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Friday, November 21, 2014

Passing judgment

Intrinsic Motivation in Public Service: Theory and Evidence from State Supreme Courts

Elliott Ash & Bentley MacLeod
NBER Working Paper, November 2014

Abstract:
This paper provides a theoretical and empirical analysis of the intrinsic preferences of state appellate court judges. We construct a panel data set using published decisions from state supreme court cases merged with institutional and biographical information on all (1,700) state supreme court judges for the 50 states of the United States from 1947 to 1994. We exploit variation in the employment conditions of judges over this period of time to measure the effect of these changes on a number of measures of judicial performance. The results are consistent with the hypothesis that judges are intrinsically motivated to provide high-quality decisions, and that at the margin they prefer quality over quantity. When judges face less time pressure, they write more well-researched opinions that are cited more often by later judges. When judges are up for election then performance falls, consistent with the hypothesis that election politics is time-consuming. These effects are strongest when judges have more discretion to select their case portfolio, consistent with psychological theories that posit a negative effect of contingency on motivation (e.g. Deci, 1971). Finally, the intrinsic preference for quality appears to be higher among judges selected by non-partisan elections than among those selected by partisan elections.

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Race and the Construction of Evidence in Homicide Cases

Glenn Pierce et al.
American Journal of Criminal Justice, December 2014, Pages 771-786

Abstract:
Research that attempts to document racial or gender disparities in the criminal justice system inevitably paints a distorted picture if only one point in the criminal justice process is examined. For example, studies that look at who is sentenced to death among a group convicted of first-degree murder will miss exposure of biases that occur at earlier stages of the criminal justice process. In this paper, we looked at prosecutorial files on over 400 homicide cases from Caddo Parish, Louisiana (the Shreveport area). Results indicate that even after controlling for aggravating factors, cases with White female victims result in thicker files than other homicides, indicating more prosecutorial effort in attempting to secure convictions in such cases. This, in turn, was related to more severe sentencing of offenders convicted of killing whites and women. On the other hand, cases with black victims resulted in the thinnest case files and the least severe sentences.

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Losing, but Accepting: Legitimacy, Positivity Theory, and the Symbols of Judicial Authority

James Gibson, Milton Lodge & Benjamin Woodson
Law & Society Review, December 2014, Pages 837–866

Abstract:
How is it that the U.S. Supreme Court is capable of getting most citizens to accept rulings with which they disagree? This analysis addresses the role of the symbols of judicial authority and legitimacy — the robe, the gavel, the cathedral-like court building — in contributing to this willingness of ordinary people to acquiesce to disagreeable court decisions. Using an experimental design and a nationally representative sample, we show that exposure to judicial symbols (1) strengthens the link between institutional support and acquiescence among those with relatively low prior awareness of the Supreme Court, (2) has differing effects depending upon levels of preexisting institutional support, and (3) severs the link between disappointment with a disagreeable Court decision and willingness to challenge the ruling. Since symbols influence citizens in ways that reinforce the legitimacy of courts, the connection between institutional attitudes and acquiescence posited by Legitimacy Theory is both supported and explained.

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Loopholes

Kim-Sau Chung & Lance Fortnow
Economic Journal, forthcoming

Abstract:
We formalize the argument of those American founding fathers who opposed the inclusion of the Bill of Rights into the Constitution. For some parameter values, the legislator, who is not sure whether or not there are any rights that he is unaware of, optimally chooses not to enumerate even those rights that he is aware of. We also show that, even if the legislator adds the sentence “this Bill should not be interpreted as suggesting that any unlisted rights can be impaired by the government” to the Bill, the equilibrium outcome will stay the same.

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Putting Justice Kagan’s “Hobbyhorse” Through Its Paces: An Examination of the Criminal Defense Advocacy Gap at the U.S. Supreme Court

William Kinder
Georgetown Law Journal, Fall 2014, Pages 227-258

"Since her appointment in 2010, Justice Elena Kagan has remarked on multiple occasions that although the overall quality of advocacy before the U.S. Supreme Court today is high, the same cannot be said of the advocacy for criminal defendants...I argue that the criminal defense advocacy gap observed by Justice Kagan does exist; that the advocacy gap places criminal defendants at a distinct disadvantage before the Court; and that to close this advocacy gap, more criminal defense attorneys should accept assistance from Supreme Court specialists once a case reaches the merits stage of Supreme Court litigation."

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Legal Institutions and Social Values: Theory and Evidence from Plea Bargaining Regimes

Yehonatan Givati
Journal of Empirical Legal Studies, December 2014, Pages 867–893

Abstract:
How do social values shape legal institutions across countries? To address this question I focus on one important legal institution — the use of plea bargaining in criminal cases. I develop a model in which the optimal scope of plea bargaining depends on social values. Specifically, a lower social emphasis on ensuring that innocent individuals are not punished, and a greater social emphasis on ensuring that guilty individuals are punished, lead to a greater use of plea bargaining. Using unique cross-country data on social preferences for punishing the innocent versus letting the guilty go free, as well as an original coding of plea bargaining regimes across countries, I obtain results that are consistent with the model.

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The Legitimacy of the US Supreme Court: Conventional Wisdoms and Recent Challenges Thereto

James Gibson & Michael Nelson
Annual Review of Law and Social Science, 2014, Pages 201-219

Abstract:
Research on the legitimacy of the US Supreme Court has blossomed of late, with scholars investigating many different hypotheses derived from legitimacy theory. As the theory has been pushed, a number of new controversies have emerged. Here, we identify four such debates: (a) whether the Court's legitimacy rests on satisfaction with its performance, (b) whether support for the Supreme Court reflects the polarization of politics in the contemporary United States, (c) whether the Court's legitimacy requires belief in the “myth of legality”, and (d) whether judicial decisions can change public opinion. Our analysis of these issues generally concludes that the Supreme Court's legitimacy is reasonably secure, in part because individual rulings have little impact on support for the institution, in part because the Court has access to powerful and influential symbols of judicial authority, and in part because the current Supreme Court issues roughly equal numbers of conservative and liberal decisions.

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Institutionalizing the Culture of Control: Modeling the Changing Dynamics of U.S. Supreme Court Death Penalty Decisions

Simon Zschirnt & Blake Randol
International Criminal Justice Review, December 2014, Pages 319-344

Abstract:
The turn away from “penal welfarism” and toward a more punitive approach to crime control policy that began in the late 1960s has been the product of a deeply rooted social and political transformation, one giving rise to what Garland (2001) has termed a “culture of control.” Perhaps the most emblematic manifestation of this culture has been the reemergence of the death penalty as a crime control tool, a reemergence facilitated by a Supreme Court that has generally acted to limit or remove constitutional and legal obstacles to carrying out death sentences. This article analyzes the Court’s role in deregulating the death penalty from a “political regimes” perspective. Using a data set of all of the votes cast in every death penalty case decided by the Court since 1969, it demonstrates the importance of regime cohort in understanding death penalty jurisprudence. Specifically, it demonstrates that the construction of the “New Right” political regime, which spearheaded the punitive trend in crime control policy, represents the critical turning point in terms of justices’ attitudes toward the death penalty. Justices appointed after 1968, even when controlling for background, ideology, partisanship, public opinion, and a variety of legal factors, were significantly more likely to vote to affirm death sentences than justices appointed prior to 1968. Moreover, this turning point also marked a reversal in the relationship between partisanship and death penalty jurisprudence. While post-1968 Republican appointees were more supportive of the death penalty than post-1968 Democratic appointees, this pattern was notably reversed among pre-1968 appointees.

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The Influence of Congressional Preferences on Legislative Overrides of Supreme Court Decisions

Alicia Uribe, James Spriggs & Thomas Hansford
Law & Society Review, December 2014, Pages 921–945

Abstract:
Studies of Court–Congress relations assume that Congress overrides Court decisions based on legislative preferences, but no empirical evidence supports this claim. Our first goal is to show that Congress is more likely to pass override legislation the further ideologically removed a decision is from pivotal legislative actors. Second, we seek to determine whether Congress rationally anticipates Court rejection of override legislation, avoiding legislation when the current Court is likely to strike it down. Third, most studies argue that Congress only overrides statutory decisions. We contend that Congress has an incentive to override all Court decisions with which it disagrees, regardless of their legal basis. Using data on congressional overrides of Supreme Court decisions between 1946 and 1990, we show that Congress overrides Court decisions with which it ideologically disagrees, is not less likely to override when it anticipates that the Court will reject override legislation, and acts on preferences regardless of the legal basis of a decision. We therefore empirically substantiate a core part of separation-of-powers models of Court–Congress relations, as well as speak to the relative power of Congress and the Court on the ultimate content of policy.

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A Field Evaluation of the Eye-Closure Interview With Witnesses of Serious Crimes

Annelies Vredeveldt et al.
Law and Human Behavior, forthcoming

Abstract:
Laboratory research shows that eye-closure during memory retrieval improves both the amount and the factual accuracy of memory reports about witnessed events. Based on these findings, we developed the Eye-Closure Interview, and examined its feasibility (in terms of compliance with the instructions) and effectiveness (in terms of the quantity and quality of reported information) in eyewitness interviews conducted by the South African Police Service. Police interviewers from the Facial Identification Unit were randomly assigned to receive Eye-Closure Interview training or no training. We analyzed 95 interviews with witnesses of serious crimes (including robbery, rape, and murder), some of whom were instructed to close their eyes during salient parts of the interview. Witnesses in the control condition rarely spontaneously closed their eyes, but witnesses in the Eye-Closure Interview condition kept their eyes closed during 97% of their descriptions, suggesting that the Eye-Closure Interview would be easy to implement in a field setting. Although witnesses who closed their eyes did not remember more information overall, the information they provided was considered to be of significantly greater forensic relevance (as reflected in 2 independent blind assessments, 1 by a senior police expert and 1 by a senior researcher). Thus, based on the findings from this field study and from previous laboratory research, we conclude that implementation of the Eye-Closure Interview in witness interviews would help police interviewers to elicit more valuable information from witnesses, which could be relevant to the police investigation and/or in court.

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Ideology, The Affordable Care Act Ruling, and Supreme Court Legitimacy

Christopher Johnston, Sunshine Hillygus & Brandon Bartels
Public Opinion Quarterly, forthcoming

Abstract:
The received wisdom in the scholarly literature on the US Supreme Court is that the perceived legitimacy of the institution is largely independent of the Court’s policy output. Legitimacy is thought to be rooted in more stable factors, such as support for democratic values, and thus to be immune from ideological discontent with any particular decision. While recent research has demonstrated a general association between political predispositions and legitimacy, questions remain about the extent to which the specific decisions of the Court might shape legitimacy judgments in the mass public. In this paper, we examine the relationship between ideology, political sophistication, and evaluations of Supreme Court legitimacy in the aftermath of the recent decision on the Affordable Care Act. Our findings suggest a substantial role for Court policymaking in shaping perceptions of legitimacy in the mass public, but the nature of the relationship is conditional on political sophistication.

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Chief Justice Roberts's Health Care Decision Disrobed: The Microfoundations of the Supreme Court's Legitimacy

Dino Christenson & David Glick
American Journal of Political Science, forthcoming

Abstract:
The 2012 challenge to the Affordable Care Act was an unusual opportunity for people to form or reassess opinions about the Supreme Court. We utilize panel data coupled with as-if random assignment to reports that Chief Justice Roberts's decision was politically motivated to investigate the microfoundations of the Court's legitimacy. Specifically, we test the effects of changes in individuals' ideological congruence with the Court and exposure to the nonlegalistic account of the decision. We find that both affect perceptions of the Court's legitimacy. Moreover, we show that these mechanisms interact in important ways and that prior beliefs that the Court is a legalistic institution magnify the effect of updating one's ideological proximity to the Court. While we demonstrate that individuals can and did update their views for multiple reasons, we also highlight constraints that allow for aggregate stability in spite of individual-level change.

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The Impact of United States v. Booker and Gall/Kimbrough v. United States on Sentence Severity: Assessing Social Context and Judicial Discretion

Byungbae Kim et al.
Crime & Delinquency, forthcoming

Abstract:
In the wake of United States v. Booker and Gall/Kimbrough v. United States, sentencing researchers and legal scholars conducted research designed to identify their impact on the federal sentencing process, with a focus on determining whether the decisions increased unwarranted disparity. In this article, we extend this body of research. Using 10 years of data from the U.S. Sentencing Commission and data from other sources, we assess whether and how these decisions influence sentence severity. Results indicate that sentence severity declined following Booker and, especially, Gall/Kimbrough, but that the decisions’ effects on sentence severity varied significantly across U.S. District Courts. Most importantly, the impact of Gall/Kimbrough sentence severity was conditioned by districts’ percent Black population, level of socioeconomic disadvantage, and degree of political conservatism; each of these factors moderated the decisions’ effects on the harshness of the sentences imposed by the districts’ judges.

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Judicial Narratives of Ideal and Deviant Victims in Judges’ Capital Sentencing Decisions

Heather Zaykowski, Ross Kleinstuber & Caitlin McDonough
American Journal of Criminal Justice, December 2014, Pages 716-731

Abstract:
Although the Victim’s Rights Movement has led to advances for victims of crime, the use of victim impact evidence in criminal trials remains controversial due to the suspicion that such evidence enhances punitive attitudes and arbitrariness in capital sentencing outcomes. Despite a growing body of literature in this area, it remains unclear if some victims are viewed more favorably than others, particularly from the perspective of judges. The current study examines the construction of victims by judges in capital cases and how this portrayal impacts sentencing outcomes in Delaware, which vests the final capital sentencing authority in judges rather than juries. In examining this gap in the literature, we consider if judges make distinctions between ideal and deviant victims, if these distinctions are associated with victim and offender characteristics, and if the construction of victims impacts offender sentencing. Findings from this study lend support to the idea that judges describe some victims as more “worthy” than others, that victims described in ideal ways are more likely to be white and female, and that “ideal victims” are more likely to result in death sentences.

