined its moral opposition to people with GID by preserving the exclusion intact. The ADA’s message to people with GID, and to the transgender community more broadly, is now clearer than ever: nearly twenty years after the passage of the ADA, people with GID are still despicable and even dangerous, and therefore undeserving of legal protection. The ADA’s moral code remains. In order to achieve true equality, transgender advocacy must rebut the moral case against transgender people. The ADA should play a prominent role in this project because the ADA’s GID exclusion “is” the moral case against transgender people. The ADA should be righted once more through passage of a modest bill, the “ADA Inclusion Act,” which removes GID from the ADA’s list of excluded impairments.