cssi/SciSciGPT-SciSciNet huggingface dataset:
More Cooperation, Less Uniformity: Tax Deharmonization and the Future of the International Tax Regime

Efforts to foster improved international tax cooperation have become preoccupied with tax harmonization. Deharmonization offers the possibility of harmony without uniformity. By exploring two examples of tax deharmonization in practice and considering the origins and limitations of tax harmonization, this Article brings the traditional emphasis on harmonization into question. It then makes the case that deharmonization - cooperation without uniformity - could provide a viable alternative. Achieving tax deharmonizations potential would require revisiting some of the most basic elements of our current international tax regime, particularly the benefits principle.
Are Catholics Unreliable from a Democratic Point of View? Thoughts on the Occasion of the Sixtieth Anniversary of Paul Blanshard's American Freedom and Catholic Power

From 1949 to 1950, Paul Blanshard’s American Freedom and Catholic Power dominated the New York Times best-seller list for eleven months, having captured the attention of American intelligentsia with its claim that “the Catholic problem is still with us” and its call for the formation of a “resistance movement.” Sixty years later, Blanshard’s bigotry is no longer defended in educated circles. Questions remain, though, concerning why Blanshard’s ideas made progress in some of the smartest American minds and throughout much of the culture. Was Blanshard onto something subversive about Catholics? Are Catholics’ commitments not compatible with the demands of American democratic philosophy and practice? Today, some scholars try to solve the Blanshard problem by changing the topic. “Liberal Catholicism,” they intimate, is not the problem posed by the unmodified Catholicism Blanshard targeted more than half a century ago. If, however, we refuse to change the topic (on the ground that the Catholic religion has not changed in any relevant sense), the problem is of broader scope, as Pope John Paul II wrote in 1991: all those who are “convinced that they know the truth and firmly adhere to it are considered unreliable from a democratic point of view.” Perhaps Blanshard was right to the extent he worried that Catholics have principled reservations about the scope of democratic legitimacy and the sweep of democratic authority. It is widely and justly celebrated that the Second Vatican Council (1962-65) declared the natural human right to liberty of conscience. What the same Council said about the liberty of the Church, the libertas ecclesiae, however, is little noticed, but of at least as much practical significance as what it declared about human conscience. Also little noticed, and also significant, is that the same Council said nothing directly about democracy. In light of these and other facts, this paper argues that faithful Catholics are indeed unreliable from a democratic point of view in the respect that they, in and through their Church, insist that the (democratic) socio-political order must be conformed to higher law and true human rights (through means that are both prudent and otherwise in conformity with valid positive law). Faithful Catholics deny the ultimacy or sufficiency of democracy and what it happens to deliver. This paper was originally delivered as the Yves R. Simon Lecture at the University of Chicago.
Errors and the Functioning of Tort Liability

The functioning of liability may be plagued by errors in determining damages and in setting due care. This article shows that errors may distort the incentives to take precaution in different ways, depending on whether they occur under rules-when a regulator defines due care and courts set the amount of damages-or standards-when courts set both damages and due care on a case-by-case basis. Thus, under rules, errors in determining damages and in setting due care occur independently of each other, while, under standards, an error in damages may trigger a corresponding error in due care. This concurrence radically changes the predictions of the literature both when errors are perfectly anticipated (biases) and when they occur randomly (uncertainty). This article further examines the extent to which judges can correct inefficient decisions by regulators and vice versa, and studies the effects of errors when the precaution technology changes.
Compassion and the Rule of Law

Compassion poses difficult challenges for the rule of law. The compassionate response is often cast as a deviation from settled law rather than a principled application of it. Compassion so understood is troubling, most obviously because it poses a challenge to overall fairness, notice and consistency. Although compassion is usually approached as a factor influencing substantive outcomes, I argue to the contrary that compassion cannot serve as a reliable indicator of who should prevail in legal debates. Whether compassion should inform substance is a normative question that must be answered in light of the purposes of the tribunal and the principles it seeks to advance. I propose instead that compassion's importance lies in its ability to aid decision-makers in understanding what is at stake for the litigant. In this sense, compassion is closely tied to humility: both are reminders of human fallibility and of the limits of individual understanding.
Externalities, Market Power, and Resource Extraction*

Abstract This article analyzes the effect of market power in the presence of dynamic and biological externalities. When several countries harvest fish in international waters the evolution of fish population is affected by their joint action, thus generating a biological and a dynamic externality. If there is trade, the market-clearing prices depend on the harvesting and consumption in all countries. Therefore, market-clearing prices also generate an externality. We find a subgame perfect Cournot–Nash equilibrium and study the conditions under which it may be efficient. We also analyze the role of different externalities in generating inefficiency.
Explaining the Blue Shift in Election Canvassing

