cssi/SciSciGPT-SciSciNet huggingface dataset:
POLICY AND WELFARE EFFECTS OF WITHIN-PERIOD COMMITMENT

Consider the problem of a benevolent government that needs to finance the provision of a public good with distortionary taxes and cannot commit to policies beyond the current period. In such a case, public expenditure is inefficiently low. If the government further loses the ability to set tax rates before production in the period takes place, then it will not internalize how its policy choices distort current factor markets. Thus, to counterbalance the costs of future distortions, it increases public good provision. For a calibrated economy, removing within-period commitment implies a welfare gain worth half a percent of yearly consumption. A similar gain can be obtained if instead, capital depreciation is allowed to be fully deducted from taxable income.
A model of liquidity hoarding and term premia in inter-bank markets

Financial crises are associated with reduced volumes and extreme levels of rates for term inter-bank loans, reflected in one-month and three-month LIBOR. We explain such stress by modeling leveraged banks' precautionary demand for liquidity. Asset shocks impair a bank's ability to roll over debt because of agency problems associated with high leverage. In turn, banks hoard liquidity and decrease term lending as their rollover risk increases over the term of the loan. High levels of short-term leverage and illiquidity of assets lead to low volumes and high rates for term borrowing. In extremis, inter-bank markets can completely freeze.
The Espionage Act and National Security Whistleblowing After Garcetti

Introduction 1531 I. The Espionage Act and Statutory Whistleblower Protection 1536 II. Garcetti, Public Employee Speech, and the First Amendment 1537 III. Non-Public Federal Whistleblower Protections 1542 Conclusion 1546
Language and Participation

In this piece, I tackle a current subject of popular controversy - whether growing multilingualism in the United States imperils the future of American democracy. I offer a positive theory, centered on the value of democratic participation, of how a society like the United States should approach the multilingualism of its population. I conclude that embracing bilingualism in individuals and multilingualism in society is more likely to make linguistic pluralism socially functional and to sustain the vitality of public and social institutions than demanding public monolingualism. I begin by demonstrating that current approaches to language diversity in constitutional democracies, including our own, are largely remedial in nature. They focus either on ensuring the survival of particular minority groups historically present and marginalized in a given nation-state, or on helping immigrants overcome language barriers as they assimilate into the dominant language of the society in question. On its own, this remedial conception cannot ensure that linguistic diversity complements, rather than undermines, democratic institutions, because it does not account for the variety of linguistic interests present in a multiethnic society. I then address this limitation by offering an alternative, participatory theory of language difference. I base my conception of participation on principles of decentralized decisionmaking. This focus requires considering how to expand the individual's associative options and improve access to the mid-level social institutions where we live out most of our lives, such as the workplace and the public schools. In accommodating speakers of multiple languages in a given institution, we should focus on promoting social investment by individuals and groups, as well as preserving individual control over matters of deeply personal concern, rather than on the survival of particular languages or cultures. In developing this framework, I draw from the experiences of other multilingual societies and legal systems, but I present the United States as a case study to explain what a participatory approach would look like in practice. I focus on the major sites of language conflict in the United States - the political arena, the debate over official English, the workplace, and the public schools - and argue that a multilingual understanding of these sites and the legal rules that structure them best promotes participation.
Institutional solutions to free-riding in peer-to-peer networks: a case study of online pirate communities

This paper provides a case study of online pirate communities who use peer-to-peer networks to share copyrighted material illegally. Early scholars of peer-to-peer networks posited the possibility of a total network collapse due to issues of free-riding. When these networks are used to distribute copyrighted material illegally, the increased risk of legal punishment adds a further disincentive to contribute. This paper uses Ostrom's (2005) framework to categorize the rules used in pirate communities to solve collective action problems, evidencing the applicability and robustness of Ostrom's framework for self-governance under less favorable conditions. Through the use of boundary, position, information, and payoff rules, pirate communities are able to mitigate free-riding in the network.
Being the Government Means (Almost) Never Having to Say You’re Sorry: The Sam Sheppard Case and the Meaning of Wrongful Imprisonment

Dr. Sam Sheppard was at the center of the highest profile crime in Ohio history. As the Ohio Supreme Court put it, the case contained "[m]urder and mystery, society, sex and suspense." Sheppard's conviction was overturned by the U.S. Supreme Court in a landmark 1966 ruling, but the controversy over the case continues to the present. The final legal chapter in the story may have been written with an unsuccessful wrongful-imprisonment lawsuit brought by the Sheppard estate in April 2000. This paper uses the long debate over the Sheppard case as a vehicle for exploring the concept of wrongful imprisonment. The main focus is on the Ohio wrongful-imprisonment statute, which has been described as among the most beneficent in the United States but which in operation has proven to be quite restrictive. The paper concludes by offering an alternative perspective on the idea of wrongful imprisonment, suggesting that the state has a moral if not a legal obligation toward those persons who have been erroneously convicted.
ROUTES OF INFECTION: EXPORTS AND HIV INCIDENCE IN SUB-SAHARAN AFRICA

