cssi/SciSciGPT-SciSciNet huggingface dataset:
Defensive Leveraging in Antitrust

Antitrust commentators have struggled to explain why firms engage in leveraging behavior and whether leveraging damages competition. The literature has focused on whether a firm with a monopoly in one market can use leveraging to gain additional monopoly profit from a second market. This article introduces the theory of defensive leveraging. According to the theory, leverage behavior should not be analyzed solely as an attempt to reap additional monopoly profit from a second market. Rather, it may be an attempt to prevent erosion of the primary monopoly. The article analyzes the life cycle of a monopoly and explains how defensive leveraging helps a monopolist extend the life of its primary monopoly by preventing splintering and next generation substitution. The article then applies defensive leveraging theory to three market examples: Microsoft's behavior in the market for Internet browsers, competition between physician and nonphysician health care providers, and Eli Lilly's behavior in the market for cephalosporins.
Harmelin's Faulty Originalism

In Harmelin v. Michigan, in 1991, Justice Scalia, writing only for himself and Chief Justice Rehnquist, set forth the claim that the Cruel and Unusual Punishments Clause, as understood in 1791, did not require proportionality in sentencing. Instead, he argued, it was understood at that time as addressing only certain methods of punishment. Twenty-one years later, the plurality opinion in Harmelin remains the foundation for conservative originalist arguments against the notion that the Clause forbids disproportionate punishment. It has continued to be cited by its adherents, Justices Scalia and Thomas, as recently as the last week of the October 2011 Term.Building on the contributions of others, but with the addition of new insights, this Essay contains a point-by-point refutation of the arguments made by Justice Scalia in Harmelin. It demonstrates that the original understanding of the Cruel and Unusual Punishments Clause is not nearly as clear as the Harmelin plurality opinion pretends. To the extent that there was any consensus in 1791, it appears that the framers and ratifiers of the Clause contemplated that it encompassed some requirement of proportionality. The notion that the Clause was clearly understood as forbidding only certain methods of punishment is demonstrably false. Indeed, the use of the term “cruel or unusual” to constrain Congress’ power to punish violators of confederal customs laws under the Articles of Confederation strongly suggests that the term encompassed a proportionality component.
Lawyers, GATS, and the WTO Accountancy Disciplines: The History of the WTO's Consultation, the IBA GATS Forum and the September 2003 IBA Resolutions

This article addresses issues related to legal services and the General Agreement on Trade in Services or GATS. The article begins by focusing on “Track #2” of the GATS and the obligation under GATS Article VI:4 to develop “any necessary disciplines.” In 1998, WTO Members implemented GATS Article VI:4 by adopting “Disciplines” that apply to the accountancy sector. WTO Members currently are in the process of deciding whether to extend the WTO Accountancy Disciplines, S/L/64, to other service sectors, including legal services. In December 2002, the WTO sent the International Bar Association (IBA) and other non-governmental organizations a “consultation letter” requesting their views about any changes that would be needed in the WTO Accountancy Disciplines if the Disciplines were to be applied to legal services. The IBA responded to this consultation with the May 2003 IBA GATS Forum held in Brussels. This day-long Forum addressed two issues, one of which was WTO’s consultation about the WTO Accountancy Disciplines. (The Forum also addressed the issue of which classification system to use in the ongoing GATS negotiations.) Following the IBA GATS Forum, the IBA Council unanimously adopted two resolutions: one resolution specified the IBA’s recommended changes to the Accountancy * Professor of Law, Penn State Dickinson School of Law (contact: LTerry@psu.edu). The author wishes to thank the International Bar Association and the members of the IBA WTO Working Group for the useful comments and assistance they provided in connection with the IBA GATS Forum, the resulting IBA resolutions and the preparation of this article; they have been a pleasure to work with. The author also would like to thank Jacinta Testa for her research assistance and Linda Olsen for her editorial assistance. TERRY.DOC 1/5/2005 12:08 PM 696 PENN STATE INTERNATIONAL LAW REVIEW [Vol. 22:4 Disciplines; the second resolution recommended Terminology to use in GATS negotiations, but not go so far as to endorse a classification system. In December 2003, the IBA transmitted these resolutions to the WTO. This article describes the events before, during, and after the IBA GATS Forum. It provides a legislative history of the September 2003 adoption of the IBA Resolution Regarding the Suitability of Applying the WTO Accountancy Disciplines to the Legal Profession and the IBA Resolution in Support of a System of Terminology for Legal Services for the Purposes of International Trade Negotiations. This article includes as appendices to documents related to the IBA GATS Forum and subsequent IBA Resolutions.
Prison Labor: Its Control, Facilitation, and Terms