We conduct statistical analysis of a phenomenon recently identified by Foley (2013), the rise in the number of votes counted after Election Day (“overtime votes”) and the growing tendency of these votes to disproportionately favor Democrats in presidential elections (the “blue shift.”) We provide a historical description of these two time series, from 1948 to 2012, and establish that the timing of the persistent growth in the blue-shifted overtime vote began with the 2004 election. While some of the interstate variability in these time series is accounted for by regional factors (e.g., a lag in news travelling to New York), changes in the time series are broadly consistent with changes in electoral practices, especially in recent years. We perform statistical analysis to understand better interstate variability in the overtime vote and the blue shift in the 2012 presidential election. We discover that variation in the size of the overtime vote is associated with the number of provisional ballots, but not the number of absentee/mail ballots; variation in the relative size of the blue shift is positively associated with the number of provisional ballots and with the Democratic partisanship of the states. We also perform an analysis of the overtime vote in seven statewide contests in Virginia, using that state’s change log as evidence. We find a tendency of provisional ballots to persistently favor Democrats in these races, whereas other sources of votes accounted for after Election Day do not persistently favor Democrats in that state. We conclude the paper by suggesting how the analysis offered here might be expanded in future work.
Consistency and Recovery in Retail Supply Chains

Practitioners and researchers describe inventory service level using uni-dimensional metrics, e.g., in-stock and fill rate. However, prior research identifies dynamic aspects of supplier performance: consistency (the ability of a supplier to fulfill orders repeatedly) and recovery (the ability of a supplier to fulfill orders after a lapse in service). We develop a method for measuring consistency and recovery, and we test the method in the retail supply chain context using more than 40,000 order and fulfillment records provided by suppliers to retailers in two distinct settings. We model a retailer purchasing from competing suppliers with different levels of consistency and recovery. This model incorporates the retailer's uncertainty about demand and the retailer's uncertainty about its suppliers' service levels, which the retailer assesses using each supplier's prior performance. We characterize how the retailer's orders change with a supplier's performance through numerical experiments designed using field-based data. Specifically, we find pronounced contrasts in market share across suppliers with similar traditional inventory service levels metrics but differences in consistency and recovery. Given the influence of consistency and recovery on supply chain outcomes, we discuss implications for practice and future research.
Stare decisis and the rule of law: A layered approach

Stare decisis remains a controversial feature of the legal systems that recognize it. Some jurists argue that the doctrine is at odds with the rule of law; others argue that there are good rule-of-...
Forward and Spot Exchange Rates in a Multi-currency World

Separate literatures study violations of uncovered interest parity (UIP) using regression-based and portfolio-based methods. We propose a decomposition of these violations into a cross-currency, a between-time-and-currency, and a cross-time component that allows us to analytically relate regression-based and portfolio-based facts and to estimate the joint restrictions they put on models of currency returns. Subject to standard assumptions on investors’ information sets, we find that the forward premium puzzle (FPP) and the “dollar trade” anomaly are intimately linked: both are driven almost exclusively by the cross-time component. By contrast, the “carry trade” anomaly is driven largely by cross-sectional violations of UIP. The simplest model that the data do not reject features a cross-sectional asymmetry that makes some currencies pay permanently higher expected returns than others, and larger time series variation in expected returns on the U.S. dollar than on other currencies. Importantly, conventional estimates of the FPP are not directly informative about expected returns because they do not correct for uncertainty about future mean interest rates. Once we correct for this uncertainty, we never reject the null that investors expect high-interest-rate currencies to depreciate, not appreciate.
Hybrid Learning Aided Inactive Constraints Filtering Algorithm to Enhance AC OPF Solution Time

The optimal power flow (OPF) problem contains many constraints. However, equality constraints and a limited set of inequality constraints encompass sufficient information to determine the problem feasible space. This article presents a hybrid supervised regression-classification learning-based algorithm to predict active and inactive inequality constraints before solving AC OPF solely based on nodal power demand information. The proposed algorithm is structured using a mixture of classifiers and regression learners. Instead of directly mapping OPF results from demand, the proposed algorithm removes inactive constraints to construct a truncated AC OPF. This truncated optimization problem can be solved faster than the original problem with less computational resources. Numerical results on several test systems show the proposed algorithm's effectiveness for predicting active and inactive constraints and constructing a truncated AC OPF.
Beyond Winter v. NRDC: A Decade of Litigating the Navy's Active SONAR Around the Environmental Exemptions