This paper estimates whether exports affect the incidence of HIV in Africa. This relationship has implications for HIV prevention policy as well as for the consequences of trade increases in Africa. I estimate this impact using two sources of data on HIV incidence one generated based on UNAIDS estimates and the other based on observed HIV mortality. These data are combined with data on export value and volume. I find a fairly consistent positive relationship between exports and new HIV infections: doubling exports leads to a 10%-70% increase in new HIV infections. Consistent with theory this relationship is larger in areas with higher baseline HIV prevalence. I interpret the result as suggesting that increased exports increase the movement of people (trucking) which increases sexual contacts. Consistent with this interpretation the effect is larger for export growth than for income growth per se and is larger in areas with more extensive road networks.
Stimulated Emission Depletion Microscopy with Diamond Silicon Vacancy Centers

The spatial resolution and fluorescence signal amplitude in stimulated emission depletion (STED) microscopy is limited by the photostability of available fluorophores. Here, we show that negatively...
Mutual fund performance with learning across funds

Abstract The average level and cross-sectional variability of fund alphas are estimated from a large sample of mutual funds. This information is incorporated, along with the usual regression estimate of alpha, in a (roughly) precision-weighted average measure of individual fund performance. Substantial “learning across funds” is documented, with significant effects on investment decisions. In a Bayesian framework, this form of learning is inconsistent with the assumption, made in the past literature, of prior independence across funds. Independence can be viewed as an extreme scenario in which the true cross-sectional distribution of alphas is presumed to be known a priori.
Bank Supervision, Regulation, and Instability During the Great Depression

Even after controlling for local economic conditions, differences in supervision and regulation help explain the large variation in state bank suspension rates across U.S. counties during the Great Depression. More stringent capital requirements lowered suspension rates whereas laws prohibiting branch banking and imposing high reserve requirements raised them. States whose bank supervisors could liquidate banks minimized contagion and credit-channel dislocations and experienced lower suspension rates. Those that gave their supervisors sole authority to issue bank charters and granted their supervisors long terms strengthened the incentives for bank lobbyists to influence supervisory decisions and consequently experienced higher rates of suspension.
Least tail‐trimmed squares for infinite variance autoregressions

We develop a robust least squares estimator for autoregressions with possibly heavy tailed errors. Robustness to heavy tails is ensured by negligibly trimming the squared error according to extreme values of the error and regressors. Tail-trimming ensures asymptotic normality and super--convergence with a rate comparable to the highest achieved amongst M-estimators for stationary data. Moreover, tail-trimming ensures robustness to heavy tails in both small and large samples. By comparison, existing robust estimators are not as robust in small samples, have a slower rate of convergence when the variance is infinite, or are not asymptotically normal. We present a consistent estimator of the covariance matrix and treat classic inference without knowledge of the rate of convergence. A simulation study demonstrates the sharpness and approximate normality of the estimator, and we apply the estimator to financial returns data. Finally, tail-trimming can be easily extended beyond least squares estimation for a linear stationary AR model. We discuss extensions to quasi-maximum likelihood for GARCH, weighted least squares for a possibly non-stationary random coefficient autoregression, and empirical likelihood for robust confidence region estimation, in each case for models with possibly heavy tailed errors.
Negligence in the Air

The article examines what has come to be known as "the risk analysis" in Anglo-American tort law and contract law. The risk analysis essentially consists of: (1) viewing negligence as a relational concept, so that a defendant is never simply negligent tout cour, but is negligent only with respect to certain persons and certain harms — other harms suffered by other persons are said not to be "within the risk" that makes the defendant negligent; and (2) the supplanting of proximate cause doctrine with doctrines of duty, the duty question being determined by the question of whether a certain person and a certain harm are within the risk that makes a defendant negligent. The article aims to explode entirely the risk analysis. After beginning with an examination of the historical roots of the risk analysis, we then seek to show that the risk analysis is: (1) conceptually incoherent because it seeks to isolate a risk that makes someone negligent; (2) normatively undesirable because it allows quite blameworthy actors not to pay for the harms they culpably cause; and (3) descriptively inaccurate of the cases decided on the more traditional, proximate cause bases.
Extraterritoriality and Political Heterogeneity in American Federalism