Offenders sentenced to prison often retain little control over their own labor. But is the view that the state rightfully controls the labor of offenders defensible? I argue that it is not, that though other rights of offenders might justifiably be curtailed by legal punishment, the right to control their labor is retained by offenders. The state must therefore seek to attract the labor of prisoners, rather than compel it. Numerous benefits to offenders and the wider community would result from having prisoners work and be paid for it. However, if prisoners are to perform paid labor, the state will have to facilitate it. Various kinds of facilitation and the problems with them are discussed.
Decomposing differences in the first moment

Abstract We propose a simple methodology for decomposing differences in the first moment into characteristics and coefficients effects. This methodology provides a way to apply the Blinder–Oaxaca decomposition to a non-linear function for both aggregate and detailed decompositions.
Social Justice and Liberation

Justice is the virtue we practice by giving people what is due them. Therefore, there is a problem of assignability when we consider an unjust social order: What is due from an individual beneficiary of that order to an individual victim? That question is answered by the concept of social justice: What all of us individually owe to each individual victim of the institutions now in place is our best efforts to reform those institutions. The first half of this paper analyzes the traditional arguments for and the conservative arguments against social justice as the answer to this problem of assignability. Within that framework, it highlights the need for combating and remedying injustices in society even though different, unknown, or more difficult problems may arise from doing so. The second half of the paper enters into an eschatological reflection on the principles of social justice from a Christian liberation theology perspective. It concludes that the demands of social justice from this Christian perspective are two-fold. First, that the members of every class have enough resources and enough power to live as befits human beings, and, second, that the privileged class be accountable to the wider society for the way they use their advantages.
Likelihood Ratio Tests and Legal Decision Rules

Various legal decision-making criteria can be formulated as likelihood ratio tests, wherein liability, prohibition, or other outcomes are associated with evidence strength exceeding a posited threshold. Stating rules in this manner clarifies their nature, facilitates the comparison of conventional and optimal rules as well as the identification of differences between rules across contexts, and provides further illumination in instances in which a decision standard is not truly a likelihood ratio test.
Bearing Down on Trademark Bullies

Trademark bullying has become a persistent problem, with large companies intimidating smaller entities with cease and desist campaigns and achieving anti-competitive results. A number of tactics exist to deal with bullying behavior. One of them is the imposition of judicial sanctions, but the standards in that area are unclear and the defendants often do not have the financial means to engage in litigation at all. Other, extralegal measures such as shaming have shown some success, but also present numerous drawbacks and prove insufficient when used against powerful actors. This symposium contribution proposes a new model that draws on the existing functions of the Patent & Trademark Office (PTO) to stem the indiscriminate sending of cease and desist letters by large trademark holders and incentivizes them to file their claims with the PTO under certain conditions. This solution seeks to guard the interests of legitimate victims of infringement while balancing their rights with the need to protect smaller entities from the threat of ruinous litigation. If the PTO could make preliminary determinations about the validity of infringement claims, trademark owners could record evidence of policing while being discouraged from making frivolous claims.
On the Social Function and the Regulation of Liability Insurance

The sale of liability insurance presents us with a basic question. On one hand, individuals want to purchase liability insurance coverage, suggesting that its ownership is socially good. On the other, the risk against which liability coverage protects its holders is having to pay legallymandated sanctions. And because the purpose of legal sanctions is in significant part to discourage and to punish unwanted behavior, the fundamental issue arises whether liability insurance might undermine the effect of the law and thus be socially undesirable. This concern led to early resistance against the sale of liability insurance, and reservations about the wisdom of liability insurance are reflected today by certain limitations on the sale of coverage. However, liability insurance is widely held, and without apparently untoward consequences for the functioning of the legal system. My purpose in this paper is to discuss what the economic theory of insurance and of liability law imply about the social desirability, or lack thereof, of liability insurance. I first consider the standard model of accidents and determine there that liability insurance is socially desirable. I then turn to the chief circumstance under which regulation of liability insurance coverage may be justified -when incentives to reduce risk are inadequate. Inadequate incentives may arise because of judgment-proof problems or the possibility of escape from liability. Regulation of liability coverage may then help to augment diluted incentives to reduce risk. Notably, requirements to purchase coverage may improve incentives when insurers can monitor insured behavior; and the opposite form of regulation, forbidding coverage, may increase incentives when insurers are not able to monitor insured behavior. *Harvard Law School and the National Bureau of Economic Research. This paper was presented as the Annual Lecture of the Geneva Insurance Association in Amsterdam, March 31, 1999. Professor of Law and Econ omics, Harvard University, an d Research Associate, Nation al Bureau of Economic Research. I thank Lucian Bebchuk and Louis Kaplow for comments. This paper was presented as the Annual Lecture of the Geneva Insurance Association in Amsterdam, March 31, 1999. Tunc (1974, p. 50). Tunc (1974, pp. 50 -51). On the Soviet ban on coverage, see generally Rud den (1966); and see also T unc (1974, pp. 51 -52). 1 forthcoming in Geneva Papers on Risk and Insurance ON THE SOCIAL FUNCTION AND THE REGULATION OF LIABILITY INSURANCE Steven Shavell © 2000 Steven Shavell. All rights reserved.
A Habit-Based Explanation of the Exchange Rate Risk Premium

