cssi/SciSciGPT-SciSciNet huggingface dataset:
Price Discovery in the U.S. Stock Options Market

Options trading on organized exchanges began in the U.S. in the 1970s when the Chicago Board of Trade (CBOT) futures exchange founded the Chicago Board Options Exchange (CBOE), and options trading was introduced at the American Stock Exchange (Amex). The CBOE used an open-outcry approach, like the CBOT, while Amex options trading adopted a specialist system, like that used for stocks. Both exchanges grew very large, and several smaller ones also were started, with the Philadelphia Stock Exchange choosing a specialist system and the Pacific Coast Exchange using open-outcry. In 2000, the International Securities Exchange (ISE) was launched, with an entirely different all-electronic trading arrangement. The ISE model has proven highly successful, making the exchange the most active market for individual stock options within only a few years. This article describes the ISE9s electronic trading technology and presents a comparison of the different exchanges9 market-making systems along several dimensions, including the size of the typical bid-ask spread, how much a trade in each market contributes to a general updating of prices across the whole market, and how frequently trades are executed inside the quoted bid-ask spread (meaning that the quoted spread did not fully reflect the best prices available at that exchange). The results indicate that the electronic marketplace performs very well relative to the more traditional trading floors on all of these dimensions.
Web disclosure and the market for charitable contributions

Abstract Nonprofit organizations face intense competition in the market for charitable contributions. Increasingly, donation decisions are made online, and organizations have responded by implementing substantive Internet disclosure and reporting regimes. We posit here that the voluntary disclosure of financial and performance information inherent in these regimes provides additional relevant information to a broad array of market participants, and thus has a positive impact on the receipt of charitable contributions. We test our hypotheses on a random sample of 400 US nonprofit organizations by building on the well established economic model of giving (Weisbrod and Dominguez, 1986), in which donations serve as the proxy for demand. Our central research question is thus: Are donors willing to “pay” for Web disclosure? Results indicate a positive relationship between the level of charitable contributions and the amount of disclosure provided by an organization on its website; however, performance and annual report disclosure are more important than financial disclosure, and performance disclosure has the biggest impact in organizations that are less reliant on donations.
Multinationals as Arbitrageurs: The Effect of Stock Market Valuations on Foreign Direct Investment

Empirical evidence of imperfect integration across world capital markets suggests a role for cross-border arbitrage by multinationals. Consistent with multinational arbitrage as a determinant of foreign direct investment (FDI) patterns, we find that FDI flows increase sharply with source-country stock market valuations—particularly the component of valuations that is predicted to revert the next year, and particularly in the presence of capital account restrictions that limit other mechanisms of cross-country arbitrage. The results suggest the existence of a cheap financial capital channel in which FDI flows reflect, in part, the use of relatively low-cost capital available to overvalued parents in the source country.
The risk of machine learning

Many applied settings in empirical economics involve simultaneous estimation of a large number of parameters. In particular, applied economists are often interested in estimating the effects of many-valued treatments (like teacher effects or location effects), treatment effects for many groups, and prediction models with many regressors. In these settings, machine learning methods that combine regularized estimation and data-driven choices of regularization parameters are useful to avoid over-fitting. In this article, we analyze the performance of a class of such methods that includes ridge, lasso, and pretest, in contexts that require simultaneous estimation of many parameters. Our analysis aims to provide guidance to applied researchers on (i) the choice between regularized estimators in practice and (ii) data-driven selection of regularization parameters. To address (i), we characterize the risk (mean squared error) of regularized estimators and derive their relative performance as a function of simple features of the data generating process. To address (ii), we show that data-driven choices of regularization parameters, based on Stein's unbiased risk estimate or on cross-validation, yield estimators with risk uniformly close to the risk attained under the optimal (unfeasible) choice of regularization parameters. We use data from recent examples in the empirical economics literature to illustrate the practical applicability of our results.
Are Auditors Professionally Skeptical? Evidence from Auditors’ Going‐Concern Opinions and Management Earnings Forecasts

We examine whether auditors exercise professional skepticism about management earnings forecasts when making going-concern decisions. Using publicly issued management earnings forecasts as a proxy for earnings forecasts provided by managers to auditors, we find that management earnings forecasts are negatively associated with both auditors� going-concern opinions and subsequent bankruptcy. The weight auditors put on management forecasts in the going-concern decision is not significantly different from the weight implied in the bankruptcy prediction model. Moreover, compared with the bankruptcy model, auditors assign a lower weight to management forecasts they perceive as being less credible, including those (1) issued by managers who issued optimistic forecasts in the previous two years, and (2) predicting high earnings increases or high earnings. Taken together, our evidence is consistent with auditors being professionally skeptical about management earnings forecasts when making going-concern decisions.
Do Managers Withhold Bad News