It is commonly understood that as a matter of federal law, states' substantive policies may diverge in respect of those matters that are not violative of the United States Constitution. As a practical matter, however, what degree of political heterogeneity among states is possible vis-a-vis substantive policies that are not unconstitutional? The answer to the question turns in large part on whether states, if they so choose, can regulate their citizens even when they are out-of-state. If they cannot, citizens can bypass their home state's laws by simply traveling to a more legally permissive state to do there what is prohibited at home, hindering a state's capacity to accomplish constitutional objectives. Consider the example of legislation banning assisted suicide: the state interests most likely are undermined if its sick citizen takes a bus to a jurisdiction that allows her to end her life there. Many courts and noted commentators have concluded that states cannot bar their traveling citizens from doing in a sister state what the sister state permits its own citizens to do. This Article shows that this view is incorrect. A careful analysis of the many constitutional provisions that bear on extraterritoriality - due process, the right to travel, Article IV's privileges and immunities clause, and the dormant commerce clause - demonstrates that states have significant powers to regulate their citizens' out-of-state activities for the purpose of ensuring the efficacy of constitutional state policies. The Article's purpose is not to show that states necessarily should extraterritorially regulate, but to correct the widespread misperception that the United States Constitution forbids states from so doing. Whether to extraterritorially regulate is a policy decision that states must make on the merits. The existence of such extraterritorial powers not only inures to the benefit of those states that desire to maximize their laws' efficacy, but is important from a broader systemic perspective. A federal system in which states did not have such extraterritorial powers would systematically disfavor regulation, undermine states' abilities to pursue paternalistic and norm-shaping goals, undercut states' powers to protect third-party interests, and limit the scope of possible experimentation across states. For these reasons, the existence of state power to extraterritorially regulate their citizens secures the possibility of rich political heterogeneity across states.
DEMOGRAPHIC STRUCTURE AND THE POLITICAL ECONOMY OF PUBLIC EDUCATION

This article examines the relationship between demographic structure and the level of government spending on K-12 education. Panel data for the states of the United States over the 1960-1990 period suggests that an increase in the fraction of elderly residents in a jurisdiction is associated with a significant reduction in per-child educational spending. This reduction is particularly large when the elderly residents and the school-age population are from different racial groups. Variation in the size of the school-age population does not result in proportionate changes in education spending, thus, students in states with larger school-age populations receive lower per-student spending than those in states with smaller numbers of potential students. These results provide support for models of generational competition in the allocation of public sector resources. They also suggest that the effect of cohort size on government-mediated transfers must be considered in analyzing how cohort size affects economic well-being.
Parents’ Discount Rate and the Intergenerational Transmission of Cognitive Skills

We use estimates of parents’ discount rate, inferred from their decisions to treat their children’s body burdens of lead, to test empirically a model of transmission of cognitive skills from parents to children. The development of a child’s cognitive skills depends in part upon the specific environment in which the skills are nurtured. The parental discount rate serves as a theoretically well defined index for a broad array of nurturing investments in the child. We find that children whose parents have a lower estimated discount rate exhibit higher assessed cognitive skills.
Learning and heterogeneity in GDP and inflation forecasts

Abstract Using a Bayesian learning model with heterogeneity across agents, our study aims to identify the relative importance of alternative pathways through which professional forecasters disagree and reach consensus on the term structure of inflation and real GDP forecasts, resulting in different patterns of forecast accuracy. There are two primary sources of forecast disagreement in our model: differences in prior beliefs, and differences in the interpretation of new public information. Estimated model parameters, together with two separate case studies on (i) the dynamics of forecast disagreement in the aftermath of the 9/11 terrorist attack in the US, and (ii) the successful inflation targeting experience of Italy after 1997, firmly establish the importance of these two pathways to expert disagreement, and help to explain the relative forecasting accuracy of these two macroeconomic variables.
Putting Typologies to Work Concept Formation, Measurement, and Analytic Rigor

Typologies are well-established analytic tools in the social sciences. They can be “put to work” in forming concepts, refining measurement, exploring dimensionality, and organizing explanatory clai...
Deferred acceptance is minimally manipulable

This paper shows that the deferred acceptance mechanism (DA) cannot be improved upon in terms of manipulability without compromising stability. A conflict between manipulability and fairness is also identified. Stable mechanisms that minimize the set of individuals who match with their least preferred achievable mate are shown to be maximally manipulable among the stable mechanisms. These mechanisms are also more manipulable than DA. A similar conflict between fairness and manipulability is identified in the case of the median stable mechanisms.
Heal the Suffering Children: Fifty Years after the Declaration of War on Poverty

