cssi/SciSciGPT-SciSciNet huggingface dataset:
The Myth of the Residual Owner: An Empirical Study

In economic theory, the residual owner is the perfect person to control the bankrupt firm. The residual owner risks its own money and has incentives identical to those of the firm. But in more than fifteen years of trying, scholars have not been able to specify a mechanism that would identify the residual owner of a bankrupt firm and put that residual owner in control. Despite this lack of success, scholars continue to frame their theories in terms of residual owners and continue to propose mechanisms. The most recent was proposed by Baird and Rasmussen in 2002. This article recounts the theoretical debate and presents the findings of an empirical study. The principal finding was that no single residual owner class existed in the large majority of reorganizing firms studied. Instead, investors from more than one priority level shared the marginal dollar of gains or losses. The article concludes that no mechanism can identify and empower the single residual owner class because, in the large majority of cases, no single residual owner class exists. The study included data on 78 to 86 of the 98 large, public companies that emerged from bankruptcy reorganization from 1991 to 1996. Tables present class-by-class data on percentage recoveries by unsecured and shareholder classes in each of the cases. Creditor investors were considered residual owners if they recovered at least 10% and less than 90% of their claims. Shareholders were considered residual owners if they received at least 10% of the stock of the emerging firm and that stock had a value of at least $5 million. The data show that investors at different levels of priority shared residual owner status in more than 62% of the cases. The average number of investor priority levels in the reorganizing firms was 4.3; the median was 4. Subordinated debt existed in 70 of 86 cases (81%).
Refusals to License Intellectual Property after Trinko

Refusals to license intellectual property (IP) present one of the thorniest issues in antitrust law. Such activity is privileged under the IP regime, the foundation of which is the right to exclude. But it may be punished under antitrust law, which focuses on competition. The courts have promulgated a number of inconsistent tests in determining whether IP refusals to license constitute monopolization. They have granted absolute immunity to the patentee, applied various rebuttable presumptions, and examined whether an essential facility was denied. Throughout this disarray, the Supreme Court has stayed on the sidelines. But the decision of Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, L.L.P. (Trinko), which addressed a telephone company's refusal to share its network with rivals, provides a range of clues as to how the Court would treat IP refusals to license. In this short symposium piece, I analyze six elements of the Trinko opinion that shed light on the Court's likely treatment of such conduct. In particular, I examine the Court's general themes of the benefits of monopoly power, the dangers of sharing, and the costs of antitrust, and specific treatment of claims addressing refusals to deal, essential facilities, and monopoly leveraging. I conclude that the Court's likely deference to IP refusals to license would support lower court cases proffering immunity and not support intent-based rebuttable presumptions or essential facility approaches. In short, Trinko will make it more difficult for plaintiffs to challenge IP refusals to license.
Leasing and Debt Financing: Substitutes or Complements?

Traditional finance theories typically treat leases and debt as substitutes. However, the empirical findings on the relation between leases and debt are mixed. This paper reinvestigates this relation. I present a model to incorporate different theories on the substitutability and complementarity between leases and debt, and I test the model implications empirically in a GMM framework that simultaneously controls for endogeneity problems and firms' fixed effects. The findings suggest that leases and debt are substitutes instead of complements. I also investigate the variation in the substitutability between leases and debt, and find that in those firms with more growth options or larger marginal tax rates, or in those firms paying no dividends, the substitutability is more pronounced, i.e., the cost of new debt increases to a larger degree with extra leases.
Race, Religion, and Informed Consent ‐ Lessons from Social Science

That minority patients have not figured at all in the literature about informed consent is an egregious omission which this article begins to repair. Moreover, the article demonstrates that by addressing identifiable harms which informed consent law now causes to racial, religious, and ethnic minority patients, the law may also better address many of the concerns legal commentators have been discussing for years with only majority patients in mind. Ironically, the solution to the discrimination felt by the excluded members of society may turn out to provide the remedy for the informed consent doctrine as a whole.
Do Labour Market Conditions Affect Gift Exchange? Some Experimental Evidence*

Financial support from the Spanish Ministerio de Educacion y Cultura (SEC2002-01352) is gratefully acknowledged. Charness also gratefully acknowledges support from the MacArthur Foundation and the Russell Sage Foundation and Brandts from the Barcelona Economics Program of CREA.
Voluntary Disclosure Incentives and Earnings Informativeness

