cssi/SciSciGPT-SciSciNet huggingface dataset:
The battle over self-insured health plans, or "one good loophole deserves another".

One of the most perplexing consequences of the Employee Retirement Income Security Act's (ERISA) preemption provisions is the differential regulatory treatment afforded to employer-sponsored health care benefits provided directly to employees by the employer's "self-insured" plan and to benefits provided by a third party that sells an insurance policy to the employer. Under ERISA's savings clause, states may regulate insurance contracts, thus allowing regulators to guarantee "insured" employees a menu of state-mandated health-insurance benefits. But under ERISA's deemer clause, self-insured plans are immune to such requirements. Since ERISA's passage three decades ago, there has been an explosion in the number of employers choosing to self-insure their health benefits plans and then purchase "stop-loss" insurance for the plan in order to avoid both state mandates and insurance risk. Critics cry foul at the use of this regulation-avoidance tactic. This Article defends employers' exploitation of the "deemer clause loophole" on the grounds that it is consistent with ERISA's clear language, structure, and delicate balance of underlying goals. But it argues that ERISA contains a complementary "savings clause loophole" that state regulators can exploit by regulating stop-loss insurance companies, thus using a self-help remedy to close the deemer clause loophole substantially. One good loophole deserves another.
Privatizing Public Forums to Eliminate Dissent

In each of the past several presidential campaigns, the candidates have tried to suppress dissent at public forum rallies using a tactic that Ronald Reagan pioneered and George W. Bush perfected. Under this tactic, the candidate's advance team "privatizes" a public square or public park by securing a municipal permit for the rally date that authorizes the expulsion of any citizen who manifests support for the rival candidate. On the day of the rally, Secret Service agents systematically expel any citizen who manifests the "wrong" viewpoint. This tactic for eliminating public forum dissent has generated only a handful of reported cases -- and it has never been successfully challenged. My thesis is that, under the First Amendment, neither the government nor its permittee may effect the viewpoint-based expulsion of citizens from a traditional public forum. If a presidential campaign wants to stage an appearance where every member of the audience has been screened to ensure unanimous support for the candidate, then the event should be held on private property, where the First Amendment does not apply.
Advertising in Health Insurance Markets

The effects of television advertising in the market for health insurance are of distinct interest to both firms and regulators. Regulators are concerned about firms potentially using ads to “cream ...
Value from Hedging Risk with reinsurance

Reinsurance is a transaction insurance firms use to hedge risk. Existing studies have only investigated the demand for reinsurance. Thus, we do not have direct evidence on whether the use of reinsurance creates value. Our study provides this evidence. We find a positive relation between the use of reinsurance and value. This relation is nuanced. Our results suggest that shareholders fully recognize the value of hedging only in the absence of noise in the firm’s environment. Our results also suggest that the use of hedging creates value for shareholders because hedging may be a less expensive substitute to holding capital.
Victim Impact Testimony and the Psychology of Punishment

A growing body of empirical evidence from psychology, sociology, law, and criminal justice has demonstrated that lay intuitions about punishment are strongly rooted in retributivism: i.e., the idea that punishment should be distributed in proportion to moral desert. Level of harm is often thought to be indicative of desert, but harm described by victims (or survivors) in the context of victim impact evidence is subjective and often unforeseeable insofar as it is attributable to chance factors. How do observers (such as jurors or judges) use information about consequences determined by chance factors when they judge punishment? The emotional and cognitive processes involved in jurors' use of victim impact evidence potentially reveals key insights about the psychological mechanisms underlying laypersons' punishment judgments generally. This paper explores empirical evidence for the notion that the subjective harm experienced by the victim of an offense serves as proxy for the level of defendant's effort and culpability, and by implication, the perceived seriousness of the crime.
The empirical determinants of the Euro: Short and long run perspectives

The behavior of the dollar/euro exchange rate is modeled using a monetary model of the exchange rate. The econometric analysis is complicated by the short sample span of actual euro data available for analysis. Hence, data on a synthetic euro are used. The assumptions underlying the monetary approach are discussed. A cointegrating relationship involving the exchange rate, money stocks, industrial production, interest and inflation rates, augmented by a relative price of nontradables, is identified for the 1991M08-1999M12 period using the Johansen procedure. The model implies that the euro was undervalued by about 13-15% in January 2000. This finding is robust to the use of alternative sample periods, and alternative estimation methodologies such as single-equation error correction and first differences specifications. A longer term perspective is provided by a productivity-based model of the real value of the euro. Some panel regression estimates of the relationship between intercountry relative productivity differentials and real exchange rates is presented. Using these estimates to conduct some calculations, one comes to the conclusion that unless drastic changes to productivity trends occur, there is little reason to believe that the real value of the euro will deviate from its current zero-drift path.
Corporate cash holdings and CEO compensation incentives

