Archive
The Effect of Law School Marketing Materials on U.S. News and World Report Rankings
The Effect of Law School Marketing Materials on U.S. News and World Report Rankings
Source: Social Science Research Network
In the last few years, law schools have inundated each other with glossy brochures, postcards, magazines, and other marketing materials in an attempt to influence their “peer assessment scores” in the annual U.S. News and World Report rankings. This article describes a study that attempted to determine whether law schools’ print marketing efforts to one another have an impact on their U.S. News rankings data. From June to December 2011, the author’s school collected and coded all of the materials it had received from schools, including materials that it itself had sent to others. In total, 427 unique pieces of marketing were received from 125 of the 191 schools that were the subjects of this study. They varied considerably in size, format, content, and audience. A number of statistical tests were conducted to compare a school’s marketing efforts with its overall rank, overall score, peer assessment score, and tier, along with any change in those variables from the 2011 rankings to the 2012 ones. The results showed that there was some correlation between a school’s marketing efforts and its U.S. News data. Schools that sent marketing materials had, on average, higher tier placement and peer assessment scores; however, there was not a significant change in year-to-year rankings variables. The number of pieces a school sent during the study period was, for the most part, not significant. On the other hand, the number of pages in its materials was correlated with a number of U.S. News variables. Schools that sent longer, magazine-type publications geared towards a specific audience had higher U.S. News scores and also showed a slight improvement in their overall score between the two years of rankings data in this study. However, it is possible that a co-variate, such as institutional financial resources, may be causing the results. Additional study is needed to determine whether marketing materials have a longer-term effect on U.S. News ranking variables that cannot be captured in a one year study.
National Federation of Independent Business v. Sebelius: Five Takes
National Federation of Independent Business v. Sebelius: Five Takes
Source: Social Science Research Network
In this article, following our now-famous “Five Takes” format, we will look at some possible meanings and implications of the Supreme Court’s decision.
We first consider possible analogies between NFIB and two other famous cases whose opinions are held out as deftly straddling the line between principle and prudence: Marbury v. Madison and the Bakke case (Takes One and Two). Takes Three and Four examine the opinion though the lens of constitutional theory. We consider whether the decision, Chief Justice Roberts’s opinion especially, served what Charles Black called the Court’s “legitimating” function, quelling doubts about the Act’s constitutionality and, thus, its legitimacy. We further consider whether, in ultimately upholding the Act despite its relative unpopularity, Chief Justice Roberts’s opinion could be seen as an example of judicial restraint a la James Bradley Thayer. Finally, in Take Five, we consider that the peculiar construction of the opinion handed the Administration a somewhat Pyrrhic victory while laying the foundation for robust judicially-enforced limits on congressional power. A brief conclusion follows.
Why Has Regional Income Convergence in the U.S. Stopped?
Why Has Regional Income Convergence in the U.S. Stopped?
Source: Social Science Research Network
The past thirty years have seen a dramatic decrease in the rate of income convergence across states and in population flows to wealthy places. We develop a model where migration drives convergence and its disappearance. The model predicts that increases in housing prices in rich areas generate (1) a divergence in the skill-specific returns to productive places, (2) a redirection of low-skilled migration, (3) diminished human capital convergence, and (4) continued convergence among places with unconstrained housing supply. Using a new panel measure of housing-supply regulations, we confirm these predictions and the role of housing in the end of convergence.
Defending Junk-Debt-Buyer Lawsuits
Defending Junk-Debt-Buyer Lawsuits
Source: Social Science Research Network
Junk debt buyer lawsuits have overwhelmed the courts all across the United States. These lawsuits wreak havoc on consumers and their families. Often overlooked is the fact that judgments against consumers which are based on junk debt are part of a zero sum game, where every bogus judgment deprives a legitimate creditor of the chance to get paid from scarce resources. Thus, the legitimate creditor to whom money is owed is materially harmed by the junk debt buyer who extracts money based on an illegitimate claim, or who causes someone to declare bankruptcy. Providing representation to this otherwise unrepresented population will not only help individual consumers. It could improve the entire U.S. economy, by preserving precious resources to pay what is legitimately owed, and avoiding paying for what is not. This article surveys the landscape of the junk debt buyer industry and provides advice for consumer advocates engaged in the battle against unscrupulous junk debt buyers.