This paper presents a model that reproduces the uncovered interest rate parity puz zle. Investors have preferences with external habits. Countercyclical risk premia and procyclical real interest rates arise endogenously. During bad times at home, when domestic consumption is close to the habit level, the representative investor is very risk averse. When the domestic investor is more risk averse than her foreign coun terpart, the exchange rate is closely tied to domestic consumption growth shocks. The domestic investor therefore expects a positive currency excess return. Because interest rates are low in bad times, expected currency excess returns increase with interest rate differentials. ACCORDING TO THE UNCOVERED INTEREST RATE PARITY (UIP) CONDITION, the ex pected change in exchange rates should be equal to the interest rate differen tial between foreign and domestic risk-free bonds. The UIP condition implies that a regression of exchange rate changes on interest rate differentials should produce a slope coefficient of one. Instead, empirical work following Hansen and Hodrick (1980) and Fama (1984) consistently reveals a slope coefficient that is smaller than one and very often negative. The international economics
Depth versus rigidity in the design of international trade agreements

I examine the impact of depth and rigidity in international trade agreements. Increasing the depth of required cooperation lowers the likelihood of full compliance and the stability of a trade regi...
Did TARP Banks Get Competitive Advantages

We investigate whether the Troubled Assets Relief Program (TARP) gave recipients competitive advantages. Using a difference-in-difference (DID) approach, we find that: i) TARP recipients received competitive advantages and increased both their market shares and market power; ii) results may be driven primarily by the safety channel (TARP banks may be perceived as safer), which is partially offset by the cost-disadvantage channel (TARP funds may be relatively expensive); and iii) these competitive advantages are primarily or entirely due to TARP banks that repaid early. These results may help explain other findings in the literature, and yield important policy implications.
Litigation Funding and the Problem of Agency Cost in Representative Actions

Alternative sources of litigation funding are complicating the already difficult world of complex litigation. While still in its infancy in the United States, the role of equity financing of contingent litigation is now well rooted in Australia, and establishing itself in Canada and the United Kingdom as well. This Article examines the market gaps filled by litigation funders in Australia and then the potential role to be played in the United States. In particular, the Article looks to litigation funding as a way to potentially protect absent class members in class actions and other representative proceedings. I. WHY LITIGATION FUNDING? The funding of legal services is a subject not generally fit for polite company. We know from the Supreme Court that “a lawyer is under an ethical obligation to exercise independent professional judgment on behalf of his client; he must not allow his own interests, financial or otherwise, to influence his professional advice.” We have even been told that coerced fee waivers in statutory fee shifting cases are unlikely to affect the willingness of lawyers to take on such cases – per the Court, there is little evidence that fee waivers will affect the willingness to take cases for impoverished clients, given that “as a practical matter the likelihood of this circumstance arising is remote.” We further know from centuries of inherited English tradition that litigation is an evil to be avoided. The multiple offenses of barratry, maintenance, and champerty were all ways at rooting out the peril of “officious intermeddling in a suit that no way belongs to one, by maintaining 1 Reiss Professor of Constitutional Law, New York University School of Law. I am deeply indebted to Justice Bernard Murphy of the Federal Court of Australia for first tutoring me on the dynamics of litigation funding. I subsequently profited from insights provided by Sean Coffey, Ashley Keller, Travis Lenkner, Michael Klausner, and Francis McGovern. No views or claims in this essay should be attributed to any of these fine individuals. Dohee Min provided excellent research assistance. 2 Evans v. Jeff D., 475 U.S. 717, 728 n. 14 (1986). 3 Id. at 741 n. 34. 4 WALTER K. OLSON, THE LITIGATION EXPLOSION 2 (1991) (“America’s common law tradition, like the legal tradition of every great nation, formerly viewed a lawsuit as an evil, at best a necessary evil.”).
Images that Matter: Online Protests and the Mobilizing Role of Pictures:

Do images affect online political mobilization? If so, how? These questions are of fundamental importance to scholars of social movements, contentious politics, and political behavior generally. Ho...
Little Girl Lost: Las Vegas Metro Police Vice Division and the Use of Material Witness Holds against Teenaged Prostitutes

This article explores the Las Vegas Metro Police Vice Division routine use of material witness holds to detain young prostitutes. The Juvenile court places the girls on material witness holds seeking their cooperation in the prosecution of their traffickers and pimps. The girls languish in detention awaiting the outcome of the adult cases in which they are the central or only witness. The use of material witness holds is reviewed through the historical perspective of government response to prostitution and the history of material witness holds. The article then argues that the detention of the girls, sometimes without charges, is a form of secondary victimization. Many of the girls are from abusive homes and the system that is meant to protect them further victimizes them. The article surmises that the use of United Nations drafted protocols in dealing with trafficked women and children is a more humane approach. The women and children are not seen as persons who aided and abetted in their sexual exploitation but are seen as victims of human rights violations. The article concludes that the Las Vegas Metro should observe the international standards set forth by the United Nations and recognize a new paradigm in dealing with sex trafficking and sexual exploitation cases.
A Normal Accident or a Sea-Change? Nuclear Host Communities Respond to the 3/11 Disaster

While 3/11 has altered energy policies around the world, insufficient attention has focused on reactions from local nuclear power plant host communities and their neighbors throughout Japan. Using site visits to such towns, interviews with relevant actors, and secondary and tertiary literature, this article investigates the community crisis management strategies of two types of cities, towns, and villages: those which have nuclear plants directly in their backyards and neighboring cities further away (within a 30 mile radius). Responses to the disaster have varied with distance to nuclear facilities but in a way contrary to the standard theories based on the concept of the ‘distance decay function’. Officials in communities directly proximal to nuclear power plants by and large remain supportive of Japan's nuclear power program, while those in cities and towns at a distance (along with much of the general public) have displayed strong opposition to the pre 3/11 status quo. Using qualitative data, this article underscores how national energy and crisis response policies rest strongly on the political economy, experiences of, and decisions made at the subnational level.
Intention and Stochastic Outcomes: An Experimental study

Do people care about intentions – even when good intentions do not produce good results? In our experiments we find that rates of punishment and reward react strongly to intentions (the wage a firm decides to pay) and more modestly to distributional outcomes (the higher or lower wage actually received including the stochastic component). For example, workers who end up receiving medium wages respond much more positively when this resulted from the firm offering a high wage but bad luck lowered the worker's pay than when this resulted from the firm offering a low wage and good luck raised the pay.
Electric Shock: The 2012 India Blackout and Public Confidence in Politicians

How do disruptions in basic public service delivery shape people’s perceptions of politicians? We offer evidence from the July 2012 blackout in India, the largest in human history. Using data from the India Human Development Survey, we compare confidence in politicians between households that were surveyed during the outage and affected by it (treatment) and only days before it (control). Balance statistics show that the treatment and control groups are statistically indistinguishable, and further tests indicate that there was no disturbance to the pattern of surveying. Far from undermining public confidence in politicians, the outage increased it, as citizens reacted to the anxiety created by the crisis. The implications are normatively troubling, as politicians seem to have reaped benefits from disruptions in public service delivery. 基本公共服務提供的中斷如何影響人們對政客的看法？ 我們提供了2012年7月印度大停電的證據，這是人類歷史上最大的停電。 使用來自印度人類發展調查的數據，我們比較了在停電期間接受調查且受其影響（處理）和僅受其影響前幾天（控制）的家庭之間對政客的信心。 平衡統計數據表明，治療組和對照組在統計學上是無法區分的，進一步的測試表明，調查模式沒有受到干擾。 停電並沒有損害公眾對政客的信心，反而增加了停電，因為公民對危機造成的焦慮做出了反應。 這在規範上令人不安，因為政治人物似乎從公共服務提供的中斷中獲得了收益。 ?Como influyen las interrupciones en la prestacion de servicios publicos basicos en las percepciones de los politicos sobre las personas? Ofrecemos evidencia del apagon de julio de 2012 en India, el mas grande en la historia humana. Utilizando datos de la Encuesta de Desarrollo Humano de India, comparamos la confianza en los politicos entre los hogares que fueron encuestados durante el corte y afectados por el (tratamiento) y solo unos dias antes (control). Las estadisticas de equilibrio muestran que los grupos de tratamiento y control son estadisticamente indistinguibles, y las pruebas adicionales indican que no hubo alteraciones en el patron de la encuesta. Lejos de socavar la confianza del publico en los politicos, el apagon lo aumento, ya que los ciudadanos reaccionaron a la ansiedad creada por la crisis. Las implicaciones son normativamente problematicas, ya que los politicos parecen haber obtenido beneficios de las interrupciones en la prestacion de servicios publicos.
Government ownership, informed trading, and private information