Abstract We examine the effect of chief executive officer (CEO) compensation incentives on corporate cash holdings and the value of cash to better understand how compensation incentives designed to enhance the alignment of manager and shareholder interests could influence stockholder-bondholder conflicts. We find a positive relation between CEO risk-taking (vega) incentives and cash holdings, and we find a negative relation between vega and the value of cash to shareholders. The negative effect of vega on the value of cash is robust after controlling for corporate governance, is stronger in firms with high leverage, is reversed for unlevered firms, and is not present in financially constrained firms. We also find that the likelihood of liquidity covenants in new bank loans is increasing in CEO vega incentives. Our evidence primarily supports the costly contracting hypothesis, which asserts that bondholders anticipate greater risk-taking in high vega firms and, therefore, require greater liquidity.
Other People's Errors

The question of when other people’s bad acts belong on our moral ledger arises in a number of different scenarios. Each scenario has received some philosophical attention, but no one has noted the structural similarities of these various scenarios or the implications of a proposed approach to one for how the others should be approached. That is the ambition of this article. In it, seemingly disparate moral phenomena—blunt rules, preemptive restrictions, moral blackmail, complicity, retreat and proportional response, and the duty to rescue from a peril one has caused—are shown to have similar structures and thus to require similar moral approaches.
The implications of firms' investment opportunities for the valuation of cash flows from investing activities

Abstract This paper examines the market valuation of cash flows from investing (CFI) activities in the presence of investment opportunities. The market valuation of investing cash flows is hypothesized to be larger when a firm possesses a relatively larger amount of positive net present value investment opportunities. Using a dichotomous growth classification based on Tobin's q, the investing cash flows of high-growth firms are found to have significant explanatory power for unexpected security returns while the investing cash flows of low-growth firms are valued consistent with “over-investments” by firms' managers. Additional tests employing deciles of the growth classification suggest that the level of investment opportunities affects the return-CFI relation.
Lay Intuitions About Family Obligations: The Case of Alimony

Most people have a sense of obligation to family members that is more powerful than the law in compelling compliance with its demands. When families dissolve, however, the power of such nonlegal norms often dissolves as well. The question then becomes what the law should require in their stead. This Article is part of a larger series of studies that have examined this question by asking what citizens believe the law should demand, using surveys of persons called to jury service in Tucson, Arizona. Respondents are asked to imagine they are the judge charged with deciding a series of cases in which the facts are systematically varied so as to reveal the implicit principles that survey respondents employ in deciding them. Previously reported results in this project have examined studies of the amount of child support that people believe appropriate, and how they believe child custody disputes should be resolved. This study examines lay views about alimony. It finds considerable divergence between American law in practice and the views of American citizens as to what the law should be. Survey respondents were willing to award alimony considerably more often than the law now does. More clearly, in deciding whether to allow an alimony award, they care most of all about the claimant’s responsibility as primary caretaker of the couple’s minor children, to some extent (but noticeably less) about the partners’ marital status and their relational duration, and very little at all about the claimant’s history of having cared for the couple’s now-grown children. Moreover, the way these factors affect our respondents’ judgments about alimony are not very dependent on who they are. Our respondents did vary among themselves, of course, in the frequency with which they allowed alimony, but they varied relatively little in how factors such as marriage, relational duration, the presence of minor children or the history of care for now-grown children affected their judgments. The citizen consensus reflected by these patterns differs, however, from the prevailing legal rules, the views of many scholars, and the recommendations of the American Law Institute. This striking discrepancy is interesting although not always surprising. Our respondents’ willingness to award alimony to non-marital partners, for example, is consistent with the law of some other Western countries, even if not with American law, suggesting perhaps that it is American law, not our respondents, that is peculiar. Perhaps it is also understandable that our respondents seem more concerned with the welfare of the couple’s current minor children than with addressing perceived inequities in the current economic circumstances of the adult partners. In any event, the views of our respondents pose a challenge to policymakers. Given the dearth of theoretical justification for current American practice, its rejection by American citizens seems all the more telling.
Interstate business tax differentials and new firm location: evidence from panel data

Abstract This paper examines the impact of state and local tax differentials on the location of industry using a panel data set of manufacturing firm start-ups. The number of firm births is modeled as a Poisson count process and the estimation technique explicitly accounts for unobserved location or state heterogeneity in the estimation. A second focus of the analysis is the development of an industry- and year-specific series of effective tax rates for each state. After controlling for state and industry effects, the estimates indicate that a high state marginal effective tax rate reduces the number of firm births for half of the industries examined.
Auditors’ Response to Assessments of High Control Risk: Further Insights

