cssi/SciSciGPT-SciSciNet huggingface dataset:
GLOBAL REFORM OF PERSONAL INCOME TAXATION, 1981-2005: EVIDENCE FROM 189 COUNTRIES

We use a panel of 189 countries to describe trends in national personal income tax systems between the years 1981 and 2005. Using complete national income tax schedules, we show that tax rates at higher income levels, structural progressivity and the complexity of national tax systems have declined signifi cantly; however, the degree of these changes varies considerably across countries. We also fi nd that the relationship between tax rates and revenue is positive for high income countries but declines with weaker institutions and lower levels of economic development.
To Apply or Not to Apply: FAFSA Completion and Financial Aid Gaps

In the United States, college students must complete the Free Application for Student Federal Aid (FAFSA) to access federal aid. However, many eligible students do not apply and consequently forgo significant amounts of financial aid. If students have perfect information about aid eligibility, we would expect that all eligible students complete FAFSA and no aid would go unclaimed. Using data from the National Postsecondary Student Aid Survey, I estimate a multinomial logit model which controls for all variables that contribute to aid eligibility and other student characteristics that may deter FAFSA completion. I find that students who are lower middle income, white, male and independent from parents are less likely to complete FAFSA even when they are eligible for aid. Using propensity score matching, I find that each year applicants forgo $9,741.05 in total aid (including grant and loan aid) which includes $1,281.00 of Pell Grants, $2,439.50 of the balance subsidized student loans, $1,986.65 of the balance of unsubsidized student loans, and $1,016.04 of institutional grants. These aid totals aggregate to $24 billion annually.
The Future of Free Expression in a Digital Age

In the twenty-first century, at the very moment that our economic and social lives are increasingly dominated by information technology and information flows, the judge-made doctrines of the First Amendment seem increasingly irrelevant to the key free speech battles of the future. The most important decisions affecting the future of freedom of speech will not occur in constitutional law; they will be decisions about technological design, legislative and administrative regulations, the formation of new business models, and the collective activities of end-users. Moreover, the values of freedom of expression will become subsumed withing a larger set of concerns that I call knowledge and information policy. The essay uses debates over network neutrality and intermediary liability as examples of these trends. Freedom of speech depends not only on the mere absence of state censorship, but also on an infrastructure of free expression. Properly designed, it gives people opportunities to create and build technologies and institutions that other people can use for communication and association. Hence policies that promote innovation and protect the freedom to create new technologies and applications are increasingly central to free speech values. The great tension in twentieth century free speech theory was the increasing protection of the formal freedom to speak against the background of mass broadcast technologies that reserved practical freedom to a relative few. The tension in twenty-first century free speech theory is somewhat different: New technologies offer ordinary citizens a vast range of new opportunities to speak, create and publish; they decentralize control over culture, over information production and over access to mass audiences. But these same technologies also make information and culture increasingly valuable commodities that can be bought and sold and exported to markets around the world. These two conflicting effects - toward greater participation and propertization - are produced by the same set of technological advances. Technologies that create new possibilities for democratic cultural participation often threaten business models that seek to commodify knowledge and control its access and distribution. Intellectual property and telecommunications law may be the terrain on which this struggle occurs, but what is at stake is the practical structure of freedom of speech in the new century.
Bank capital requirements and managerial self-interest

Abstract Is there an interaction between bank capital requirements and agency problems? To which extent is the assumption of perfectly aligned bank manager–shareholders harmless? To address these questions, we consider a bank in which both a regulator–bank conflict and a shareholders–manager agency problem coexist. We analyze the effect of capital adequacy requirements on bank risk policy when managers and shareholders have different information about the quality of the loan portfolio. Taking as given optimal regulation on capital requirements and deposit insurance, we show that the separation of ownership and control in banks leads to an excessive reduction in the banks’ loan portfolio risk (underinvestment) and an increase in the managerial effort in loan supervision. We find, in fact, that only high-quality loans are taken on by banks, and some profitable investments are bypassed. Additionally, we show how bank debt and reserve requirements can help restore efficiency. Our results are related to the theoretical and empirical literature that deals with the effects of the Basle Accords on the banks’ credit policy.
Money for Nothing? The Impact of Changes in the Pell Grant Program on Institutional Revenues and the Placement of Needy Students