Abstract We investigate the nature and extent of information asymmetry among traders in companies with government ownership. Consistent with a less transparent information environment, we find relatively less informed trading in the shares of firms with government presence, and specifically, fewer informed trades related to the skilled analysis of public information. At the same time, we also find that firms with government presence have a significantly higher proportion of informed trading that arises from explicitly private information, consistent with the literature on the self-serving influence of government stakeholders not necessarily committed to maximizing firm value.
Equilibrium informativeness in veto games

Abstract In a veto game a biased expert recommends an action that an uninformed decision maker can accept or reject for an outside option. The arrangement is ubiquitous in political institutions, corporations, and consumer markets but has seen limited use in applications due to a poor understanding of the equilibrium set and an ensuing debate over selection. We develop a simple method to construct every veto equilibrium and identify the most informative equilibrium in a setting that spans prior work. We show that Krishna and Morgan's (2001) equilibrium is maximally informative and strengthen Dessein's (2002) comparison of full delegation and veto. In an application we study the relationship between a patient and a doctor with a financial incentive to overtreat, and show that the doctor's bias harms the patient both through excessive treatment and information loss, that the latter can be substantial, and that insurance benefits both parties by improving communication.
The legal framework for meeting surge capacity through the use of volunteer health professionals during public health emergencies and other disasters.

Recent events such as Hurricane Katrina and the global SARS outbreak underscore the importance of having public health and medical systems that are prepared to increase surge capacity in a variety of emergency scenarios. A core component to increasing surge capacity is the availability of skilled health professionals to supplement the existing health workforce. This article examines the legal context volunteer health professionals find themselves in during public health emergencies and disasters. In addition, the article makes several recommendations about how to refine the law to increase the availability of volunteer health professionals during public health emergencies and disasters. First, states should incorporate advance registration systems and protections for volunteers into laws that authorize emergency preparedness and response efforts. These laws should explicitly define the powers of state government during emergencies and clarify the legal provisions applicable to VHPs and the entities or organizations that may rely on them. Second, a floor of legal protections for volunteers is essential to achieve a minimum level of uniformity among the states and facilitate multi-jurisdictional cooperation in emergency response. Third, the scope and breadth of state based volunteer registries must be expanded to ensure comprehensive and coordinated emergency response efforts among states. Fourth, laws must ensure balanced civil liability protections for VHPs and their host entities by creating responsible immunity protections and alternative mechanisms to compensate injured patients. Fifth, states are encouraged to enact laws and regulations providing for license portability during emergencies. Sixth, VHPs should be vested with workers' compensation protections for injuries, disabilities, or deaths experienced while carrying out their duties. Finally, state and federal laws should confer robust privacy protections on volunteer registries, implement fair information practices to allow VHPs and patients to access and verify registry data, and simultaneously ensure responsible access to and use of registry information to mount an effective response.
Keep Securities Reform Moving: Eliminate the SEC's Integration Doctrine

Small businesses are regarded as the engine that drives economic growth. Success generally requires that early stage companies be fed with sufficient infusions of capital often. It is therefore imperative that a national policy of economic growth provide adequate capital-formation opportunities for developing companies. The principal federal statute regulating the offer and sale of securities is the Securities Act of 1933 (“1933 Act” or “Act”). The 1933 Act mandates a formal registration process for all offers and sales of securities unless an exemption from registration exists. Unfortunately, start-ups and developing companies cannot, as a practical matter, raise capital under the expensive, timeconsuming process of registration. After having tapped out the founders’ and their families’ resources, the only capital-raising alternative for most companies not blessed with venture capital or angel
A nested dissection approach to modeling transport in nanodevices: Algorithms and applications

SUMMARY Modeling nanoscale devices quantum mechanically is a computationally challenging problem where new methods to solve the underlying equations are in a dire need. In this paper, we present an approach to calculate the charge density in nanoscale devices, within the context of the nonequilibrium Green's function approach. Our approach exploits recent advances in using an established graph partitioning approach. The developed method has the capability to handle open boundary conditions that are represented by full self-energy matrices required for realistic modeling of nanoscale devices. Our method to calculate the electron density has a reduced complexity compared with the established recursive Green's function approach. As an example, we apply our algorithm to a quantum well superlattice and a carbon nanotube, which are represented by a continuum and tight binding Hamiltonian, respectively, and demonstrate significant speedup over the recursive method. Copyright © 2013 John Wiley & Sons, Ltd.
Forcing The Issue: An Examination Of Johnson V. United States