Fifty years ago, President Lyndon B. Johnson declared the War on Poverty. Since then, the federal tax code has been a fundamental tool in providing financial assistance to poor working families. Even today, however, thirtytwo million children live in families that cannot support basic living expenses, and sixteen million of those live in extreme poverty. This Article navigates the confusing requirements of an array of child-related tax benefits including the dependency exemption deduction, head of household filing status, the Earned Income Tax Credit, and the Child Tax Credit. Specifically, this Article explores how altering the definition of a qualifying child across these tax benefits might provide financial relief for working families. The Article concludes that the elimination of outdated citizenship or residency requirements would reduce taxpayer confusion and result in more effective tax benefits to help lift working families
The Sources of Law and the Value of Precedent: A Comparative and Empirical Study of a Civil Law State in a Common Law Nation

This Article provides a contemporary and comparative examination of the sources of law and the value of precedent in Louisiana, a state whose judicial system resembles those of common law judicial systems of the United States, but whose private civil law is rooted in the civil law traditions of France and Spain, which were prevalent in the territory of Louisiana in the late eighteenth century and early nineteenth century. The Article examines the doctrines of "stare decisis" and "jurisprudence constante" and the value of precedent in select common law and civil law jurisdictions, then focuses on Louisiana as an example of a jurisdiction which, like many jurisdictions worldwide, has valued precedent in such a way that it is extremely influential, but not always binding on the courts. The Article refers to this practice as "systemic respect for jurisprudence" because the value of a precedent is directly related to the status in the legal system of the court deciding the prior case. An empirical study of the Louisiana judiciary on the sources of law and the value of precedent in Louisiana complements a discussion of these issues based on scholarly works on Louisiana law and Louisiana judicial opinions. The author concludes that many jurisdictions, both common law- and civil law-based, are gravitating to "systemic respect for jurisprudence" and away from strict use of the traditional stare decisis and jurisprudence constante doctrines. The Article then proposes law to codify the principle of systemic respect for jurisprudence.
Police Misconduct as a Cause of Wrongful Convictions

This study gathers data from two mass exonerations resulting from major police scandals, one involving the Rampart division of the L.A.P.D., and the other occurring in Tulia, Texas. To date, these cases have received little systematic attention by wrongful convictions scholars. Study of these cases, however, reveals important differences among subgroups of wrongful convictions. Whereas eyewitness misidentification, faulty forensic evidence, jailhouse informants, and false confessions have been identified as the main contributing factors leading to many wrongful convictions, the Rampart and Tulia exonerees were wrongfully convicted almost exclusively as a result of police perjury. In addition, unlike other exonerated persons, actually innocent individuals charged as a result of police wrongdoing in Rampart or Tulia only rarely contested their guilt at trial. As is the case in the justice system generally, the great majority pleaded guilty. Accordingly, these cases stand in sharp contrast to the conventional wrongful conviction story. Study of these groups of wrongful convictions sheds new light on the mechanisms that lead to the conviction of actually innocent individuals.
Forecasting Crashes: Trading Volume, Past Returns and Conditional Skewness in Stock Prices

Abstract We develop a series of cross-sectional regression specifications to forecast skewness in the daily returns of individual stocks. Negative skewness is most pronounced in stocks that have experienced (1) an increase in trading volume relative to trend over the prior six months, consistent with the model of Hong and Stein (NBER Working Paper, 1999), and (2) positive returns over the prior 36 months, which fits with a number of theories, most notably Blanchard and Watson's (Crises in Economic and Financial Structure. Lexington Books, Lexington, MA, 1982, pp. 295–315) rendition of stock-price bubbles. Analogous results also obtain when we attempt to forecast the skewness of the aggregate stock market, though our statistical power in this case is limited.
Collective Self-Control

Behavioral economics presents a "paternalistic" rationale for a benevolent government's intervention. We consider an economy where the only "distortion" is agents' time-inconsistency. We study the desirability of various forms of collective action, ones pertaining to costly commitment and ones pertaining to the timing of consumption, when government decisions respond to voters' preferences via the political process. Three messages emerge. First, welfare is highest under either full centralization or laissez-faire. Second, introducing collective action only on consumption decisions yields no commitment. Last, individuals' relative preferences for commitment may reverse depending on whether future consumption decisions are centralized or not.
The Case Against the Special Olympics