ABSTRACT: We propose that the value of the earnings reporting process as an information source lies in limiting delays in the release of bad news, either by inducing managers to disclose it voluntarily or by directly releasing the negative news that managers have incentives to withhold. We compare earnings informativeness in bad-news and good-news quarters. Using returns to measure news, we find, consistent with our prediction, that earnings informativeness relative to other sources is higher in bad-news quarters than in good-news quarters. Further, cross-sectional tests indicate that earnings differential informativeness in bad-news quarters is more pronounced when managers do not voluntarily disclose the news, information asymmetry is stronger, and managers are net sellers of stock. JEL Classifications: G3; M4; M40; M41; M48. Data Availability: Data are available from Compustat, CRSP, First Call, I/B/E/S, ISSM, TAQ, and Thompson Financial.
The Consensus Myth in Criminal Justice Reform

It has become popular to identify a “bipartisan consensus” on criminal justice reform, but how deep is that consensus, actually? This Article argues that the purported consensus is largely illusory. Despite shared reformist vocabulary, the consensus rests on distinct critiques that identify different flaws and justify distinct policy solutions. The underlying disagreements transcend traditional left/right political divides and speak to deeper disputes about the state and the role of criminal law in society. The Article offers a typology of the two prevailing, but fundamentally distinct, critiques of the system: (1) the quantitative approach (what I call the “over” frame); and (2) the qualitative approach (what I call the “mass” frame). The “over” frame grows from a belief that criminal law has an important and legitimate function, but that the law’s operations have exceeded that function. This critique assumes that there are optimal rates of incarceration and criminalization, but the current criminal system is sub-optimal in that it has criminalized too much and incarcerated too many. In contrast, the “mass” frame focuses on the criminal system as a socio-cultural phenomenon. This reformist frame indicates that the issue is not a mere miscalculation; rather, reforms should address how the system marginalizes populations and exacerbates both power imbalances and distributional inequities. To show how these frames differ, this Article applies the “over” and the “mass” critique, in turn, to the maligned phenomena of mass incarceration and overcriminalization. The existing literature on mass incarceration and overcriminalization displays an elision between these two frames. Some scholars and reformers have adopted one frame exclusively, while others use the two interchangeably. No matter how much scholars and critics bemoan the troubles of mass incarceration and overcriminalization, it is hard to believe that they can achieve meaningful reform if they are talking about fundamentally different problems. While many reformers may adopt an “over” frame in an effort to attract a broader range of support or appeal to politicians, “over” policy proposals do not reach deeper “mass” concerns. Ultimately, then, this Article argues that a pragmatic turn to the “over” frame may have significant costs in legitimating deeper structural flaws and failing to address distributional issues of race, class, and power at the heart of the “mass” critique.
Making Schools Safer and/or Escalating Disciplinary Response: A Study of Police Officers in North Carolina Schools:

The “defund the police” movement has recently called for the removal of police—or school resource officers (SROs)—from schools. This call is driven by concerns that SROs may heighten student contac...
Ballot (and voter) “exhaustion” under Instant Runoff Voting: An examination of four ranked-choice elections☆

Some proponents of municipal election reform advocate for the adoption of Instant Runoff Voting (IRV), a method that allows voters to rank multiple candidates according to their preferences. Although supporters claim that IRV is superior to the traditional primary-runoff election system, research on IRV is limited. We analyze data taken from images of more than 600,000 ballots cast by voters in four recent local elections. We document a problem known as ballot “exhaustion,” which results in a substantial number of votes being discarded in each election. As a result of ballot exhaustion, the winner in all four of our cases receives less than a majority of the total votes cast, a finding that raises serious concerns about IRV and challenges a key argument made by the system's proponents.
Analytical calculation of risk measures for variable annuity guaranteed benefits

Abstract With the increasing complexity of investment options in life insurance, more and more life insurers have adopted stochastic modeling methods for the assessment and management of insurance and financial risks. The most prevalent approach in market practice, Monte Carlo simulation, has been observed to be time consuming and sometimes extremely costly. In this paper we propose alternative analytical methods for the calculation of risk measures for variable annuity guaranteed benefits on a stand-alone basis. The techniques for analytical calculations are based on the study of geometric Brownian motion and its integral. Another novelty of the paper is to propose a quantitative model which assesses both market risk on the liability side and revenue risk on the asset side in the same framework from the viewpoint of risk management. As we demonstrate by numerous examples on quantile risk measure and conditional tail expectation, the methods and numerical algorithms developed in this paper appear to be both accurate and computationally efficient.
The Impact of Activity-Based Costing on Managerial Decisions at Insteel Industries—A Field Study