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Are All Cases Treated Equal?: Using Goffman’s Frame Analysis to Understand How Homicide Detectives Orient to Their Work

Shila Hawk & Dean Dabney
British Journal of Criminology, November 2014, Pages 1129-1147

Abstract:
Drawing upon ethnographic data from one US metropolitan police department’s homicide unit, this study employs Goffman’s frame analysis to explore two questions: (1) What types of cases are prioritized in homicide investigations? and (2) How are those prioritizations operationalized and justified? Themes within the data suggest that although detectives struggle to ‘work every case the same’, their approach and effort on cases is nonetheless influenced largely by unit culture and perceptions of victim deservedness. Furthermore, we demonstrate that framing techniques enable investigators to compartmentalize and manage the emotional strain of deprioritizing some homicides while rigorously investigating other cases. These findings add to our understanding of the administration of homicide work, theorize the moral complexities of said work and point to frame analysis as a potentially useful framework for crime researchers.

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Interviewing High Value Detainees: Securing Cooperation and Disclosures

Jane Goodman-Delahunty, Natalie Martschuk & Mandeep Dhami
Applied Cognitive Psychology, forthcoming

Abstract:
Four types of coercive and noncoercive interview strategies (legalistic, physical, cognitive and social) used to facilitate disclosure by high value detainees were examined in an international sample of practitioners and detainees (N = 64). Predictive analyses confirmed that the accusatorial approach was positively correlated with physically coercive strategies (rs = .58) and negatively with forms of social persuasion (rs = −.31). In response to social strategies, detainees were more likely to disclose meaningful information [odds ratio (OR) = 4.2] and earlier in the interview when rapport-building techniques were used (OR = 14.17). They were less likely to cooperate when confronted with evidence (OR = 4.8). Disclosures were more complete in response to noncoercive strategies, especially rapport-building and procedural fairness elements of respect and voice. These findings augmented past theory on interactional processes and the evidence-base of international best practices in suspect interviews.

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Challenging the Randomness of Panel Assignment in the Federal Courts of Appeals

Adam Chilton & Marin Levy
University of Chicago Working Paper, November 2014

Abstract:
A fundamental academic assumption about the federal courts of appeals is that the three-judge panels that hear cases have been randomly configured. Scores of scholarly articles have noted this “fact,” and it has been relied on heavily by empirical researchers. Even though there are practical reasons to doubt that judges would always be randomly assigned to panels, this assumption has never been tested. This Article fill this void by doing so. To determine whether the circuit courts utilize random assignment, we have created what we believe to be the largest dataset of panel assignments of those courts constructed to date. Using this dataset, we tested whether panel assignments are, in fact, random by comparing the actual assignments to truly random panels generated by code that we have created to simulate the panel generation process. Our results show evidence of non-randomness in the federal courts of appeals. To be sure, the analysis here is descriptive, not explanatory or normative. We do not ourselves mean to suggest that “perfect randomness” is a desirable goal. We are simply testing an existing assumption and believe these findings will have implications for empirical researchers and court scholars more generally.

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Breaking Stereotypes and School Punishment: Family Socioeconomic Status, Test Scores, Academic and Sport Activities, Backlash, and Racial and Ethnic Discipline Disparities

Anthony Peguero, Ann Marie Popp & Zahra Shekarkhar
Journal of Ethnicity in Criminal Justice, forthcoming

Abstract:
The disproportionate punishment of racial and ethnic minority adolescents is a serious problem within schools. Few studies, however, consider factors outside of school misbehavior that may moderate this relationship. This study extends research on this topic by considering whether stereotypes moderate the school punishment of racial and ethnic minorities. This study utilizes multilevel modeling techniques to examine if and how stereotypes based on family socioeconomic status, test scores, and school-based activities moderate racial and ethnic minority adolescents’ odds of being punished. Adolescents who do not conform to racial and ethnic stereotypes are more likely to be punished. The findings that suggest that stereotypes may be linked to increased school punishment for racial and ethnic minorities are discussed.

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Can Equitable Punishment Be Mandated? Estimating Impacts of Sentencing Guidelines on Disciplinary Disparities

Anton Bekkerman & Gregory Gilpin
International Review of Law and Economics, October 2014, Pages 51–61

Abstract:
This study empirically investigates the potentially unintended effects of state laws that seek to improve safety in U.S. public school by mandating standardized student punishment. We estimate the effects of exogenous state-level variation in the quantity and type of such mandates on disciplinary disparities across students who commit serious offenses. Estimation results indicate that more severe punishments are imposed in schools with higher proportions of black or Hispanic students, but such disparities are significantly dampened in states that mandate a higher number of guidelines for serious offenses. However, more guidelines for less severe misconduct tend to increase race-based disciplinary disparities and increase the severity of punishments administered for serious offenses. These outcomes extend the existing sentencing guidelines literature and provide empirical implications for considering marginal deterrence effects when crafting future policies.

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Capital Sentencing In Kentucky, 2000–2010

Gennaro Vito, George Higgins & Anthony Vito
American Journal of Criminal Justice, December 2014, Pages 753-770

Abstract:
The current study attempts to build upon previous analyses of capital sentencing in Kentucky and other states. Using data compiled from official court records compiled by the Kentucky Department of Public Advocacy, we examined death eligible homicide cases for the years 2000–2010 for the state (N = 359). Multivariate analysis determined that the death penalty in Kentucky was sought 3.17 times or 217 % more when the victim is female. It also found that cases featuring a black defendant and a white victim were 56 % less likely to result in a plea than cases featuring other defendant/victim racial combinations. Despite legal requirements, Kentucky fails to collect data to assess the factors that influence the seeking and imposition of the death penalty.

By KEVIN LEWIS | 09:00:00 AM

Thursday, November 20, 2014

A time and place

Facial Feature Assessment of Popular U.S. Country Music Singers Across Social and Economic Conditions

Terry Pettijohn et al.
Current Psychology, December 2014, Pages 451-459

Abstract:
The facial features of the artists of the top Country Billboard song for each year from 1946 to 2010 were investigated across changes in U.S. socioeconomic conditions. When conditions were relatively poor, country music artists with more mature facial features of smaller eyes and larger chins were popular, and when conditions were more prosperous, country music artists with more baby-faced features of larger eyes and smaller chins were popular. Results extend previous findings with pop singers, movie actresses, and Playboy Playmates, and suggest the social and economic environment influences preferences for country singers across time.

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Cancer and the Plow

David Fielding
Social Forces, forthcoming

Abstract:
Past research has shown that the invention of the plow played a key role in human social evolution. The physical strength required to drive a plow gave men a comparative advantage in economically productive activity; this created gender norms that have persisted to the present day. However, there is an additional channel through which the invention of the plow could have influenced modern human societies: the creation of an economic environment favoring not only the sexual division of labor but also the selection of men with more upper-body strength. In this case, modern populations descended from plow-using communities should exhibit greater sexual dimorphism than others, and greater dimorphism should be associated with higher androgen levels in males. This has a direct epidemiological implication, because the incidence of many cancers is correlated with androgen levels. Using international data on cancer incidence, we show that there is a strong association between the magnitude of sex differences in cancer risk and the proportion of the population descended from plow-using communities. Although both of these characteristics are correlated with other socio-economic factors (such as the level of economic development), controlling for such correlations does not diminish estimates of the magnitude of the association between cancer risk and plow ancestry. In addition to their implications for cancer epidemiology, the results suggest that the international variation in gender norms might also be associated with variation in androgen levels.

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Proximity of Paired Nations Reveals Correlation of Masculinity With Individualism

Herbert Barry
Journal of Cross-Cultural Psychology, forthcoming

Abstract:
Hofstede measured four dimensions of national differences: Masculinity, Individualism, Uncertainty Avoidance, and Power Distance. The information was obtained from IBM employees in more than 60 nations. Correlations applied to the national scores were close to zero for Masculinity with each of the three other dimensions. Correlations can be misleading because of regional and other variations in a world sample of nations. Undesirable effects of regional variations can be minimized by correlating differences between paired nearby nations in their scores on the two dimensions. Differences between pair members revealed that the nation with a higher score on Masculinity usually had a higher score on Individualism. A wide range of quantitative scores enabled large differences between the pair members and minimized omissions of data because of the same score for both members on either of the correlated dimensions. National Masculinity is highly correlated with national Individualism when regional differences are controlled.

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American and Chinese Students' Calibration of Comprehension and Performance

Nannette Evans Commander et al.
Current Psychology, December 2014, Pages 655-671

Abstract:
In the present study we examined the ability of American and Chinese undergraduate students to calibrate their understanding of textbook passages translated into their native languages. Students read a series of texts and made predictions of their understanding of each text as well as the number of questions they would be able to answer correctly. Students also made postdictions of their test performance. Chinese students were significantly better than American students in calibrating their understanding of passages and predicting how many comprehension items they would answer correctly. Chinese students also outperformed American students on comprehension tests. All students were able to make more accurate postdictions of comprehension test scores than predictions. Results are related to possible instructional differences between American and Chinese students. Several possible directions for future research are discussed.

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Astronomics in Action: The Graduate Earnings Premium and the Dragon Effect in Singapore

Nicholas Sim
Economic Inquiry, forthcoming

Abstract:
This paper investigates the return to university education in Singapore using a new estimation strategy related to Chinese traditions where children born in the Year of the Dragon are believed to be superior. Because parents might time the arrival of their offspring on a Dragon year, this causes the Dragon cohort to be larger and university entry to be more competitive. First, we find evidence of a negative "Dragon effect" on university educational attainment. Then, using it as an estimation strategy, we find that university education has a ceteris paribus effect of raising earnings by at least 50% on average.

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Regulatory Focus as an Explanatory Variable for Cross-Cultural Differences in Achievement-Related Behavior

Jenny Kurman et al.
Journal of Cross-Cultural Psychology, forthcoming

Abstract:
The main claim of the present study is that regulatory focus (i.e., promotion vs. prevention orientations) is an important explanatory variable of cross-cultural differences in actual and self-reported achievement-related behaviors and preferences, which include a component of autonomy. It adds explained variance in behavior above and beyond that of individualism/collectivism (I/C), and mediates the relations between I/C and behavior. Three studies are reported. The first compared Israeli Jews and Arabs on minimal initiation (n = 255), the second compared Israeli Jews and Japanese on creativity (n = 92), and the third compared Swiss, Mexican, and Indonesian samples on preference for mastery goals in education (n = 488). All three studies demonstrated the ability of regulatory focus scales to distinguish between cultures and to serve as meaningful predictors of actual and self-reported achievement-related behaviors. The measured I/C scales were found to be less relevant to behavior prediction than was regulatory focus. In most studies, regulatory focus scales mediated the relations between some of the I/C scales and behavior. The diversity of the measured behaviors and cultures supports the ecological validity of the findings.

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Social Capital and Health: Evidence that Ancestral Trust Promotes Health Among Children of Immigrants

Martin Ljunge
Economics & Human Biology, December 2014, Pages 165-186

Abstract:
This paper presents evidence that generalized trust promotes health. Children of immigrants in a broad set of European countries with ancestry from across the world are studied. Individuals are examined within country of residence using variation in trust across countries of ancestry. The approach addresses reverse causality and concerns that the trust measure picks up institutional factors in the individual's contextual setting. There is a significant positive estimate of ancestral trust in explaining self-assessed health. The finding is robust to accounting for individual, parental, and extensive ancestral country characteristics. Individuals with higher ancestral trust are also less likely to be hampered by health problems in their daily life, providing evidence of trust influencing real life outcomes. Individuals with high trust feel and act healthier, enabling a more productive life.

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Mothers' Goals for Adolescents in the United States and China: Content and Transmission

Yang Qu, Eva Pomerantz & Ciping Deng
Journal of Research on Adolescence, forthcoming

Abstract:
This research examined children's socialization toward culturally valued goals during adolescence in the United States and China. Two hundred and twenty-three mothers listed and ranked their five most important goals for their children (mean age = 12.85 years). Children ranked the importance of the goals listed by their mothers and explained why they were or were not important to them. American mothers placed heightened emphasis on their children maintaining feelings of worth and pursuing what they enjoy. Chinese mothers stressed their children achieving outcomes, as did African American mothers. European American children's rankings of importance were the least similar to those of their mothers, and they gave the fewest autonomous reasons for importance, suggesting that their adoption of mothers' goals was weakest.

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Urbanization increases left-bias in line-bisection: An expression of elevated levels of intrinsic alertness?

Karina Linnell, Serge Caparos & Jules Davidoff
Frontiers in Psychology, October 2014

Abstract:
Urbanization impairs attentional selection and increases distraction from task-irrelevant contextual information, consistent with a reduction in attentional engagement with the task in hand. Previously, we proposed an attentional-state account of these findings, suggesting that urbanization increases intrinsic alertness and with it exploration of the wider environment at the cost of engagement with the task in hand. Here, we compare urbanized people with a remote people on a line-bisection paradigm. We show that urbanized people have a left spatial bias where remote people have no significant bias. These findings are consistent with the alertness account and provide the first test of why remote peoples have such an extraordinary capacity to concentrate.