In this study, we examine whether managers delay disclosure of bad news relative to good news. If managers accumulate and withhold bad news up to a certain threshold, but leak and immediately reveal good news to investors, then we expect the magnitude of the negative stock price reaction to bad news disclosures to be greater than the magnitude of the positive stock price reaction to good news disclosures. We present evidence consistent with this prediction. Our analysis suggests that management, on average, delays the release of bad news to investors.
Control Rights, Priority Rights, and the Conceptual Foundations of Corporate Reorganizations

THE modern approach to corporate reorganizations begins in a curious place. Everywhere else in corporate law, we focus on those who control the firm and on when others should be able to go to court and reverse their decisions.' With respect to corporate reorganizations, however, we ignore these questions and instead focus on priority rights.2 Our lodestar is the real estate foreclosure. A real estate foreclosure is an actual sale of a physical asset, and the proceeds of the sale are distributed to old creditors and shareholders according to nonbankruptcy priorities. A reorganization is
The Other Supreme Court

Despite the Constitution's one supreme Court language, the Supreme Court came in two flavors for 37 years. From 1802 to 1838, the members of the Court gathered in Washington every winter for a conventional en banc February Term, but then in the summer a single Justice would return to the nation's capital to sit alone as a rump Supreme Court for a short August Term. This odd one-Justice rump Court does not fit the long-standing and widely-accepted understanding that the words one supreme Court mean one [indivisible] supreme Court - a single en banc body consisting of all of its available and qualified members to conduct its business. The framers of the Constitution thought that was what they said when they chose those words, as the records of the constitutional convention of 1787 show. Gouverneur Morris, an influential figure in the drafting of the Constitution, recalled this point on the floor of the Senate in 1802: "The constitution says, the judicial power shall be vested in one supreme court, and in inferior courts. The legislature can therefore only organize one supreme court, but they may establish as many inferior courts as they shall think proper." A couple of generations later, Chief Justice Morrison R. Waite was even more emphatic about the indivisibility of the one Supreme Court. Addressing a banquet in Philadelphia during a celebration of the centennial of the Constitution, while Congress in Washington debated proposals to enlarge and panelize the Court, he said, "I beg you to note this language: 'ONE SUPREME COURT and such inferior courts as Congress MAY, FROM TIME TO TIME, ordain and establish.' Not a Supreme Court or Supreme Courts, but 'ONE,' and ONLY ONE. This one Supreme Court Congress cannot abolish, neither can it create another. Upon this the Constitution has no doubtful meaning. There must be one, and but one." Over the years, members of the Court from Justice Stephen J. Field to Chief Justice Charles Evans Hughes to retired Chief Justice Earl Warren made similar arguments. Nothing has changed, then, since the Constitution was written and ratified. It is and always has been understood that Congress's implementation of the one supreme Court language of Article III has not involved and could not involve a reorganization of the Court under which some Justice or Justices conducted the Court's business while others qualified to serve were compelled to watch from the sidelines. But this historical belief in perfect congressional perpetuation of the one [indivisible] supreme Court is mistaken. Early Congresses did not always treat the constitutional commitment to one supreme Court as an absolute bar to all subdivision of the structure and business of the Court. And the Supreme Court itself went along with the legislature in the 1802 creation of the one-Justice rump Supreme Court that sat every year on the first Monday of August until 1839.
Locating Authority in Law, and Avoiding the Authoritarianism of 'Textualism'

Much modern jurisprudence attempts to move the locus of authority away from people with authority in order to locate it instead, for example, in rules or texts. This article argues that authority, wherever it exists, is a quality of the actions of persons. The article mounts this argument by showing how Justice Scalia’s textualism is the legal analogue of a largely discredited form of “Christian positivism,” one that leads to a form of authoritarianism. The article goes on to argue that authorianism can be avoided only by individuals’ and their communities’ becoming authoritative, including in the making and enforcement of law. Relying on a fairly thick normative anthropology to identify what is authoritative, this article mounts a non-liberal critique of the conservative jurisprudential doctrine that lies at the core of the American cult of the Supreme Court.
Enforcement and the concept of law

International law, many think, is not really law at all because it is not enforced. This Essay asks two philosophical questions about that claim. What do we mean by enforcement when we channel the intuition that enforcement is part of law’s nature? And what is the place of enforcement in our concept of law? Enforcement, the Essay argues, is the activity by which a legally constituted power is applied to make the law’s dictates actual; it is a matter of law’s efficacy. Enforcement so conceived is constitutive of law’s identity as law, but not strictly necessary to it because law is not the kind of thing that has strictly necessary features. Nor is enforcement sufficient to make a norm a law: the skepticism toward international law is not based on enforcement alone.
Is There a Correlation Between Law Professor Publication Counts, Law Review Citation Counts, and Teaching Evaluations? An Empirical Study