In this field-based study, we interview top- and middle-level managers at Insteel Industries and conduct statistical analysis of firm-level data in order to shed light on whether activity-based costing (ABC) provides new information to managers and whether activity-based management (ABM) significantly influences product and customer-related decisions. We find that after the ABC analysis, Insteel undertook a number of process improvements that resulted in significant cost savings. Additionally, Insteel displayed a higher propensity to discontinue or increase prices of products and discontinue customers that were found comparatively unprofitable in the ABC study. Thus we provide empirical evidence that ABC influences both strategic and operational managerial decisions.
American Indian Law--Elucidating Constitutional Law

The incorporation of American Indian law into the study of Constitutional Law accomplishes a number of pedagogical goals as well as understanding questions concerning American Indian law that naturally evolve in the study. This broadened understanding of the United States Constitution helps to explain the complex subject of opinion writing and the role of politics in reading United States Supreme Court decisions. From a practice perspective, the incorporation of American Indian law into a Constitutional Law study further serves the purpose of explaining legal distinctions, which enable future practitioners to be knowledgeable in "spotting" issues where clients present such facts. In the first introduction of the Constitutional Law class, it takes only a few minutes to raise the subject of Indians in the United States Constitution. This discussion helps to lay the groundwork for the issues that arise throughout the course. Mentioning Indian issues may be problematic because of the question concerning the "politically correct"l term for referring to America's indigenous people. "American Indian" has been the term frequently used in cases and in legal contexts; and the term "Native American" has been recently adopted to encompass not only the indigenous people of the continental United States, but the Alaskan Natives as well. 2 If you address the Articles of Confederation, this is a good time to point out that relations with Indians provided a good bit of the impetus • VictoIia Sutton is an Associate Professor of Law at Texas Tech University School of Law. She is SecretaIy of the National Native AmeIican Bar Association for 2001-2002 and a member of the Lumbee Nation. 1. Colloquial term for framing issues in a politically acceptable manner, sensitive to all political viewpoints. 2. Both the AmeIican Association of Law Schools Section and the National Native AmeIican Bar Association have considered these references. The decision for both legal groups has been for inclusion, rather than exclusion. 539
Implementing Black-Litterman Using an Equivalent Formula and Equity Analyst Target Prices

We examine an alternative and equivalent Black and Litterman [1992] formula using classical multivariate analysis, which is easier to interpret and allows more general view formulations than the original formula. Specifically, the equivalent formula provides a more intuitive explanation under the limiting case of deterministic views, and makes it easier to show the resulting optimal portfolio as a combination of the market portfolio and a long–short view portfolio. The equivalent formula also allows for more convenient empirical implementations when views and expected return priors are correlated. We then use a numerical example to illustrate the equivalent formula, and we also implement the formula in an optimal asset-allocation setting, using equity analysts’ 12-month-ahead target price forecasts for the period 1999–2010. We show that the optimal portfolio outperforms the market (S&P 500) and this result is robust across different time periods and model parameter choices.
A compact early-type galaxy at z= 0.6 under a magnifying lens: evidence for inside-out growth

We use Keck laser guide star adaptive optics imaging and exploit the magnifying effects of strong gravitational lensing (the effective resolution is FWHM ≈ 200 pc) to investigate the sub-kpc scale of an intermediate-redshift (z= 0.63), massive early-type galaxy being lensed by a foreground early-type galaxy; we dub this class of strong gravitational lens systems EELs, i.e. early-type/early-type lenses. We find that the background source is massive (M*= 1010.9 M⊙) and compact (re= 1.1 kpc), and a two-component fit is required to model accurately the surface brightness distribution, including an extended low-surface-brightness component. This extended component may arise from the evolution of higher redshift ‘red nuggets’ or may already be in place at z∼ 2 but is unobservable due to cosmological surface brightness dimming.
Does successful small-scale coordination help or hinder coordination at larger scales?

An individual can interact with the same set of people over many different scales simultaneously. Four people might interact as a group of four and, at the same time, in pairs and triads. What is the relationship between different parallel interaction scales, and how might those scales themselves interact? We devised a four-player experimental game, the Modular Stag Hunt, in which participants chose not just whether to coordinate, but with whom, and at what scale. Our results reveal coordination behavior with such a strong preference for dyads that undermining pairwise coordination actually improves group-scale outcomes. We present these findings as experimental evidence for competition, as opposed to complementarity, between different possible scales of multi-player coordination. This result undermines a basic premise of approaches, like those of network science, that fail to model the interacting effects of dyadic, triadic, and group-scale structures on group outcomes.
Extended Yule–Walker identification of VARMA models with single- or mixed-frequency data