Abstract Using new institutional-level data, we assess the impact of changing federal aid levels on institutional-level Pell revenues. Using various policy instruments associated with Pell generosity, we quantify the sensitivity of institutional Pell revenues to the generosity of the Pell Grant program. In general, we find an elastic response of institutional Pell revenues with respect to the maximum Pell award, where other policy instruments associated with Pell generosity are found to have an inelastic or zero impact. We also document significant asymmetries across institutional selectivity, both in magnitude and in terms of which channel accounts for the measured sensitivity—award values directly or institutional enrollment. In the end, exogenous changes in the federal Pell Grant program are found to correlate strongly with changes in the distribution of needy students and revenues across institutional quality.
Human Resource Management Role Implications for Corporate Reputation

Corporate reputation is an intangible yet important factor that influences stakeholder behavior, including employees, management, customers and investors. In order to add organizational value, the human resource (HR) function must focus on actions that build employee competencies and motivation that in turn positively influence corporate reputation. This article reviews HR roles and presents a conceptual framework that builds on research conducted by Fombrun and van Riel (2004). The framework suggests that HR can indirectly help improve corporate reputation. The author provides organizational examples and implications for HR managers.
Piracy and New Product Creation: A Bollywood Story

Abstract While copyright research in the decade following Napster focused mostly on whether file sharing undermines demand, research has more recently asked how piracy and other aspects of digitization affect the supply of new products. Although revenue has declined sharply, evidence that weakened effective copyright protection undermines creation has been elusive. Instead, because of cost-reducing effects of digitization, the number of new recorded music products – and their apparent quality – has increased. This study examines movie production in India during a period of technological change that facilitated large-scale piracy. The diffusion of the VCR and cable television in India between 1985 and 2000 created substantial opportunities for unpaid movie consumption. We undertake a case study of this episode to shed light on possible impacts of piracy on supply. We first document, from narrative sources, conditions conducive to piracy as these technologies diffused. We then provide strong circumstantial evidence of piracy in diminished appropriability: movies’ revenues fell by a third to a half, conditional on their ratings by movie-goers and their ranks in their annual revenue distributions. Weaker effective demand undermined creative incentives. While the number of new movies released had grown steadily from 1960 to 1985, it fell markedly between 1985 and 2000, suggesting a supply elasticity in the range of 0.2–0.7. Thus, our study provides suggestive evidence on a central tenet of copyright policy, that stronger effective copyright protection effects more creation. We contrast our findings with evidence from other contexts.
Super Size Me and the Conundrum of Race/Ethnicity, Gender, and Class for the Contemporary Law-Genre Documentary Filmmaker

According to director Morgan Spurlock, the idea for "Super Size Me", the hugely popular documentary that explored the health impact of fast food, originated from a news report about "Pelman v. McDonald's", one of the fast food obesity cases. Over the course of his month-long McDonald's binge, Spurlock became the literal embodiment of fast-food's ill-effects on the seemingly generic American adult physique. Spurlock's take on the subject, however, ignores the circumstances that contributed to the overweight conditions of the "Pelman" plaintiffs who were two black adolescent females who ate their fast food in the Bronx. One of them was homeless during the relevant time period. The paper discusses what the circumstances of the "Pelman" plaintiffs might have been, including the incidence of obesity and overweight and related diseases in minority populations, the correlation between obesity and food insecurity, the significance of fast food restaurants in poor urban minority communities, the relationship between fast food and soul food, race-specific cultural attitudes regarding women's weight, and race/ethnicity-related restraints on leisure. To be sure, based on past experience, a white male filmmaker like Spurlock might have found it difficult to tackle these subjects (especially in a film that is otherwise lighthearted and humorous) without encountering substantial criticism. Furthermore, most of the factors are irrelevant to the law of products liability, which pays little attention to inequities in the demographic distribution of risk. However, allowing generally disempowered subjects like the "Pelman" plaintiffs an opportunity to reveal their reflexivity about their situations is one way of combating disapproval and prompting deeper analysis of a social problem; Spurlock's television series "30 Days" is a fine example of that. Alternatively, filmmakers like Spurlock might display more reflexivity or critical self-assessment about their techniques for bringing only part of a complex issue to the screen . . . on the screen itself.
Should American Law Schools Continue to Graduate Lawyers Whom Clients Consider Worthless

The United Technologies Corporation (“UTC”), which makes everything from elevators to jet engines, is the sixteenth largest manufacturing concern in the United States and America’s thirty-seventh largest corporation. It pays law firms more than $100 million per year for a variety of legal services. On April 9, 2010, its Associate General Counsel, Paul Beach, told a national conference on the future of legal education that UTC does not “allow first or second year associates to work on any of our matters without special permission, because they’re worthless.” Inasmuch as the “worthless” young lawyers whom UTC does not want working on their matters are in all likelihood being paid over $150,000 per year by the leading law firms that had energetically recruited them as the top students from the most prestigious law schools, Beach’s comment might engender severe cognitive dissonance. Yet describing new associates as worthless to clients is actually
Mutual fund corporate culture and performance