“[I]t is one of the surest indexes of a mature and developed jurisprudence not to make a fortress out of the dictionary; but to remember that statutes always have some purpose or object to accomplish. . .” – Judge Learned Hand, 1945 “Any review of Supreme Court decisions will reveal numerous cases in which the Justices disagreed about the meaning of what appeared on the surface to be simple legislative language.” Additionally, in situations where there is disagreement on the meaning of statutory language, the Supreme Court has held that “[t]here is a basic difference between filling a gap left by Congress’ silence and rewriting rules that Congress has affirmatively and specifically enacted.” However, the Supreme Court’s opinion in Johnson v. United States goes against these ideals. The Johnson case involved Florida’s battery statute, which can be violated through mere touching. The issue before the Court was whether a prior conviction for battery by touching constituted a violent felony, and thus could be used for sentence enhancement under the Armed Career Criminal Act. The Supreme Court’s reversal of the Eleventh Circuit’s decision in Johnson resolved a long-standing circuit split over the statutory meaning of “physical force.” Unfortunately, the reasoning for the reversal was tenuous – based on a dictionary definition rather than the well-defined common law meaning or the legislative history – in opposition to Congress’s intent in enacting the ACCA.While the ACCA has long been a heavily debated issue, most points of contention involve the interpretation of the residual clause. The residual clause involves an analysis of what crimes present a “serious potential risk.” This case note does not join that discussion, but rather, addresses a new and important question surrounding the ACCA – the physical force clause. Prior to the Johnson decision, there was a circuit split over whether the requisite physical force to be considered a “violent felony” under the ACCA included de minimis touching or whether the physical force must be violent in nature. The Eleventh Circuit, falling on the de minimis side of the split, was reversed by the Supreme Court. However, Justice Scalia, writing for the majority, failed to follow well-established canons of statutory interpretation, as well as his own advice in previous decisions.This case note will discuss the errors in Justice Scalia’s opinion and why the Eleventh Circuit was correct in its interpretation of the ACCA. Part II will discuss the history of the ACCA. Part III will discuss the circuit split, as well as the Supreme Court’s previous interpretations of the ACCA. Part IV will discuss the facts of the Johnson case, the reasoning behind the Eleventh Circuit’s decision, and why the Supreme Court reversed. Part V will analyze the correct and incorrect aspects of Justice Scalia’s opinion and propose recommendations for how the consequences of the Johnson decision should be resolved. Part VI concludes.
When forensic examiners disagree: Bias, or just inaccuracy?

Background: Previous investigators have suggested that bias might account for the disparate rates at which examiners conclude that defendants are competent to stand trial (CST). This article describes three computer studies of how biases and imperfect accuracy might affect rates of disagreement. Methods: Study 1 assumed that examiners could discriminate between competent and incompetent accurately (effect size = 1.81, ROC area = 0.90) and used computer simulation of 20,000 pairs of CST evaluations to determine how different judgment thresholds (e.g., thresholds exemplifying biases toward opinions that defendants were competent or incompetent) would elevate disagreement rates above those expected through chance error alone. Studies 2 and 3 evaluated the assumptions of Study 1 using previously published data to make inferences about examiner accuracy and threshold locations. Results: Imperfect accuracy alone would often explain much between-examiner disagreement, even if examiners approached evaluations with distinct biases. Results from Studies 2 and 3 suggested that assumptions used in Study 1 were reasonable. Conclusion: Many instances of between-examiner disagree might be attributable to imperfect accuracy that expresses itself in random errors, rather than to examiner biases that imply different thresholds for judging defendants’ competence.
The Effect of Annual Report Readability on Analyst Following and the Properties of Their Earnings Forecasts

ABSTRACT: This study examines the effect of the readability of firms’ written communication on the behavior of sell-side financial analysts. Using a measure of the readability of corporate 10-K filings, we document that analyst following, the amount of effort incurred to generate their reports, and the informativeness of their reports are greater for firms with less readable 10-Ks. Additionally, we find that less readable 10-Ks are associated with greater dispersion, lower accuracy, and greater overall uncertainty in analyst earnings forecasts. Overall, our results are consistent with the prediction of an increasing demand for analyst services for firms with less readable communication and a greater collective effort by analysts for firms with less readable disclosures. Our results contribute to the understanding of the role of analysts as information intermediaries for investors and the effect of the complexity of written financial communication on the usefulness of this information.
Tort Reform, Kiwi-Style