This empirical study attempts to answer an age-old debate in legal academia: whether scholarly productivity helps or hurts teaching. The study is of an unprecedented size and scope. It covers every tenured or tenure-track faculty member at 19 U.S. law schools, a total of 623 professors. The study gathers four years of teaching evaluation data (calendar years 2000–2003) and tests for associations between the teaching data and five different measures of research productivity/scholarly influence. The results are counterintuitive: there is either no correlation or a slight positive correlation between teaching effectiveness and any of the five measures of research productivity. Given the breadth of the study, this finding is quite robust. These findings should help inform debates about teaching and scholarship among law school and other faculties and likely require some soul-searching about the interaction between the two most important functions of U.S. law schools.
Go Figure: The Strategy of Nonliteral Speech

We develop a model of figurative or indirect speech, which may convey a meaning that differs from its literal meaning. The model yields analytical conditions for speech to be figurative in equilibrium and delivers a number of comparative statics results. For instance, it predicts that the likelihood of figurative speech is greater if the benefit to the listener of correctly understanding the speaker is greater. We then apply the model to analyze particular forms of indirect speech, including terseness, irony, and veiled bribery. Interestingly, the model provides a novel argument for the effectiveness of laws that strictly punish attempted bribery. (JEL D83, K42, Z13) T his paper develops a signaling model of figurative or indirect speech, which may convey a meaning that differs from its literal meaning. In the model, a speaker has a thought or meaning that she may want to communicate to a listener. The speaker can send the listener a direct and unambiguous message that clearly reveals her thought to the listener. Alternatively, she can send an indirect and ambiguous message that has a literal meaning that differs from her actual thought. In other words, she can express her thought figuratively. Expressing a thought figuratively may actually be less costly than expressing it unambiguously for several reasons. First, expressing a thought figuratively may simply be easier and less time consuming than disambiguating it, especially if the thought is complicated. Second, by expressing a thought figuratively, the speaker can potentially communicate it without articulating it, which may enable the speaker and listener to avoid liability for offending third party listeners with whom they may have a conflict of interest. Third, it may enable the speaker to avoid incurring liability for offending the listener if the speaker and listener have a disagreement over actions. As Pinker (2008) and Pinker, Nowak, and Lee (2008) have argued, indirect speech carries the advantage of “plausible deniability.” However, expressing a thought figuratively carries a greater risk of miscommunication, because the listener might naively interpret the expression literally even though it is meant figuratively (an aspect not taken into account in the analysis by Pinker 2008, or Pinker, Nowak, and Lee 2008). The model assumes that there is a potential trade-off
Analysts’ Weighting of Private and Public Information

Using both a linear regression method and a probability-based method, we find that on average, analysts place larger than efficient weights on (i.e., they overweight) their private information when they forecast corporate earnings. We also find that analysts overweight more when issuing forecasts more favorable than the consensus, and overweight less, and may even underweight, private information when issuing forecasts less favorable than the consensus. Further, the deviation from efficient weighting increases when the benefits from doing so are high or when the costs of doing so are low. These results suggest that analysts' incentives play a larger role in misweighting than their behavioral biases. Copyright 2006, Oxford University Press.
International tests of a five-factor asset pricing model ☆

Abstract Average stock returns for North America, Europe, and Asia Pacific increase with the book-to-market ratio (B/M) and profitability and are negatively related to investment. For Japan, the relation between average returns and B/M is strong, but average returns show little relation to profitability or investment. A five-factor model that adds profitability and investment factors to the three-factor model of Fama and French (1993) largely absorbs the patterns in average returns. As in Fama and French, 2015 , Fama and French, 2016 , the model's prime problem is failure to capture fully the low average returns of small stocks whose returns behave like those of low profitability firms that invest aggressively.
On Quality Bias and Inflation Targets

Does Ramsey optimal policy call for adjusting the inflation target by the size of the quality bias in measured inflation? We find that if it is nonhedonic (or sticker) prices that are sticky, the conventional view, according to which it is optimal to adjust the inflation target upward by the size of the quality bias, is misguided. Furthermore, we establish that quality improvement is crucial for the determination of the optimal inflation target even in the absence of quality bias. In this case, if nonhedonic prices are sticky, sticker prices should fall at the rate of quality growth.
Naturalized Epistemology and the Law of Evidence