Abstract In this paper we test if a mutual fund's own corporate culture predicts fund performance. To do this we use Morningstar's corporate culture ratings for mutual funds and then examine the ability of these corporate culture ratings to predict risk-adjusted performance of domestic equity funds over the period 2005–2010. Using methods that are robust to survivorship bias, we find there is little significant evidence that corporate culture predicts better fund performance. Indeed, we find that no individual component of the Morningstar stewardship rating including board quality, fees, manager incentives and regulatory issues is able to consistently predict fund performance.
Love, Loyalty and the Louisiana Civil Code: Rules, Standards and Hybrid Discretion in a Mixed Jurisdiction

This article examines the design of legal directives found in and surrounding the Louisiana Civil Code through the prism of the classic rules versus standards debate. The Preliminary Title portion of the article introduces the vocabulary, descriptions and justifications typically displayed in jurisprudential debates over the propriety of rules and standards. Books One, Two and Three of the article analyze the extent to which several significant legal regimes in the Louisiana Civil Code — regimes that are likely to affect individuals in moments of personal crisis, when they enter into and exit from intimate personal relationships and when their love and loyalty to one another and to other intimate associates is most severely tested — have incorporated open textured standards as a primary form of rule design, have resisted discretionary remedialism by remaining tethered to relatively crystalline rules or have produced models of hybrid discretion. Although the author originally expected to discover that Louisiana private law had largely embraced discretionary decision making within the realm of the Civil Code, punctuated with occasional moments of discretion skepticism, just as Niall Whitty has observed occurring in Scotland, the article’s analysis reveals that Louisiana has not evolved so decisively in the direction of standard based decision making models. Indeed, in the particular areas of private law examined (family law, co-ownership, and the inter-relationship between forced heirship and undue influence claims challenging wills), the author finds that Louisiana’s private legal order has only been partially transformed by the general trend toward discretionary remedialism that scholars like Whitty have observed occurring in other legal regimes. The article concludes by pointing to a number of additional concerns that should inform further scholarship examining whether Louisiana has assembled the proper mix of rules and standards.
Adventures in Heteronormativity: The Straight Line from Liberace to Lawrence

The two particular adventures in heteronormativity inspected and juxtaposed here are sodomy statutes targeting homosexuals, the subject of a vast legal literature, and the hetero-sexualized popular culture of Las Vegas and Nevada, not previously a subject of legal scholarship. Anti-gay sodomy statutes and the hyper-sexualized culture of Las Vegas are not completely separate subjects: from 1977 to 1992, Nevada had a sodomy statute specifically targeting homosexual sex, one of just nine states to do so. Las Vegas may or may not represent the future of America, but it can certainly teach us something important about the cultural meanings of law and about the legal meanings of sexuality. Las Vegas is brash, loud and unabashedly about sex. The dominant culture of Las Vegas is an extreme commodification of sexuality. The city presents itself as a festival of pleasure for heterosexual men, with a stunning visual culture of commodified, sexualized images of available women. Las Vegas' image as the capital of extreme heteronormativity is part of the adventure.
Breaking Bad in Mississippi: Do County-Level Alcohol Sale Bans Encourage Crystal Methamphetamine Production and Consumption?

If alcohol has substitutes, changes in its relative price can encourage the production and consumption of other illicit and harmful drugs. This paper considers if county-level bans on the sale of alcohol in the state of Mississippi encourage the production and consumption of crystal methamphetamine. We estimate the parameters of a drug production function in which the inputs are the density of people and firms, underscoring the importance of learning and knowledge spillovers to production and consumption. Poisson and Negative Binomial parameter estimates reveal that county-level bans on hard liquor sales; but not on beer and wine, increase the number of crystal methamphetamine labs. In the absence of such laws, there would be approximately 308 fewer crystal methamphetamine labs in the state of Mississippi. Our findings suggest that in Mississippi, which is the least healthiest state in the nation, county-level bans on hard liquor sales are not welfare improving as they encourage substitution for a drug that is potentially more harmful to individual health than alcohol.
Basic Values and the Victim's State of Mind