Top Ten Myths of Medicare
Top Ten Myths of Medicare
Source: Social Science Research Network
In the context of changing demographics, the increasing cost of health care services, and continuing federal budgetary pressures, Medicare has become one of the most controversial federal programs. To facilitate an informed debate about the future of this important public initiative, this article examines and debunks the following ten myths surrounding Medicare: (1) there is one Medicare program, (2) Medicare is going bankrupt, (3) Medicare is government health care, (4) Medicare covers all medical cost for its beneficiaries, (5) Medicare pays for long-term care expenses, (6) the program is immune to budgetary reduction, (7) it wastes much of its money on futile care, (8) Medicare is less efficient than private health insurance, (9) Medicare is not means-tested, and (10) increased longevity will sink Medicare.
Why Do Good People Sometimes Do Bad Things?: 52 Reflections on Ethics at Work
Why Do Good People Sometimes Do Bad Things?: 52 Reflections on Ethics at Work
Source: Social Science Research Network
Why do good people sometimes do bad things in their work? This important question for the management of the ethics and integrity of an organization is addressed in this book. Drawing on social-psychological experiments, a model of 7 cultural factors is presented.
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Acqui-Hiring
Acqui-Hiring
Source: Social Science Research Network
Google, Facebook, Zynga, and other prominent technology companies in Silicon Valley are buying start-up companies at a brisk pace. In many of these transactions, the buyer has little interest in acquiring the start-up’s projects or assets. Instead, the buyer’s primary motivation is to hire some or all of the start-up’s software engineers. These so-called “acqui-hires” represent a novel — and increasingly common — tool by which the largest and most successful technology companies in the world satisfy their intense demand for engineering talent.
To date, the acqui-hire has attracted no attention in the academic or professional legal literature. This Article aspires to fill this gap. Drawing on interviews with Silicon Valley entrepreneurs, start-up investors, buyer representatives, and lawyers, we offer the first formal description of the acqui-hire. In so doing, we seek to enrich the understanding of those already acquainted with the acqui-hire while also providing a comprehensive account of this transaction structure to the uninitiated.
The Article also identifies — and seeks to solve — a significant puzzle stemming from the acqui-hire phenomenon. If a large technology company wants to hire a team of software engineers, why go to all of the trouble and expense of acquiring the company that currently employs them? Why not simply hire away the individuals that it wants? We argue that the solution to the puzzle lies primarily in the way that social norms and the threat of informal sanctions shape the behavior of Silicon Valley software engineers. Although California law strongly supports the principle of employee mobility, social norms lead many engineers to pursue acqui-hires in lieu of defecting. We buttress this norms-based account with insights from prospect theory and tax law to show that the unique structure of the acqui-hire reduces its perceived and actual costs, which in turn promotes these transactions.
The Article then considers the most significant economic issue common to all acqui-hires: how to allocate the buyer’s aggregate purchase price between the software engineers and the start-up’s outside investors. We first predict that a money-back-for-the-investors norm will eventually develop and that this norm will drive allocation determinations. We then propose several contractual innovations that could be used in an attempt to augment the investors’ allocations in acqui-hires.
A Transactional Genealogy of Scandal: From Michael Milken to Enron to Goldman Sachs
A Transactional Genealogy of Scandal: From Michael Milken to Enron to Goldman Sachs
Source: Social Science Research Network
Three scandals have fundamentally reshaped business regulation over the past thirty years: the securities fraud prosecution of Michael Milken in 1988, the Enron implosion of 2001, and the Goldman Sachs “Abacus” enforcement action of 2010. The scandals have always been seen as unrelated. This Article highlights a previously unnoticed transactional affinity tying these scandals together — a deal structure known as the synthetic collateralized debt obligation (“CDO”) involving the use of a special purpose entity (“SPE”). The SPE is a new and widely used form of corporate alter ego designed to undertake transactions for its creator’s accounting and regulatory benefit.
The SPE remains mysterious and poorly understood, despite its use in framing transactions involving trillions of dollars and its prominence in foundational scandals. The traditional corporate alter ego was a subsidiary or affiliate with equity control. The SPE eschews equity control in favor of control through pre-set instructions emanating from transactional documents. In theory, these instructions are complete or very close thereto, making SPEs a real world manifestation of the “nexus of contracts” firm of economic and legal theory. In practice, however, formal designations of separateness do not always stand up under the strain of economic reality.