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When Should We Disagree? The Effect of Relationship Conflict on Team Identity in East Asian and North American Teams

Lindie Liang, Wendi Adair & Ivona Hideg
Negotiation and Conflict Management Research, November 2014, Pages 282-289

Abstract:
Along with recent research uncovering distinctly Asian approaches to conflict management, we examine the experience and effect of relationship conflict on team identity in culturally homogeneous North American versus East Asian teams. In a longitudinal field experiment with student teams, we found that East Asian teams, compared to North American teams, experienced more relationship conflict at later stages of team tenure. We further found that, while relationship conflict undermined team identity in North American teams, relationship conflict did not influence team identity in East Asian teams. Our study counterintuitively finds that East Asian teams may be less influenced by relationship conflict than North American teams, despite their relationship maintenance orientation. We present several possible future avenues to unpack the psychological mechanisms underlying the distinct temporal patterns and outcome effects of relationship conflict in East Asian teams and implications for cross-cultural East Asian and North American teams.

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Cultural Variations in Global Versus Local Processing: A Developmental Perspective

Shigehiro Oishi et al.
Developmental Psychology, forthcoming

Abstract:
We conducted 3 studies to explore cultural differences in global versus local processing and their developmental trajectories. In Study 1 (N = 363), we found that Japanese college students were less globally oriented in their processing than American or Argentine participants. We replicated this effect in Study 2 (N = 1,843) using a nationally representative sample of Japanese and American adults ages 20 to 69, and found further that adults in both cultures became more globally oriented with age. In Study 3 (N = 133), we investigated the developmental course of the cultural difference using Japanese and American children, and found it was evident by 4 years of age. Cultural variations in global versus local processing emerge by early childhood, and remain throughout adulthood. At the same time, both Japanese and Americans become increasingly global processors with age.

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Trust, Cohesion, and Cooperation After Early Versus Late Trust Violations in Two-Person Exchange: The Role of Generalized Trust in the United States and Japan

Ko Kuwabara et al.
Social Psychology Quarterly, forthcoming

Abstract:
We examine how the timing of trust violations affects cooperation and solidarity, including trust and relational cohesion. Past studies that used repeated Prisoner's Dilemmas suggest that trust violations are more harmful when they occur in early rather than later interactions. We argue that this effect of early trust violations depends on cultural and individual differences in generalized trust. A laboratory study from high- and low-trust cultures (the United States vs. Japan) supported our claim. First, early trust violations were more harmful than late trust violations, but only for Americans; the pattern reversed for Japanese. Second, these patterns were mediated by individual differences in generalized trust. Finally, generalized trust also moderated the effect of trust violations in the United States but not Japan. By demonstrating that generalized trust is not only lower but also less important in low-trust cultures, our research advances our understanding of how culture affects the development of solidarity in exchange relations.

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Impartial Institutions, Pathogen Stress and the Expanding Social Network

Daniel Hruschka et al.
Human Nature, forthcoming

Abstract:
Anthropologists have documented substantial cross-society variation in people's willingness to treat strangers with impartial, universal norms versus favoring members of their local community. Researchers have proposed several adaptive accounts for these differences. One variant of the pathogen stress hypothesis predicts that people will be more likely to favor local in-group members when they are under greater infectious disease threat. The material security hypothesis instead proposes that institutions that permit people to meet their basic needs through impartial interactions with strangers reinforce a tendency toward impartiality, whereas people lacking such institutions must rely on local community members to meet their basic needs. Some studies have examined these hypotheses using self-reported preferences, but not with behavioral measures. We conducted behavioral experiments in eight diverse societies that measure individuals' willingness to favor in-group members by ignoring an impartial rule. Consistent with the material security hypothesis, members of societies enjoying better-quality government services and food security show a stronger preference for following an impartial rule over investing in their local in-group. Our data show no support for the pathogen stress hypothesis as applied to favoring in-groups and instead suggest that favoring in-group members more closely reflects a general adaptive fit with social institutions that have arisen in each society.

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Happiness, economic freedom and culture

Ayse Evrensel
Applied Economics Letters, forthcoming

Abstract:
The cultural dimension of the subjective well-being (SWB)-economic freedom relationship has been largely absent from the current literature. This article's argument for the inclusion of culture is twofold. First, culturally distinct groups may view the desirability of freedom in general and economic freedom in particular differently. Second, the inclusion of culture may explain some of the results presented in the existing research, such as positive contributions of freedom to SWB being confined to mostly developed countries. In this article, the respondent-based results use the World Values Survey (WVS) data with over 180 000 subjects in 86 countries and indicate that freedom of choice felt by individuals is an important determinant of SWB along with health and satisfaction with finances. While the respondent-based estimations do not show any variation in the effect of freedom of choice on SWB among different religious affiliations, the cross-section data-set that contains the same countries as in the WVS data yields different results. When the latter data-set is used, the interaction terms between economic freedom and religious affiliations indicate that higher economic freedom increases SWB in mainly Christian countries, while this effect is negative for mainly Muslim and Buddhist/Hindu countries.

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Evolution of cultural traits occurs at similar relative rates in different world regions

Thomas Currie & Ruth Mace
Proceedings of the Royal Society: Biological Sciences, 22 November 2014

Abstract:
A fundamental issue in understanding human diversity is whether or not there are regular patterns and processes involved in cultural change. Theoretical and mathematical models of cultural evolution have been developed and are increasingly being used and assessed in empirical analyses. Here, we test the hypothesis that the rates of change of features of human socio-cultural organization are governed by general rules. One prediction of this hypothesis is that different cultural traits will tend to evolve at similar relative rates in different world regions, despite the unique historical backgrounds of groups inhabiting these regions. We used phylogenetic comparative methods and systematic cross-cultural data to assess how different socio-cultural traits changed in (i) island southeast Asia and the Pacific, and (ii) sub-Saharan Africa. The relative rates of change in these two regions are significantly correlated. Furthermore, cultural traits that are more directly related to external environmental conditions evolve more slowly than traits related to social structures. This is consistent with the idea that a form of purifying selection is acting with greater strength on these more environmentally linked traits. These results suggest that despite contingent historical events and the role of humans as active agents in the historical process, culture does indeed evolve in ways that can be predicted from general principles.

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Do Individualists Complain More than Collectivists? A Four-Country Analysis on Consumer Complaint Behavior

Olga Chapa et al.
Journal of International Consumer Marketing, Fall 2014, Pages 373-390

Abstract:
Understanding the consumer complaint patterns of response and the cultural underpinnings of their characteristics may facilitate the customization and timing of response to such consumer demands. We investigated complaint behavior differences between collectivist and individualist societies. Specifically, our study compared three consumer complaint patterns of response (voice, private response, and third party) across the individualism/collectivism continuum. We opted for the mall intercept technique in surveying our participants in four countries (United States, Egypt, Mexico, and Turkey). Our most salient findings revealed that the individualist consumer is very likely to demand redress and very likely practice speaking to others about their dissatisfaction. Collectivists would avoid the product before switching companies. All participants who voiced their dissatisfaction privately showed significant exit intentions. Interesting differences were also found among collectivist countries. Managerial implications are annotated.

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Social representations of European integration as narrated by school textbooks in five European nations

Inari Sakki
International Journal of Intercultural Relations, forthcoming

Abstract:
Social representations of European integration in the school textbooks of five European countries (France, England, Germany, Finland and Sweden) are analyzed. By analyzing the history and civics textbooks of major educational publishers and by presenting a double content analysis of textbooks of five European countries, this study aims to demonstrate what is written on European integration and how it is portrayed. The study shows how textbooks function to shape the identity space through articulations of the symbology of history and identity. The results show how European identity is only very rarely portrayed as an end in itself, but dominantly as an instrument for the nations to gain power in the globalizing world or even as a threat. Despite the efforts to Europeanize educational systems in the EU-countries, the story of European integration is told from a national perspective in each country and textbooks are used as vehicles of nationalism.

By KEVIN LEWIS | 09:00:00 AM

Wednesday, November 19, 2014

Bottom line

What Death Can Tell: Are Executives Paid for Their Contributions to Firm Value?

Bang Dang Nguyen & Kasper Meisner Nielsen
Management Science, forthcoming

Abstract:
Using stock price reactions to sudden deaths of top executives as a measure of expected contribution to shareholder value, we examine the relationship between executive pay and managerial contribution to shareholder value. We find, first, that the managerial labor market is characterized by positive sorting: managers with high perceived contributions to shareholder value obtain higher pay. The executive pay-contribution relationship is stronger for professional executives and for executives with high compensation. We estimate, second, that an average top executive (chief executive officer) appears to retain 71% (65%) of the marginal rent from the firm-manager relationship. We examine, third, how the executive pay-contribution relationship varies with individual, firm, and industry characteristics. Overall, our results are informative for the ongoing discussion about the level of executive compensation.

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Making the Numbers? 'Short Termism' & the Puzzle of Only Occasional Disaster

Hazhir Rahmandad, Nelson Repenning & Rebecca Henderson
Harvard Working Paper, October 2014

Abstract:
Much recent work in strategy and popular discussion suggests that an excessive focus on "managing the numbers" ― delivering quarterly earnings at the expense of longer term investments ― makes it difficult for firms to make the investments necessary to build competitive advantage. "Short termism" has been blamed for everything from the decline of the US automobile industry to the low penetration of techniques such as TQM and continuous improvement. Yet a vigorous tradition in the accounting literature establishes that firms routinely sacrifice long-term investment to manage earnings and are rewarded for doing so. This paper presents a model that reconciles these apparently contradictory perspectives. We show that if the source of long-term advantage is modeled as a stock of capability that accumulates over time, a firm’s proclivity to manage short-term earnings at the expense of long-term investment can have very different consequences depending on whether the firm's capability is close to a critical "tipping threshold". When the firm operates above this threshold, managing earnings smoothes revenue and cash flow with few long-term consequences. Below it, managing earnings can tip the firm into a vicious cycle of accelerating decline. Our results have important implications for understanding managerial incentives and the internal processes that create sustained advantage.

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Impression Management and the Biasing of Executive Pay Benchmarks: A Dynamic Analysis

Mathijs De Vaan & Thomas DiPrete
Columbia University Working Paper, October 2014

Abstract:
We study the selection of peers into compensation peer groups reported by U.S. corporations. Securities and Exchange Commission (SEC) regulation requires firms to report these peer groups which are used by investors and shareholders to benchmark the compensation of CEOs. Building on a novel, dynamic analysis of more than 1,400 compensation peer groups since 2006, this paper presents new evidence that compensation peer groups are biased upwards relative to neutrally chosen “natural” peer groups. This upward bias is masked by several factors including normative selection on other criteria than compensation and the strong negative relationship between bias and the percentile at the named peer group at which the CEO is compensated. We find that adjustments to compensation peer groups are often better explained as bias-maintaining impression management than as structural adjustments to align peer groups more closely with the normative principles for peer group selection. We also find that peer group bias cannot generally be explained away as a reward for CEO talent. Our research suggests that although the SEC regulation was intended to minimize rent extraction, it has given firms a tool to manage impressions of shareholders and justify excessive pay.

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Dark Side of CEO Ability: CEO General Managerial Skills and Cost of Equity Capital

Dev Mishra
Journal of Corporate Finance, December 2014, Pages 390–409

Abstract:
CEOs with substantial general managerial ability (generalist CEOs) possess a substantial share of organization (human) capital and have different risk-taking incentives than do their counterpart specialist CEOs. Using an index increasing in CEO general managerial skills as a proxy for general managerial ability, we find that investors require higher returns from firms featuring CEOs who have profuse general managerial ability. Furthermore, expected returns are significantly increasing with CEO general managerial ability in firms with high organization capital, that belong to M&A-intensive industries and that have complex operations, high agency problems and high anti-takeover provisions. These findings are consistent with arguments that organization (human) capital has significant expected return implications and that CEOs with higher general managerial skills may lead to higher agency problems, feature different risk-taking incentives and be more costly to retain in times of need.

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Yesterday's Heroes: Compensation and Risk at Financial Firms

Ing-Haw Cheng, Harrison Hong & José Scheinkman
Journal of Finance, forthcoming

Abstract:
Many believe that compensation, misaligned from shareholders’ value due to managerial entrenchment, caused financial firms to take creative risks before the financial crisis of 2008. We argue that even in a classical principal-agent setting without entrenchment and with exogenous firm risk, riskier firms may offer higher total pay as compensation for the extra risk in equity stakes born by risk-averse managers. Using long lags of stock price risk to capture exogenous firm risk, we confirm our conjecture and show that riskier firms are also more productive and more likely to be held by institutional investors, who are most able to influence compensation.

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Corporate Social Responsibility or CEO Narcissism? CSR Motivations and Organizational Performance

Oleg Petrenko et al.
Strategic Management Journal, forthcoming

Abstract:
This study builds on insights from both upper echelons and agency perspectives to examine the effects on corporate social responsibility (CSR) practices of CEO’s narcissism. Drawing on prior theory about CEO narcissism, we argue that CSR can be a response to leaders’ personal needs for attention and image reinforcement and hypothesize that CEO narcissism has positive effects on levels and profile of organizational CSR; additionally, CEO narcissism will reduce the effect of CSR on performance. We find support for our ideas with a sample of Fortune 500 CEOs, operationalizing CEO narcissism with a novel media-based measurement technique that uses third-party ratings of CEO characteristics with validated psychometric scales.

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Investment Banks as Corporate Monitors in the Early 20th Century United States

Eric Hilt & Carola Frydman
NBER Working Paper, October 2014

Abstract:
We use the Clayton Antitrust Act of 1914 to study the effect of bankers on corporate boards in facilitating access to external finance. In the early twentieth century, securities underwriters commonly held directorships with American corporations; this was especially true for railroads, which were the largest enterprises of the era. Section 10 of the Clayton Act prohibited investment bankers from serving on the boards of railroads for which they underwrote securities. Following the implementation of Section 10 in 1921, we find that railroads that had maintained strong affiliations with their underwriters saw declines in their valuations, investment rates and leverage ratios, and increases in their costs of external funds. We perform falsification tests using data for industrial corporations, which were not subject to the prohibitions of Section 10, and find no differential effect of relationships with underwriters on these firms following 1921. Our results are consistent with the predictions of a simple model of underwriters on corporate boards acting as delegated monitors. Our findings also highlight the potential risks of unintended consequences from financial regulations.