Auditing standards prescribe a risk-based approach where auditors assess the risk of material misstatement and then design and perform audit procedures to reduce audit risk to an appropriately low level. Prior research suggests that auditors are responsive to high control-risk assessment (CRA) but that this response is, perhaps, only partially effective at reducing audit risk, with relatively little insight into where and why this occurs. By refining analyses to more detailed levels of the audit, I extend this research by providing further insight into auditors’ response to high CRA. I examine and find that audit fees are significantly higher for high CRA in revenue relative to high CRA in other accounts, suggesting that auditor effort in response to high CRA is more pronounced in audit areas of particular interest and concern to investors and regulators. Despite this, I find evidence suggesting that revenue is the only audit area examined where auditor effort in response to high CRA does not attenuate the likelihood of misstatement. Finally, because auditors face time constraints, I examine whether increased effort in response to high CRA in certain audit areas diverts auditors’ attention from other areas with lower risk, thus contributing to the overall association between misstatements and internal control deficiencies documented in prior research. I find a greater likelihood of misstatement in non-core operating accounts with lower CRA as audit effort increases in response to high CRA in revenue, consistent with the explanation that high CRA in revenue may divert auditors’ attention from other areas of the audit with lower CRA. This article is protected by copyright. All rights reserved.
Nested Ethics: A Tale of Two Cultures

As law firms have become larger and more complex, 1 many of them have adopted more sophisticated programs to ensure that lawyers in the firm comply with their professional responsibilities. 2 These programs attempt to achieve more consistent behavior across the firm by relying on specifically designated ethics experts who take the lead in establishing standard procedures that coordinate and reduce reliance on individual discretion. 3 Aside from producing greater uniformity, such procedures also lessen reliance on the probity of individual lawyers. This reflects awareness of the powerful way that circumstances can shape behavior, particularly in large organizations. We can think of these procedures and policies as constituting the basic elements of a law firm’s ethical infrastructure. This term sometimes is used to encompass a broader set of initiatives, but for analytical purposes, I want to use it in the narrower sense.
Hip-Hop and Housing: Revisiting Culture, Urban Space, Power, and Law

U.S. housing law is finally receiving its due attention. Scholars and practitioners are focused primarily on the subprime mortgage and foreclosure crises. Yet the current recession has also resurrected the debate about the efficacy of place-based lawmaking. Place-based laws direct economic resources to low-income neighborhoods to help existing residents remain in place and to improve those areas. Law-and-economists and staunch integrationists attack place-based lawmaking on economic and social grounds. This Article examines the efficacy of place-based lawmaking through the underutilized prism of culture. Using a sociolegal approach, it develops a theory of cultural collective efficacy as a justification for place-based lawmaking. Cultural collective efficacy describes positive social networks that inner-city residents develop through participation in musical, artistic, and other neighborhood-based cultural endeavors. This Article analyzes two examples of cultural collective efficacy: the early development of hip-hop in the Bronx and community murals developed by Mexican immigrants in Chicago’s Pilsen neighborhood. These examples show that cultural collective efficacy can help inner-city residents mitigate the negative effects of living in a poor and segregated community and obtain more concrete benefits from urban revitalization in their communities. Cultural collective efficacy also provides a framework to examine important microdynamics in the inner-city that scholars and policymakers have ignored. Lastly, this Article devises new combinations of place-based laws that might protect cultural collective efficacy, such as: (1) historic districts with affordable housing protections secured through transferable development rights, (2) foreclosure prevention strategies, (3) techniques to mitigate eminent domain abuse, and (4) reinterpretations of the Fair Housing Act’s “affirmatively furthering” fair housing mandate. These examples of place-based lawmaking may more effectively promote equitable development and advance distributive justice in U.S. housing law and policy.
Dual Emphasis and the Long-Term Financial Impact of Customer Satisfaction