The Special Olympics has been a controversial program for persons with disabilities. Research has often found negative results concerning the Special Olympics, and there have been numerous discussions in the literature concerning pros and cons of the Special Olympics. The purpose of this article is to articulate and elaborate on concerns regarding the Special Olympics, to promote discussion about these issues, and to suggest future directions for service delivery.
The JOBS Act disclosure exemptions: Some early evidence

Abstract This paper examines early evidence of IPO registrants' disclosure exemption choices in response to the optional disclosure relief provided by the recently enacted Jumpstart Our Business Startups Act (JOBS Act) of 2012. The JOBS Act provides firms going public classified as “emerging growth companies” (EGCs) with certain accounting and financial reporting and disclosure exemptions not available to other issuers. The study's results for EGC firms filing prospectuses through August, 2013, indicate that for the earliest companies affected by the JOBS Act, greater board independence and audit committee accounting expertise are associated with greater likelihood of foregoing financial reporting exemptions. Moreover, the study finds that scaled executive compensation disclosure exemptions had widespread acceptance while the private company accounting standards and reduced audited financial statements exemption provisions were initially less utilized. Finally, the study finds that even though the JOBS Act raised the threshold for disclosure relief up to $1 billion in revenues, those firms that were already classified as smaller reporting companies which already have less extensive disclosure demands under SRC Rule #33–8876, were those most likely to initially take these exemptions. The paper discusses the practical implications of the study's findings for accounting standard-setters, watchdogs, and policy makers.
A tale of two regions: Novgorod and Pskov as models of symbolic development

Abstract Russian regions display remarkably different patterns of economic and political development. These differences come into sharp focus when comparing two nearly identical northwestern regions, Novgorod and Pskov. Novgorod's success and Pskov's failure are attributed to the local elite's creative use of key cultural symbols and myths to support regional development. Contrasting two popular approaches to culture and development—“cultural adjustment” and “cultural congruence”—the author argues that the cultural congruence model, adopted by Novgorod, dramatically improves the chances for rapid social and economic transformation.
Early-life disease exposure and occupational status: The impact of yellow fever during the 19th century

Using city-of-birth data from the 100% sample of the 1880 Census merged to city-level fatality counts, I estimate the relationship between early-life yellow fever exposure and adult occupational status. I find that white males with immigrant mothers were less likely to become professionals and more likely to become unskilled laborers or report occupational nonresponse if they were born during yellow fever epidemics. They also reported occupations with lower 1900 occupational income scores. The children of U.S.-born mothers (who were less susceptible to the disease) were relatively unaffected. Furthermore, I find no evidence that epidemics 3 to 4 years after birth affect adult occupational status, and the results are robust to controlling for local trade during an individual's birth year.
The Distributional Effects of the Social Security Windfall Elimination Provision

Over five million state and local government employees have lifetime earnings that are divided between employment that is covered by the Social Security system and employment that is not covered. As Social Security benefits are a nonlinear function of covered lifetime earnings, the simple application of the standard benefit formula to covered earnings only would provide a higher replacement rate on those earnings than is appropriate given the individuals' total (covered plus uncovered) lifetime earnings. The Windfall Elimination Provision (WEP), established in 1983, is intended to correct this situation by applying a modified benefit formula to earnings of individuals with non-covered employment. This paper analyzes the distributional implications of the WEP and finds that it reduces benefits disproportionately for individuals with lower lifetime covered earnings. It discusses an alternative method of calculating the WEP that comes closer to preserving the intended redistribution of the system. In recognition of historical data limitations that prevent the Social Security Administration (SSA) from being able to implement this alternative method at present, the paper also analyzes two alternative ways of calculating the WEP that use the same information as the current WEP, are budget neutral, and come closer to maintaining the individual-level, cross-sectional progressivity of Social Security than does the existing WEP formula.
Overcoming Temptations to Violate Human Dignity in Times of Crisis: On the Possibilities for Meaningful Self-Restraint

The codification of international human rights law and international humanitarian law, and the accession to those treaties by a large majority of states, does not at first glance seem to have any significant effect upon states' behavior in situations of crisis. Any understanding of the prospects for such law in these situations requires an appraisal of both the motivations of states in concluding these treaties and the pressures on them to ignore them. This paper analyzes those motivations and temptations through the framework of precommitment theory, a component of rational choice theory, originally articulated by Jon Elster and Thomas Schelling. The metaphor of Ulysses offers a useful way to address three different dimensions of the purposes that states join treaties: (1) beliefs, i.e., the state's attitude toward the norms in the treaty; (2) predictions, the state's concerns about its own future behavior; and (3) interactions, i.e., the extent to which the state is trying to influence or bind other states. And it permits linking those motivations to the propensity of states to comply at a later time. The paper offers a four-part typology for why states commit to such treaties, contrasting it with notions from contemporary international relations theories. It then explores the contrasting approaches of compliance theories and international law doctrine to the temptation of states to violate treaties and elaborates the contributions of the precommitment framework. Building upon that framework, it proposes a set of strategies that those concerned with compliance might explore for making international law more relevant when governments seem most inclined to discount it.
The First Amendment and Commercial Speech