This paper important developments in epistemology, and defends a theoretical framework for evidence scholarship from the perspective of naturalized epistemology. It demonstrates that naturalized epistemology provides a firm conceptual foundation for much research into law of evidence. These developments in epistemology have not been much noted in legal scholarship, despite their importance in philosophy and their coincidence with some widely shared approaches to evidence scholarship. This article is a partial antidote for the unproductive fascination in some quarters of the legal academy with "postmodern" conceptions of knowledge and truth and to the even more common search by the legal professoriat for algorithms that provide answers to important legal questions. In the field of evidence, there is some interest in post-modern epistemology, and much searching for the appropriate algorithm, such as Bayesian decision theory or micro-economics, or simply the complete neglect of epistemological matters. The article argues that the naturalistic turn in epistemology of the past thirty years (especially that branch of naturalized epistemology known as social epistemology) provides the appropriate theoretical framework for the study of evidence, as it does for virtually any enterprise concerned with the empirical adequacy of its theories and the truth-generating capacity of its methodologies. Evidence scholarship and law are concerned with both, and thus naturalized epistemology provides a fruitful way of understanding the limitations of some of the existing efforts to provide theoretical and philosophical foundations to evidence law. It also provides a way to conceptualize and evaluate specific rules of evidence, and concomitantly explains what most evidence scholars do, regardless of their explicit philosophical commitments. For the great bulk of evidentiary scholars, this article should solidify the ground beneath their feet.
Executive Turnover Following Option Backdating Allegations

ABSTRACT: We find that the likelihood of forced turnover in the CEO and CFO positions is significantly higher for firms in the aftermath of option backdating than in propensity-score matched control firms. Forced turnover occurs in about 36 percent of the accused firms. The forced turnover rates for CEOs and CFOs are similar and several times higher than normal. The displaced managers are further punished by the managerial labor market, as they are much less likely than control firm managers to be rehired at comparable positions. We also find that backdating firms restructure CEO compensation to rely less on stock options. Finally, we learn the higher turnover extends to the General Counsel. While boards are often viewed as unresponsive to criticisms involving executive compensation, they did respond quite decisively to option backdating allegations and the accompanying adverse publicity. Data Availability: All data used in this study are publicly available from the sources indicated.
Do Collective Action Clauses Raise Borrowing Costs

We examine the implications for borrowing costs of including collective-action clauses in loan contracts. For a sample of some 2,000 international bonds, we compare the spreads on bonds subject to UK governing law, which typically include collective-action clauses, with spreads on bonds subject to US law, which do not. Contrary to the assertions of some market participants, we find that collective-action clauses in fact reduce the cost of borrowing for more credit-worthy issuers, who appear to benefit from the ability to avail themselves of an orderly restructuring process. In contrast, less credit-worthy issuers pay, if anything, higher spreads. We conjecture that for less credit-worthy borrowers the advantages of orderly restructuring are offset by the moral hazard and default risk associated with the presence of renegotiation-friendly loan provisions.
Learning about investment risk: The effects of structural uncertainty on dynamic investment and consumption

Abstract We analyze a general equilibrium model where production shocks are unobservable and there is structural uncertainty regarding investment risk because the volatility of the production shocks is unknown. Higher investment generally accelerates learning on the unknown parameter, but the dynamic interaction between learning and investment is complex. We quantify this interaction by numerically computing equilibrium investment and consumption in a version of the model calibrated by aggregate US data. We find that imperfect observability (of productivity shocks) by itself does not significantly affect equilibrium investment and consumption, but structural uncertainty significantly impacts equilibrium investment and consumption levels.
The Strugglers: The New Poor in Latin America?

Summary We identify a group of people in Latin America that are not poor but not middle class either—namely “strugglers” in households with daily income per capita between $4 and $10 (at constant 2005 PPP). This group will account for about a third of the region’s population over the next decades; as the size and income of the middle class rises, they could become increasingly marginalized. The cash transfers they receive are largely offset by indirect taxes; the benefit of schooling and other in-kind transfers they receive is questionable after adjusting for quality. We discuss implications for the social contract.
Mercury: the good, the bad, and the export ban ⁄

Abstract We analyze the bipartisan call to ban US exports of commodity mercury. An export ban can generate positive environmental benefits by increasing the scarcity of mercury in developing economies where significant toxic releases occur. We show, however, that a direct mercury purchase and retirement policy can achieve the same foreign environmental goals without adverse impacts on domestic environmental quality. We present qualitative and quantitative evidence that highlight the potential inefficiencies of a mercury export ban as a method of achieving environmental objectives.
Understanding the evolution of world business cycles