Chen and Zadrozny (1998) developed the linear extended Yule-Walker (XYW) method for determining the parameters of a vector autoregressive (VAR) model with available covariances of mixed-frequency observations on the variables of the model. If the parameters are determined uniquely for available population covariances, then, the VAR model is identified. The present paper extends the original XYW method to an extended XYW method for determining all ARMA parameters of a vector autoregressive moving-average (VARMA) model with available covariances of single- or mixed-frequency observations on the variables of the model. The paper proves that under conditions of stationarity, regularity, miniphaseness, controllability, observability, and diagonalizability on the parameters of the model, the parameters are determined uniquely with available population covariances of single- or mixed-frequency observations on the variables of the model, so that the VARMA model is identified with the single- or mixed-frequency covariances.
Technological Change and U.S. Productivity Growth in the Interwar Years

Manufacturing contributed almost all—83 percent—of the growth of total factor productivity in the U.S. private nonfarm economy between 1919 and 1929. During the depression manufacturing TFP growth was not as uniformly distributed, and only half as rapid, accounting for only 48 percent of PNE TFP growth. Yet the overall growth of the residual between 1929 and 1941 was the highest of any comparable period in the twentieth century. This resulted from the combination of a still potent manufacturing contribution with advances in transportation, public utilities, and distribution, fueled in part by investments in public infrastructure.
The Questionable Origins of the Copyright Infringement Analysis

Central to modern copyright law is its test for determining infringement, famously developed by Judge Jerome Frank in the landmark case of Arnstein v. Porter. The “Arnstein test,” which courts continue to apply, demands that the analysis be divided into two components, actual copying—the question whether the defendant did in fact copy, and improper appropriation—the question whether such copying, if it did exist, was unlawful. Somewhat counter-intuitively though, the test treats both components as pure questions of fact, requiring that even the question of improper appropriation go to a jury. This jury-centric approach continues to influence modern copyright law and is responsible for the subjective and unpredictable nature of the infringement analysis in a wide range of copyright infringement lawsuits (e.g., the “Blurred Lines” verdict). Looking to the judges’ memoranda and correspondence in the case, as well as their extensive extra-judicial writing around the time, reveals that the court’s decision to empower the jury was driven almost entirely by Judge Frank’s unique legal philosophy—his skeptical views about judicial fact-finding and his desire to control lower court decision-making. Characterizing the entire infringement analysis as a purely factual one provided him with a perfect mechanism for giving effect to this skepticism. The Arnstein test thus had very little to do with substantive copyright law and policy, a reality that copyright jurisprudence has thus far ignored altogether in its continuing affirmation of the opinion’s framework. This Article disaggregates the complex issues that were at play in Arnstein to show how it was rooted in a dystopian vision of the adjudicative process that has since come to be universally repudiated, and argues that it may well be time for copyright jurisprudence to reconsider its dogmatic reliance on Arnstein, thereby freeing copyright law from one of its best-known malaises.
Europe Without Borders? The Effect of the Euro on Price Convergence:

Has the introduction of the Euro reduced the economic significance of national borders across the Euro Area? This article extends Engel and Rogers well known work on border effects to cities across Western Europe over the period 1995—2004. Although cross-border prices across the Euro Area are still more volatile than within-country prices, the importance of the border has diminished since the euro was introduced in 1999. The impact of the common currency on the border effect varies by country size, with the largest decreases occurring between larger Euro countries. Although cross-border price volatility has not changed between the United Kingdom and large Euro countries, volatility has actually increased between the small Euro countries and the United Kingdom. These results are consistent with the fact that exchange rates are more likely to adjust to price differentials between small countries than between large countries.
Body and Soul: Equality, Pregnancy, and the Unitary Right to Abortion