This paper draws on the quality profitability emphasis framework of Rust, Moorman, and Dickson (2002) (Rust, Roland T., Christine Moorman, Peter R. Dickson. 2002. Getting returns from service quality: Revenue expansion, cost reduction, or both. J. Marketing66(October) 7-24.) to examine the association between customer satisfaction and long-term financial performance among firms that achieve a dual emphasis (focusing on both revenue-expansion and cost-reduction simultaneously, rather than solely emphasizing one over the other). Using a longitudinal data set of 77 firms from the United States, we test this hypothesis and find that the association between customer satisfaction and long-term financial performance is positive and relatively stronger for firms that successfully achieve a dual emphasis. We build on the work of Rust, Moorman, and Dickson (2002), who investigated the financial impact of engaging in the process of achieving a dual emphasis. Collectively, these studies show that while achieving a dual emphasis is desirable for long-run financial success, the process of achieving a dual emphasis may not be as financially rewarding in the short run. Firms pursuing a dual emphasis need to consider both short- and long-term consequences of their strategy.
The Twombly Standard and Affirmative Defenses: What is Good for the Goose is Not Always Good for the Gander

The United States district courts disagree as to whether the plausibility pleading standard for claims first described by the United States Supreme Court in Bell Atlantic Corp. v. Twombly also extends to affirmative defenses pled by defendants in federal courts. The divergent opinions result from conflicting interpretations of the language of the Federal Rules of Civil Procedure, standards of preferred practice, and notions of fairness. This Note examines the district courts’ arguments in deciding whether the Twombly standard extends to affirmative defenses. It identifies the quiddities of the courts’ reasoning through an analysis of their decisions and, based upon this review, argues that the courts should not extend the Twombly standard to affirmative defenses. This Note shows how this conclusion adheres to the text and intention of the Federal Rules, as well as the holding and public policy considerations of Twombly itself. Moreover, it acknowledges that simple injustice would befall defendants on account of an extension of the Twombly standard.
What's the use? Law and authority in patenting human genetic material.

In recent years, the area of biology known as genetics has emerged in America as a significant force, producing and organizing new types of information, knowledge, and meaning about personhood, agency, and the nature of human-ness. Genetics is rapidly becoming not only a vast scientific and commercial enterprise but also a powerful new way of thinking about individuals and their relation to society, the market, and the state. As the metaphors and practices of genetics proliferate, genetic identity is emerging as a critical new category for assessing and assigning legal rights and duties.
INO80 Chromatin Remodelling Coordinates Metabolic Homeostasis with Cell Division

Adaptive survival requires the coordination of nutrient availability with expenditure of cellular resources. For example, in nutrient-limited environments, 50% of all S. cerevisiae genes synchronize and exhibit periodic bursts of expression in coordination with respiration and cell division in the Yeast Metabolic Cycle (YMC). Despite the importance of metabolic and proliferative synchrony, the majority of YMC regulators are currently unknown. Here we demonstrate that the INO80 chromatin-remodelling complex is required to coordinate respiration and cell division with periodic gene expression. Specifically, INO80 mutants have severe defects in oxygen consumption and promiscuous cell division that is no longer coupled with metabolic status. In mutant cells, chromatin accessibility of periodic genes, including TORC1-responsive genes, is relatively static, concomitant with severely attenuated gene expression. Collectively, these results reveal that the INO80 complex mediates metabolic signaling to chromatin in order to restrict proliferation to metabolically optimal states.
Learning to Respond: The Use of Heuristics in Dynamic Games ⁄

While many learning models have been proposed in the game theoretic literature to track individuals’ behavior, surprisingly little research has focused on how well these models describe human adaptation in changing dynamic environments. Analysis of human behavior demonstrates that people are often remarkably responsive to changes in their environment, on time scales ranging from millennia (evolution) to milliseconds (reflex). The goal of this paper is to evaluate several prominent learning models in light of a laboratory experiment on responsiveness in a lowinformation dynamic game subject to changes in its underlying structure. While history-dependent reinforcement learning models track convergence of play well in repeated games, it is shown that they are ill suited to these environments, in which sastisficing models accurately predict behavior. A further objective is to determine which heuristics, or “rules of thumb,” when incorporated into learning models, are responsible for accurately capturing responsiveness. Reference points and a particular type of experimentation are found to be important in both describing and predicting play.
What Is Natural Resources Law

A recent flurry of new natural resources law casebooks, coming a quarter-century since the publication of the last significant new teaching materials, is an occasion to revisit the boundaries that define the field. The similarities among the casebooks are stronger than their differences, and represent a consensus about what composes natural resources law. The published teaching materials as well as an informal poll of natural resources law professors show a substantial overlap between natural resources and environmental law course coverage. Administrative implementation of statutes dominates both subjects. Both courses typically cover environmental impact analysis and endangered species protection. The new casebooks broaden natural resources law coverage to include water rights, wetland development, and other subjects outside of public land management.Despite the common ground shared with environmental law, natural resources law retains a distinctive character. This article describes four attributes that justify separate pedagogical treatment of natural resources law as a stand-alone course in law schools. First, the in-situ character of extractive activities that dominate natural resources law raises special problems and generates place-based approaches to governance. Second, the deeper roots of natural resources law present particularly vexing interpretive issues for applying the old statutes, deeds, and doctrines to contemporary problems. Third, natural resources law has more experience with ecosystem management. Fourth, despite the now-paramount importance of administrative tools, natural resources law still displays a broader array of property interests that go beyond the variations studied in the first-year property class.
In the Nick of Time: Performance-Based Compensation and Proactive Responses to the Tax Cuts and Jobs Act