The story of Sandy Kadish's professional life to date is very much the history of American criminal law in the second half of the twentieth century. The event that played a formative role in both was no doubt the drafting of the Model Penal Code early in this period.' Headed by Kadish's great and greatly admired teacher, Herbert Wechsler, the project has been later depicted by Professor Kadish2 as the culmination of a series of codification efforts whose intellectual pedigree Kadish traces back to Bentham's utilitarianism.3 Not surprisingly, one dominant theme in Professor Kadish's work has been a reaction to this creed. One finds in his work an appreciation of the humanizing and rationalizing insight that a utilitarian perspective can bring to the law, coupled with a wise critical attitude that highlights the limitations of this perspective and seeks additional normative resources to supplement it.4 In this regard, Kadish's work echoes in the context of criminal law one of the dominant strands in the moral philosophy of the era: a critical reexamination of utilitarianism and a deontological, for the most part Kantian, response to it. This paper shares this general approach and is a step in the same enterprise. What I propose, for the most part, is a further development, perhaps refinement, in the normative landscape that emerges out of the deontological critique of utilitarianism. Although my proposal thus proceeds in a generally familiar vein, it is made
A Paradigm for Sexual Harassment: Toward the Optimal Level of Loss

This article proposes a paradigm that draws from the common-law rule of negligence. It defines actionable sexual conduct in the workplace in terms of the cost of precautionary conduct and the increased safety such precaution would have yielded. Like the rule of negligence, the proposed paradigm creates incentives for men and women to take steps to prevent sexual conduct loss to the point at which the cost of an additional increment of precaution is equal to the value of the reduction in risk of loss. This point is the optimal level of precaution. After this point, additional precaution might further reduce sexual conduct loss, but the cost of such precaution would outweigh the resulting benefit.
Infrastructure and economic development in Sub-Saharan Africa

An adequate supply of infrastructure services has long been viewed by both academics and policy makers as a key ingredient for economic development. Sub-Saharan Africa ranks consistently at the bottom of all developing regions in terms of infrastructure performance, and an increasing number of observers point to deficient infrastructure as a major obstacle for growth and poverty reduction across the region. This paper offers an empirical assessment of the impact of infrastructure development on growth and inequality, with a focus on Sub-Saharan Africa. The paper uses a comparative cross-regional perspective to place Africa's experience in the international context. Drawing from an updated data set of infrastructure quantity and quality indicators covering more than 100 countries and spanning the years 1960-2005, the paper estimates empirical growth and inequality equations including a standard set of control variables augmented by infrastructure quantity and quality measures, and controlling for the potential endogeneity of the latter. The estimates illustrate the potential contribution of infrastructure development to growth and equity across Africa.
Costs and benefits of friendly boards during mergers and acquisitions

Abstract Finance theory predicts that board independence is not always in the shareholders׳ interest. in situations in which board advice is more important than monitoring, independence can decrease firm value. I test this prediction by examining the connection between takeover returns and board friendliness, using social ties between the CEO and board members as a proxy for less independent boards. I find that social ties are associated with higher bidder announcement returns when the potential value of board advice is high, but with lower returns when monitoring needs are high. The evidence suggests that friendly boards can have both costs and benefits, depending on the company׳s specific needs.
Forced Sales and House Prices

The market for housing differs in several important ways from the textbook model of a liquid asset market with exogenous fundamentals. This implies that the price at which a house is sold can be influenced not only by general supply and demand conditions, but also by idiosyncratic factors, including the urgency of the sale and the effects of the ownership transfer on the physical quality of the house. First, houses are productive only when people are living in them. Owning an empty house is equivalent to throwing away the dividend on a financial asset. Second, houses are fragile assets that need maintenance, and are vulnerable to van dalism. Unoccupied houses are particularly vulnerable and expensive to protect. Third, short-term rental contracts involve high transactions costs, resulting from the moving costs of renters and the need of homeowners to protect their property against damage. Fourth, houses are expensive, indivisible, and heterogeneous assets. Each house has certain unique characteristics which are likely to appeal to certain poten tial buyers and not to others, so selling a house requires matching it with an appro priate buyer. Because of the high costs of intermediation in housing, this task is normally undertaken by a real estate broker rather than a dealer. Fifth, most home owners must finance their purchases using mortgages, collateralized debt contracts that transfer home ownership to the mortgage lender through a foreclosure process if the homeowner defaults. The expansion of mortgage credit in the early 2000s and the recent decline in house prices have led to an unprecedented increase in foreclosures since 2006. Foreclosures transfer houses to financial institutions which must maintain and pro tect them until they can be sold. Foreclosed houses are likely to sell at low prices, both because they may have been physically damaged during the foreclosure pro cess, and because financial institutions have an incentive to sell them quickly. In a liquid market, an asset can be sold rapidly with a minimal impact on its price, but
Supply responses to digital distribution: Recorded music and live performances