When coupled with financial disaster, the use of an SPE alter ego can turn even a minor compliance problem into scandal because of the mismatch between the traditional legal model of the firm and the SPE’s economic reality. The standard legal model looks to equity ownership to determine the boundaries of the firm: equity is inside the firm, while contract is outside. Regulatory regimes make inter-firm connections by tracking equity ownership. SPEs escape regulation by funneling inter-firm connections through contracts, rather than equity ownership.
The integration of SPEs into regulatory systems requires a ground-up rethinking of traditional legal models of the firm. A theory is emerging, not from corporate law or financial economics but from accounting principles. Accounting has responded to these scandals by abandoning the equity touchstone in favor of an analysis in which contractual allocations of risk, reward, and control operate as functional equivalents of equity ownership, and approach that redraws the boundaries of the firm. Transaction engineers need to come to terms with this new functional model as it could herald unexpected liability, as Goldman Sachs learned with its Abacus CDO.
Using Real-World Examples to Enhance the Relevance of the Introductory Statistics Course
Using Real-World Examples to Enhance the Relevance of the Introductory Statistics Course
Source: Social Science Research Network
This paper discusses various cases, stories, and examples involving the use of statistics that can add excitement to an introductory statistics course. Teaching statistics as a mathematics course does not work for students interested in careers in business and accounting. What is needed, the authors feel, are attention-grabbing examples. The authors provide instructors with interesting material for making a statistics course exciting and relevant.
Just Post It: The Lesson from Two Cases of Fabricated Data Detected by Statistics Alone
Just Post It: The Lesson from Two Cases of Fabricated Data Detected by Statistics Alone
Source: Social Science Research Network
I argue that journals should require authors to post the raw data supporting their published results. I illustrate some of the benefits of doing so by describing two cases of fraud I identified exclusively through statistical analysis of reported means and standard deviations. Analyses of the raw data provided important confirmation of the initial suspicions, ruling out benign explanations (e.g., reporting errors; unusual distributions), identifying additional signs of fabrication, and also ruling out one of the suspected fraudster’s explanations for his anomalous results. If we want to reduce fraud, we need to require authors to post their raw data.
Copyright and Innovation: The Untold Story
Copyright and Innovation: The Untold Story
Source: Social Science Research Network
Copyright has an innovation problem. Judicial decisions, private enforcement, and public dialogue ignore innovation and overemphasize the harms of copyright infringement. Just to pick one example, “piracy,” “theft,” and “rogue websites” were the focus of debate in connection with the PROTECT IP Act (PIPA) and Stop Online Piracy Act (SOPA). But such a debate ignores the effect of copyright law and enforcement on innovation. Even though innovation is the most important factor in economic growth, it is difficult to observe, especially in comparison to copyright infringement.
This article addresses this problem. It presents the results of a groundbreaking study of 31 CEOs, company founders, and vice-presidents from technology companies, the recording industry, and venture capital firms. Based on in-depth interviews, the article offers original insights on the relationship between copyright law and innovation. It also analyzes the behavior of the record labels when confronted with the digital music revolution. And it traces innovators’ and investors’ reactions to the district court’s injunction in the case involving peer-to-peer (p2p) service Napster.
The Napster ruling presents an ideal setting for a natural experiment. As the first decision to enjoin a p2p service, it presents a crucial data point from which we can trace effects on innovation and investment. This article concludes that the Napster decision reduced innovation and that it led to a venture capital “wasteland.” The article also explains why the record labels reacted so sluggishly to the distribution of digital music. It points to retailers, lawyers, bonuses, and (consistent with the “Innovator’s Dilemma”) an emphasis on the short term and preservation of existing business models.
The article also steps back to look at copyright litigation more generally. It demonstrates the debilitating effects of lawsuits and statutory damages. It gives numerous examples, in the innovators’ own words, of the effects of personal liability. It traces the possibilities of what we have lost from the Napster decision and from copyright litigation generally. And it points to losses to innovation, venture capital, markets, licensing, and the “magic” of music.
The story of innovation in digital music is a fascinating one that has been ignored for too long. This article aims to fill this gap, ensuring that innovation plays a role in today’s copyright debates.
Municipal Government ICT in 3.11 Crisis: Lessons from the Great East Japan Earthquake and Tsunami Crisis
A structured field survey of ICT divisions in 13 municipalities in areas devastated by the Great East Japan Earthquake and Tsunami on March 11, 2011 revealed 1) lack of ICT business continuity plans (BCP), 2) importance (and lack of) a comprehensive data backup policy, 3) necessity to deal with diverse situations, 4) importance of organizing a collaborative network among governments and private sectors, 5) importance of securing power and network supply, among many other observations. Recommendations are made based on the findings on how to formulate a BCP that can deal with a diverse range of situations, and policies in creating a collaborative network of a diverse range of organizations to protect vital information infrastructure in crisis. Strong interests were shown toward the use of cloud technologies for future backup purposes.