The Tax Cuts and Jobs Act of 2017 (TCJA) introduced two major changes that may influence the structure of executive compensation: (1) reducing corporate tax rates from 35 to 21 percent and (2) eliminating the performance-based pay exception in Section 162(m). These changes provide incentives to maximize deductible compensation expense in 2017, before the TCJA goes into effect. Therefore, we predict performance-based compensation to increase more in 2017 relative to prior years. Consistent with our expectation, we find that the increase in CEO bonus and stock option compensation is significantly greater in 2017. Our difference-in-difference results are consistent with the tax rate reduction driving the bonus increase and the repeal of the performance-based exception leading to the increase in CEO stock options. The TCJA also changed the definition of covered employees to include the CFO. We find weak evidence for abnormal increases in CFO performance-based compensation. Additional analyses indicate firms facing stronger tax incentives drive our results. Overall, our findings suggest that firms’ responded to the TCJA in the period before it was effective.
PRICE AND QUANTITY QUOTES ON NASDAQ: A STUDY OF DEALER QUOTATION BEHAVIOR

We show that the majority of quotes posted by NASDAQ dealers are noncompetitive and only 19.5% (18.4%) of bid (ask) quotes are at the inside. The percentage of dealer quotes that are at the inside is higher for stocks with wider spreads, fewer market makers, and more frequent trading, and lower for stocks with larger trade sizes and higher return volatility. These results support our conjecture that dealers have greater incentives to be at the inside for stocks with larger market-making revenues and smaller costs. Dealers post large depths when their quotes are at the inside and frequently quote the minimum required depth when they are not at the inside. The latter quotation behavior leads to the negative intertemporal correlation between dealer spread and depth.
Policing Wage Theft in the Day Labor Market

In recent years, workers’ rights advocates have turned to a novel tactic in the fight against employer exploitation: pushing for the criminalization of wage theft. In a growing number of jurisdictions, advocates have persuaded lawmakers to pass laws imposing criminal sanctions — hefty fines and the possibility of imprisonment — onto employers for engaging in these bad acts. In this Essay, I focus on the challenges of enforcing wage theft laws within those industries dependent on unauthorized immigrant labor. I argue that federal immigration enforcement programs — ranging from funding inducements to information-sharing schemes to collateral penalties — dampen the promise of turning to the police as allies in the effort to eradicate wage theft. Specifically, local law enforcement agencies (LEAs) that consider protecting unauthorized immigrants (through the enforcement of wage theft laws) must do so amid competing pressures to identify and detain unauthorized immigrants (through the enforcement of federal immigration laws). The structure and design of these federal immigration enforcement programs make it difficult for LEAs to fully withdraw from the larger enterprise of identifying and removing immigrants, which is necessary to effectively enforce wage theft laws in immigrant-dominated communities. My point here is not to dissuade labor rights advocates from ever turning to the criminal justice system for help in the fight against workplace exploitation. But assessing whether the police can solve the problem of wage theft in the day labor market requires further study. Thus, I conclude the Essay with a research agenda of sorts in which I lay out further research trajectories to help answer the question of when policing wage theft can be both effective and desirable.
Institutional stickiness of democracy in post-communist states: Can prevailing culture explain it?

Structural explanation of political development offers a finite set of factors that cause democracy to consolidate or not (Acemoglu and Robinson 2006). This approach is, however, insufficient to explain political development of post-communist countries because it ignores a role of social arrangements in democratic consolidation. The field of comparative political economy is becoming more acceptable to the idea that social institutions have significant impact on political development (Boettke et al. Review of Austrian Economics 18(3–4): 281–304, 2005). Using transitional experience of post-communist countries, I demonstrate that institutional stickiness of democracy depends on a combination of causal factors, including underlying political culture (Boettke et al. American Journal of Sociology and Economics 67(2), 2008; Pejovich The Review of Austrian Economics 16(4):347–361, 2003).
A study of competing designs for a liquidity-saving mechanism