Technologies that enable free redistribution of digital goods (e.g., music, movies, software, books) can undermine sellers’ ability to profitably sell such goods, which raises concerns about the future development of socially valuable digital products. In this paper we explore the possibility that broad, illegitimate distribution of a digital good might have offsetting effects on the demand for complementary non-digital goods. We examine the impact of file-sharing on sales of recorded music and on the demand for live concert performances. We provide evidence suggesting that while file-sharing reduced album sales, it simultaneously increased demand for concerts. This effect is most pronounced for small artists, perhaps because file-sharing boosts awareness of such artists. The impact of file-sharing on large, well-known artists’ live performances is negligible.
On the Economics of Mandatory Audit Partner Rotation and Tenure: Evidence from PCAOB Data

We analyze the effects of partner tenure and mandatory rotation on audit quality, pricing, and production for a large cross-section of U.S. public firms over the 2008 to 2014 period. On average, we...
The BP Blowout and the Social and Environmental Erosion of the Louisiana Coast

“There, shockingly, along the grassy bayou bank, I can now make out a dozen or so old tombs, all in different stages of submersion, tumbling brick by brick into the bayou water . . . . The bayou is swallowing the dead here.”1 This quote comes from a book, whose subtitle says it all: “The Rich Life and Tragic Death of Louisiana’s Cajun Coast.” The author, Mike Tidwell, observes that the “whole ragged sole of the Louisiana boot, an area the size of Connecticut . . . is literally washing out to sea . . . taking with it entire Cajun towns and an age-old way of life.”2 But the Louisiana coast is not the only part of the Gulf that is in deep trouble, and the Cajuns are not the only group to suffer the consequences. Despite the attention the Gulf of Mexico (the Gulf) has received since the BP Deepwater Horizon blowout, it may take years before the consequences of this disaster will be fully understood.3 All of this attention to the spill is warranted by the magnitude of the disaster. It risks, however, obscuring the context surrounding the spill itself. Members of the public who were following events might well have supposed that the spill was a gigantic blot on an otherwise unblemished natural coast-
Globalization and Taste Convergence: the Cases of Wine and Beer

This paper investigates changes in cultural consumption patterns for a low-concentration industry: wine and beer. Using data on 38 countries from 1963-2000, there is clear convergence in the consumption of wine relative to beer between 1963 and 2000. Convergence occurs even more quickly within groups of countries that have a higher degree of integration. A key prediction of international trade is confirmed in the data: greater trade integration weakens the association between production and consumption patterns -- although the relative consumption of wine can be explained well in 1963 by grape production and latitude, these variables are much less significant in 2000. Despite these “scientific” explanations for the consumption of wine, there is also a cultural angle to wine consumption. While the relative wine consumption of France and Germany is converging, several Latin American countries fail to converge. The patterns of convergence are consistent with dynamics of adjustment in an overlapping generation habit formation model.
Stakeholder Involvement in the Design of U.S. Voluntary Environmental Programs: Does Sponsorship Matter?

Voluntary environmental programs (VEPs) promise to provide firms and facilities additional flexibility in managing their environmental affairs while increasing internal efficiencies and improving their public image. Although stakeholder input is thought to improve program development, little is known about the extent that stakeholders are involved in the VEP design process. Based on a survey of 61 program managers, this research distinguishes between the intensity and diversity of stakeholder involvement and uses these two concepts to assess VEP development relative to government, industry, and third-party sponsorship. Even in the absence of a mandate, all three sponsors include a variety of stakeholders in program design. Although there is evidence that collaborative relationships are developing between sponsors and a range of stakeholder groups, variations in the intensity of involvement among sponsors suggest that some stakeholders may have disproportionate levels of influence in the design of VEPs.
Using Cost Pass-Through to Calibrate Demand

We demonstrate that cost pass-through can be used to inform demand calibration, potentially eliminating the need for data on margins, diversion, or both. We derive the relationship between cost pass-through and consumer demand using a general oligopoly model of Nash–Bertrand competition and develop specific results for four demand systems: linear demand, logit demand, log-linear demand and the Almost Ideal Demand System (AIDS). The methods we propose may be useful to researchers and antitrust authorities when reliable measures of margins or diversion are unavailable. We also develop that cost pass-through can help illuminate the suitability of some demand systems to specific economic applications.
Intermediation, Money Creation, and Keynesian Macrodynamics in Multi-agent Systems