This Article explores equality-based arguments for abortion rights, revealing both their necessity and their pitfalls. It first uses the narrowness of the “health exception” to abortion regulations to show why equality arguments are needed—because our legal tradition's conception of liberty is based on male experience, and we have no theory of basic human rights grounded in women's reproductive experiences. Next, however, the Article shows that equality arguments, although necessary, can undermine women's reproductive freedom because they require that pregnancy and abortion be analogized to male experiences. The result is that equality arguments focus on either the bodily or the social aspect of pregnancy, to the detriment of the other. Most recently, for example, Jack Balkin has argued that there are “two rights” to abortion, one based in the right to bodily integrity and one based in the right to avoid motherhood. This is the wrong way to theorize pregnancy. The body-focused arguments fail to resonate with the reasons most women seek abortions, and the role that pregnancy and abortion play in women’s lives. The burden-of-motherhood arguments imply a sunset clause on abortion rights and lend credibility to arguments for a right to “male abortion.” This division between the body and the social suggests that women’s liberty can be protected only by breaking it into pieces that have analogs in men’s experiences. When men are the norm, women’s rights become derivative. Women’s rights would stand more firmly on their own footing. The Article proposes a different framework for theorizing pregnancy. While this understanding of pregnancy could form the basis for yet more comparative equality arguments, abortion is better understood through a liberty framework developed directly from women’s experiences. 1 Associate Professor, University of Tennessee College of Law (jsh@tennessee.edu); J.D., Harvard Law School; B.A. Swarthmore College. HENDRICKS, BODY AND SOUL 2 Introduction 3 I. The Intuition About Equality and Abortion 5 II. Bodies and Burdens: Two Takes on Abortion as an Equality Right 12 A. Body-Focused Arguments: Arguing Equality When Women’s Liberty Is Not Enough 13 1. The Health Exception: Liberty Is Not Enough .......13 2. The Good Samaritan Argument 22 B. Burdens of Motherhood Arguments: An Incomplete Account of Reproductive Rights 26 1. Version One: Women in a Man’s World 26 2. Version Two: Women in a Sexist World 29 III. The Constitutional Status of Pregnancy 35 A. Pregnancy and Parenthood 36 B. Pregnancy as Parenting: A Dangerous Path? 38 1. Abortion and Mothering 38 2. Abortion Decisions as Parental Decisions 40 IV. The Dialectic of Equality 44 A. Some New Comparisons 44 1. Mandatory Visitation 45 2. Stockholm Syndrome 46 B. Affirmative Rights 48 C. The Limits of Equality 49 Conclusion 51 HENDRICKS, BODY AND SOUL 3 If men could get pregnant, abortion would be a sacrament.
Avoiding a Cliff Dive

The Future of the Internet . And How to Stop It. By Jonathan L. Zittrain . Yale University Press, New Haven, CT, 2008. 350 pp. $30. ISBN 9780300124873. () The author argues that the runaway success of the Internet has placed it on the road to a innovation-stifling and centrally monitored (and controlled) state.
A Review of Stackelberg Differential Game Models in Supply Chain Management

Over the last two decades, differential game (DG) models have been used extensively to study such issues in dynamic environments as competitive advertising and pricing for new products in the marketing literature, capacity investments in the energy industry, government's subsidy policy in new technology, and monetary and fiscal policies in economics. Recently, a number of papers have applied DGs to treat dynamic interactions between the channel members in decentralized supply chains. This review focuses on these applications. Specifically, we review papers that analyze dynamic retail-wholesale pricing strategies, joint slotting and pricing decisions to launch an innovative durable product, and investment in supply chain infrastructure. We consider Stackelberg equilibria as the solution concept for the games under consideration. We shall begin our review with an introduction to the basics of the Stackelberg DGs. We then summarize the important managerial insights obtained in each of the studies being reviewed. Finally, we point out future research avenues for applications of DGs in supply chain management.
The Economic Impact of Index Investing

We study the impact of index investing on firm performance by examining the link between commodity indices and firms that use index commodities. Around 2004, commodity index investing dramatically increased. This event is referred to as the financialization of commodity markets. Following financialization, firms that use index commodities make worse production decisions, earn 40% lower profits, and have 6% higher costs. Consistent with a feedback channel in which market participants learn from prices, our results suggest that index investing distorts the price signal, thereby generating a negative externality that impedes firms’ ability to make production decisions. Received March 31, 2017; editorial decision July 5, 2018 by Editor Itay Goldstein. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.
What Is the Impact of Software Patent Shifts? Evidence from Lotus v. Borland

Abstract Economists have debated the extent to which strengthening patent protection spurs or detracts from technological innovation. This paper examines the reduction of software copyright protection in the Lotus v. Borland decision. If patent and copyright protections are substitutes, weakening of one form should be associated with an increased reliance on the other. We find that the firms affected by the diminution of copyright protection disproportionately accelerated their patenting in subsequent years. But little evidence can be found for any harmful effects on firms' performance and incentive to innovate: in fact, the increased reliance on patents is correlated with growth in measures such as sales and R&D expenditures.
Concavity of Utility, Concavity of Welfare, and Redistribution of Income

The marginal social value of income redistribution is understood to depend on both the concavity of individuals’ utility functions and the concavity of the social welfare function. In the pertinent literatures, notably on optimal income taxation and on normative inequality measurement, it seems to be accepted that the role of these two sources of concavity is symmetric with regard to the social concern about inequality in the distribution of income. Direct examination of the question, however, reveals that this is not the case. Concavity of utility has a simple, direct effect on the marginal social value of redistribution, as might be expected, whereas concavity of the social welfare function has a more subtle influence, one that in some cases may not be very significant. The implications of this difference are examined for some standard forms of utility and welfare functions, including particular versions that appear in the optimal income taxation literature.
Idea generation: the performance of U.S. States 1997–2007