The world would do well not to follow the lead of the United States in its view that commercial speech is an aspect of free speech. If guidance were sought, rather than the current American view developed over the last thirty years, greater wisdom would be found in the earlier American view that commercial speech has nothing to do with such freedom. With this in mind, Part II of this Article offers three arguments that I have previously advanced for excluding commercial speech from First Amendment protection and one additional argument that, though I have never offered it, is provocative and I largely endorse. First, however, Part I gives a very brief history of the U.S. constitutional treatment of commercial speech and a possibly controversial characterization of its current status.
Online Auction Demand

With $40 billion in annual gross merchandise volume, electronic auctions comprise a substantial and growing sector of the retail economy. Using unique data on Celtic coins, we estimate a structural model of buyer and seller behavior via Markov chain Monte Carlo (MCMC) with data augmentation. Results indicate that buyer valuations are affected by item, seller, and auction characteristics; buyer costs are affected by bidding behavior; and seller costs are affected by item characteristics and the number of listings. The model enables us to compute fee elasticities even though there is no variation in fees in our data. We find that commission elasticities exceed per item fee elasticities because they target high-value sellers and enhance their likelihood of listing. By targeting commission reductions to high-value sellers, auction house revenues can be increased by 3.9%. Computing customer value, we find that attrition of the largest seller would decrease fees paid to the auction house by $97. Given the seller paid $127 in fees, competitive effects offset only 24% of those fees. In contrast, competition offsets 81% of the buyer attrition effect. In both events, the auction house would overvalue its customers by neglecting competitive effects.
CORRELATED DEFAULT WITH INCOMPLETE INFORMATION

Abstract The recent accounting scandals at Enron, WorldCom, and Tyco were related to the misrepresentation of liabilities. We provide a structural model of correlated multi-firm default, in which public bond investors are uncertain about the liability-dependent barrier at which individual firms default. Investors form prior beliefs on the barriers, which they update with the default status information of firms arriving over time. Whenever a firm suddenly defaults, investors learn about the default threshold of closely associated business partner firms. This updating leads to “contagious” jumps in credit spreads of business partners. We characterize joint default probabilities and the default dependence structure as assessed by investors, where we emphasize the the modeling of dependence with copulas. A case study based on Brownian asset dynamics illustrates our results.
Predicting corporate financial distress: A time-series CUSUM methodology

The ability to predict corporate financial distress can be strengthened using models that account for serial correlation in the data, incorporate information from more than one period and include stationary explanatory variables. This paper develops a stationary financial distress model for AMEX and NYSE manufacturing and retailing firms based on the statistical methodology of time-series Cumulative Sums (CUSUM). The model has the ability to distinguish between changes in the financial variables of a firm that are the result of serial correlation and changes that are the result of permanent shifts in the mean structure of the variables due to financial distress. Tests performed show that the model is robust over time and outperforms similar models based on the popular statistical methods of Linear Discriminant Analysis and Logit.
A Conceptual Analysis of State Support for Higher Education: Appropriations Versus Need-Based Financial Aid

In this paper, we use economic concepts to examine the choice that states make between giving appropriations to public colleges or need-based financial aid to students. We begin by reviewing the economic justification for state support for higher education. Next, we introduce a simple economic model for comparing and contrasting appropriations and need-based aid for supporting higher education. We then provide a graphical depiction of the model and simulate the effects of each policy on access to higher education. We show that it is in the best interest of states to provide need-based aid and not appropriations. Finally, we conclude with a discussion of the factors that complicate the reallocation of state funding away from appropriations and towards need-based aid.
Tort Reform and Physician Sanctioning

This article examines the relationship between changes in tort rules and the sanctioning of physicians by state medical boards. It compares the sanctioning rates for doctors in states that have passed tort reforms with the rates in states that have not made legislative changes. It concludes that alterations to the joint liability rule may have increased sanctioning, while the addition of pre–trial screening panels and regulation of attorney fees may have limited the number of physicians who receive punishment.
When Are Modifications of Securitized Loans Beneficial to Investors