Abstract We study two designs for a liquidity-saving mechanism (LSM), a queuing arrangement used with an interbank settlement system. With a balance-reactive LSM, banks can set a balance threshold below which payments are not released from the queue, an action not possible with a receipt-reactive LSM. Payments that are costly to delay are settled earlier with a receipt reactive LSM. Payments that are not costly to delay may be queued with a balance reactive LSM but are always delayed with a receipt reactive LSM. We show that either system can provide higher welfare.
Pardon Me: The Constitutional Case Against Presidential Self-Pardons

Can a president pardon himself? President Nixon thought so, and seriously considered it, and the specter of a self-pardon has been raised several times since then. But the answer is unclear. This note makes the case against the validity of self-pardons, using arguments from the Constitution's history, text, and structure, and from general legal principles. In brief, the Framers either assumed that self-pardons were invalid or at most failed to consider the issue. The text they wrote does not say anything specific about self-pardons, but their failure to explicitly ban self-pardons cannot be read as a decision to allow them. Looking at the structure of the Constitution and the government it creates, we find a general distaste for self-dealing and a specific notion of a presidency that is limited in ways that are inconsistent with allowing self-pardons. Finally, general principles about the rule of law and against self-judging militate strongly in favor of the notion that self-pardons are invalid.
What do bond holdings reveal about international funds' preferences? ☆

Abstract International bond funds are important institutional investors in emerging markets and their asset allocation decisions have significant implications for bond market developments and debt management policies in developing countries. This paper studies emerging market bond holdings of international funds and analyzes economic and financial factors affecting their bond preferences. It shows that mutual funds prefer to invest in countries with sound fundamentals and more openness to trade. In addition, they favor bonds with high past returns and yields while averting bonds with high transaction costs and idiosyncratic risks.
Assortment management under the generalized attraction model with a capacity constraint

We consider an assortment optimization problem where a retailer chooses a set of substitutable products to maximize the total expected revenue or profit subject to a capacity constraint. The customer purchase behavior follows the generalized attraction model (GAM), of which the multinomial logit model and the independent demand model are special cases. We visualize the efficient assortments and propose a nonrecursive polynomial-time algorithm to find the optimal one for the static problem. We then connect it with the concept of efficient set in the context of revenue management and show that the efficient sets, the only candidates for the optimal assortments under the capacitated GAM formulation, are of polynomial size. Moreover, the efficient sets significantly reduce the computational complexity in the dynamic assortment management and the optimal policy has a time-threshold structure.
Guarding the Subjective Premium: Condemnation Risk Discounts in the Housing Market

We propose the condemnation risk discount theory, whereby home buyers deduct a discount from housing prices in the absence of insurance against the risk that the government will condemn their property for private transfer. Homeowners cannot separate out the negative risk that their home will be condemned from the positive effect that high-value redevelopment projects may have on the surrounding area. There are, consequently, competing effects of the risk of eminent domain on fair market value.
Operation Arbitration: Privatizing Medical Malpractice Claims

Binding arbitration is generally less available in tort suits than in contract suits because most tort plaintiffs do not have a pre-dispute contract with the defendant, and are unlikely to consent to arbitration after the occurrence of an unforeseen injury. But the Federal Arbitration Act applies to all “contract[s] evincing a transaction involving commerce,” including contracts for healthcare and medical services. Given the broad trend towards arbitration in nearly every other business-to-consumer industry, coupled with some rollbacks in tort reform measures that have traditionally favored medical professionals in the judicial system, it is very possible that we may witness in the near future more medical contracts containing arbitration provisions. As a consequence, all manner of tort claims (including negligence, loss of chance, and other allegations of medical malpractice resulting in physical and psychological injury) might be hashed out in the sequestered universe of arbitration.
Can Sticky Price Models Generate Volatile and Persistent Real Exchange Rates

The central puzzle in international business cycles is that real exchange rates are volatile and persistent. The most popular story for real exchange rate fluctuations is that they are generated by monetary shocks interacting with sticky goods prices. We quantify this story and find that it can account for some of the observed properties of real exchange rates. When prices are held fixed for at least one year, risk aversion is high and preferences are separable in leisure, the model generates real exchange rates that are as volatile as in the data. The model also generates real exchange rates that are persistent, but less so than in the data. If monetary shocks are correlated across countries, then the comovements in aggregates across countries are broadly consistent with those in the data. Making asset markets incomplete or introducing sticky wages does not measurably change the results.
Do Community-Based Voter Mobilization Campaigns Work Even in Battleground States? Evaluating the Effectiveness of MoveOn's 2004 Outreach Campaign ∗