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Do Compensation Consultants Enable Higher CEO Pay? New Evidence from Recent Disclosure Rule Changes

Jenny Chu, Jonathan Faasse & Raghavendra Rau
University of Cambridge Working Paper, September 2014

Abstract:
In July 2009, the SEC announced additional disclosure rules requiring firms that purchase other services from their compensation consultants to disclose fees paid for both compensation consulting and other services. This exogenous requirement dramatically increased both the turnover of compensation consultants and the number of specialist firms in the industry solely providing executive compensation consulting services. After the rule change, client firms that switched to specialist consultants paid their chief executive officers (CEOs) 9.7% more in median total compensation than a matched sample of firms that remained with multi-service consultants. Compensation consultants retained solely by the board are associated with 12.9% lower median pay levels than a propensity-score matched sample of firms with additional management-retained consultants. Finally, CEOs at firms that start hiring compensation consultants experience a 7.5% increase in median pay relative to a propensity-score matched sample. Overall, our study finds strong empirical evidence for the hiring of compensation consultants as a justification device for higher executive pay.

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Short Selling Pressure, Stock Price Behavior, and Management Forecast Precision: Evidence from a Natural Experiment

Yinghua Li & Liandong Zhang
Journal of Accounting Research, forthcoming

Abstract:
Using a natural experiment (Regulation SHO), we show that short selling pressure and consequent stock price behavior have a causal effect on managers’ voluntary disclosure choices. Specifically, we find that managers respond to a positive exogenous shock to short selling pressure and price sensitivity to bad news by reducing the precision of bad news forecasts. This finding on management forecasts appears to be generalizable to other corporate disclosures. In particular, we find that, in response to increased short selling pressure, managers also reduce the readability (or increase the fuzziness) of bad news annual reports. Overall, our results suggest that maintaining the current level of stock prices is an important consideration in managers’ strategic disclosure decisions.

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You don't forget your roots: The influence of CEO social class background on strategic risk taking

Jennifer Kish-Gephart & Joanna Tochman Campbell
Academy of Management Journal, forthcoming

Abstract:
Social class is increasingly recognized as a powerful force in people's lives. Yet, despite the long and extensive stream of research on the upper echelons of organizations, we know little about how executives' formative childhood experiences with social class influence strategic choices. In this study, we investigate the influence of CEO social class origins on firm risk taking. We also explore the moderating influences of other important career experiences, including elite education and diverse functional background. Our theory and findings highlight that one's social class origins have a lasting and varying impact on individual preferences, affecting executives' tendency to take risks. By examining this novel managerial characteristic, we offer important implications for social class and upper echelons theorizing.

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'I Do': Does Marital Status Affect How Much CEOs 'Do'?

Gina Nicolosi & Adam Yore
Financial Review, forthcoming

Abstract:
This paper explores whether a CEO's marital status reveals unobservable risk preferences which influence their firm’s investment and compensation policies. Using biographical data for CEOs of large domestic companies, we find that corporate deal-making activity (e.g., mergers, joint ventures, major capital expenditures, etc.) and overall firm riskiness both increase significantly with personal life restructuring (e.g., marriages and divorces). This relation is supported by an instrumental variables analysis and also an investigation surrounding CEO turnover. Finally, the link between a CEO’s marital status and preference for option-based compensation further suggests that personal restructuring may be an indicator of executive risk appetites.

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CEO Narcissism and the Impact of Prior Board Experience on Corporate Strategy

David Zhu & Guoli Chen
Administrative Science Quarterly, forthcoming

Abstract:
We examine how chief executive officer (CEO) narcissism influences the interorganizational imitation of corporate strategy. We theorize that narcissistic CEOs are influenced more by the corporate strategies they experienced on other boards and less by the corporate strategies experienced by other directors. These effects are strengthened if the other firms to which the CEO has interlock ties have high status and if the CEO is powerful. Through longitudinal analyses of Fortune 500 companies’ decisions (from 1997 to 2006) related to the acquisition emphasis of a firm’s growth strategy and the firm’s level of international diversification, we show that narcissistic CEOs are influenced by corporate strategies that they witnessed at other firms much more than other CEOs. In addition, relatively narcissistic CEOs not only strongly resist the influence of other directors’ prior experience but also tend to demonstrate their superiority by adopting corporate strategies that are the opposite of what fellow directors’ prior experience would suggest. Our theory and results highlight how CEO narcissism limits directors’ influence over corporate strategy and influences CEOs’ learning and information processing in making strategic decisions.

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The Impact of Prior Stock Market Reactions On Risk Taking in Acquisitions

Shyam Kumar, Jaya Dixit & Bill Francis
Strategic Management Journal, forthcoming

Abstract:
We study the relationship between the stock market's reaction to a prior acquisition and the risk associated with a subsequent acquisition. Using a sample of 823 acquisitions over the period 1990–2006 we find that acquirers buy increasingly volatile targets both as the abnormal dollar gains from the previous acquisition announcement increase, and as the abnormal dollar losses increase (i.e. a V shaped relationship). Our findings are consistent with psychological theories of decision making, including prospect theory and the house money effect. In addition, they highlight that the stock market reaction to the prior acquisition announcement acts as an important reference point in acquisition decisions.

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Are the Benefits of Debt Declining? The Decreasing Propensity of Firms to be Adequately Levered

Ranjan D’Mello & Mark Gruskin
Journal of Corporate Finance, December 2014, Pages 327–350

Abstract:
We observe a persistent increase in the percentage of firms with little or no debt in their capital structure over the last three decades. The fraction of firms with less than five percent debt in their capital structure increases from 14.01 percent in 1977 to 34.42 percent in 2010 while the percentage of all-equity firms increases 200 percent over the same period. We find that even after controlling for firm- and industry-specific variables that are relevant to capital structure policy, there is a deficiency in firms’ propensity to be levered. Additionally, the deficiency is increasing over time and by 2010 the percent of firms that are nearly all-equity is twice the predicted level. Our findings are robust to different methodologies, specifications, and time periods. Overall, these results suggest that the well-documented benefits of leverage are less valuable over the sample period and that the determinants of firms’ capital structure decisions have evolved since the 1970s.

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Does Uncertainty about Management Affect Firms' Costs of Borrowing?

Yihui Pan, Tracy Yue Wang & Michael Weisbach
NBER Working Paper, November 2014

Abstract:
Uncertainty about management appears to affect firms’ cost of borrowing and financial policies. In a sample of S&P 1500 firms between 1987 and 2010, CDS spreads, loan spreads and bond yield spreads all decline over the first three years of CEO tenure, holding other macroeconomic, firm, and security level factors constant. This decline occurs regardless of the reason for the prior CEO’s departure. Similar but smaller declines occur following turnovers of CFOs. The spreads are more sensitive to CEO tenure when the prior uncertainty about the CEO’s ability is likely to be higher: when he is not an heir apparent, is an outsider, is younger, and when he does not have a prior relationship with the lender. The spread- tenure sensitivity is also higher when the firm has a higher default risk and when the debt claim is riskier. These patterns are consistent with the view that the decline in spreads in a manager’s first three years of tenure reflects the resolution of uncertainty about management. Firms adjust their propensities to issue external debt, precautionary cash holding, and reliance on internal funds in response to these short-term increases in borrowing costs early in their CEOs’ tenure.

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Paying the price? The impact of controversial governance practices on managerial reputation

Michael Bednar, Geoffrey Love & Matthew Kraatz
Academy of Management Journal, forthcoming

Abstract:
This study directly examines the reputational penalties that managers pay when they engage in controversial governance practices that raise questions about managerial self-interest. These penalties should deter questionable behavior and enable reputation to serve a social control function, yet we know little about how and when these penalties are actually imposed. Unlike prior research in this vein, we account for the fact that reputational penalties associated with such practices may differ across audiences because of differences in interpretations of the practice and differences in causal attributions about its use. Specifically, we develop theory to explain how and when stock analysts and peer executives applied reputational penalties to managers when firms used a poison pill. We find that the reputational penalties associated with poison pills differed substantially between these two groups and that these groups applied different penalties depending on the media coverage that the poison pill received, the performance of the firm, and the extent to which the practice had already been adopted. The findings suggest that reputational penalties for questionable behaviors may be more contingent and harder to sustain than previously thought.

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Do analysts matter for governance? Evidence from natural experiments

Tao Chen, Jarrad Harford & Chen Lin
Journal of Financial Economics, forthcoming

Abstract:
Building on two sources of exogenous shocks to analyst coverage (broker closures and mergers), we explore the causal effects of analyst coverage on mitigating managerial expropriation of outside shareholders. We find that as a firm experiences an exogenous decrease in analyst coverage, shareholders value internal cash holdings less, its CEO receives higher excess compensation, its management is more likely to make value-destroying acquisitions, and its managers are more likely to engage in earnings management activities. Importantly, we find that most of these effects are mainly driven by the firms with smaller initial analyst coverage and less product market competition. We further find that after exogenous brokerage exits, a CEO's total and excess compensation become less sensitive to firm performance in firms with low initial analyst coverage. These findings are consistent with the monitoring hypothesis, specifically that financial analysts play an important governance role in scrutinizing management behavior, and the market is pricing an increase in expected agency problems after the loss in analyst coverage.

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Explicit Employment Contracts and CEO Compensation

Wei-Ling Song & Kam-Ming Wan
Journal of Corporate Finance, forthcoming

Abstract:
This study investigates the relation between the use of explicit employment agreements (EA) and CEO compensation. Overall, our findings are broadly consistent with the predictions of Klein, Crawford, and Alchian (1978) that an EA is used to induce CEOs to make firm-specific human capital investments that are vulnerable to opportunistic behavior. We determine that compensation is higher when CEOs have employment agreements that are written, longer in duration, or more explicit in terms. Additionally, such employment agreements are more likely to occur when firms have (i) externally hired CEOs, (ii) CEOs with large abnormal compensation, (iii) low investment intensity, (iv) low growth opportunities, and (v) CEOs with a short employment history with the firm.

By KEVIN LEWIS | 09:00:00 AM

Tuesday, November 18, 2014

Race past

When Canvassers Became Activists: Antislavery Petitioning and the Political Mobilization of American Women

Daniel Carpenter & Colin Moore
American Political Science Review, August 2014, Pages 479-498

Abstract:
Examining an original dataset of more than 8,500 antislavery petitions sent to Congress (1833–1845), we argue that American women's petition canvassing conferred skills and contacts that empowered their later activism. We find that women canvassers gathered 50% or more signatures (absolute and per capita) than men while circulating the same petition requests in the same locales. Supplementary evidence (mainly qualitative) points to women's persuasive capacity and network building as the most plausible mechanisms for this increased efficacy. We then present evidence that leaders in the women's rights and reform campaigns of the nineteenth century were previously active in antislavery canvassing. Pivotal signers of the Seneca Falls Declaration were antislavery petition canvassers, and in an independent sample of post–Civil War activists, women were four times more likely than men to have served as identifiable antislavery canvassers. For American women, petition canvassing — with its patterns of persuasion and networking — shaped legacies in political argument, network formation, and organizing.

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Pathways From Racial Discrimination to Multiple Sexual Partners Among Male African American Adolescents

Steven Kogan et al.
Psychology of Men & Masculinity, forthcoming

Abstract:
African American male adolescents’ involvement with multiple sexual partners has important implications for public health as well as for their development of ideas regarding masculinity and sexuality. The purpose of this study was to test hypotheses regarding the pathways through which racial discrimination affects African American adolescents’ involvement with multiple sexual partners. We hypothesized that racial discrimination would engender psychological distress, which would promote attitudes and peer affiliations conducive to multiple sexual partnerships. The study also examined the protective influence of parenting practices in buffering the influence of contextual stressors. Participants were 221 African American male youth who provided data at ages 16 and 18 years; their parents provided data on family socioeconomic disadvantages. Of these young men, 18.5% reported having 3 or more sexual partners during the past 3 months. Structural equation models indicated that racial discrimination contributed to sexual activity with multiple partners by inducing psychological distress, which, in turn, affected attitudes and peer affiliations conducive to multiple partners. The experience of protective parenting, which included racial socialization, closeness and harmony in parent–child relationships, and parental monitoring, buffered the influence of racial discrimination on psychological distress. These findings suggest targets for prevention programming and underscore the importance of efforts to reduce young men’s experience with racial discrimination.

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Political Polarization as a Social Movement Outcome: 1960s Klan Activism and Its Enduring Impact on Political Realignment in Southern Counties, 1960 to 2000

Rory McVeigh, David Cunningham & Justin Farrell
American Sociological Review, forthcoming

Abstract:
Radical social movements can exacerbate tensions in local settings while drawing attention to how movement goals align with political party agendas. Short-term movement influence on voting outcomes can endure when orientations toward the movement disrupt social ties, embedding individuals within new discussion networks that reinforce new partisan loyalties. To demonstrate this dynamic, we employ longitudinal data to show that increases in Republican voting, across several different time intervals, were most pronounced in southern counties where the Ku Klux Klan had been active in the 1960s. In an individual-level analysis of voting intent, we show that decades after the Klan declined, racial attitudes map onto party voting among southern voters, but only in counties where the Klan had been active.