To find ultra-quiet modern submarines, the Navy uses highpowered active sonar. However, active sonar is also linked to marine mammal strandings and other types of harms to whales, dolphins, fish, and sea turtles. This connection has led to over a decade of challenges against the Navy’s active sonar training exercises in the Pacific, culminating in the U.S. Supreme Court’s November 2008 decision in Winter v. Natural Resources Defense Council. This Article suggests that the Supreme Court’s failure to reach the merits of the case—the actual legality of the Navy’s training exercises off the southern California coast—is the most troubling part of the Court’s somewhat cabined analysis of the lower courts’ preliminary injunctions. Specifically, this Article argues that the Navy sonar litigation represents a progressive elimination both of flexibility in the applicable environmental requirements and effective oversight of military actions that could ensure that neither national security nor environmental goals are unnecessarily sacrificed.
Arrogance can be a virtue: Overconfidence, information acquisition, and market efficiency ☆

Abstract In behavioral finance, overconfidence has been established as a prevalent psychological bias, which can make markets less efficient by creating mispricing in the form of excess volatility and return predictability. In this paper, we develop a model in which overconfidence causes investors to overinvest in information acquisition when this information could improve market efficiency by driving prices closer to true values. We study the impact of overconfidence on mispricing and information acquisition, comparing their net effect on prices. We derive several novel implications. First, overconfidence generally improves market pricing provided the level of overconfidence is not too high. Pricing can also improve even when overconfidence is arbitrarily high, depending on the amount of private information acquired relative to publicly available information.
The Value of Fit Information in Online Retail: Evidence from a Randomized Field Experiment

Online channels generate frictions when selling products with nondigital attributes, such as apparel. Customers may be reluctant to purchase products they have not been able to try on and those customers who do purchase may return products when they do not fit as expected. Virtual fitting-room technologies provide information about how a product fits a particular customer and promise to mitigate some of the frictions the information gap generates in the retailers’ supply chains. By implementing a series of randomized field experiments, we study the value of virtual fit information in online retail. In our experiments, customers are randomly assigned to a treatment condition where virtual fit information is available or to a control condition where virtual fit information is not available. Our results show that offering virtual fit information increases conversion rates and order value, and reduces fulfillment costs arising from returns and home try-on behavior, that is, customers ordering multiple sizes o...
Excess Cash and Shareholder Payout Strategies

On March 19, 2012, Apple announced a program to distribute its “excess” cash to shareholders in the form of dividends and share buybacks. This announcement followed a pattern that is remarkably similar to the one leading up to Microsoft's announcement in 2004. Likewise IBM, the bluest of blue chips, made a path-breaking decision to initiate share buybacks in the 1980s. And as recently as April 2012, IBM, along with many other large corporations, announced yet another major share buyback program together with an increase in its dividend. These actions underscore the reality that senior management's main job is to allocate capital efficiently—and that efficient allocation of capital means distributing it when necessary. In light of these events, and the demand from shareholders that appears to be driving them, this paper explores analytical and empirical issues related to excess cash and corporate payout policy. In so doing, it provides the outline of an analytical framework for executives when thinking about the allocation of excess cash among competing uses, including deleveraging, growth, special and regular dividends, and share buybacks. The essence of the framework is this: Once companies satisfy their demands for cash based on their expected financial transactions, their targeted capital structure, and prospective investment (mergers and acquisitions) considerations, management should turn its attention to capital structure and shareholder payout decisions. Assuming that the company's capital structure is reasonably close to its target, and that its rating agencies are supportive, management should aim to pay a level of dividends that (1) reflects the underlying strength and stability of their projected earnings streams and that (2) satisfies the expectations of its core shareholders while positioning itself for the future. For more cyclical and otherwise riskier companies, management should also consider the use of stock buybacks or special dividends as a way of paying out the more variable, or unexpected, part of their expected earnings stream.
Testing the positive theory of government finance

Researchers characterizing optimal tax policies for dynamic economies have reasoned that tax rates should follow a random walk. We conduct a frequency-domain examination of U.S. tax rates and reject the hypothesis that the first difference in the series is white noise. The source of the rejection is pronounced activity of tax changes at an eight-year cycle. Regression analysis confirms the finding that there is a cyclical component to tax changes corresponding to changes in political party administration. The results suggest that the positive theory of government finance needs to be refined to incorporate features of political equilibrium.
Two complementary representations of multiple time series in state‐space innovation forms

This paper discusses two alternative innovation representations (forward and backward) of a state space model of a multivariate weakly stationary time series, and suggests estimators of system matrices and innovation noise covariances which are alternative to these based on stochastic realization theory. A scheme for iterative improvements of the initial estimates is also suggested.
If You Build It, He Will Come: Judicial Takings and a Search for Common Ground