American legal scholars and social scientists have long been intrigued by New Zealand's accident compensation system, which essentially abolished common law tort almost 40 years ago. This paper, prepared for a conference sponsored by the Brookings Institution and Common Good, provides an up-to-date account of the New Zealand system, with a focus on its treatment of two types of claims - for medical injuries and emotional distress - that raise particularly vexing boundary problems for the system. It then discusses a number of lessons that U.S. policymakers and scholars can draw from the New Zealand experience.
Emerging Economy Responses to the Global Financial Crisis of 2007-09 - An Empirical Analysis of the Liquidity Easing Measures

This paper draws on a unique data set on the nontraditional systemic liquidity easing measures recently undertaken by many emerging market economies. It offers an empirical analysis of the key determinants affecting the decision to undertake these measures over the period September 2008–March 2009. The paper finds that economy size, access to international credit markets, CDS spreads, currency depreciation, and current account balances are among the key factors influencing the adoption of these measures. It provides a rationale for the differences in central bank policy responses, which reflect differences in economic structures rather than conflicting views on fundamental principles. The paper also provides a preliminary assessment of the effectiveness of these measures and points out that despite their positive impacts, they have not fully shielded the real economy from the recent financial meltdown. This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. JEL Classification Numbers: E44, E52, E58.
Boom–bust cycles: Leveraging, complex securities, and asset prices

Abstract Recent history suggests that many boom–bust cycles are naturally driven by linkages between the credit market and asset prices. Additionally, new structured securities have been developed, e.g., MBS, CDOs, and CDS, which have acted as instruments of risk transfer. We show that there is a certain non-robustness in the pricing of these instruments and we create a model in which both their role in the recent financial market meltdown, and in which the mechanism by which they exacerbate leverage cycles, is explicit. We first discuss the extent to which complex securities can amplify boom–bust cycles. Then, we propose a model in which distinct financial market boom–bust cycles emerge naturally. We demonstrate the interaction of leveraging and asset pricing in a dynamical model and spell out some implications for monetary policy.
Risk and Market Segmentation in Financial Intermediaries' Returns

This study examines both the quantity and price of risk exposure for different segments of financial intermediaries. Overall, we find evidence of market segmentation in the U.S. financial services industry. Specifically, we find that securities firms, consistently over the sampling period 1974–1994, had the most market risk exposure with the lowest market risk premium. Banks' market risk fluctuated over the sampling period. Banks increased their market risk-taking after the shift in monetary target in October 1979 and the announcement of the risk-based capital requirements in July 1988. The banks' market risk became the highest and insignificantly different from securities firms'. The results are consistent with the moral hazard argument; that is, banks took on more risk to take advantage of government guarantees as their charter value declined. Banks were subject to relatively high interest rate risk premium. However, in response to increased interest rate volatility and decreased charter value after October 1979, banks (while they increased their market risk exposure) lowered their interest rate risk exposure to an insignificant level. The results suggest that the federal safety net may have been perceived by the market as covering only market risk but not interest rate risk. Overall, we find little evidence of interest rate risk exposure, suggesting the prevalence of hedging programs using interest rate derivatives. The interest rate risk premiums, unlike the risk exposure, differ across financial intermediaries.
The Ticket to Easy Street? The Financial Consequences of Winning the Lottery

Abstract This paper examines whether giving large cash transfers to financially distressed people causes them to avoid bankruptcy. A comparison of Florida Lottery winners who randomly received $50,000 to $150,000 to small winners indicates that such transfers only postpone bankruptcy rather than prevent it, a result inconsistent with the negative shock model of bankruptcy. Furthermore, the large winners who subsequently filed for bankruptcy had similar net assets and unsecured debt as small winners. Thus, our findings suggest that skepticism regarding the long-term impact of cash transfers may be warranted.
Regulated Deregulation: The New York Experience in Electric Utility Deregulation

Conventional wisdom has been that public utility regulation of electric utilities was a failed enterprise and that better public policy would be to deregulate electricity, much as we have deregulated other industries. This article describes how that deregulation has been done in New York State. The article argues that rather than full deregulation, New York has replaced one regulatory system with another, albeit one that is more sensitive to economic incentives. The article reviews the process followed by New York in adopting electricity deregulation, particularly the collaborative effort between the New York Public Service Commission and the industry to articulate a "vision" for the electric utility industry in New York, and describes the difficulties in implementing deregulation. Four factors help explain the deregulation shortfall: the institutions of deregulation; the approach that regulators have taken to "market power"; the industrial facts of electricity markets; and the design of the wholesale auction market. The article concludes that although structural and design factors have led (predictably) to more of a regulated electric market than was promised, the goal of deregulation should not be abandoned. Instead, the PSC will need to move from regulatory agency to "supervisor of competitive markets," with a focus on market-set prices rather than regulated ones and on the incentives necessary for capital investment in generation and transmission capacity.
Unsafe Harbor: An Analysis of Local Government Use of Harboring Ordinances to Restrict Illegal Aliens’ Access to Housing