ABSTRACTThis paper offers a simple computational model of monetary creation, derived from individual agent behavior, that provides additional support for the well-known and more or less universally accepted idea that money creation is inevitable in demand-driven Keynesian economies. The endogeneity of money is linked to asynchronous production, in which investment is set autonomously by a combination of animal spirits and capacity utilization, while savings adjusts to bring about macroeconomic equilibrium. It is seen that once these Keynesian motifs are translated into the agent-based framework, endogenous money arises as a natural consequence of the model. The contribution of the paper is twofold. First, it links endogenous money creation to decision making in real historical time—two shibboleths of post-Keynesian macroeconomics. Second, it suggests a fruitful cross-fertilization between post-Keynesian economics and the methods of agent-based modeling.
The role of education in the production of health: an empirical analysis of smoking behavior.

Abstract We estimate the effect of education on smoking. Our estimation strategy “differences out” the impact of unobserved characteristics correlated with education by exploiting education differences between similarly selected groups 1 year apart in their life cycle. Individuals with a given age, education, and student status in the current and previous year are compared to their counterparts born 1 year later with the same age, education, and student status in the following and current year. We find that an additional year of education does not have a causal effect on smoking. Unobserved factors correlated with education entirely explain their cross-sectional relationship.
The Economics of Synthetic Rhino Horns

Abstract To examine the potential impact of synthetic horns to reduce rhino poaching, a formal model of the rhino horn market in which there exist firms with the capability to produce high quality synthetic horns is presented and studied. The analysis shows that whether the availability of synthetic horns would decrease the equilibrium supply of wild horns—and how much the reduction would be—depends on market structure—i.e., how competitive the synthetic horn production sector is—and on how substitutable the synthetic horns are for wild horns. The implications of these results for conservation policies are derived and discussed. Synthetic horn producers would benefit more by promoting their products as being superior to wild horns, but this could increase horn prices and lead to more rhino poaching. For conservation purposes, it may be beneficial to incentivize firms to produce inferior fakes—synthetic horns that are engineered to be undesirable in some respect but difficult for buyers to distinguish from wild horns. The analysis also shows that promoting competition in the production of synthetic horns in general is desirable from a conservation standpoint as synthetic horn producers may prefer to keep prices at a high enough level that could still encourage significant amount of poaching.
Privacy and Consequences: Legal and Policy Structures for Implementing New Counter‐Terrorism Technologies and Protecting Civil Liberty

New 21st century technologies (ranging from data-mining, to link analysis and data-integration, to biometrics, to new encryption techniques) have much to offer in achieving the compelling national goal of preventing terrorism. This paper asks a practical, concrete question: Can the new technologies be developed, deployed, implemented, and operated in a manner that allows them to be used as an effective anti-terrorism tool while ensuring that there is minimal risk that use of the tool-set will infringe upon American civil liberties? Practical answers to the problem of oversight can, and must, be crafted. This paper is an effort to sketch out precisely what those safeguards ought to be and how they might impact the most prominent proposed new technologies. Privacy values of the anonymity form have previously been protected by technological inefficiency. With the demise of that protection, a new mechanism of controlling the consequences that arise from scrutiny must be substituted. Broadly speaking those mechanisms should minimize intrusiveness; provide for automated audit and oversight and accountability; and embed within the system architecture policy rules for imposing adverse consequences on individuals.
Credit Market Speculation and the Cost of Capital

We examine the effects of speculation using credit derivatives on the cost of debt and the likelihood of default. The availability of credit default swaps induces investors who are optimistic about borrower revenues to sell protection instead of buying bonds. This benefits bor rowers if protection can only be bought with an insurable interest, but can increase the cost of debt and crowd out productive lending if protection can be purchased as a bet on default. We also show that the possibility of speculation on default may cause multiple equilibria and exacerbate the problem of rollover risk. (JEL D86, G13, G31)
Politics, unemployment, and the enforcement of immigration law

Immigration control-related audits and their resulting sanctions are not solely determined by impartial enforcement of laws and regulations. They are also determined by the incentives faced by vote-maximizing politicians, agents acting on their behalf, and workers likely to compete with immigrants in the local labor market. In this paper, we use a unique data set to test the extent to which congressional oversight determines the bureaucratic immigration enforcement process. We examine the decisions made at each stage of enforcement from over 40,000 audits from 1990 to 2000. This includes analysis of (1) whether a firm is found in violation, (2) whether a fine is issued, (3) the size of the fine issued, and (4) how much of a dollar reduction fined employers were able to negotiate. We find that the number of audits conducted increases with local unemployment. We also find that a congressman’s party affiliation and its interaction with committee membership and party majority status, as well as firm size and local union membership, correlate to decisions made at every stage of enforcement.
Large Robust Games