The Takings Clause of the Fifth Amendment provides property owners with an important constitutional protection against government intervention with private property interests. While the text of the Clause clearly provides a protection, the Clause does not articulate which branch of government it applies to. While the Supreme Court has consistently recognized that the Takings Clause provisions apply to the executive and legislative branches of government, the Court has been hesitant to apply the Takings Clause to the judicial branch.In the landmark case of Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection, a majority of the Supreme Court agreed that there is a remedy when it is found that a judicial decision deprives an individual of an established property right. The Court, however, disagreed on how to best achieve this remedy. One block of the court advocated that the Takings Clause should be applied to the judicial branch, while the other block argued that the Due Process Clause of the Fourteenth Amendment would provide an adequate remedy. Implementing a Due Process remedy would be tenuous at best. It would also involve a substantial diversion from modern Due Process jurisprudence. A superior alternative would be to adopt a Judicial Takings doctrine, effectively extending the Takings Clause protections to individuals who have had an established property right eliminated or substantially changed by a court decision. Under a Judicial Takings doctrine, consideration would be given to the degree to which a court ruling has changed or departed from state common law as well as the economic effect that the ruling has on the property. If it is found that a judicial decision has deprived a property owner of an established property right, then the court’s ruling could be overturned under the Judicial Takings doctrine. If the protections of the Takings Clause were extended to protect property owners from judicial decisions that changed or extinguished an established property right, it would create assurance and predictability in interpreting state property law. This issue is of particular importance in light of increasing environmental regulation of property, specifically on the nation’s coastlines and waterways. This type of property is especially sensitive to sudden shifts in the law because of its high price and attractiveness to businesses. If adopted, this doctrine would have the effect of operating as a check on judicial power while preserving the state’s sovereign authority to enact state-specific property law.
The Wheat Study on Establishment of Accounting Principles (1971–72): A historical study

Abstract The 1972 report of the Wheat Study on Establishment of Accounting Principles became the blueprint for the Financial Accounting Standards Board (FASB), which began its official operations on July 1, 1973, succeeding the Accounting Principles Board. The FASB was the world’s first independent, full-time standard-setting board which was not organized within the accounting profession. This paper is an attempt to understand the crisis in standard setting that led up to the appointment of the Wheat Study, as well as the main elements in the Study’s process of examining the milieu of the APB, securing views from a wide range of interested parties, and fashioning its report, including the roles played by the different members of the study group.
Event Studies in Information Systems Research: An Updated Review

A change in the stock value of a company is an important indicator of firm performance. Event studies, which look at abnormal stock price reactions to specific events or happenings that may impact a business's operations, represent a relatively new but fast growing research approach in the information systems field. Building on earlier literature reviews, in this paper we examine forty-six event studies related to information technology. The purpose of this updated review is to determine the current state of this research stream and to indentify existing research gaps. These gaps may represent promising opportunities for future event studies.
Generalist Interest Organizations and Interest System Density: A Test of the Competitive Exclusion Hypothesis*

Objective We examine the effects of interest community density on generalist interest organizations. A core element of population ecology theory is competitive exclusion, which suggests two hypotheses. First, through niche partitioning of the issue space among similar organizations and the comparative advantages of specialist organizations, generalists in heavily populated systems struggle to secure members more than their counterparts in less densely populated ones. Second, surviving generalists narrow the scope of their lobbying activities to fewer issues on which they hold comparative advantage. Methods We test both hypotheses through regression analysis of data on the mobilization and lobbying focus of U.S. state Chambers of Commerce. Results Both participation in state Chambers and the number of bills that Chambers track decline as the business interest community becomes more densely populated. Conclusions We conclude that even state Chambers—the old bulls of the lobbying pasture—are powerfully influenced by competition among business interest organizations.
Social security reform with impure intergenerational altruism

Abstract This paper studies the long-run aggregate and welfare effects of eliminating Social Security in a quantitative dynamic general equilibrium life-cycle model where parents and their children are linked by voluntary and accidental bequests. Social Security in this model with impure altruism has a smaller effect on capital accumulation than in a pure life-cycle model, a bigger effect than in a model with two-sided altruism. The welfare gain of eliminating Social Security system under impure altruism is smaller than that in a pure life-cycle model, and bigger than that in a model with two-sided altruism.
Predicting Joining and Participating in Minority Employee Network Groups