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Early Life Environment and Racial Inequality in Education and Earnings in the United States

Kenneth Chay, Jonathan Guryan & Bhashkar Mazumder
NBER Working Paper, October 2014

Abstract:
Chay, Guryan and Mazumder (2009) found substantial racial convergence in AFQT and NAEP scores across cohorts born in the 1960’s and early 1970’s that was concentrated among blacks in the South. We demonstrated a close tracking between variation in the test score convergence across states and racial convergence in measures of health and hospital access in the years immediately after birth. This study analyzes whether the across-cohort patterns in the black-white education and earnings gaps match those in early life health and test scores already established. It also addresses caveats in the earlier study, such as unobserved selection into taking the AFQT and potential discrepancies between state-of-birth and state-of-test taking. With Census data, we find: i) a significant narrowing across the same cohorts in education gaps driven primarily by a relative increase in the probability of blacks going to college; and ii) a similar convergence in relative earnings that is insensitive to adjustments for employment selection, as well as time and age effects that vary by race and state-of-residence. The variation in racial convergence across birth states matches the patterns in the earlier study. The magnitude of the earnings gains is greater than can be explained by only the black gains in education and test scores for reasonable estimates of the returns to human capital. This suggests that other pre-market, productivity factors also improved across successive cohorts of blacks born in the South between the early 1960’s and early 1970’s. Finally, our cohort-based hypothesis provides a cohesive explanation for the aggregate patterns in several, previously disconnected literatures.

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“Racism Still Exists”: A Public Health Intervention Using Racism “Countermarketing” Outdoor Advertising in a Black Neighborhood

Naa Oyo Kwate
Journal of Urban Health, October 2014, Pages 851-872

Abstract:
The negative health effects of racism have been well documented, but how to intervene to redress these effects has been little studied. This study reports on RISE (Racism Still Exists), a high-risk, high-reward public health intervention that used outdoor advertising to disseminate a “countermarketing” campaign in New York City (NYC). Over 6 months, the campaign advertised stark facts about the persistence of racism in the USA. A probability sample of N = 144 participants from two predominantly Black NYC neighborhoods completed measures of health status, health behaviors, and social attitudes. Three months postintervention, statistically significant declines in psychological distress were seen among study participants who were exposed to the campaign compared to those who were not. There were no changes in other hypothesized outcomes. The campaign also generated significant public discourse, particularly in social media. The results suggest that racism countermarketing campaigns may have promise as a community-based intervention to address health inequalities.

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Caste-based Crimes and Economic Status: Evidence from India

Smriti Sharma
Journal of Comparative Economics, forthcoming

Abstract:
Crimes against the historically marginalized Scheduled Castes and Scheduled Tribes (SC and ST) by the upper castes in India represent an extreme form of prejudice and discrimination. In this paper, we investigate whether changes in relative material standards of living between the SCs/STs and upper castes - as measured by the ratio of consumption expenditures of SCs/STs to that of upper castes - are associated with changes in the incidence of crimes against SCs/STs. Based on the hierarchical social structure implied by the caste system, we posit that an increase in the expenditure ratio is positively correlated with the incidence of crimes committed by the upper castes against the lower castes. Using official district level crime data for the period 2001-10, we find a positive association between crimes and expenditure of SC/ST vis-á-vis the upper castes. Further, distinguishing between violent and non-violent crimes, we find it is the violent crimes that are responsive to changes in economic gaps. Moreover, this relationship is on account of changes in the upper castes’ economic well-being rather than changes in the economic position of the SCs and STs.

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Racial and Spatial Targeting: Segregation and Subprime Lending within and across Metropolitan Areas

Jackelyn Hwang, Michael Hankinson & Kreg Steven Brown
Social Forces, forthcoming

Abstract:
Recent studies find that high levels of black-white segregation increased rates of foreclosures and subprime lending across US metropolitan areas during the housing crisis. These studies speculate that segregation created distinct geographic markets that enabled subprime lenders and brokers to leverage the spatial proximity of minorities to disproportionately target minority neighborhoods. Yet, the studies do not explicitly test whether the concentration of subprime loans in minority neighborhoods varied by segregation levels. We address this shortcoming by integrating neighborhood-level data and spatial measures of segregation to examine the relationship between segregation and subprime lending across the 100 largest US metropolitan areas. Controlling for alternative explanations of the housing crisis, we find that segregation is strongly associated with higher concentrations of subprime loans in clusters of minority census tracts but find no evidence of unequal lending patterns when we examine minority census tracts in an aspatial way. Moreover, residents of minority census tracts in segregated metropolitan areas had higher likelihoods of receiving subprime loans than their counterparts in less segregated metropolitan areas. Our findings demonstrate that segregation played a pivotal role in the housing crisis by creating relatively larger areas of concentrated minorities into which subprime loans could be efficiently and effectively channeled. These results are consistent with existing but untested theories on the relationship between segregation and the housing crisis in metropolitan areas.

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Racial Discrimination, Fear of Crime, and Variability in Blacks’ Preferences for Punitive and Preventative Anti-crime Policies

Mark Ramirez
Political Behavior, forthcoming

Abstract:
A growing body of research recognizes that people’s policy opinions are not simply positive or negative, but instead derive from a variety of positive and negative beliefs related to a political issue. This research expands this insight by explaining the variability in support for punitive anti-crime policies among black Americans. Data from a nationally representative survey of black Americans (n = 515) are used to show that a majority of blacks are conflicted between a strong desire to reduce crime and perceptions of widespread racial discrimination within the criminal justice system. Using a heteroskedastic item response theory model, I demonstrate that conflict between these beliefs results in far greater variability around their support for punitive, but not preventative policies. Both the conflict and variability of many black Americans’ preferences on punitive anti-crime policies complicates their ability to clearly voice their support for or opposition toward punitive policies and likely limits the ability of elected officials to represent members of this community.

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Racial Microaggressions and Asian Americans: An Exploratory Study on Within-Group Differences and Mental Health

Kevin Nadal et al.
Asian American Journal of Psychology, forthcoming

Abstract:
Racial microaggressions are subtle forms of discrimination that have been found to have negative effects on the mental health of people of color. Due to the dearth of quantitative research that has examined the influence of racial microaggressions on Asian Americans, we recruited an Asian American sample (N = 157) for the current study to investigate the relationship between racial microaggressions with depression and other mental health symptoms. Recruited from both community and college populations, the sample consisted of 107 Asian American women and 50 men, with varying educational backgrounds, immigration statuses, and geographic locations in the U.S. Using the Racial and Ethnic Microaggressions Scales (REMS; Nadal, 2011b) and the Mental Health Inventory (MHI; McHorney, Ware, Rogers, Raczek, & Lu, 1992), there were 2 major findings. First, after controlling for education, hierarchical regression analyses indicated that racial microaggressions predicted general mental health problems: F(2, 91) = 11.37, p <.00, with the model explaining approximately 20% of the variance (R2 = .20, adjusted R2 = .09). Second, although comparative t tests did not yield significant differences based on gender or immigration status, t tests did reveal that Asian Americans experience various types of microaggression, based on geographic location, education, and age. Research implications for Asian American psychology and recommendations for clinical practice will be discussed.

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White Flight and the Presence of Neighborhood Nonprofit Organizations: Ethno-racial Transition, Poverty, and Organizational Resources

Eve Garrow & Samuel Garrow
Race and Social Problems, December 2014, Pages 328-341

Abstract:
A growing body of evidence suggests that urban neighborhoods of color experience a dearth of institutional resources, including parks and social services. Yet, little is known of how a key process in the creation and maintenance of racially and ethnically segregated neighborhoods — the flight of whites from integrating neighborhoods — influences the availability of nonprofit human services. Drawing insights from the place stratification perspective and the sociological study of residential segregation by race and ethnicity, we develop hypotheses on the relationship between white flight and nonprofit presence, and test them with a dataset that combines census tract data with data on all nonprofit human service organizations in Los Angeles County in 2001 and 2011. Consistent with the place stratification perspective, we find that white flight is negatively associated with the presence of nonprofit human services after controlling for neighborhood structural characteristics. However, the expectation that the negative effect of white flight on organizational numbers is stronger in poor neighborhoods than in nonpoor neighborhoods is not supported. The negative association between white flight and the presence of nonprofits is equally as pronounced in neighborhoods with low and high levels of poverty.

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Race, Sovereignty, and Civil Rights: Understanding the Cherokee Freedmen Controversy

Circe Sturm
Cultural Anthropology, August 2014, Pages 575–598

Abstract:
Despite a treaty in 1866 between the Cherokee Nation and the federal government granting them full tribal citizenship, Cherokee Freedmen — the descendants of African American slaves to the Cherokee, as well as of children born from unions between African Americans and Cherokee tribal members — continue to be one of the most marginalized communities within Indian Country. Any time Freedmen have sought the full rights and benefits given other Cherokee citizens, they have encountered intense opposition, including a 2007 vote that effectively ousted them from the tribe. The debates surrounding this recent decision provide an excellent case study for exploring the intersections of race and sovereignty. In this article, I use the most recent Cherokee Freedmen controversy to examine how racial discourse both empowers and diminishes tribal sovereignty, and what happens in settler-colonial contexts when the exercise of tribal rights comes into conflict with civil rights. I also explore how settler colonialism as an analytic can obscure the racialized power dynamics that undermine Freedmen claims to an indigenous identity and tribal citizenship.

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Double Jeopardy: Why Latinos Were Hit Hardest by the US Foreclosure Crisis

Jacob Rugh
Social Forces, forthcoming

Abstract:
Recent research has demonstrated that Latinos have been hit hardest by the US foreclosure crisis. In this article, I combine place stratification and spatial assimilation theory to explain why Latinos suffered a devastating double blow during the foreclosure crisis. Using a national sample of borrowers who received risky mortgage loans during the boom and following them through the crisis, I find that Latinos were most likely subject to high-cost subprime lending and especially risky low-/no-documentation lending as Latino suburbanization and immigration peaked along with national home prices. As a result, while Latino borrowers were no less likely to lose their homes to foreclosure than blacks prior to the crisis or in the Rust Belt, they were significantly more likely to lose their homes after the crisis began and in the Sand States of Arizona, California, Florida, and Nevada. Taken together, the results demonstrate the risk of rising Latino immigration, suburbanization, and homeownership during the stages of the housing boom and foreclosure crisis.

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Racial Segregation and Quality of Care Disparity in US Nursing Homes

Momotazur Rahman & Andrew Foster
Journal of Health Economics, forthcoming

Abstract:
In this paper we examine the contributions of travel distance and preferences for racial homogeneity as sources of nursing home segregation and racial disparities in nursing home quality. We first theoretically characterize the distinctive implications of these mechanisms for nursing home racial segregation. We then use this model to structure an empirical analysis of nursing home sorting. We find little evidence of differential willingness to pay for quality by race among first-time nursing home entrants, but do find significant distance and race-based preference effects. Simulation exercises suggest that both effects contribute importantly to racial disparities in nursing home quality.

By KEVIN LEWIS | 09:00:00 AM

Monday, November 17, 2014

Insufficient funds

Subprime Mortgage Defaults and Credit Default Swaps

Eric Arentsen et al.
Journal of Finance, forthcoming

Abstract:
We offer the first empirical evidence on the adverse effect of credit default swap (CDS) coverage on subprime mortgage defaults. Using a large database of privately securitized mortgages, we find that higher defaults concentrate in mortgage pools with concurrent CDS coverage, and within these pools the loans originated after or shortly before the start of CDS coverage have an even higher delinquency rate. The results are robust across zip code and origination quarter cohorts. Overall, we show that CDS coverage helped drive higher mortgage defaults during the financial crisis.

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The failure of models that predict failure: Distance, incentives, and defaults

Uday Rajan, Amit Seru & Vikrant Vig
Journal of Financial Economics, forthcoming

Abstract:
Statistical default models, widely used to assess default risk, fail to account for a change in the relations between different variables resulting from an underlying change in agent behavior. We demonstrate this phenomenon using data on securitized subprime mortgages issued in the period 1997–2006. As the level of securitization increases, lenders have an incentive to originate loans that rate high based on characteristics that are reported to investors, even if other unreported variables imply a lower borrower quality. Consistent with this behavior, we find that over time lenders set interest rates only on the basis of variables that are reported to investors, ignoring other credit-relevant information. As a result, among borrowers with similar reported characteristics, over time the set that receives loans becomes worse along the unreported information dimension. This change in lender behavior alters the data generating process by transforming the mapping from observables to loan defaults. To illustrate this effect, we show that the interest rate on a loan becomes a worse predictor of default as securitization increases. Moreover, a statistical default model estimated in a low securitization period breaks down in a high securitization period in a systematic manner: it underpredicts defaults among borrowers for whom soft information is more valuable. Regulations that rely on such models to assess default risk could, therefore, be undermined by the actions of market participants.

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Consumer Credit: Too Much or Too Little (or Just Right)?

Jonathan Zinman
Journal of Legal Studies, June 2014, Pages S209-S237

Abstract:
The intersection of research and policy on consumer credit often has a Goldilocks feel. Some researchers and policy makers posit that consumer credit markets produce too much credit. Other researchers and policy makers posit that markets produce too little credit. I review theories and evidence on inefficient consumer credit supply. For each of eight classes of theories I sketch some of the leading models and summarize any convincing empirical tests of those models. I also discuss more circumstantial evidence that does not map tightly onto a particular model but has the potential to shed light on, or obscure, answers to key questions. Overall there is a lack of convincing evidence on whether markets err and in which direction. We do not yet understand whether and under what conditions markets oversupply or undersupply credit, much less why.