With many semi-anonymous players, the equilibria of simultaneous-move games are extensively robust. This means that the equilibria survive even if the simultaneous-play assumption is relaxed to allow for a large variety of extensive modifications. Such modifications include sequential play with partial and differential revelation of information, commitments, multiple revisions of choices, cheap talk announcements, and more.
TAKEOVER DEFENSE WHEN FINANCIAL MARKETS ARE (ONLY) RELATIVELY EFFICIENT

This paper evaluates the impact of developments in the understanding of asset value pricing for alternative legal standards for takeover defenses: the management discretion and the shareholder rights positions. Both sides place considerable, albeit implicit, reliance on alternative views of the efficiency of financial markets. Developments in finance theory show that when financial markets are only "relatively efficient," stock prices can incorrectly value the corporation at any point in time, at the same time as investors cannot outperform the market on an ongoing basis. I focus on financial market anomalies arising from the failure of the capital asset pricing model to provide a reliable estimate of the market capitalization rate. In a world of perfectly efficient capital markets, a shareholder choice standard is the dominant policy solution. In such a state, any noncoercive hostile tender offer at a premium to the market price moves assets to more valued uses while offering shareholders enhanced market value. Best of all, it sends a clear signal to all managers to be more faithful to shareholder interests or risk losing their jobs. But in a world where capital markets are only relatively efficient, the calculus shifts. Successful hostile tender offers could move assets to less valued uses. Shareholders could be paid less than the intrinsic value of the corporation. Worst of all, managers might choose to manage to the financial market anomalies; that is, to adopt otherwise suboptimal business strategies intended to minimize the risks of under-pricing or maximize the probability of over-pricing. I conclude that the legal standard prevailing in Delaware regarding takeover defenses can be understood as focusing on giving managers the discretion to maximize the value of the corporation. In light of modern finance theory, and the evidence that capital markets are only relatively efficient, this is a plausible way to strike the balance.
Risk management and calculative cultures

Abstract Enterprise risk management (ERM) has recently emerged as a widespread practice in financial institutions. It has been increasingly codified and encrypted into regulatory, corporate governance and organizational management blueprints. A burgeoning literature of regulatory and practitioner texts is indicative of the apparent diversity of ambitions, objectives and techniques that constitute the ERM agenda. Making sense of these developments is a challenge. This paper presents field-based evidence from two large banking organizations suggesting that systematic variations in ERM practices exist in the financial services industry. The cases illustrate four risk management ideal types and show how they form the ‘risk management mix’ in a given organization. Further, drawing on the literature of the roles and uses of management control systems (MCS), the paper explores how ERM achieved organizational significance in the studied settings. The findings are indicative of the current co-existence of alternative models of ERM. In particular, two types of ERM models are postulated: one driven by a strong shareholder value imperative (ERM by the numbers), the other corresponding to the demands of the risk-based internal control imperative (holistic ERM). This paper explains the differences in the two risk management mixes pointing towards alternative logics of calculation [Power, M.K., 2007. Organized Uncertainty—Designing a World of Risk Management. Oxford University Press, Oxford], which I conceptualise and describe as different calculative cultures. The study suggests that calculative cultures, which in these cases shaped managerial predilections towards ERM practices, are relevant, albeit so far neglected, constituents of the fit between MCS and organizational contexts.
Exploring Relations Between Decision Analysis and Game Theory

Many authors, including Cavusoglu and Raghunathan (2004. Configuration of detection software: A comparison of decision and game theory approaches. Decision Anal. 1(3) 131--148.) in this journal, have argued that proper modeling of the strategic interaction between players requires a game-theoretic approach as opposed to a decision-theoretic approach. We argue in this paper, however, that there are many environments in which decision analysis can deal with strategic interactions just as well, and we present equivalence results for such environments. These equivalence results allow the prescriptive decision analyst to use the standard tools that a sound decision analysis requires, including decision trees and sensitivity analysis, even when confronted with strategic settings. We further present two technical comments on the Cavusoglu and Raghunathan (2004) paper.
Source Cues and Public Support for the Supreme Court

It is well known that the public often relies on cues or heuristics when forming opinions. At the same time, leading theories of opinion formation about the Supreme Court see such support as relati...
From Public to Private: The Newly Enacted Chinese Property Law and the Protection of Property Rights in China