E          in large corporations over the last 25 years, but little is known about these groups. Case studies show that they have been effective at generating organizational change at some companies in the 1970s (Friedman and Deinard 1996) and that African-Americans in companies with network groups report greater levels of career optimism (Friedman, Kane, and Cornfield, 1998), but we do not know who joins network groups or why. Are the motivations purely rational (cost-benefit analysis), or is joining driven also by workplace dissatisfaction (an important predictor of joining unions) or the attraction of community and social ties (an important predictor of joining identified in the voluntary association literature)? Thus, do managers need to worry about groups being “union-like,” and should we think of network groups as “expressive” (McPherson and Smith-Lovin 1986) or purely instrumental? Similarly, what sustains participation among members of these groups once they have joined? In this study, these questions are addressed by examining patterns of joining and participation at one organization with many network groups. Our focus in this study will be on the African-American, Hispanic, and Asian groups owing to the large number
Success in Global Venture Capital Investing: Do Institutional and Cultural Differences Matter?

We analyze the impact of institutional and cultural differences on success in global venture capital (VC) investing. In both developed and emerging economies, superior legal rights (and enforcement) and better developed stock markets significantly enhance VC performance. Remarkably, cultural distance between countries of the portfolio company and its lead investor positively affects VC success. Further analysis reveals that cultural differences create incentives for rigorous ex ante screening, improving VC performance. Finally, local VC participation enhances success and mitigates foreign VCs’ “liability of foreignness,” albeit only in developed economies. Our findings follow from analyzing VC investments in nearly 10,000 companies across 30 countries.
Evidence About the Link Between Education, Poverty and Terrorism Among Palestinians

This paper investigates the ways in which terrorism is linked to education and poverty using data newly culled from Hamas and Palestinian Islamic Jihad (PIJ) documentary sources. The paper presents a statistical analysis of the determinants of participation in terrorist activities by members of the Hamas and PIJ between the late 1980s and May 2002. The resulting evidence suggests that both higher education and standard of living are positively associated with participation in Hamas or PIJ and with becoming a suicide bomber, while being married significantly reduces the probability of participation in terrorist activities.
The Use of Archimedean Copulas to Model Portfolio Allocations

A copula is a means of generating an n-variate distribution function from an arbitrary set of n univariate distributions. For the class of portfolio allocators that are risk averse, we use the copula approach to identify a large set of n-variate asset return distributions such that the relative magnitudes of portfolio shares can be ordered according to the reversed hazard rate ordering of the n underlying univariate distributions. We also establish conditions under which first- and second-degree dominating shifts in one of the n underlying univariate distributions increase allocation to that asset. Our findings exploit separability properties possessed by the Archimedean family of copulas.
Trust in Forecast Information Sharing

This paper investigates the capacity investment decision of a supplier who solicits private forecast information from a manufacturer. To ensure abundant supply, the manufacturer has an incentive to inflate her forecast in a costless, nonbinding, and nonverifiable type of communication known as “cheap talk.” According to standard game theory, parties do not cooperate and the only equilibrium is uninformative---the manufacturer's report is independent of her forecast and the supplier does not use the report to determine capacity. However, we observe in controlled laboratory experiments that parties cooperate even in the absence of reputation-building mechanisms and complex contracts. We argue that the underlying reason for cooperation is trust and trustworthiness. The extant literature on forecast sharing and supply chain coordination implicitly assumes that supply chain members either absolutely trust each other and cooperate when sharing forecast information, or do not trust each other at all. Contrary to this all-or-nothing view, we determine that a continuum exists between these two extremes. In addition, we determine (i) when trust is important in forecast information sharing, (ii) how trust is affected by changes in the supply chain environment, and (iii) how trust affects related operational decisions. To explain and better understand the observed behavioral regularities, we also develop an analytical model of trust to incorporate both pecuniary and nonpecuniary incentives in the game-theoretic analysis of cheap-talk forecast communication. The model identifies and quantifies how trust and trustworthiness induce effective cheap-talk forecast sharing under the wholesale price contract. We also determine the impact of repeated interactions and information feedback on trust and cooperation in forecast sharing. We conclude with a discussion on the implications of our results for developing effective forecast management policies. This paper was accepted by Ananth Iyer, operations and supply chain management.
The New Economy Business Model and the Crisis of U.S. Capitalism