One of the hallmarks of the 2004 presidential election was the unusual emphasis on face-to-face voter mobilization, particularly face-to-face mobilization conducted within neighborhoods or social networks. Unlike previous studies of face-to-face voter mobilization, which have focused largely on nonpartisan campaigns conducted during midterm or local elections, this study assesses the effects of a campaign organized by MoveOn.org, an organization that allied itself with the Democratic Party in 2004 to aid presidential candidate John Kerry. A regression discontinuity analysis of 46,277 voters from 13 swing states demonstrates that neighbor-to-neighbor mobilization substantially increased turnout among target voters during the 2004 presidential election. Contact with MoveOn volunteers increased turnout by approximately nine percentage-points. This finding corroborates experimental findings showing the effectiveness of door-to-door canvassing but contradicts results suggesting that such mobilization is ineffective in the context of high-salience elections.
Commentary on “Analysis of Choice Expectations in Incomplete Scenarios,”

This paper addresses an important topic in the preference elicitation field, namely the method of inferring population preference from hypothetical choice data collected from a random sample of that population. While criticized by a subset of economists who object to the hypothetical nature of the responses and put faith only in preference predictions derived from revealed preference analysis, hypothetical choice analysis is widely used in a range of economic applications that draw their data from, for example, panel studies. Manski attempts to provide a solid theoretical basis for the use of such response data. The focus of his present paper is the use of probabilistic expectations data to predict behavior in feasible or counterfactual scenarios. Given the rich context in which actual decisions are made, any choice scenario described by a researcher is bound to be incomplete. The contribution of the paper lies in its attempt to combine assumptions about respondents' preference formation with assumptions about their expectations of unspecified scenario details that may affect their preferences.
Board Composition, Managerial Ownership, and Firm Performance: An Empirical Analysis

Our objective is to examine the sensitivity of simultaneous equations techniques in corporate governance research. We model Tobin's Q, board composition, and managerial ownership using a three-equation instrumental variables approach, with two specifications and four instruments. We find that the variables are jointly determined. However, results depend strongly on the specification of the model and the instruments. We conclude that results using simultaneous equations methods must be interpreted cautiously, OLS estimates should not be casually dismissed, and that sensitivity analysis is essential when estimating an empirical model whose structure is uncertain.
Aggressive Boards and CEO Turnover

This study investigates a communication game between a CEO and a board of directors where the CEO's career concerns can potentially impede value‐increasing informative communication. By adopting a policy of aggressive boards (excessive replacement), shareholders can facilitate communication between the CEO and the board. The results are in contrast to the multitude of models which generally find that management‐friendly boards improve communication, and help to explain empirical results concerning CEO turnover. The results also provide the following novel predictions concerning variation in CEO turnover: (1) there is greater CEO turnover in firms or industries where CEO performance is relatively more difficult to assess; (2) the board is more aggressive in their replacement of the CEO in industries or firms where the board's advisory role is more salient; and (3) there is comparatively less CEO turnover in firms or industries where the variance of CEO talent is high.
Inadmissible in Iberia: The Fate of Asylum Seekers in Spain and Portugal

During the past decade both Spain and Portugal have amended their legislation to add an inadmissibility phase to their asylum procedures. These inadmissibility proceedings follow an accelerated pace and include a broad array of grounds for rejecting applications. Asylum seekers deemed inadmissible under these procedures never receive a hearing on the substance of their claims for protection. The expansive inadmissibility grounds in Spain and Portugal prevent an applicant from entering the refugee status determination proceeding if an inadmissibility examiner concludes that the application contains false, implausible, or outdated information or deems the application unfounded. Additionally, an examiner can declare inadmissible an asylum seeker with a well founded fear of persecution if the examiner concludes that the asylum seeker engaged in conduct that precludes refugee status. Despite the complex evidentiary issues raised, the inadmissibility examiners make their decisions on an expedited timetable in circumstances that exacerbate cultural and class biases that undercut reliable decision making. This approach to inadmissibility proceedings thwarts the humanitarian purpose of asylum policy and increases the likelihood of refoulement to persecution, torture, and inhuman or degrading treatment. It deters asylum seekers and violates international obligations to protect refugees. Moreover, it conflicts with the proposed EU Procedures Directive, which limits inadmissibility grounds to ascertaining the state with the responsibility for hearing an asylum request and to repetitive petitions. Consequently, the great majority of contemporary justifications for inadmissibility decisions will be impermissible under the Procedures Directive, rendering much of the current Spanish and Portuguese inadmissibility proceedings unlawful.
Can Vermont Put the Nuclear Genie Back in the Bottle? A Test of Congressional Preemptive Power