This article is an analysis of the use of “harboring” ordinances to restrict illegal aliens’ access to housing. In particular, we analyze the promulgation of harboring statutes in the communities of Valley Park, Missouri and Escondido, California in the context of social justice. Our thesis is that the promulgation of harboring laws by local governments frustrates our country's ability to build a cohesive and consistent national policy towards the provision of shelter to illegal aliens. When local governments legislate in this area, we find that at least three major problems arise: (1) there is an increase in the number of disparate rules in this policy domain, thus frustrating the construction of a cohesive national policy scheme; (2) this leads to an increase in the opportunities for disparate interpretations of laws modeled after a federal law; and (3) there is the potential for the creation of unintended deleterious effects on the access to housing by illegal aliens. As such, we make a number of assoc...
The impact of direct democracy on state spending priorities

Do direct democracy institutions affect governmental policy? Previous research on the American states has generated a disparate variety of findings, so there is no scholarly consensus on this question. We argue that many earlier works were limited by their focus on single policy areas or static analyses. To overcome these issues, we analyze yearly data on governmental spending priorities across a full array of policy areas in the 50 states from 1982 through 2011. Our results clearly show that direct democracy states devote more resources to collective goods policies while non-direct democracy states emphasize particularized benefits. This difference occurs because public preferences in direct democracy states are more closely aligned with policy priorities than is the case in states without direct democracy institutions.
Integrating Practice into Accounting Research

I argue that academic research in accounting has strayed from producing work that is useful to either practitioners or policy makers. I use three criteria to arrive at that assessment: (i) How many...
An Empirical Study of Single-Tier versus Two-Tier Partnerships in the Am Law 200

During the last decade, many of the nation's largest law firms have converted from single-tier to two-tier (or multi-tier) partnerships. A two-tier firm contains separate tracks for equity and nonequity partner. The equity tier typically controls the firm and enjoys a larger per capita share of the firm's profits. At present, two-tier partnerships make up 80 percent of Am Law 200. The conventional explanation for the growth of the two-tier system (or, conversely, the abandonment of the single-tier) is that it produces higher profits per equity partner (PPP), thus solidifying the prestige of the firm and improving its ability to attract the best legal talent. Drawing upon a comprehensive dataset of Am Law 200 firms, this study documents that average PPP is significantly higher in single-tier firms, even after controlling for geographic market segment and firm leverage. The higher profitability of single-tier firms appears to be a function of higher levels of reputational capital, which enable single-tier firms to (a) attract and retain a more lucrative client base, and (b) run a more rigorous promotion-to-partnership tournament.Based upon a ten-year longitudinal sample, this study also found negligible statistical evidence that the two-tier structure, after controlling for relative starting position and geographic market, is associated with larger gains in PPP. In light of its uncertain financial benefits, the author theorizes that the two-tier structure is primarily a bonding mechanism used by less prestigious firms to institutionalize a marginal product method of partnership compensation and consolidate managerial control for the benefit of the firm's most powerful partners. Failure to switch to the two-tier structure leaves the firm vulnerable to defections and possible collapse. As a result, the primary economic benefit of the two-tier format may be firm stability rather than higher average PPP. Finally, this study provides some evidence that the appeal of permanent nonequity partnership status, which typically entails fewer professional demands, may set in a motion an adverse selection problem at the associate recruitment level, thus undermining some of the perceived benefits of a two-tier (or multi-tier) format.
Security Recommendations and the Liabilities of Broker-Dealers

I investigate the liabilities of broker-dealers from the arbitration of investor claims relating to security recommendations. I find that investor awards are more positive for claims involving securities that are more difficult to evaluate, and that the more positive awards relate to investor assertions of a fiduciary duty violation and to investor assertions of a suitability violation. I also find that the length of the arbitration, a measure of the cost of arbitration and a proxy for the potential difficulty of the two parties to directly settle the dispute, are greater for these claims. Overall, the results indicate that broker-dealers can have additional liabilities when recommending securities that are more difficult to evaluate. The results illustrate the importance of the applicable laws, including arbitration as a forum for dispute resolution, as a determinant of the liabilities or potential costs of broker-dealers to provide security recommendations.