Driven by industrial innovation, in the last half of the 20th century the population of the United States attained, on average, a very high standard of living. Yet, in the first decade of the 21st century, large numbers of Americans are economically insecure. In this paper, I summarize the findings of my research into the ways in which over the past three decades the transformation of the dominant business model" that prevails in the information and communication technology industries has contributed to the rise of economic insecurity in the United States. I describe how the Old Economy business model" (OEBM) that was in place in the immediate post-World War II decades gave way to the New Economy business model" (NEBM) that is now ubiquitous in U.S. high-tech industry. Under OEBM, an employee could hold the realistic expectation of a career with one company. Under NEBM, career employment depends much more on interfirm labor mobility, which in and of itself makes continuous employment less certain. Nevertheless, in the ICT industries, NEBM has been an engine of economic growth so that a strong demand for high-tech labor can potentially offset a lack of employment security with one company. Since the early 1990's, however, this demand for high-tech labor has tended to be a demand for qualified lower-wage labor, which has meant that ICT companies have favored the employment of younger workers over older workers and of workers in developing nations over workers in the United States. At the same time, acting as both a motive for employing lower-wage labor and as a rationale for laying off experienced workers has been the adherence of U.S. corporate executives to the ideology that their companies should be run to maximize shareholder value." The most important manifestation of the influence of this ideology on corporate resource allocation is the extent to which U.S. companies repurchase their own stock to support their stock prices. I conclude this essay by arguing that neither the ideology of maximizing shareholder value nor the practice of stock repurchases has any economic merit. Indeed both must bear the blame for contributing to the rise of economic insecurity in the United States.
Hedge funds and discretionary liquidity restrictions

Abstract We study hedge funds that imposed discretionary liquidity restrictions (DLRs) on investor shares during the financial crisis. DLRs prolong fund life, but impose liquidity costs on investors, creating a potential conflict of interest. Ostensibly, funds establish DLRs to limit performance-driven withdrawals that could force fire sales of illiquid assets. However, after they restrict investor liquidity, DLR funds do not reduce illiquid stock sales and underperform a control sample of non-DLR funds. Consequently, DLRs appear to negatively impact fund family reputation. After the crisis, funds from DLR families faced difficulties raising capital and were more likely to cut their fees.
Bargaining power and industry dependence in mergers

Abstract In contrast to the widely held belief that targets capture the lion's share of merger gains, I show that the average dollar gains to targets are only modestly more than the dollar gains to acquirers. To help explain the variation in merger outcomes, I present empirical evidence in support of a new hypothesis that a target's relative scarcity (proxied by its market power) and product market dependence (proxied by customer–supplier relations) help to explain its share of the total merger gains. These results provide new evidence for an unexplored role of product markets on bargaining outcomes in mergers.
Emigration and wages in source countries: Evidence from Mexico

Abstract This paper examines empirically the effect of Mexican emigration to the United States on wages in Mexico using data from the Mexican and US censuses from 1970 to 2000. The main result in the paper is that emigration has a strong and positive effect on Mexican wages. There is also evidence for increasing wage inequality in Mexico due to emigration. Simple welfare calculations based on a labor demand–supply framework suggest that the aggregate welfare loss to Mexico due to emigration is small. However, there is a significant distributional impact between labor and other factors.
Convergence by design: The case of CalPERS in Japan

U.S. institutional investors are a key actor helping to diffuse shareholder-primacy precepts overseas, including to Japan. This study focuses on CalPERS, the public pension fund that is one of Japan’s largest foreign equity investors. Using original sources, the article shows how CalPERS transferred to Japan the activist tactics and governance principles it developed in the United States. CalPERS had modest success in changing corporate governance law and practice in Japan. It faced opposition from big business and other groups skeptical that the CalPERS principles would improve corporate performance. Given this resistance as well as barriers to institutional and legal change, CalPERS turned to relational investing as a way of extracting greater value from its Japan investments. Although CalPERS seeks to create long-term value, it is also concerned with the distribution of value among corporate stakeholders. The article considers the distributional effects of governance change and urges continuing attention to this issue.
Some possible antecedents and consequences of in-role and extra-role salesperson performance

The purpose of this study is to integrate the notion of extra-role performance with the current understanding of the relationships among salesperson job attitudes (job satisfaction and organization...
The importance of precautionary motives in explaining individual and aggregate saving

Abstract This paper examines predictions of a life-cycle simulation model — in which individuals face uncertainty regarding thier length of life, earnings, and out-of- pocket medical expenditures, and imperfect insurance and lending markets — for
The Impact of Tort Reform on Employer-Sponsored Health Insurance Premiums

We evaluate the effect of tort reform on employer-sponsored health insurance premiums by exploiting state-level variation in the timing of reforms. Using a dataset of health plans representing over 10 million Americans annually between 1998 and 2006, we find that the most common set of tort reforms during this period reduces premiums of employer-sponsored self-insured health plans by 2.1%. Of the four individual reforms comprising this set, caps on noneconomic damages and collateral source reforms have the greatest impact. We do not find reductions in premiums for fully insured plans, which in our sample are almost entirely Health Maintenance Organizations (HMOs). Further analysis reveals that self-insured HMOs are also unresponsive to reforms. Taken together, these findings suggest that HMOs reduce ‘‘defensive medicine,’’ even absent reform. The results are the first direct evidence that tort reform reduces healthcare costs in aggregate; prior research has largely focused on particular medical conditions. (JEL I1, K3, K13, K20)
An Economic and Public Policy View of Demonetization in India