Loan modification is widely discussed as an alternative to foreclosure, but little research has focused on quantifying its effect on loan performance. I quantify this effect early in the housing crisis by exploiting exogenous variation in the incentives to modify securitized nonagency loans. An additional modification reduces loan losses by 35.8% relative to the average loss; this reduction suggests that the marginal benefit of modification likely exceeded the marginal cost. Consistent with the idea that high-income borrowers may be better equipped to withstand bad economic times, I find that modifications are especially beneficial when borrowers have larger loans. Received April 25, 2016; editorial decision March 24, 2017 by Editor Philip Strahan.
Three (Potential) Pillars of Transnational Economic Justice: The Bretton Woods Institutions as Guarantors of Global Equal Treatment and Market Completion

: This essay aims to bring two important lines of inquiry and criticism together. It first lays out an institutionally enriched account of what a just world economic order will look like. That account prescribes, via the requisites to that mechanism which most directly instantiates the account, “three realms of equal treatment and market completion”—the global products, services, and labor markets; the global investment/financial markets; and the global preparticipation opportunity allocation. The essay then suggests how, with minimal if any departure from familiar canons of traditional international legal mandate interpretation, each of the Bretton Woods institutions—particularly the GATT/WTO and the IMF—can be viewed at least in part as charged with the task of fostering equal treatment and ultimate market completion within one of those three realms. The piece then argues that one of the institutions in particular—the World Bank—has, for reasons of at best negligent and at worst willful injustice on the part of influential state actors in the world community, fallen farthest short in pursuit of what should be viewed as its proper mandate. The article accordingly concludes that a fuller empowerment of the Bank to effect its ideal mission will press the Bretton Woods system more nearly into ethical balance, and with it the world into justice; and that full empowerment of the GATT/WTO and IMF should be partly conditioned upon the fuller empowerment of the Bank.
Investor Sentiment and Pro Forma Earnings Disclosures

We examine the influence of investor sentiment on managers’ discretionary disclosure of “pro forma” (adjusted) earnings metrics in earnings press releases. We find that managers’ propensity to disclose an adjusted earnings metric (especially one that exceeds the GAAP earnings number) increases with the level of investor sentiment. Furthermore, our analyses suggest that, as investor sentiment increases, managers: (1) exclude higher levels of both recurring and nonrecurring expenses in calculating the pro forma earnings number and (2) emphasize the pro forma figure by placing it more prominently within the earnings press release. Additional analyses indicate that the association between investor sentiment and managers’ pro forma disclosure decisions at least partly reflects opportunistic motives. Finally, we find that managers’ own sentiment-driven expectations also play a role in their pro forma disclosure decisions.
The Pardy-Ruhl Dialogue on Ecosystem Management, Part IV: Narrowing and Sharpening the Questions

This article, fourth in a five-part dialogue appearing in the Pace ELR, further responds to Professor Bruce Pardy's critique of ecosystem management. I defend ecosystem management, arguing it does not involve the standardless, unbridled administrative discretion Pardy suggests.
The Bumpiness of Criminal Law

Criminal law frequently relies on all-or-nothing determinations. A defendant who reasonably believed his companion consented to sex may have no criminal liability, while one who fell just short of being reasonable may spend several years in prison for rape. Though their levels of culpability vary slightly, their legal treatment differs dramatically. True, the law must draw difficult lines, but the lines need not have such dramatic effects. We can precisely adjust fines and prison sentences along a
THRIVING VS. SURVIVING: A REGULATORY FOCUS PERSPECTIVE ON ENTREPRENEURIAL STRIVING

Entrepreneurs are often faced with a choice between persisting on the current opportunity, and moving on to other opportunities. These choices can be framed in terms of thriving (maximizing positive outcomes) or surviving (minimizing negative outcomes). Using a policy capturing approach, we tested whether Regulatory Focus (Higgins, 1987; Higgins, 1997) is a predictor of the choice that is made. Approximately 750 individuals enrolled in a variety of continuing education programs were invited to participate in the survey. Data collection is currently under way. We expect to find that individual Regulatory Focus is a reliable predictor of individual effort on collective tasks under varying conditions of goal attainment, and in the presence, or absence of alternate opportunities.
When Do Research Consortia Work Well and Why? Evidence from Japanese Panel Data

We examine the impact of a large number of Japanese government-sponsored research consortia on the research productivity of participating firms by measuring their patenting in the targeted technologies before, during, and after participation. Consistent with the predictions of the theoretical literature on research consortia, we find consortium outcomes are positively associated with the level of potential R&D spillovers within the consortium and (weakly) negatively associated with the degree of product market competition among consortium members. Furthermore, our evidence suggests that consortia are most effective when they focus on basic research. (JEL O32, O31, L52)
Conflict specialists as leaders: Revisiting the role of the conflict specialist from a leadership perspective