Abstract This paper studies the changes in world business cycles during the period 1960–2003. We employ a Bayesian dynamic latent factor model to estimate common and country-specific components in the main macroeconomic aggregates (output, consumption, and investment) of the G-7 countries. We then quantify the relative importance of the common and country components in explaining comovement in each observable aggregate over three distinct time periods: the Bretton Woods (BW) period (1960:1–1972:2), the period of common shocks (1972:3–1986:2), and the globalization period (1986:3–2003:4). The results indicate that the common (G-7) factor explains, on average, a larger fraction of output, consumption and investment volatility in the globalization period than it does in the BW period.
Gender and Negotiation Performance

When males and females negotiate with persons of the opposite sex—and people of the same sex—gender-based stereotypes may influence their interactions. Men and women often assume that males are more likely to be competitive, win–lose negotiators who want to maximize their own return. Women are expected to be more accommodating, win–win negotiators who try to preserve relationships by seeking to maximize the joint return achieved by the parties. If these assumptions are accurate, we might expect men to achieve better negotiating results than women. This article explores common gender-based beliefs that might affect bargaining interactions. It then compares the performance of male and female law students over the past 16 years on Legal Negotiation course exercises to determine whether men or women achieve better results on negotiation exercises. The data suggest that negotiator gender does not significantly influence negotiation results.
Bond risk, bond return volatility, and the term structure of interest rates

Abstract This paper explores the time variation in the bond risk, as measured by the covariation of bond returns with stock returns and consumption growth, and in the volatility of bond returns. A robust stylized fact in empirical finance is that the spread between the yields on long- and short-term bonds forecasts future excess returns on bonds at varying horizons positively; in addition, the short-term nominal interest rate forecasts both the stock return volatility and the exchange rate volatility positively. This paper presents evidence that movements in both the short-term nominal interest rate and the yield spread are positively related to changes in the subsequent realized bond risk and bond return volatility. The yield spread appears to proxy for business conditions, while the short rate appears to proxy for inflation and economic uncertainty. A decomposition of bond betas into a real cash flow risk component and a discount rate risk component shows that yield spreads have offsetting effects in each component. A widening yield spread is correlated with a reduced cash-flow (or inflationary) risk for bonds, but it is also correlated with a larger discount rate risk for bonds. The short rate only forecasts the discount rate component of the bond beta.
The Last Bankrupt Hanged: Balancing Incentives in the Development of Bankruptcy Law

This Article frames the history of the Anglo-American bankruptcy tradition as a search for solutions to the basic problem that has from the first underlain the bankruptcy process: how to obtain the assistance of a debtor in his financial dismantling. The pivotal moment in this story came in the years 1705 and 1706, when the English Parliament drafted a bill making the bankrupt’s refusal to cooperate with the commissioners running his bankruptcy a capital crime. Almost as an afterthought, they also introduced discharge of debt. Incentivizing cooperation with discharge would have a fruitful future. Coercing the debtor to be honest, however, proved a failure. Fraud flourished, and few perpetrators were executed, in part because creditors and jurors found putting bankrupts to death a bit excessive. And yet, despite the failure of the English experiment with harsh penalties, the desire to punish debtors has remained a part of the culture of bankruptcy to this day. Copyright © 2010 by Emily Kadens. † Assistant Professor, University of Texas at Austin School of Law. B.A. University of Chicago; Ph.D. Princeton University; J.D. University of Chicago. The author thanks the following people for their advice and assistance: Douglas Baird, Wyatt Dowling, Andres Dura, Mark Gergen, Ryan Goins, Jason Kilborn, Douglas Laycock, Angela Littwin, James Oldham, Shane Pennington, Harry Rajak, Michael Riordan, Marlyn Robinson, David Seipp, Anthony Taussig, John Tribe, Jay Westbrook, and the staff of the Parliamentary Archives in London. KADENS IN FINAL 4/1/2010 1:07:40 PM 1230 DUKE LAW JOURNAL [Vol. 59:1229
Non-Traded Goods and Real Exchange Rate Volatility in a Two-Country DSGE Model

This paper uses a two-country dynamic stochastic general equilibrium model (DSGE) to study how different characteristics of an economy, such as openness or price stickiness, affect the contribution of the relative price of non-traded goods to real exchange rate fluctuations. The model shows that changes in the relative price between traded and non-traded goods are the main channel through which productivity shocks are transmitted to the real exchange rate. Productivity and monetary shocks also affect the real exchange rate through changes in the international relative price of traded goods. The economy’s characteristics have a significant effect on the transmission mechanism and the overall volatility of the real exchange rate in response to both types of shocks.
Corporate Law Doctrine and the Legacy of American Legal Realism