The paper looks at the recent demonetization exercise that the government of India imposed on its people. The demonetization exercise was marketed from a Public Interest perspective as a way to eliminate corruption, increase the tax base and to fight terrorism. However, the Public Choice perspective brings out the political self-interest involved in the demonetization exercise. The role of foreign and domestic interest groups involved in pushing for demonetization is explored. Insights from Austrian Economics shows why top down planning fails and results in more controls. Insights from Public Policy shows that the lasting impact of demonetization is an increased interest in digital payments.
Durable good celebrities

Abstract Celebrity musicians and other famous touring performers face problems similar to those of a durable good seller with market power, since the number of tickets sold (or expected to be sold) at a given time has intertemporal demand effects. I show that the durability of celebrity output leads to “excessively” long tours and that there is a strong incentive to take actions early in one's career that will increase costs later in one's career. These effects may help explain high rates of drug abuse and other anomalous self-destructive behavior observed among celebrities.
Promise and Private Law

This essay was part of a symposium on the thirtieth anniversary of the publication of Charles Fried’s Contract as Promise and revisits Fried’s theory in light of two developments in the private-law scholarship: the rise of corrective justice and civil-recourse theories. The structural features that motivate these theories—the bilateralism of damages and the private standing of plaintiffs—are both elements of the law of contracts that Contract as Promise sets out to explain. I begin with the issue of bilateralism. Remedies— in particular the defense of expectation damages—occupy much of Fried’s attention in Contract as Promise, and he insists that this particular remedial response flows from a commitment to promissory morality. I am skeptical of this claim and seek to show the implausibility of grounding compensatory damages in a duty to keep a promise. Rather, to explain this feature of contract law, the duty to keep a promise must be joined with principles of corrective justice. I next turn to the issue of private standing. First, I seek to demonstrate that our plaintiff-centered system of contract law is a genuine puzzle. We cannot dismiss the issue of private standing as a pragmatic and ad hoc response to problems of enforcement. Rather, I argue that a better candidate can be found in the work of civil-recourse theorists who seek to elucidate the value of victims in a liberal society by holding wrongdoers accountable for their wrongs. Finally, I address some of the problems associated with the arguments presented in this essay. How exactly do promissory morality, corrective justice, and civil recourse relate to one another? My conclusion is that, at best, there is an uneasy and ill-defined relationship between these different goals. On the other hand, I hope to show that promissory theories of contract nevertheless must take the issue of private law seriously. The bilateral structure of liability and the system of private standing are major institutional features whose existence must be acknowledged and accounted for in future efforts to defend a promissory vision of contract. * Associate Professor, William & Mary Law School. This essay was prepared for the Contract as Promise at 30 symposium at Suffolk University Law School. I am grateful to Professor Jeffery Lipshaw for the invitation to participate in the symposium. As always, I thank Heather. OMAN_LEAD_WDF (DO NOT DELETE) 6/20/2012 2:22 PM 936 SUFFOLK UNIVERSITY LAW REVIEW [Vol. XLV:935
Prices and Portfolio Choices in Financial Markets: Theory, Econometrics, Experiments

Many tests of asset-pricing models address only the pricing predictions, but these pricing predictions rest on portfolio choice predictions that seem obviously wrong. This paper suggests a new approach to asset pricing and portfolio choices based on unobserved heterogeneity. This approach yields the standard pricing conclusions of classical models but is consistent with very different portfolio choices. Novel econometric tests link the price and portfolio predictions and take into account the general equilibrium effects of sample-size bias. This paper works through the approach in detail for the case of the classical capital asset pricing model (CAPM), producing a model called CAPM+e. When these econometric tests are applied to data generated by large-scale laboratory asset markets that reveal both prices and portfolio choices, CAPM+eis not rejected.
Legislating social change in an Islamic society : Indonesia's marriage law