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Do Financial Market Developments Influence Accounting Practices? Credit Default Swaps and Borrowers’ Reporting Conservatism

Xiumin Martin & Sugata Roychowdhury
Journal of Accounting and Economics, forthcoming

Abstract:
This paper investigates whether the initiation of trading in credit default swaps (CDSs) on a borrowing firm's outstanding debt is associated with a decline in that firm's reporting conservatism. CDS investments can modify lenders’ payoffs on their loan portfolios by providing insurance on negative credit outcomes. The onset of CDS trading reduces lenders’ incentives to continuously monitor borrowers and also their demand that borrowers report conservatively. Additionally, borrowers expect CDS-insured lenders to be more intransigent in renegotiations triggered by defaults and covenant violations. Since conservatism can trigger earlier covenant violations, borrowers have heightened incentives to report less conservatively in the post-CDS period. Using a differences-in-differences research design, we observe a decline in borrowing firms’ reporting conservatism after CDS trade initiation. This effect is more pronounced when reputation costs lenders face from reducing monitoring are lower, when debt contracts outstanding at the time of CDS trade initiation have more financial covenants, and when lenders who monitor borrowers more regularly in the pre-CDS period enter into CDS contracts to hedge their credit exposures.

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Managing markets for toxic assets

Christopher House & Yusufcan Masatlioglu
Journal of Monetary Economics, March 2015, Pages 84–99

Abstract:
A model in which banks trade toxic assets to raise funds for investment is analyzed. Toxic assets generate an adverse selection problem and, consequently, the interbank asset market provides insufficient liquidity. Investment is inefficiently low because acquiring funding requires banks to sell high-quality assets for less than their “fair” value. Equity injections reduce liquidity and may be counterproductive as a policy for increasing investment. Paradoxically, if it is directed to firms with the greatest liquidity needs, an equity injection will reduce investment further. Asset purchase programs, like the Public-Private Investment Program, often have favorable impacts on liquidity, investment and welfare.

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Systemic Risk and Stability in Financial Networks

Daron Acemoglu, Asuman Ozdaglar & Alireza Tahbaz-Salehi
American Economic Review, forthcoming

Abstract:
This paper argues that the extent of financial contagion exhibits a form of phase transition: as long as the magnitude of negative shocks affecting financial institutions are sufficiently small, a more densely connected financial network (corresponding to a more diversified pattern of interbank liabilities) enhances financial stability. However, beyond a certain point, dense interconnections serve as a mechanism for the propagation of shocks, leading to a more fragile financial system. Our results thus highlight that the same factors that contribute to resilience under certain conditions may function as significant sources of systemic risk under others.

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Financial Education, Financial Competence, and Consumer Welfare

Sandro Ambuehl, Douglas Bernheim & Annamaria Lusardi
NBER Working Paper, October 2014

Abstract:
We introduce the concept of financial competence, a measure of the extent to which individuals' financial choices align with those they would make if they properly understood their opportunity sets. Unlike existing measures of the quality of financial decision making, the concept is firmly rooted in the principles of choice-based behavioral welfare analysis; it also avoids the types of paternalistic judgments that are common in policy discussions. We document the importance of assessing financial competence by demonstrating, through an example, that an educational intervention can appear highly successful according to conventional outcome measures while failing to improve the quality of financial decision making. Specifically, we study a simple intervention concerning compound interest that significantly improves performance on a test of conceptual knowledge (which subjects report operationalizing in their decisions), and appears to counteract exponential growth bias. However, financial competence (welfare) does not improve. We trace the mechanisms that account for these seemingly divergent findings.

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Do rating agencies cater? Evidence from rating-based contracts

Pepa Kraft
Journal of Accounting and Economics, forthcoming

Abstract:
I examine whether rating agencies cater to borrowers with rating-based performance-priced loan contracts (PPrating firms). I use data from Moody's Financial Metrics on its quantitative adjustments for off-balance-sheet debt and qualitative adjustments for soft factors. In the cross-section and for borrowers experiencing adverse economic shocks, I find that these adjustments are more favorable for PPrating firms than for other firms, consistent with rating agencies catering to the PPrating borrowers. I find that this catering is muted in two circumstances when rating agencies' reputational costs are higher than usual: (1) near the investment grade and prime short-term rating thresholds and (2) when Fitch Ratings also provides a rating.

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The Futility of Cost-Benefit Analysis in Financial Disclosure Regulation

Omri Ben-Shahar & Carl Schneider
Journal of Legal Studies, June 2014, Pages S253-S271

Abstract:
What would happen if cost-benefit analysis (CBA) were applied to disclosure regulations? Mandated disclosure has largely escaped rigorous CBA because it looks so plausible: disclosure seems rich in benefits and low in cost. This article makes two arguments. First, it previews our thesis in More Than You Wanted to Know that disclosure laws do not deliver their anticipated benefits and thus cannot easily pass quantified CBA. Second, it describes a previously unrecognized cost of disclosure, one arising from lawmakers’ collective-action problem. With the proliferation of disclosures, each new mandate diminishes the attention that people can give to other information, including all other disclosures. The problem for CBA is lawmakers’ inability to coordinate laws across different fields and jurisdictions. This article illustrates this regulatory failure by examining the rigorous cost-effectiveness analysis conducted by the Consumer Financial Protection Bureau for its recent mortgage disclosure regulation.

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Intrinsically Advantageous? Reexamining the Production of Class Advantage in the Case of Home Mortgage Modification

Lindsay Owens
Social Forces, forthcoming

Abstract:
Social class confers a bundle of capabilities, practices, and beliefs that are conventionally assumed to be hierarchical, rigid, and self-perpetuating. However, this framework often belies the fact that these qualities needn't be necessarily or exhaustively advantageous. In particular, social change may render obsolete class-linked characteristics that were advantageous in previous periods. Drawing on interviews with homeowners at risk of foreclosure and a yearlong ethnography of a housing counseling organization, I find that although the housing crisis of the “Great Recession” affected both working- and middle-class homeowners alike, the practices of working-class borrowers better positioned them to exploit a number of informational advantages in the rapidly changing mortgage modification setting. My findings are a departure from existing research that treats middle-class capabilities and practices as intrinsically advantageous.

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The Political Economy of Regulation in Markets with Naïve Consumers

Patrick Warren & Daniel Wood
Journal of the European Economic Association, forthcoming

Abstract:
In a model of a competitive industry selling base goods and add-ons, we investigate the conditions under which citizen-consumers will support policies that eliminate behavioral inefficiencies induced by naïve consumers. Unregulated competitive markets have two effects: they produce deadweight losses, and they redistribute income away from biased consumers. Both unbiased and naïve consumers believe that they benefit from this redistribution (the naïve consumers are wrong), so support for efficiency-improving regulation is limited. Extending our model to consumers with partial sophistication about their naïveté, we predict patterns of regulation consistent with the form and timing of the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009.

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Strategic or Nonstrategic: The Role of Financial Benefit in Bankruptcy

Shuoxun Zhang, Tarun Sabarwal & Li Gan
Economic Inquiry, forthcoming

Abstract:
A partial test for strategic behavior in bankruptcy filing may be formulated by testing whether consumers manipulate their debt and filing decision jointly, or not: that is, testing for endogeneity of financial benefit and the bankruptcy filing decision. Using joint maximum likelihood estimation of an extended discrete choice model, test results are consistent with nonstrategic filing: financial benefit is exogenous to the filing decision. This result is confirmed in two different datasets (Panel Study of Income Dynamics and Survey of Consumer Finances). This result is consistent with an ex ante low net gain from a bankruptcy filing; a type of “rational inattention” to rare events such as bankruptcy.

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Payday Lending Regulation and the Demand for Alternative Financial Services

Roman Galperin & Andrew Weaver
Johns Hopkins University Working Paper, September 2014

Abstract:
In this paper we use a novel empirical strategy to estimate the net benefit of regulatory restrictions on the supply of fringe credit products. Our estimation measures the effect of strict regulation and prohibition of one such product — payday loans — on demand for another product — refund anticipation loans (RALs). Using a policy discontinuity at state border approach with zip-code-level panel data, we find an economically and statistically significant negative effect of strict regulation of payday loans on demand for RALs. A state ban on payday lending results in about five percent reduction in demand for RALs. We interpret this effect as evidence that the behavioral component is stronger than the rational-strategic component of demand for payday loans, indicating that strict regulation of payday loans may benefit households on net. We conclude with a discussion of implications for policy.

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Securitization and the Fixed-Rate Mortgage

Andreas Fuster & James Vickery
Review of Financial Studies, forthcoming

Abstract:
Fixed-rate mortgages (FRMs) dominate the U.S. mortgage market, with important consequences for monetary policy, household risk management, and financial stability. We show that the FRM market share is sharply lower when mortgages are difficult to securitize, exploiting plausibly exogenous variation in access to liquid securitization markets generated by a regulatory cutoff and time variation in private securitization activity. We interpret our findings as evidence that lenders are reluctant to retain the prepayment and interest rate risk embedded in FRMs. The form of securitization (private versus government backed) has little effect on FRM supply during periods in which private securitization markets are well functioning.

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New Evidence on the Impact of Financial Crises in Advanced Countries

Christina Romer & David Romer
University of California Working Paper, October 2014

Abstract:
This paper revisits the aftermath of financial crises in advanced countries in the decades before the Great Recession. We construct a new series on financial distress in 24 OECD countries for the period 1967–2007. The series is based on narrative assessments of the health of countries’ financial systems that were made in real time; and it classifies financial distress on a relatively fine scale, rather than treating it as a 0-1 variable. We find little support for the conventional wisdom that the output declines following financial crises are uniformly large and long-lasting. Rather, the declines are highly variable, on average only moderate, and often temporary. One important driver of the variation in outcomes across crises appears to be the severity and persistence of the financial distress itself: when distress is particularly extreme or continues for an extended period, the aftermath of a crisis is worse.

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The Evolution of Bank Supervision: Evidence from U.S. States

Kris James Mitchener & Matthew Jaremski
NBER Working Paper, October 2014

Abstract:
We use a novel data set spanning 1820-1910 to examine the origins of bank supervision and assess factors leading to the creation of formal bank supervision across U.S. states. We show that it took more than a century for the widespread adoption of independent supervisory institutions tasked with maintaining the safety and soundness of banks. State legislatures initially pursued cheaper regulatory alternatives, such as double liability laws; however, banking distress at the state level as well as the structural shift from note-issuing to deposit-taking commercial banks and competition with national banks propelled policymakers to adopt costly and permanent supervisory institutions.

By KEVIN LEWIS | 09:00:00 AM

Sunday, November 16, 2014

Togetherness

Children Conform to the Behavior of Peers; Other Great Apes Stick With What They Know

Daniel Haun, Yvonne Rekers & Michael Tomasello
Psychological Science, forthcoming

Abstract:
All primates learn things from conspecifics socially, but it is not clear whether they conform to the behavior of these conspecifics — if conformity is defined as overriding individually acquired behavioral tendencies in order to copy peers’ behavior. In the current study, chimpanzees, orangutans, and 2-year-old human children individually acquired a problem-solving strategy. They then watched several conspecific peers demonstrate an alternative strategy. The children switched to this new, socially demonstrated strategy in roughly half of all instances, whereas the other two great-ape species almost never adjusted their behavior to the majority’s. In a follow-up study, children switched much more when the peer demonstrators were still present than when they were absent, which suggests that their conformity arose at least in part from social motivations. These results demonstrate an important difference between the social learning of humans and great apes, a difference that might help to account for differences in human and nonhuman cultures.

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Human Faces Are Slower than Chimpanzee Faces

Anne Burrows et al.
PLoS ONE, October 2014

Background: While humans (like other primates) communicate with facial expressions, the evolution of speech added a new function to the facial muscles (facial expression muscles). The evolution of speech required the development of a coordinated action between visual (movement of the lips) and auditory signals in a rhythmic fashion to produce “visemes” (visual movements of the lips that correspond to specific sounds). Visemes depend upon facial muscles to regulate shape of the lips, which themselves act as speech articulators. This movement necessitates a more controlled, sustained muscle contraction than that produced during spontaneous facial expressions which occur rapidly and last only a short period of time. Recently, it was found that human tongue musculature contains a higher proportion of slow-twitch myosin fibers than in rhesus macaques, which is related to the slower, more controlled movements of the human tongue in the production of speech. Are there similar unique, evolutionary physiologic biases found in human facial musculature related to the evolution of speech?

Methodology/Prinicipal Findings: Using myosin immunohistochemistry, we tested the hypothesis that human facial musculature has a higher percentage of slow-twitch myosin fibers relative to chimpanzees (Pan troglodytes) and rhesus macaques (Macaca mulatta). We sampled the orbicularis oris and zygomaticus major muscles from three cadavers of each species and compared proportions of fiber-types. Results confirmed our hypothesis: humans had the highest proportion of slow-twitch myosin fibers while chimpanzees had the highest proportion of fast-twitch fibers.

Conclusions/significance: These findings demonstrate that the human face is slower than that of rhesus macaques and our closest living relative, the chimpanzee. They also support the assertion that human facial musculature and speech co-evolved. Further, these results suggest a unique set of evolutionary selective pressures on human facial musculature to slow down while the function of this muscle group diverged from that of other primates.

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Narcissism and Emotional Contagion: Do Narcissists “Catch” the Emotions of Others?

Anna Czarna et al.
Social Psychological and Personality Science, forthcoming

Abstract:
In this research, we investigated the association between narcissism and one central aspect of empathy, susceptibility to emotional contagion (the transfer of emotional states from one person to another). In a laboratory study (N = 101), we detected a negative link between narcissism and emotional contagion in response to experimentally induced positive affect. In an online study (N = 195), narcissism was negatively linked to experimentally induced emotional contagion regardless of valence. These findings indicate that individuals with high narcissism levels are apparently less prone to emotional contagion than individuals lower in narcissism. Hence, narcissists are less likely to “catch the emotions” of others. Furthermore, by comparing experimental assessments of susceptibility to emotional contagion with subjective self-reports, we were able to study self-insight. Across both samples, self-insight was generally low, and individual differences in self-insight were unrelated to narcissism.