In this contribution to a symposium on "Legal Realism and Legal Doctrine," I examine the role that jurisprudence plays in corporate law doctrine. Through an examination of paired cases from the United States and United Kingdom, I offer a case study of the contrasting influence on corporate law judging of American Legal Realism versus traditional U.K. Doctrinalism.Specialist judges in both systems, aided by specialist lawyers, clearly identify and understand the core policy issues involved in a dispute and arrive at sensible results. Adjusting for differences in background law and institutions, it seems likely that the disputes would ultimately be resolved in more or less the same way in each system. This is unsurprising in a field such as corporate law, where market and institutional pressures demand practical solutions to practical problems.On the other hand, the differences in style are inescapable. While Delaware corporate law judges openly identify gaps and resolve them by reference to policy, U.K. judges employ a traditional historical/doctrinal approach, working through precedent and, in doing so, developing principles to resolve the case at bar. These differences in style, it seems to me, are a legacy of the impact of American Legal Realism on legal education in the United States, in contrast to the more traditional approach dominant in the United Kingdom. Explicit policy analysis is far more acceptable and natural in the Delaware approach than in the United Kingdom, and this difference in legal culture has effects on how lawyers present cases.
Davids, Goliaths, and Business Cycles

We show that a simple, intuitive variable,   (Goliath versus David) reflects timevariation in discount rates related to changes in aggregate business conditions.   is the annual change in the weight of the largest 250 firms in the aggregate stock market, and is motivated by research that shows that small firms are more severely impacted than large firms by economic shocks due to differences in access to external finance. We find that   is the best single predictor of market returns out-of-sample among traditional predictors, predicting quarterly market returns with an out-of-sample 2 of 6.3% in the 1976-2011 evaluation period. Consistent with its motivation,   forecasts lower future  and aggregate investment growth.   also forecasts returns on treasury bonds and the 25 size and book-to-market sorted portfolios (and consequently as well as ), with assets we ex-ante expect to be more sensitive to discount rate variation displaying greater sensitivity to   .W e show that   is the only variable among traditional predictors that forecasts stock returns, bond returns, and macroeconomic variables. We also show that  ’s predictive ability is robust, and not due to information contained in traditional variables, such as  and net payout.
Measurement in Financial Reporting: The Need for Concepts

SYNOPSIS: The Conceptual Framework neither specifies the objective or definition of accounting measurement, nor provides a conceptual basis for choosing among alternative measurement bases. This paper offers a starting point for developing measurement concepts based on existing Framework concepts, including the objective of financial reporting, the qualitative characteristics of useful financial information, and the definitions of assets and liabilities. The paper focuses on subsequent measurement of individual assets and liabilities and concludes that fair value measurement is more consistent with existing concepts than either modified or unmodified historical cost. Although unmodified historical cost is consistent with some concepts, modified historical cost—which is widely used today—largely is not. Also, aggregate amounts, such as total assets and total liabilities based on modified or unmodified historical cost, lack meaning. Because financial statements include such aggregate amounts and changes in ...
Jurisprudence and Gender

What is a human being? Legal theorists must, perforce, answer this question: jurisprudence, after all, is about human beings. The task has not proven to be divisive. In fact, virtually all modern American legal theorists, like most modern moral and political philosophers, either explicitly or implicitly embrace what I will call the "separation thesis" about what it means to be a human being: a "human being," whatever else he is, is physically separate from all other human beings. I am one human being and you are another, and that distinction between you and me is central to the meaning of the phrase "human being." Individuals are, in the words of one commentator, "distinct and not essentially connected with one another." We are each physically "boundaried" – this is the trivially true meaning of the claim that we are all individuals. In Robert Nozick's telling phrase, the "root idea" of any acceptable moral or political philosophy is that "there are individuals with separate lives." Although Nozick goes on to derive from this insight an argument for the minimal state, the separation thesis is hardly confined to the libertarian right. According to Roberto Unger, premiere spokesperson for the communitarian left, "[t]o be conscious is to have the experience of being cut off from that about which one reflects: it is to be a subject that stands over against its objects . . . The subjective awareness of separation. . . defines consciousness." The political philosopher Michael Sandel has recently argued that most (not all) modern political theory is committed to the proposition that "[w]hat separates us is in some important sense prior to what connects us – epistemologically prior as well as morally prior. We are distinct individuals first, and then we form relationships and engage in co-operative arrangements with others; hence the priority of plurality over unity." The same commitment underlies virtually all of our legal theory. Indeed, Sandel's formulation may be taken as a definitive restatement of the "separation thesis" that underlies modern jurisprudence. Parts One and Two of this Article will contrast the "human being" constructed and described by (non-legal) feminist theory, with the "human being" constructed, described, or simply assumed by masculine jurisprudence. I will try to show that the "human being" sometimes explicated, and most often simply assumed by our modern legal theory contrasts in every particular with the "woman" sometimes assumed but more often carefully constructed by modern feminist theory. The third part of the Article discusses the possibility for, the promise of, the obstacles to, and the present status of a truly feminist jurisprudence, which I define as a jurisprudence built upon feminist insights into women's true nature, rather than upon masculine insights into "human" nature. Finally, the conclusion suggests how a humanist jurisprudence might evolve, and how feminist legal theory can contribute to its creation.
Authority, Autonomy, and Choice: The Role of Consent in the Moral and Political Visions of Franz Kafka and Richard Posner