In 1974 Indonesia, the world's most populace Islamic country, passed a National Marriage Act,1 the first legislative revision of the country's marriage and divorce law. Prior to the passage of the law, the marriage and divorce of Indonesia's majority Muslim population was governed exclusively by the unamended rules of Islamic law. Although a statute passed in 1946 required registration of marriages, reconciliations, and divorces, prior to 1974 there had been no legislative interference with the substance of Islamic marriage rules. Among the government's purposes in proposing marriage legislation were limiting arbitrary divorce and polygamy and eliminating or reducing child marriage.2 To accomplish those objectives the Act restricted a Muslim husband's power unilaterally to repudiate his wife or to take a second wife by requiring judicial approval and statutory grounds for both divorce and polygamy. The Act also required that marriage be based on the consent of the parties, that persons marrying under the age of 21 have parental consent to marry, and imposed a minimum marriage age of 16 for girls and 19 for boys.
Redressing Inequality in the Market for Justice: Why Access to Lawyers Will Never Solve the Problem and Why Rethinking the Role of Judges Will Help

Commentators have argued that the solution to addressing unequal justice under law lies in increased government funding for legal services for the poor and increased pro bono hours from private lawyers. While these proposals could result in providing more lawyers for more low income people, they fail to account for the pervasive inequality resulting from the distribution of legal services primarily through the market. Given the influence of market distribution of legal services on legal outcomes, government-funded legal services and pro bono assistance can provide a valuable form of charity, but not an effective means of equalizing justice. The Essay instead suggests that a more effective way to enhance equal justice under law would be to rethink the proper role of the judge and make the judge an "active umpire" responsible for the quality of justice.
Employee cost-sharing and the welfare effects of flexible spending accounts

Flexible Spending Accounts (FSAs) subsidize out-of-pocket health expenses not covered by employerprovided health insurance, making health care cheaper ex post, but also reducing the incentive to insure. We use a cross section of firm-level data to show that FSAs are indeed associated with reduced insurance coverage, and to evaluate the welfare consequences of this shift. Correcting for selection effects we find that FSAs are associated with insurance contracts that have coinsurance rates about 7 percentage points higher, relative to a sample average coinsurance rate of 17%. Meanwhile, coinsurance rates net of the subsidy are approximately unchanged, providing evidence that FSAs are only welfare neutral if we ignore distributional considerations and the deadweight loss of the taxes necessary to finance the subsidy. These results also suggest that FSAs may explain a significant fraction of the shift in health care costs to employees that has occurred in recent years.
A Dependence Metric for Possibly Nonlinear Processes

Abstract. A transformed metric entropy measure of dependence is studied which satisfies many desirable properties, including being a proper measure of distance. It is capable of good performance in identifying dependence even in possibly nonlinear time series, and is applicable for both continuous and discrete variables. A nonparametric kernel density implementation is considered here for many stylized models including linear and nonlinear MA, AR, GARCH, integrated series and chaotic dynamics. A related permutation test of independence is proposed and compared with several alternatives.
Corporate governance systems and firm value: empirical evidence from Japan's natural experiment

Purpose – This paper aims to present evidence that the adoption by Japanese firms of a shareholder‐oriented, more transparent, system of corporate governance creates greater corporate value in comparison to the traditional system of statutory auditors.Design/methodology/approach – This study uses panel data of Tokyo Stock Exchange listed companies to explore the potential convergence of corporate governance systems by examining the value differences between Japanese firms selecting one of two legal systems. A random‐effects panel regression is used to analyze the data. The dependent variable of the study is Tobin's q.Findings – This paper finds a significant increase in firm valuation, as measured by Tobin's q, for companies that adopted the alternative of the Anglo‐American type committee system, even though comparative financial data show little difference in performance after adoption. This finding is attributed to signal sending, as companies that adopted this system signal a choice toward transparenc...
Big losses in ecosystem niches: how core firm decisions drive complementary product shakeouts

This study examines shakeouts in the context of business ecosystems. Market turbulence generated by core firm decisions in competing differentiated ecosystems can generate financial losses and exit for complementary niche market firms. I develop hypotheses predicting which niche markets will suffer larger losses and be more susceptible to shakeouts, and how core firm decisions will drive complementor performance and survival. I then apply these hypotheses to brand-based differentiated ecosystems in the automotive industry, where networks of suppliers, customers, and complementors surround car manufacturers. More specifically, I study the complementary niche market of automotive leasing, where manufacturers sway leasing markets through product change, entry, and subsidization. To test the hypotheses, I use a proprietary dataset of 200,000 individual car leases between 1997–2002 to identify how manufacturer product design and niche market entry drive complementor losses and exit. These data allow a unique opportunity to understand how the strategic choices of core firms can have substantial and often devastating effects on niche markets in their ecosystem. Further, the results suggest how the dynamic capabilities to adapt to core firm behavior might improve performance for certain niche market complementors. Copyright © 2008 John Wiley & Sons, Ltd.