Regional prosperity increasingly depends on a region’s capacity to have command over the production of ideas. Measuring the production of ideas with patents, the objective of this paper is to analyze how the number of utility patents granted to inventors in U.S. States in different technologies changed between 1997 and 2007 and how States took advantage of the new opportunities and adapted to the changing technology landscape. The paper uses shift-share analysis, traditionally used in employment studies, for analyzing change in patents by technology categories developed by the NBER. The shift-share results show that only a few states were able to take advantage of the information technology driven increases in patents. California dominates in patent production and may be providing spillover benefits to neighboring states. The shift-share decompositions are used as variables in a fixed-effect panel-regression model of state economic growth. The regression results show that the shift-share decompositions provide statistically significant information in explaining growth after accounting for a State’s stock of patents, suggesting that States should concentrate on effective ways to boost their stock of knowledge in rapidly growing technologies to improve state economic growth.
Discussion of an economic framework for conservative accounting and Bushman and Piotroski (2006)

Abstract We offer an economic framework for generating predictions about the demand for conservative accounting reports. We define conservatism as: More timely recognition of losses than gains as a result of the costs and benefits of reporting verifiable information by managers and/or firms being asymmetric. We also discuss Bushman and Piotroski's interpretation of the speeds of “good news recognition” and “incremental bad news recognition” in “Basu-type” regressions as separate signals about accounting conservatism. Finally, we suggest avenues for future research that seeks to investigate the links between institutions and contracts, and between contracts and conservatism.
An examination of non-government-assisted US commercial bank mergers during the financial crisis

Abstract In this study, we examine non-government-assisted US commercial bank merger activity prior to and during the recent financial crisis. Mergers that occur throughout the crisis appear to be more significant events for both targets and acquirers. Acquirers seek out relatively larger targets during the crisis and offer premiums are higher than pre-crisis values. Valuation discrepancies between targets and acquirers are also greater for crisis period mergers, suggesting that merger gains outweigh presumably high capital reallocation costs. Acquirers have lower capital ratios than their peers during the crisis, indicating that they may use mergers defensively as recapitalization events. However, crisis period mergers do not appear to be motivated by asset-based liquidity concerns for either the target or acquirer. Examining how firm characteristics relate to value creation, we find targets that are undervalued relative to their acquirers see larger offer premiums during the crisis, but not before. Targets with poorer-performing loan portfolios, however, observe lower offer premiums during the crisis. Lastly, we find overall merger announcement value creation during the financial crisis is greater when targets have higher quality assets, are better capitalized, and are less efficient.
Defense Spending in a Neo-Ricardian World

This paper shows that Ricardian equivalence no longer holds once we recognize that govern- ment acts as an intermediary between generations in the provision of national defence. Conse- quently, the level of public debt is positively related to defence spending since this component of government expenditures insures the transferability of bequests, as well as protecting savings. It is shown that defence spending has an adverse effect on both national saving and the saving rate that has not been considered in the economic growth literature. More gener- ally, the paper emphasizes that in developing a positive theory of taxation, the composition of government spending plays an integral role. The separation of government expenditures from the methods used to finance them has been an extremely useful assumption employed in economics. It has allowed economists to analyse a series of problems which would be much more difficult to study if individual taxpayers were assumed to perceive a link between the tax structure and the expenditure structure of an economy. Hettich and Winer (1988), for example, following this tradition, develop a positive theory of a tax system. This separation has been used most frequently and fruitfully to address the important question, Do fiscal deficits matter? More specifically, does the way that government finances its expenditures, between taxing and issuing public debt, matter in terms of their impact on the real economy? Barro (1974) employed an overlapping-generations model with altruism to show that if individuals are not bequest-constrained then government bonds are not perceived as net wealth. The recipients of government transfers financed by bonds realize that their descendants will have to finance the debt through higher taxes, and so they offset the increase in public debt by increas- ing the size of the bequest to their children by the same amount. The effect is that interest rates, wages and the level of output of the economy are unaltered. This result, usually referred to as the Ricardian equivalence theorem, presented a challenge to the profession to find circumstances under which it would not hold and when, therefore, financing government spending with debt would
Using invalid instruments on purpose: Focused moment selection and averaging for GMM