Protection of Property Rights has become a pressing issue in China since the country strived to move from a planned economy to a market economy in late 1970s. The passage of the Property Law of China on March 16, 2007 marked an historic change in the country from public to private with respect to property rights. Effective on October 1, 2007, the Property Law for the first time in Chinese history grants an equal protection to both public and private properties, breaking up the orthodox ideology in favor of public ownership against private ownership and individual liberty. With a notable civil law tradition, the Property Law is intended to set forth comprehensive rules regulating creation, alteration, alienation as well as termination of property rights, and protecting private property rights in China, a country where the public or state ownership is still playing a leading role in the nation's economy. Many aspects of the Property Law, which are different from those in other countries, particularly common law countries, are unique not only in their content but also in their application. The land use rights typically reflect a Chinese reality, in that the ownership of land is separated from the possession and use of it. Adoption of the Property Law in China is a substantial step toward protection of private property rights in the nation. The greatest challenge facing the country, however, is how to enforce the law so that the private property rights are effectively protected, especially in situations where public ownership is involved. The "Nail House" syndrome that has spread across the country indeed raises the serious issue of compensation in cases of government takings. Whether or not compensation for takings will be just and reasonable remains to be answered. t Associate Professor of Law, Temple University Beasley School of Law. The author would like to thank Professor Robert Reinstein, the Dean of Temple University Beasley School of Law for his guidance, and Professor Jane Baron of Temple University Beasley School of Law for her suggestions and advice. Berkeley Business Law Journal
Rights of Access and the Shape of the Internet

This article reviews recent developments in the law of access to information, that is, cases involving click-through agreements, the doctrine of trespass to chattels, the anti-circumvention provisions of the Digital Millennium Copyright Act, and civil claims under the Computer Fraud and Abuse Act. Though the objects of these different doctrines substantially overlap, the different doctrines yield different presumptions regarding the respective rights of information owners and information consumers. The Article reviews those presumptions in light of different metaphorical premises on which courts rely: Internet-as-place, in the trespass, DMCA, and CFAA contexts, and contract-as-assent, in the click-through context. It argues that the different doctrines should be applied consistently with one another and consistent with an understanding of the relevant metaphor that is based on consumer and user experiences of the Internet, rather than on formal property-based constructs.
Lumpy Consumer Durables, Market Power, and Endogenous Business Cycles

. In this paper we show that lumpy consumer durables and market power can generate endogenous cycles consistent with the facts. Past sales determine the current market size of durable goods. Larger past sales, ceteris paribus, thus naturally result in a smaller current market size and income. In this manner, the seeds of a downturn are sown in an upturn. JEL Classification: E32, E13 Biens de consommation durables en gros morceaux, pouvoir de marche et cycles d’affaires endogenes. Ce memoire montre que des biens de consommation durables en gros morceaux et du pouvoir de marche peuvent engendrer des cycles endogenes qui se calquent sur les chroniques observees. Les ventes passees determinent la taille du marche present pour les biens durables. De plus grandes ventes dans le passe, toutes choses etant egales par ailleurs, resultent naturellement en un marche present plus petit et des revenus moindres. De cette maniere, le germe du declin est deja contenu dans l’expansion.
Efficient Mechanisms for Public Goods with Use Exclusions

Constrained efficient provision of an excludable public good is studied in a model where preferences are private information. The provision level is asymptotically deterministic, making it possible to approximate the optimal mechanism with a mechanism that provides a fixed quantity of the good and charges fixed user fees for access. In general, the fixed fees involve third degree price discrimination, but, if names are uninformative about preferences, the analysis provides a justification for average cost pricing. Copyright 2004, Wiley-Blackwell.
Memory, transaction records, and The Wealth of Nations

Adam Smith hypothesized that impersonal exchange was necessary for a society to develop specialized division of labor and create wealth. Douglass North and Vernon Smith argue that successful developed economies are the result of institutions. We hypothesize and provide evidence from ethnographic data that the basic accounting technology of recording transactions is associated with more extensive impersonal exchange and increased specialization in the division of labor. Our intuition is that extensive impersonal exchange requires reliable memory of trading partners’ past behavior to sustain trust and encourage reciprocity when a group expands beyond the size of traditional hunter-gatherer groups. Our findings are consistent with the hypothesis that transaction records are necessary for the emergence of complex economies as suggested by the archaeological evidence of recordkeeping in Mesopotamian societies 10,000 years ago.