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Automatic Personality Assessment Through Social Media Language

Gregory Park et al.
Journal of Personality and Social Psychology, forthcoming

Abstract:
Language use is a psychologically rich, stable individual difference with well-established correlations to personality. We describe a method for assessing personality using an open-vocabulary analysis of language from social media. We compiled the written language from 66,732 Facebook users and their questionnaire-based self-reported Big Five personality traits, and then we built a predictive model of personality based on their language. We used this model to predict the 5 personality factors in a separate sample of 4,824 Facebook users, examining (a) convergence with self-reports of personality at the domain- and facet-level; (b) discriminant validity between predictions of distinct traits; (c) agreement with informant reports of personality; (d) patterns of correlations with external criteria (e.g., number of friends, political attitudes, impulsiveness); and (e) test–retest reliability over 6-month intervals. Results indicated that language-based assessments can constitute valid personality measures: they agreed with self-reports and informant reports of personality, added incremental validity over informant reports, adequately discriminated between traits, exhibited patterns of correlations with external criteria similar to those found with self-reported personality, and were stable over 6-month intervals. Analysis of predictive language can provide rich portraits of the mental life associated with traits. This approach can complement and extend traditional methods, providing researchers with an additional measure that can quickly and cheaply assess large groups of participants with minimal burden.

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Adolescent Neighborhood Quality Predicts Adult dACC Response to Social Exclusion

Marlen Gonzalez et al.
Social Cognitive and Affective Neuroscience, forthcoming

Abstract:
Neuroimaging studies using the social-exclusion paradigm Cyberball indicate increased dACC and right insula activity as a function of exclusion. However, comparatively less work has been done on how social status factors may moderate this finding. The current study used the Cyberball paradigm with 85 (45 female) socio-economically diverse participants from a larger longitudinal sample. We tested whether neighborhood quality during adolescence would predict subsequent neural responding to social exclusion in young adulthood. Given previous behavioral studies indicating greater social vigilance and negative evaluation as a function of lower status, we expected that lower adolescent neighborhood quality would predict greater dACC activity during exclusion at young adulthood. Our findings indicate that young adults who lived in low-quality neighborhoods in adolescence showed greater dACC activity to social exclusion than those who lived in higher-quality neighborhoods. Lower neighborhood quality also predicted greater prefrontal activation in the superior frontal gyrus, dorsal medial prefrontal cortext, and the middle frontal gyrus, possibly indicating greater regulatory effort. Finally, this effect was not driven by subsequent ratings of distress during exclusion. In sum, adolescent neighborhood quality appears to potentiate neural responses to social exclusion in young adulthood, effects that are independent of felt distress.

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Predictability of Extreme Events in Social Media

José Miotto & Eduardo Altmann
PLoS ONE, November 2014

Abstract:
It is part of our daily social-media experience that seemingly ordinary items (videos, news, publications, etc.) unexpectedly gain an enormous amount of attention. Here we investigate how unexpected these extreme events are. We propose a method that, given some information on the items, quantifies the predictability of events, i.e., the potential of identifying in advance the most successful items. Applying this method to different data, ranging from views in YouTube videos to posts in Usenet discussion groups, we invariantly find that the predictability increases for the most extreme events. This indicates that, despite the inherently stochastic collective dynamics of users, efficient prediction is possible for the most successful items.

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OXTR Polymorphism Predicts Social Relationships through its Effects on Social Temperament

Kasey Creswell et al.
Social Cognitive and Affective Neuroscience, forthcoming

Abstract:
Humans have a fundamental need for strong interpersonal bonds, yet individuals differ appreciably in their degree of social integration. That these differences are also substantially heritable has spurred interest in biological mechanisms underlying the quality and quantity of individuals' social relationships. We propose that polymorphic variation in the oxytocin receptor gene (OXTR) associates with complex social behaviors and social network composition through intermediate effects on negative affectivity and the psychological processing of socially-relevant information. We tested a hypothesized social cascade from the molecular level (OXTR variation) to the social environment, through negative affectivity and inhibited sociality, in a sample of 1,295 men and women of European American (N=1081) and African American (N=214) ancestry. Compared to European Americans having any T allele of rs1042778, individuals homozygous for the alternate G allele reported significantly lower levels of negative affectivity and inhibited sociality, which in turn predicted significantly higher levels of social support and a larger/more diverse social network. Moreover, the effect of rs1042778 variation on social support was fully accounted for by associated differences in negative affectivity and inhibited sociality. Results replicated in the African American sample. Findings suggest that OXTR variation modulates levels of social support via proximal impacts on individual temperament.

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Friends With Each Other but Strangers to You: Source Relationship Softens Ostracism’s Blow

Nicole Iannone et al.
Group Dynamics, forthcoming

Abstract:
This study explored how the relationship between sources of ostracism, whether they are friends or strangers to each other, influences the targeted person’s reactions to ostracism. Participants interacted with 2 confederates who indicated that they were friends or strangers with each other. Participants were then ostracized or included by the confederates in Cyberball. The results indicated that being ostracized by 2 people who were strangers to each other made participants feel worse than being ostracized by 2 people who were friends with each other. Additionally, participants felt best being included by 2 people who were strangers to each other. These findings may have occurred as a result of differential expectations for inclusion and exclusion from 2 people who are friends, rather than strangers, to each other.

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The Long Goodbye: A Test of Grief as a Social Signal

Tania Reynolds et al.
Evolutionary Behavioral Sciences, forthcoming

Abstract:
The human grief response has perplexed researchers. Grief is costly, leading to painful and potentially deleterious symptoms. Yet, it is a human universal. We argue that grief functions as a hard-to-fake signal of underlying capacities to form strong social bonds. If so, those who grieve more intensively than others should be perceived as higher quality social partners. We tested this hypothesis in 4 studies. High grievers were rated as nicer, more loyal, and more trustworthy than low grievers. High grievers were also expected to cooperate in a prisoner’s dilemma more than low grievers. Last, high grievers were chosen as a trusted social partner more than another individual who expressed sadness for lost material items, indicating that grief may be a specific display of distress that is particularly informative to potential social partners. These results support a signaling theory of grief and are discussed in that context.

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Autistic empathy toward autistic others

Hidetsugu Komeda et al.
Social Cognitive and Affective Neuroscience, forthcoming

Abstract:
Individuals with Autism Spectrum Disorder (ASD) are thought to lack self-awareness and to experience difficulty empathising with others. Although these deficits have been demonstrated in previous studies, most of the target stimuli were constructed for typically developing (TD) individuals. We employed judgment tasks capable of indexing self-relevant processing in individuals with and without ASD. Fourteen Japanese males and one Japanese female with high-functioning ASD (17–41 years of age) and 13 Japanese males and two TD Japanese females (22–40 years of age), all of whom were matched for age and full and verbal intelligence quotient scores with the ASD participants, were enrolled in this study. The results demonstrated that the ventromedial prefrontal cortex was significantly activated in individuals with ASD in response to autistic characters and in TD individuals in response to non-autistic characters. Whereas the frontal-posterior network between the ventromedial prefrontal cortex and superior temporal gyrus participated in the processing of non-autistic characters in TD individuals, an alternative network was involved when individuals with ASD processed autistic characters. This suggests an atypical form of empathy in individuals with ASD toward others with ASD.

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Troubling Gifts of Care: Vulnerable Persons and Threatening Exchanges in Chicago's Home Care Industry

Elana Buch
Medical Anthropology Quarterly, forthcoming

Abstract:
By tracing the transformations of troubling exchanges in paid home care, this article examines how differently positioned individuals strive to build caring relations within potentially restrictive regimes of care. In paid home care in Chicago, older adults and their workers regularly participate in exchanges of money, time, and material goods. These gifts play a crucial role in building good care relationships that sustain participants’ moral personhood. Amid widespread concern about vulnerable elders, home care agencies compete in a crowded marketplace by prohibiting these exchanges, even as they depend on them to strengthen relationships. Supervisors thus exercise discretion, sometimes reclassifying gift exchanges as punishable thefts. In this context, the commodification of care did not lead to the actual elimination of gift relations, but rather transformed gift relations into a suspicious and troublesome source of value.

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Attachment-security priming attenuates amygdala activation to social and linguistic threat

Luke Norman et al.
Social Cognitive and Affective Neuroscience, forthcoming

Abstract:
A predominant expectation that social relationships with others are safe (a secure attachment-style), has been linked with reduced threat-related amygdala activation. Experimental priming of mental representations of attachment security can modulate neural responding, but the effects of attachment-security priming on threat-related amygdala activation remains untested. Using functional magnetic resonance imaging (fMRI), the present study examined the effects of trait and primed attachment security on amygdala reactivity to threatening stimuli in an emotional faces and a linguistic dot-probe task in forty-two healthy participants. Trait attachment anxiety and attachment avoidance were positively correlated with amygdala activation to threatening faces in the control group, but not in the attachment primed group. Furthermore, participants who received attachment-security priming showed attenuated amygdala activation in both the emotional faces and dot-probe tasks. The current findings demonstrate that variation in state and trait attachment security modulates amygdala reactivity to threat. These findings support the potential use of attachment security-boosting methods as interventions and suggest a neural mechanism for the protective effect of social bonds in anxiety disorders.

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Why We Think We Can't Dance: Theory of Mind and Children's Desire to Perform

Lan Nguyen Chaplin & Michael Norton
Child Development, forthcoming

Abstract:
Theory of mind (ToM) allows children to achieve success in the social world by understanding others' minds. A study with 3- to 12-year-olds, however, demonstrates that gains in ToM are linked to decreases in children's desire to engage in performative behaviors associated with health and well-being, such as singing and dancing. One hundred and fifty-nine middle-class children from diverse backgrounds in a Northeastern U.S. metropolitan area completed the study in 2011. The development of ToM is associated with decreases in self-esteem, which in turn predicts decreases in children's willingness to perform. This shift away from performance begins at age 4 (when ToM begins to develop), years before children enter puberty.

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Tell Me the Gossip: The Self-Evaluative Function of Receiving Gossip About Others

Elena Martinescu, Onne Janssen & Bernard Nijstad
Personality and Social Psychology Bulletin, December 2014, Pages 1668-1680

Abstract:
We investigate the self-evaluative function of competence-related gossip for individuals who receive it. Using the Self-Concept Enhancing Tactician (SCENT) model, we propose that individuals use evaluative information about others (i.e., gossip) to improve, promote, and protect themselves. Results of a critical incident study and an experimental study showed that positive gossip had higher self-improvement value than negative gossip, whereas negative gossip had higher self-promotion value and raised higher self-protection concerns than positive gossip. Self-promotion mediated the relationship between gossip valence and pride, while self-protection mediated the relationship between gossip valence and fear, although the latter mediated relationship emerged for receivers with mastery goals rather than performance goals. These results suggest that gossip serves self-evaluative functions for gossip receivers and triggers self-conscious emotions.

By KEVIN LEWIS | 09:00:00 AM

Saturday, November 15, 2014

Sensemaking

Action video game play facilitates the development of better perceptual templates

Vikranth Bejjanki et al.
Proceedings of the National Academy of Sciences, forthcoming

Abstract:
The field of perceptual learning has identified changes in perceptual templates as a powerful mechanism mediating the learning of statistical regularities in our environment. By measuring threshold-vs.-contrast curves using an orientation identification task under varying levels of external noise, the perceptual template model (PTM) allows one to disentangle various sources of signal-to-noise changes that can alter performance. We use the PTM approach to elucidate the mechanism that underlies the wide range of improvements noted after action video game play. We show that action video game players make use of improved perceptual templates compared with nonvideo game players, and we confirm a causal role for action video game play in inducing such improvements through a 50-h training study. Then, by adapting a recent neural model to this task, we demonstrate how such improved perceptual templates can arise from reweighting the connectivity between visual areas. Finally, we establish that action gamers do not enter the perceptual task with improved perceptual templates. Instead, although performance in action gamers is initially indistinguishable from that of nongamers, action gamers more rapidly learn the proper template as they experience the task. Taken together, our results establish for the first time to our knowledge the development of enhanced perceptual templates following action game play. Because such an improvement can facilitate the inference of the proper generative model for the task at hand, unlike perceptual learning that is quite specific, it thus elucidates a general learning mechanism that can account for the various behavioral benefits noted after action game play.

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Blind Insight: Metacognitive Discrimination Despite Chance Task Performance

Ryan Scott et al.
Psychological Science, forthcoming

Abstract:
Blindsight and other examples of unconscious knowledge and perception demonstrate dissociations between judgment accuracy and metacognition: Studies reveal that participants’ judgment accuracy can be above chance while their confidence ratings fail to discriminate right from wrong answers. Here, we demonstrated the opposite dissociation: a reliable relationship between confidence and judgment accuracy (demonstrating metacognition) despite judgment accuracy being no better than chance. We evaluated the judgments of 450 participants who completed an AGL task. For each trial, participants decided whether a stimulus conformed to a given set of rules and rated their confidence in that judgment. We identified participants who performed at chance on the discrimination task, utilizing a subset of their responses, and then assessed the accuracy and the confidence-accuracy relationship of their remaining responses. Analyses revealed above-chance metacognition among participants who did not exhibit decision accuracy. This important new phenomenon, which we term blind insight, poses critical challenges to prevailing models of metacognition grounded in signal detection theory.