Even before the nuclear core meltdowns at the Fukushima Daiichi nuclear reactors in Japan re-stoked public anxiety about nuclear energy, Vermont’s Senate, under the auspices of Vermont Act No. 160, voted to block continued operation of Vermont Yankee Nuclear Power Plant after the expiration of its forty-year operating license. This article examines whether a state can legislatively override a permit issued by the Nuclear Regulatory Commission extending the license of a power plant. The author places this question within a broader federalism context, in which states assert their sovereign rights to regulate the environment in the shadow of federal mandates. She finds persuasive the absence of an express preemption provision in the Atomic Energy Act (AEA) or language mandating the use of nuclear power, the AEA’s reservation of state authority over the generation, sale, and transmission of energy produced by nuclear power plants, and the passage of environmental laws giving states regulatory authority over some aspects of nuclear power plant operation. Additionally, the author argues that policy arguments favoring preemption, such as the need for uniformity and coordination of shared resources, superior federal resources and technical knowledge, and prevention of spillover effects do not apply in this situation; while arguments against preemption, such as preserving states as robust centers of governance and regulatory experimentation and as checks on federal government excesses and errors, and avoidance of regulatory gaps and regulatory capture, do. Even collective action problems, which arise when a state thinks solely of its own interests to the detriment of other states or the nation as a whole and often favor preemption, are weak. An argument that Vermont’s initiative may derail recent national efforts to “restart” the nuclear power industry as a way to reduce the nation’s dependence on foreign oil and its global carbon footprint also gains little traction. For these and other reasons, the author concludes that Vermont Act No. 160 should withstand a preemption challenge.
University licensing and the flow of scientific knowledge

Abstract As university involvement in technology transfer and entrepreneurship has increased, concerns over the patenting and licensing of scientific discoveries have grown. This paper examines the effect that the licensing of academic patents has on journal citations to academic publications covering the same scientific research. We analyze data on invention disclosures, patents, and licenses from the University of California, a leading U.S. academic patenter and licensor, between 1997 and 2007. We also develop a novel “inventor-based” maximum-likelihood matching technique to automate and generalize Murray's (2002) “patent-paper pairs” methodology. We use this methodology to identify the scientific publications associated with University of California patents and licenses. Based on a “difference-in-differences” analysis, we find that within our sample of patented academic discoveries, citations to licensed patent-linked publications are higher in the three years after the license, although this difference is not statistically significant. We then disaggregate our sample into (a) patented discoveries that are likely to be used as “research tools” by other researchers (based on the presence of material transfer agreements (MTAs) that cover them) and (b) patented discoveries not covered by MTAs. Citations to publications linked to licensed patents in the latter subset (not covered by MTAs) are higher for publications linked to licensed patents, and this difference is statistically significant. In contrast, licensing of patented discoveries that are also research tools is associated with a reduction in citations to papers linked to these research advances, raising the possibility that licensing may restrict the flow of inputs to “follow-on” scientific research.
Rationality and salience

A number of authors, including Thomas Schelling and David Lewis, have envisaged a model of the generation of action in coordination problems in which salience plays a crucial role. Empirical studies suggest that human subjects are likely to try for the salient combination of actions, a tendency leading to fortunate results. Does rationality dictate that one aim at the salient combination? Some have thought so, Thus proclaiming that salience is all that is needed to resolve coordination problems for agents who are rational in the sense of game theory. I argue against this position; rational agents will not necessarily aim for the salient. It remains to explain how the salient comes to be chosen by human beings. Various possibilities are noted. One involves a mechanism invoked by Hume and Wittgenstein in other contexts: we may project an unreasoned compulsion onto reason, falsely believing that rationality dictates our choice of the salient.
Jurisdictional Control and Network Growth

Transport infrastructure evolves over time in a complex process as part of a dynamic and open system including travel demand, land use, as well as economic and political initiatives. As transport infrastructure changes, each traveler may adopt a new schedule, frequency, destination, mode, and/or route, and in the long term may change the location of their activities. These new behaviors create demand for a new round of modifications of infrastructure. In the long run, we observe the collective change in the capacity, service, connectivity, and connection patterns (topology) of networks. This paper examines how a fixed set of places incrementally gets connected as transport networks are constructed and upgraded over time. A simulator of network incremental connection (SONIC) is constructed to model the process of incremental connections and examines how networks evolve differently under centralized versus decentralized jurisdictional initiatives. Exploring the mechanism underlying this dynamic process can answer questions such as how urban networks have developed into various topologies, which network patterns are more efficient, and whether and how transport engineers, planners, and decision makers can guide the dynamics of land uses and infrastructure in a desired direction.