In finite samples, the use of a slightly endogenous but highly relevant instrument can reduce mean-squared error (MSE). Building on this observation, I propose a novel moment selection procedure for GMM–the Focused Moment Selection Criterion (FMSC)–in which moment conditions are chosen not based on their validity but on the MSE of their associated estimator of a user-specified target parameter. The FMSC mimics the situation faced by an applied researcher who begins with a set of relatively mild “baseline” assumptions and must decide whether to impose any of a collection of stronger but more controversial “suspect” assumptions. When the (correctly specified) baseline moment conditions identify the model, the FMSC provides an asymptotically unbiased estimator of asymptotic MSE, allowing us to select over the suspect moment conditions. I go on to show how the framework used to derive the FMSC can address the problem of inference post-moment selection. Treating post-selection estimators as a special case of moment-averaging, in which estimators based on different moment sets are given data-dependent weights, I propose simulation-based procedures for inference that can be applied to a variety of formal and informal moment-selection and averaging procedures. Both the FMSC and confidence interval procedures perform well in simulations. I conclude with an empirical example examining the effect of instrument selection on the estimated relationship between malaria and income per capita.
Before Marriage: The Unexplored History of Nonmarital Recognition and Its Relationship to Marriage

In the wake of the celebration of the U.S. Supreme Court’s decision in United States v. Windsor, it seems obvious that the LGBT movement is intent on securing marriage. But the relationship between LGBT advocacy and marriage was not always so clear. In fact, before the movement began to make explicit claims to marriage in the 1990s, leading advocates engaged in a vigorous debate about whether to seek marriage. This debate went beyond mere strategic disagreement and instead focused on ideological differences regarding the role of marriage and its relationship to LGBT rights, family diversity, and sexual freedom. Those opposing the turn to
Instantons and some concordance invariants of knots

Concordance invariants of knots are derived from the instanton homology groups with local coefficients, as introduced in earlier work of the authors. These concordance invariants include a 1-parameter family of homomorphisms $f_{r}$, from the knot concordance group to the reals. Prima facie, these concordance invariants have the potential to provide independent bounds on the genus and number of double points for immersed surfaces with boundary a given knot.
Federalism at Step Zero

Given the extensive interconnections between state and federal actors and laws in the administrative sphere, it should be no surprise that administrative law cases—cases often involving the application of Chevron—frequently raise federalism questions.1 States are deeply intertwined in the development and implementation of federal regulation.2 Federal rules and policies affect states in myriad ways, including by preempting state law, by burdening state coffers, and by limiting state administrators‘ discretion and flexibility through the imposition of federal standards.3 What should courts do when the worlds of Chevron and federalism collide? This is among the ―second-generation‖4 Chevron questions that merit attention as we look back at Chevron‘s first thirty years and ahead to its future.5 The U.S. Supreme Court has at times indicated—repeatedly, but not consistently—that Chevron does not apply in certain federalism cases,
Why Do Hedgers Trade So Much

AbstractFutures positions of commercial hedgers in wheat, corn, soybeans, and cotton fluctuate much more than expected output. Hedgers’ short positions are positively correlated with price changes. Together, these observations raise doubt about the common practice of categorically classifying trading by hedgers as hedging while classifying trading by speculators as speculation, as hedgers frequently change their futures positions over time for reasons unrelated to output fluctuations, which is arguably a form of speculation.
How risky is college investment

Abstract This paper is motivated by the fact that nearly half of U.S. college students drop out without earning a bachelor's degree. Its objective is to quantify how much uncertainty college entrants face about their graduation outcomes. To do so, we develop a quantitative model of college choice. The innovation is to model in detail how students progress towards a college degree. The model is calibrated using transcript and financial data. We find that more than half of college entrants can predict whether they will graduate with at least 80 % probability. As a result, stylized policies that insure students against the financial risks associated with uncertain graduation have little value for the majority of college entrants.
Two-Person Pie-Cutting: The Fairest Cuts.

Barbanel, Brams, and Stromquist (2009) asked whether there exists a two-person moving-knife procedure that yields an envy-free, undominated, and equitable allocation of a pie. We present two procedures: One yields an envy-free, almost undominated, and almost equitable allocation, whereas the second yields an allocation with the two “almosts” removed. The latter, however, requires broadening the definition of a “procedure," which raises philosophical, as opposed to mathematical, issues. An analogous approach for cakes fails because of problems in eliciting truthful preferences.
Trading Volume and Cross-Autocorrelations in Stock Returns