In "The Ethical and Political Basis of Wealth Maximization" and two related articles, Professor (now Judge) Richard Posner argues that widely shared pro-autonomy moral values are furthered by wealth-maximizing market transfers, judicial decisions, and legal institutions advocated by members of the "law and economics" school of legal theory. Such transactions, decisions, and institutions are morally attractive, Posner argues, because they support autonomy; wealth-maximizing transfers are those to which all affected parties have given their consent. This Article argues that Posner's attempt to defend wealth-maximization on principles of consent rests on a simplistic and false psychological theory of human motivation. Posner's argument depends on both an explicit assumption that the presence of consent, without more, satisfies the requirements of an ideal of autonomy and on an implicit assumption that people consent to changes in their world in order to improve their well-being. Through a series of contrasts, I will argue that Franz Kafka's fictional works on the nature of law dramatize a dark underside of Posner's argument that the fact of consent morally legitimates our legal, social, and personal worlds. In Kafka's fictional and horrific world, as in Posner's theoretical and ideal one, victim, aggressor, and community all regard this consent as validating an otherwise unappealing state of affairs. Consent insulates these situations from moral criticism and renders them, without more, morally attractive. Kafka's fictional world thus provides a dramatic enactment of Posner's moral claim: Posner argues that consent morally legitimates all; Kafka illustrates what a world so legitimated might look and feel like. In both worlds, good and evil, and right and wrong, lose all meaning when all that matters is whether and to what extent people get exactly what they think they want.
Gambling Preferences, Options Markets, and Volatility

This study examines whether the gambling behavior of investors affects volume and volatility in financial markets. Focusing on the options market, we find that the ratio of call option volume relative to total option volume is greatest for stocks with return distributions that resemble lotteries. Consistent with the theoretical predictions of Stein (1987), we demonstrate that gambling-motivated trading in the options market influences future spot price volatility. These results not only identify a link between lottery preferences in the stock market and the options market, but they also suggest that lottery preferences can lead to destabilized stock prices.
The Importance of the Context in Brand Extension: How Pictures and Comparisons Shift Consumers' Focus from Fit to Quality

Abstract It is well established that consumers' evaluations of brand extensions depend on the quality of the parent brand and the fit between that brand and the extension category. The authors propose that the relative importance of these two factors is influenced by two key features of a typical shopping environment: the presence of visual information and the availability of comparison brands. In particular, the authors demonstrate that adding pictures and enabling brand comparisons shift consumers' preference from extensions of better-fitting brands to extensions of higher-quality brands. The authors propose that this occurs because pictures and brand comparisons create a more concrete representation of the extension, which in turn increases the importance of parent brand quality relative to brand–extension fit. They provide support for this underlying mechanism and discuss the practical implications of their findings.
Cost Allocation for Capital Budgeting Decisions

Investment decisions frequently require coordination across multiple divisions of a firm. This paper explores a class of capital budgeting mechanisms in which the divisions issue reports regarding the anticipated profitability of proposed projects. To hold the divisions accountable for their reports, the central office ties the project acceptance decision to a system of cost allocations comprised of depreciation and capital charges. If the proposed project concerns a common asset that benefits multiple divisions, then our analysis derives a sharing rule for dividing the asset among the users. Capital charges are based on a hurdle rate determined by the divisional reports. We find that this hurdle rate deviates from the firm's cost of capital in a manner that depends crucially on whether the coordination problem is one of implementing a common asset or choosing among multiple competing projects. We also find that more severe divisional agency problems will increase the hurdle rate for common assets, yet th...
Relaxing Traditional Economic Assumptions and Values: Toward a New Disciplinary Discourse on Law

Economics has been viewed traditionally as a discipline removed from other, "softer", fields of social analysis. Professor R. Malloy has fought to remove these barriers and encourage interdisciplinary dialogue. In a field previously dominated by normative values of majority power holders, a multidisciplinary approach allows for a more extensive examination of social trends and the question of innate human "rights". By relaxing the assumptions of traditional neoclassical economic analysis, one can gain a theoretical perspective that includes insights from multiple disciplines. This article reinforces Malloy's conceptualization of new social analysis, hoping to further this new interdisciplinary cooperation.
Disintermediating Avarice: A Legal Framework for Commercially Sustainable Microfinance