The aim of this article is to explore the cross fertilization between the emerging fields of alternative dispute resolution (ADR) and leadership. The first section explores similarities in themes and characteristics of both disciplines that are influenced by the zeitgeist. The second section argues that the parallels between the disciplines challenge and call for further exploration of the conflict specialist's role. The third section offers a reading into skills emphasized in leadership scholarship not commonly stressed in ADR trainings, examining how conflict specialists can ameliorate their practice by incorporating a leadership mind-set and additional relevant skills into their work.
Do We Care What Others Get? A Behaviorist Approach to Targeted Promotions

Abstract Increased access to individual customers and their purchase histories has led to a growth in targeted promotions, including the practice of offering different pricing policies to prospective, as opposed to current, customers. Prior research on targeted promotions has adopted a tenet of the standard economic theory of choice, whereby what a consumer chooses depends exclusively on the prices available to that consumer. In this article, the authors propose that consumer preference for firms is affected not just by prices the consumers themselves are offered but also by prices available to others. This departure from the conventional strong-rationality approach to targeted promotion results in a decidedly different optimal policy. Through a laboratory experiment, calibration of a stochastic model, and game-theoretic analysis, the authors demonstrate that ignoring behaviorist effects exaggerates the importance of targeting switchers as opposed to loyals. This occurs, though with intriguing differences...
Commentary: Revolutionary Times, Then and Now

It is difficult to put in words my feelings about the three tributes to my work. I admit that through the 1990s when I thought about the Nobel I often imagined the scene at the AEA luncheon where I had seen so many others honored over the years. In the event, the three invited speeches by James Heckman, Amartya Sen and Joseph Stiglitz all surpassed what I had imagined. Anyone reading their speeches will understand that they have made me proud and grateful. In this issue of
Governance Structure, Innovation and Internationalization: Evidence From India

Abstract We examine the impact of firm-level governance structure on the innovation and internationalization strategies of emerging market firms. We propose that in the case of emerging market firms, governance is a response to the prevailing institutional environment and affects the innovation and internationalization strategies of firms. Based on a longitudinal sample of 16,337 firm-year observations of Indian listed firms over a year time period from 2002 to 2009, we find a positive effect of family ownership and group affiliation on R&D intensity and new foreign investments. Institutional ownership also positively affects new foreign investments, but has no effect on R&D intensity. Further, we find that R&D intensity interacts with family ownership, institutional ownership and group affiliation in affecting new foreign investments.
Is the 'shrinkwrap' licence worth the paper envelope it's printed on?

Although shrink-wrap licensing has been used in the mass distribution of software for more than a decade. Nevertheless, its enforceability has always been suspect, at best. This article traces the relatively sparse case law on the subject and recent legislative initiatives, which give cause for optimism and caution in future enforcement actions.
Commodity Prices and the Terms of Trade

On combining national terms-of-trade data for developing countries with world prices of internationally traded primary commodities, it is found that variation in the world prices of three or fewer key exported commodities account for 50% or more of the annual variation in the terms of trade of a typical developing country. A considerable fraction of the variation is specific to a particular commodity and, given that the overall importance of primary commodities differs across developing countries, it is possible to account for much of the heterogeneity across them. It is concluded that commodity price fluctuations should be central features of two related literatures: studies of business cycle transmission across developing and industrialized nations, and empirical work aimed at constructing perpetual claims on developing country incomes as suggested by Shiller in 1995.
Economic Freedom and the Size of Government

It has long been argued that big government leads to freedom lost. Guess what: The author, after careful analysis, shows that it is often the opposite. Higher taxes, in particular, mostly lead to more freedom, even according to conservative indices of freedom.
The Changing Nature of Corporate Distributions and Its Implications for Investors

Because cash dividends no longer appear to be a complete measure of corporate distributions, tests of dividend irrelevance based on cash dividends may not be well specified. We compare the performance of long/short investment strategies based on portfolios of high, low-, and zero-payout firms and on each of three measures of corporate distributions. The strategy with the highest risk-adjusted returns is long in high-payout/short in low-payout stocks formed on the basis of the most comprehensive measure of payout, including dividend yield, and net share repurchases. We show that corporate profitability and investment opportunities are significantly associated with firms' payout policies, and this helps explain the relatively strong performance of the zero-payout stocks.