The Golden Dilemma
The Golden Dilemma
Source: Social Science Research Network
Gold objects have existed for thousands of years but gold has only been an actively traded object since 1975. Gold has often been described as an inflation hedge. If gold is an inflation hedge then on average its real return should be zero. Yet over 1, 5, 10, 15 and 20 year investment horizons the variation in the nominal and real returns of gold has not been driven by realized inflation. The real price of gold is currently high compared to history. In the past, when the real price of gold was above average, subsequent real gold returns have been below average. As a result investors in gold face a daunting dilemma: 1) seek inflation protection by paying a high real gold price that almost guarantees a decline in future purchasing power or 2) avoid gold and run the risk of a decline in future purchasing power if inflation surges. Given this situation is it time to explore “this time is different” rationalizations? We show that new mined supply is surprisingly unresponsive to prices. In addition, authoritative estimates suggest that about three quarters of the achievable world supply of gold has already been mined. On the demand side, we focus on the official gold holdings of many countries. If prominent emerging markets increase their gold holdings to average per capita or per GDP holdings of developed countries, the real price of gold may rise even further from today’s elevated levels.
Marriage Structure and Resistance to the Gender Revolution in the Workplace
Marriage Structure and Resistance to the Gender Revolution in the Workplace
Source: Social Science Research Network
In this article, we examine a heretofore neglected pocket of resistance to the gender revolution in the workplace: married male employees who have stay-at-home wives. We develop and empirically test the theoretical argument suggesting that such organizational members, compared to male employees in modern marriages, are more likely to exhibit attitudes, beliefs, and behaviors that are harmful to women in the workplace. To assess this hypothesis, we conducted four studies with a total of 718 married, male participants. We found that employed husbands in traditional marriages, compared to those in modern marriages, tend to (a) view the presence of women in the workplace unfavorably, (b) perceive that organizations with higher numbers of female employees are operating less smoothly, (c) find organizations with female leaders as relatively unattractive, and (d) deny, more frequently, qualified female employees opportunities for promotion. The consistent pattern of results found across multiple studies employing multiple methods and samples demonstrates the robustness of the findings. We discuss the theoretical and practical import of our findings and suggest directions for future research.
From Real-Time Intercepts to Stored Records: Why Encryption Drives the Government to Seek Access to the Cloud
From Real-Time Intercepts to Stored Records: Why Encryption Drives the Government to Seek Access to the Cloud
Source: Social Science Research Network
This paper explains how changing technology, especially the rising adoption of encryption, is shifting law enforcement and national security lawful access to far greater emphasis on stored records, notably records stored in the cloud. The major and growing reliance on surveillance access to stored records results from the following changes:
- Encryption. Adoption of strong encryption is becoming much more common for data and voice communications, via virtual private networks, encrypted webmail, SSL web sessions, and encrypted Voice over IP voice communications.
- Declining effectiveness of traditional wiretaps. Traditional wiretap techniques at the ISP or local telephone network increasingly encounter these encrypted communications, blocking the effectiveness of the traditional techniques.
- New importance of the cloud. Government access to communications thus increasingly relies on a new and limited set of methods, notably featuring access to stored records in the cloud.
- The “haves” and “have-nots.” The first three changes create a new division between the “haves” and “have-nots” when it comes to government access to communications. The “have-nots” become increasingly dependent, for access to communications, on cooperation from the “have” jurisdictions.
Part 1 of the paper describes the changing technology of wiretaps and government access. Part 2 documents the growing adoption of strong encryption in a wide and growing range of settings of interest to government agencies. Part 3 explains how these technological trends create a major shift from real-time intercepts to stored records, especially in the cloud.
Business Dynamics Statistics Briefing: Where Have All the Young Firms Gone?
Business Dynamics Statistics Briefing: Where Have All the Young Firms Gone?
Source: Social Science Research Network
The Census Bureau’s Business Dynamics Statistics (BDS) provides data on business dynamics for U.S. firms and establishments with paid employees. This briefing highlights some key features of the most recent BDS update, which now has data through 2010. As the most complete public-use dataset allowing for the analysis of business dynamics in the United States, the BDS is a key source of knowledge about the changing state, as well as the national, economy.