This paper finds that trading volume is a significant determinant of the lead-lag patterns observed in stock returns. Daily and weekly returns on high volume portfolios lead returns on low volume portfolios, controlling for firm size. Nonsynchronous trading or low volume portfolio autocorrelations cannot explain these findings. These patterns arise because returns on low volume portfolios respond more slowly to information in market returns. The speed of adjustment of individual stocks confirms these findings. Overall, the results indicate that differential speed of adjustment to information is a significant source of the cross-autocorrelation patterns in short-horizon stock returns. BOTH ACADEMICS AND PRACTITIONERS HAVE LONG BEEN interested in the role played by trading volume in predicting future stock returns. 1 In this paper, we examine the interaction between trading volume and the predictability of short horizon stock returns, specifically that due to lead-lag cross-autocorrelations in stock returns. Our investigation indicates that trading volume is a significant determinant of the cross-autocorrelation patterns in stock returns. 2 We find that daily or weekly returns of stocks with high trading volume lead daily or weekly returns of stocks with low trading volume. Additional tests indicate that this effect is related to the tendency of high volume stocks to respond rapidly and low volume stocks to respond slowly to marketwide information.
College-Based Personal Finance Education: Student Interest in Three Delivery Methods.

27 Introduction College students face high tuition costs and increasingly complex financial decisions. As Lusardi (2010) notes, choosing when and how to invest in education is in and of itself an extremely complicated decision. One half of all freshmen borrow to pay for their educations and in the process make decisions that will affect their financial futures in ways they likely do not yet understand (Gladieux & Perna, 2005). Without exposure to financial education or counseling, many students find the variables involved in making accurate financial decisions abstruse or inaccessible (Adams & Moore, 2007; Avard, Manton, English, & Walker, 2005; Chen & Volpe, 1998). This lack of financial knowledge and difficulty in making good financial decisions is evident even after young adults graduate and move into the workforce (Volpe, Chen, & Liu, 2006). Financialrelated stress, which has become increasingly common among students (Phinney & Haas, 2003), can lead to poor academic performance and productivity (Pinto, Parente, & College-Based Personal Finance Education: Student Interest in Three Delivery Methods
A behavioral definition of unforeseen contingencies

Abstract The paper proposes a choice-theoretic definition of an unforeseen event and a model of behavior that accommodates such events. The analysis presumes an individual who is aware of their unawareness, which explains why all unforeseen events in this paper are non-null. Relative to existing work, the main contribution is to establish a distinction between unforeseen events and events whose likelihood is ambiguous. This is achieved by adopting a dynamic choice setting.
In memoriam: R. Morris Coats, a second wave public choice scholar in camouflage

R. Morris Coats, late Professor of Economics and Argent Bank Professor of Business Administration (2000–2006) at Nicholls State University, was a prolific scholar in the area of public (choice) economics. The present memoriam piece contends that he was a highly significant figure among the “second wave” of public choice scholars.
The Agency Problem, Corporate Governance, and the Asymmetrical Behavior of Selling, General, and Administrative Costs*

Selling, general, and administrative (SGA Anderson and Lanen 2007; Balakrishnan and Soderstrom 2009; Banker, Byzalov, and Plehn-Dujowich 2010). Prior studies have predominantly explained cost stickiness with economic factors such as asset intensity and uncertainty of future demand and have largely ignored the impact of managerial incentives on cost behavior. Although Anderson et al. (2003: 49) conjecture that part of SG&A cost asymmetry may be attributable to agency costs, there is no largescale empirical evidence on their conjecture. Drawing on the empire building and the downsizing literatures, we fill the gap in the cost stickiness literature by examining the following two research questions: (i) Is SG&A cost asymmetry positively associated with the agency problem, after controlling for known economic determinants of this asymmetry? (ii) Does strong corporate governance mitigate any positive association between the agency problem and SG&A cost asymmetry? Agency theory predicts that the misalignment of interests between shareholders and managers could lead to agency problems, that is, managers engage in activities for their own benefits rather than the benefits of the firm’s shareholders (Jensen and Meckling 1976). A well-documented agency problem is managerial ‘‘empire building’’, which refers to managers’ tendencies to grow the firm beyond its optimal size or to maintain unutilized
Boundaries of the firm: evidence from the banking industry☆

Abstract Agency theory implies that asset ownership and decision authority are complements. Using 1998 data from Texas commercial banks, we test whether the likelihood of local ownership of bank offices increases with the importance of granting local managers greater decision authority (for example, due to location or customer base). Our empirical evidence is consistent with this hypothesis. It suggests that complementarities between strategy and organizational structure can foster differentiation among firms in terms of location, customers, and products. It also supports the growing view that small locally-owned banks have a comparative advantage over large banks within specific environments.