Although microfinance has emerged as a key tool to alleviate poverty, the need for microfinance lending vastly exceeds the amount of funds that can be raised from charitable donors. Commercial bank lending currently supplements donor money, but microfinance loans made by banks are expensive and sometimes even exploitive. This Article examines how innovative legal structures can enable microfinance loans to be funded directly from lower-cost, and virtually limitless, capital market sources by removing, or “disintermediating,” the need for a bank intermediary. In that context, this Article identifies and attempts to resolve the resulting law and business issues of first impression and also examines, more normatively, the extent to which microfinance lending should rely on capital market funding sources.
A Polycentric Approach for Coping with Climate Change

This paper proposes an alternative approach to addressing the complex problems of climate change caused by greenhouse gas emissions. The author, who won the 2009 Nobel Prize in Economic Sciences, argues that single policies adopted only at a global scale are unlikely to generate sufficient trust among citizens and firms so that collective action can take place in a comprehensive and transparent manner that will effectively reduce global warming. Furthermore, simply recommending a single governmental unit to solve global collective action problems is inherently weak because of free-rider problems. For example, the Carbon Development Mechanism (CDM) can be gamed in ways that hike up prices of natural resources and in some cases can lead to further natural resource exploitation. Some flaws are also noticeable in the Reducing Emissions from Deforestation and Forest Degradation in Developing Countries (REDD) program. Both the CDM and REDD are vulnerable to the free-rider problem. As an alternative, the paper proposes a polycentric approach at various levels with active oversight of local, regional, and national stakeholders. Efforts to reduce global greenhouse gas emissions are a classic collective action problem that is best addressed at multiple scales and levels. Given the slowness and conflict involved in achieving a global solution to climate change, recognizing the potential for building a more effective way of reducing green house gas emissions at multiple levels is an important step forward. A polycentric approach has the main advantage of encouraging experimental efforts at multiple levels, leading to the development of methods for assessing the benefits and costs of particular strategies adopted in one type of ecosystem and compared to results obtained in other ecosystems. Building a strong commitment to find ways of reducing individual emissions is an important element for coping with this problem, and having others also take responsibility can be more effectively undertaken in small- to medium-scale governance units that are linked together through information networks and monitoring at all levels. This paper was prepared as a background paper for the 2010 World Development Report on Climate Change.
Feasibility Assessment of Wearable Respiratory Monitors for Ambulatory Inhalation Topography

Background: Natural environment inhalation topography provides useful information for toxicant exposure, risk assessment and cardiopulmonary performance. Commercially available wearable respiratory monitors (WRMs), which are currently used to measure a variety of physiological parameters such as heart rate and breathing frequency, can be leveraged to obtain inhalation topography, yet little work has been done. This paper assesses the feasibility of adapting these WRMs for measuring inhalation topography. Methods: Commercially available WRMs were compiled and assessed for the ability to report chest motion, data analysis software features, ambulatory observation capabilities, participant acceptability, purchasing constraints and affordability. Results: The following WRMs were found: LifeShirt, Equivital EQ02 LifeMonitor, Smartex WWS, Hexoskin Smart Garment, Zephyr BioHarness, Nox T3&A1, BioRadio, SleepSense Inductance Band, and ezRIP & zRIP Durabelt. None of the WRMs satisfied all six assessment criteria in a manner enabling them to be used for inhalation topography without modification and development. Conclusions: The results indicate that there are WRMs with core technologies and characteristics that can be built upon for ambulatory inhalation topography measurement in the NE.
Disentangling supercohomology symmetry-protected topological phases in three spatial dimensions

We build exactly solvable lattice Hamiltonians for fermionic symmetry-protected topological (SPT) phases in (3+1)D classified by group supercohomology. A central benefit of our construction is that it produces an explicit finite-depth quantum circuit (FDQC) that prepares the ground state from an unentangled symmetric state. The FDQC allows us to clearly demonstrate the characteristic properties of supercohomology phases - namely, symmetry fractionalization on fermion parity flux loops - predicted by continuum formulations. By composing the corresponding FDQCs, we also recover the stacking relations of supercohomology phases. Furthermore, we derive topologically ordered gapped boundaries for the supercohomology models by extending the protecting symmetries, analogous to the construction of topologically ordered boundaries for bosonic SPT phases. Our approach relies heavily on dualities that relate certain bosonic 2-group SPT phases with supercohomology SPT phases. We develop physical motivation for the dualities in terms of explicit lattice prescriptions for gauging a 1-form symmetry and for condensing emergent fermions. We also comment on generalizations to supercohomology phases in higher dimensions and to fermionic SPT phases outside of the supercohomology framework.