The new BDS data release shows that, in 2010, 394,000 startups created 2.3 million jobs (these were not simply establishment openings but new firms whose establishments also were new to the economy). This reflects substantial job creation in a time of anemic overall economic activity. Over the same period from March 2009 to March 2010, the net job creation from all U.S. private sector firms was – 1.8 million jobs. Without the contribution of business startups, the net employment loss would have been substantially greater.
Value Investing: Investing for Grown Ups?
Value Investing: Investing for Grown Ups?
Source: Social Science Research Network
Value investors generally characterize themselves as the grown ups in the investment world, unswayed by perceptions or momentum, and driven by fundamentals. While this may be true, at least in the abstract, there are at least three distinct strands of value investing. The first, passive value investing, is built around screening for stocks that meet specific characteristics – low multiples of earnings or book value, high returns on projects and low risk – and can be traced back to Ben Graham’s books on security analysis. The second, contrarian investing, requires investing in companies that are down on their luck and in the market. The third, activist value investing, involves taking large positions in poorly managed and low valued companies and making money from turning them around. While value investing looks impressive on paper, the performance of value investors, as a whole, is no better than that of less “sensible” investors who chose other investment philosophies and strategies. We examine explanations for why “active” value investing may not provide the promised payoffs.
Low Risk Stocks Outperform within All Observable Markets of the World
Low Risk Stocks Outperform within All Observable Markets of the World
Source: Social Science Research Network
This article provides global evidence supporting the Low Volatility Anomaly: that low risk stocks consistently provide higher returns than high risk stocks. This study covers 33 different markets during the time period from 1990-2011. (Two previous studies by Haugen & Heins (1972) and Haugen & Baker (1991) show the same negative payoff to risk in time periods 1926-1970 and 1970-1990.) The procedure for our study is intentionally simple, transparent and easily replicable. Our samples include non-survivors.
We look at an international universe of stocks beginning with the first month of 1990 until December 2011; we compute the volatility of total return for each company in each country over the previous 24 months. Stocks in each country are ranked by volatility and formed into deciles. In the total universe and in each individual country low risk stocks outperform, the relationship with respect to Sharpe ratios is even more impressive.
We believe this anomaly is caused primarily by agency issues, namely the compensation structures and internal stock selection processes at asset management firms which lead institutional investors on average to hold more volatile stocks. The article also addresses the implications for how corporate finance managers make capital investment decision in light of this evidence. The evidence presented here dethrones both CAPM and the Efficient Market Hypothesis.
Death and Taxes and Zombies
Death and Taxes and Zombies
Source: Social Science Research Network (University of Iowa Law School Review, forthcoming)
The U.S. stands on the precipice of a financial disaster, and Congress has done nothing but bicker. Of course, I refer to the coming day when the undead walk the earth, feasting on the living. A zombie apocalypse will create an urgent need for significant government revenues to protect the living, while at the same time rendering a large portion of the taxpaying public dead or undead. The government’s failure to anticipate or plan for this eventuality could cripple its ability to respond effectively, putting us all at risk.
This article fills a glaring gap in the academic literature by examining how the estate and income tax laws apply to the undead. Beginning with the critical question of whether the undead should be considered dead for estate tax purposes, the article continues on to address income tax issues the undead are likely to face. In addition to zombies, the article also considers how estate and income tax laws should apply to vampires and ghosts. Given the difficulties identified herein of applying existing tax law to the undead, new legislation may be warranted. However, any new legislation is certain to raise its own set of problems. The point here is not to identify the appropriate approach. Rather, it is to goad Congress and the IRS into action before it is too late.
Racial Critiques of Mass Incarceration: Beyond the New Jim Crow
In the last decade, a number of scholars have called the American criminal justice system a new form of Jim Crow. These writers have effectively drawn attention to the injustices created by a facially race-neutral system that severely ostracizes offenders and stigmatizes young, poor black men as criminals. This Article argues that despite these important contributions, the Jim Crow analogy leads to a distorted view of mass incarceration. The analogy presents an incomplete account of mass incarceration’s historical origins, fails to consider black attitudes toward crime and punishment, ignores violent crimes while focusing almost exclusively on drug crimes, obscures class distinctions within the African American community, and overlooks the effects of mass incarceration on other racial groups. Finally, the Jim Crow analogy diminishes our collective memory of the Old Jim Crow’s particular harms.