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The Floor Is Nearer Than the Sky: How Looking Up or Down Affects Construal Level

Anneleen Van Kerckhove, Maggie Geuens & Iris Vermeir
Journal of Consumer Research, forthcoming

Abstract:
This research shows that consumers select a different product when they look down versus up. Because (1) people are accustomed to looking down to process nearby stimuli and to looking up to process distant stimuli, and because (2) perceived distance is linked to concrete versus abstract processing, the association between moving one’s eyes or head down or up and concrete versus abstract processing has become overgeneralized. A series of three experiments highlights that downward (upward) head and eye movements evoke more concrete (abstract) processing because downward (upward) head or eye movements have come to serve as a proximity (distance) cue. Two additional experiments indicate downstream behavioral consequences of moving one’s eyes or head down versus up. Consumers choose more for feasible versus desirable products when looking down and vice versa when looking up. They also tend to be more preference consistent when looking down versus up.

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Unconscious discrimination of social cues from eye whites in infants

Sarah Jessen & Tobias Grossmann
Proceedings of the National Academy of Sciences, 11 November 2014, Pages 16208–16213

Abstract:
Human eyes serve two key functions in face-to-face social interactions: they provide cues about a person’s emotional state and attentional focus (gaze direction). Both functions critically rely on the morphologically unique human sclera and have been shown to operate even in the absence of conscious awareness in adults. However, it is not known whether the ability to respond to social cues from scleral information without conscious awareness exists early in human ontogeny and can therefore be considered a foundational feature of human social functioning. In the current study, we used event-related brain potentials (ERPs) to show that 7-mo-old infants discriminate between fearful and nonfearful eyes (experiment 1) and between direct and averted gaze (experiment 2), even when presented below the perceptual threshold. These effects were specific to the human sclera and not seen in response to polarity-inverted eyes. Our results suggest that early in ontogeny the human brain detects social cues from scleral information even in the absence of conscious awareness. The current findings support the view that the human eye with its prominent sclera serves critical communicative functions during human social interactions.

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Hunger moderates the activation of psychological disease avoidance mechanisms

Sarah Ainsworth & Jon Maner
Evolutionary Behavioral Sciences, October 2014, Pages 303-313

Abstract:
Humans evolved to possess psychological mechanisms that help them avoid coming into contact with infectious diseases. Those mechanisms promote vigilance to and avoidance of disease cues, including heuristic cues displayed by other people (e.g., old age, obesity). The current research demonstrated that hunger — a state that sensitizes people to the presence of foodborne pathogens — moderated the activation of psychological disease avoidance mechanisms. In 2 experiments, hunger moderated the effect of pathogen priming on responses to social disease cues. A pathogen prime led participants who were subjectively hungry (Experiment 1) and who had abstained from eating for 5 hr (Experiment 2) to display heightened disease avoidance responses, including increases in overt prejudice (Experiment 1) and biases toward categorizing targets into groups heuristically associated with disease (the obese and the elderly). These findings highlight the functional interplay between psychological and physiological processes in helping people avoid disease. Findings also have implications for identifying subtle sources of social prejudice.

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Hearing a statement now and believing the opposite later

Teresa Garcia-Marques et al.
Journal of Experimental Social Psychology, January 2015, Pages 126–129

Abstract:
Existing findings on the truth effect could be explained by recollection of the statements presented in the exposure phase. In order to examine a pure fluency account of this effect, we tested a unique prediction that could not be derived from recollection of a statement. In one experiment, participants judged the truth of a statement that had the same surface appearance as a statement presented earlier but contradicted it, for example “crocodiles sleep with their eyes open” one week after having heard “crocodiles sleep with their eyes closed”. We predicted and found that participants judged contradictory statements as being more false than new statements after a delay of only a few minutes, but judged them as more likely to be true after one week. In contrast to earlier findings, this result cannot be explained by accounts relying on recollection of the previously presented statements.

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Always Gamble on an Empty Stomach: Hunger Is Associated with Advantageous Decision Making

Denise de Ridder et al.
PLoS ONE, October 2014

Abstract:
Three experimental studies examined the counterintuitive hypothesis that hunger improves strategic decision making, arguing that people in a hot state are better able to make favorable decisions involving uncertain outcomes. Studies 1 and 2 demonstrated that participants with more hunger or greater appetite made more advantageous choices in the Iowa Gambling Task compared to sated participants or participants with a smaller appetite. Study 3 revealed that hungry participants were better able to appreciate future big rewards in a delay discounting task; and that, in spite of their perception of increased rewarding value of both food and monetary objects, hungry participants were not more inclined to take risks to get the object of their desire. Together, these studies for the first time provide evidence that hot states improve decision making under uncertain conditions, challenging the conventional conception of the detrimental role of impulsivity in decision making.

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The Cool Scent of Power: Effects of Ambient Scent on Consumer Preferences and Choice Behavior

Adriana Madzharov, Lauren Block & Maureen Morrin
Journal of Marketing, forthcoming

Abstract:
The present research examines how ambient scents impact spatial perceptions in retail environments, which in turn influence customers' feelings of power and thus product preference and purchasing behavior. Specifically, the authors demonstrate that in a warm- (versus cool-) scented and thus perceptually more (versus less) socially dense environment, people experience a greater (versus lesser) need for power, which manifests in increased preference for and purchase of premium products and brands. This research extends knowledge on store atmospherics and customer experience management through the effects of ambient scent on spatial perceptions, and builds on recent research on power in choice contexts.

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Unconscious information changes decision accuracy but not confidence

Alexandra Vlassova, Chris Donkin & Joel Pearson
Proceedings of the National Academy of Sciences, 11 November 2014, Pages 16214–16218

Abstract:
The controversial idea that information can be processed and evaluated unconsciously to change behavior has had a particularly impactful history. Here, we extend a simple model of conscious decision-making to explain both conscious and unconscious accumulation of decisional evidence. Using a novel dichoptic suppression paradigm to titrate conscious and unconscious evidence, we show that unconscious information can be accumulated over time and integrated with conscious elements presented either before or after to boost or diminish decision accuracy. The unconscious information could only be used when some conscious decision-relevant information was also present. These data are fit well by a simple diffusion model in which the rate and variability of evidence accumulation is reduced but not eliminated by the removal of conscious awareness. Surprisingly, the unconscious boost in accuracy was not accompanied by corresponding increases in confidence, suggesting that we have poor metacognition for unconscious decisional evidence.

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Competitive Interaction Leads to Perceptual Distancing Between Actors

Laura Thomas, Christopher Davoli & James Brockmole
Journal of Experimental Psychology: Human Perception and Performance, forthcoming

Abstract:
People physically distance themselves from competitors and the disliked, and cooperate less with those who are further away. We examine whether social interaction can also impact the space people perceive between themselves and others by measuring the influence of competitive dynamics on visual perception. In 2 experiments, participants played a ball toss game until they reached a target score. In Experiment 1, a confederate stood across the room from the participant and either (a) played the same game competitively, (b) played the same game cooperatively, or (c) observed the participant without playing, while in Experiment 2, 2 participants played the same versions of the game with each other. After the game, participants provided an estimate of the distance between themselves and the other player. Participants in Experiment 1 who competed with the confederate consistently judged her to be more distant than participants who cooperated with the confederate or played alone. In Experiment 2, players who lost the competition perceived more distance between themselves and their opponents than did players who won, suggesting that the experience of losing a competition drives this perceptual distancing. These findings demonstrate the power of a socially distancing interaction to create perceptual distance between people.

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Violent and Sexual Media Impair Second-Language Memory during Encoding and Retrieval

Robert Lull, Yakup Çetin & Brad Bushman
Journal of Experimental Social Psychology, January 2015, Pages 172–178

Abstract:
Research suggests that exposure to media containing violence and sex impairs attention and memory. Learning a foreign language is one domain in which attention and memory are critical. Two experiments addressed whether exposure to media containing violence and sex interferes with foreign-language performance. Turkish participants (NExperiment 1 = 70, NExperiment 2 = 76) completed a foreign-language performance task before and after viewing a video. By random assignment, participants watched either a video containing violence and sex or a video containing no violence or sex. In both experiments, the two groups did not differ on pretest performance, but participants exposed to violence and sex performed worse on the posttest (Experiment 1: English; Experiment 2: Spanish), and on a delayed test one-week later (Experiment 2). These results suggest that participants exposed to violence and sex allocated attentional resources to violent and sexual cues in their videos rather than to the foreign language material.

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Embodied effects are moderated by situational cues: Warmth, threat, and the desire for affiliation

Adam Fay & Jon Maner
British Journal of Social Psychology, forthcoming

Abstract:
Recent research demonstrates fundamental links between low-level bodily states and higher order psychological processes. How those links interact with the surrounding social context, however, is not well-understood. Findings from two experiments indicate that the psychological link between physical warmth and social affiliation depends on the situation in which the warmth is experienced. Participants who had been primed with physical threat (as compared with control conditions) responded to warmth with stronger increases in affiliative motivation. This effect replicated across different threat and warmth primes. These findings support a view in which physical sensations interact dynamically with aspects of the immediate situation to influence the activation and application of higher order social processes. This view implies that many embodied psychological processes could function to help people respond adaptively to situational threats and opportunities.

By KEVIN LEWIS | 09:00:00 AM

Friday, November 14, 2014

Running the show

What’s a Dog Story Worth?

Matthew Atkinson, Maria Deam & Joseph Uscinski
PS: Political Science & Politics, October 2014, Pages 819-823

Abstract:
Journalists consider the importance of events and the audience’s interest in them when deciding on which events to report. Events most likely to be reported are those that are both important and can capture the audience’s interest. In turn, the public is most likely to become aware of important news when some aspect of the story piques their interest. We suggest an efficacious means of drawing public attention to important news stories: dogs. Examining the national news agenda of 10 regional newspapers relative to that of the New York Times, we evaluated the effect of having a dog in a news event on the likelihood that the event is reported in regional newspapers. The “dog effect” is approximately equivalent to the effect of whether a story warrants front- or back-page national news coverage in the New York Times. Thus, we conclude that dogs are an important factor in news decisions.

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Congressional Cohorts: The House Republican Class of 2010

Lawrence Evans
The Forum, October 2014, Pages 541–561

Abstract:
As a result of its size and close ties to the Tea Party movement, the freshman cohort of House Republicans elected in 2010 had a significant impact on the chamber. Compared to other Republicans, the districts the freshmen represented did not tilt more toward the GOP or the Tea Party, nor was their roll call ideology during 2011–2012 statistically distinguishable from that of their more senior colleagues. For votes that were Tea Party priorities, however, the effects of freshman status were often large. And the most consequential impact of the class was over party strategy and agenda. The role played by the 2010 House freshmen has implications for how we should think about party influence in Congress.

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Backward Induction in the Wild: Evidence from the U.S. Senate

Jörg Spenkuch
Northwestern University Working Paper, September 2014

Abstract:
Backward induction is a cornerstone of modern game theory. Yet, laboratory experiments consistently show that subjects fail to properly backward induct. Whether these findings generalize to other, real-world settings remains an open question. This paper develops a simple model of sequential voting in the U.S. Senate that allows for a straightforward test of the null hypothesis of myopic play. Exploiting quasi-random variation in the alphabetical composition of the Senate and, therefore, the order in which Senators get to cast their votes, the evidence suggests that agents do rely on backward reasoning. At the same time, Senators' backward induction prowess appears to be quite limited. In particular, there is no evidence of Senators reasoning backwards on the first several hundred roll call votes in which they participate.

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Storable Votes and Judicial Nominations in the U.S. Senate

Alessandra Casella, Sébastien Turban & Gregory Wawro
Columbia University Working Paper, September 2014

Abstract:
We model a procedural reform aimed at restoring a proper role for the minority in the confirmation process of judicial nominations in the U.S. Senate. We propose that nominations to the same level court be collected in periodic lists and voted upon individually with Storable Votes, allowing each senator to allocate freely a fixed number of total votes. Although each nomination is decided by simple majority, storable votes make it possible for the minority to win occasionally, but only when the relative importance its members assign to a nomination is higher than the relative importance assigned by the majority. Numerical simulations, motivated by a game theoretic model, show that under plausible assumptions a minority of 45 senators would be able to block between 20 and 35 percent of nominees. For most parameter values, the possibility of minority victories increases aggregate welfare.

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The Seventeenth Amendment, Senate ideology and the growth of government

Danko Tarabar & Joshua Hall
Applied Economics Letters, forthcoming

Abstract:
The Seventeenth Amendment disturbed the existing electoral system in the United States by requiring direct elections for state Senators. Scholars have argued this made the Senate more populist and contributed to the growth of government in the US post-1913. We employ econometric tools to investigate whether the mean ideology of the Senate and its winning policies experienced a structural change around the time of the enactment. We find no compelling evidence of a structural break at that time but do find some evidence for a change in the mid-to-late 1890s.

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Foreign Junkets or Learning to Legislate? Generational Changes in the International Travel Patterns of House Members, 1977–2012

Alexander Alduncin et al.
The Forum, October 2014, Pages 563–577

Abstract:
In the aftermath of the polarization that has taken hold in Congress, some have pointed to the changing social connectedness of Congressional members as a possible cause, effect, or both. In this article, we take an initial look at this element of the story by analyzing one aspect of change over time in what are known as CODELs. We outline our data collection of these foreign trips taken by House members in two distinct periods and show how the use, users, and locations of these trips have changed. Among other changes, we find that more members are traveling than in the past, but that these trips are on average much shorter in duration. As a result, members of Congress are spending less time together during foreign travel, potentially reducing the opportunities for building relationships among them.

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Lame Ducks And The Media

Oliver Latham
Economic Journal, forthcoming

Abstract:
Do media organisations turn on unpopular governments and, if so, why? We model a demand-side and supply-side explanation and derive testable implications that can be used to differentiate between them. We take these predictions to the data by examining whether British newspapers give more coverage to investigations into government MPs when the government is behind in the polls. Instrumenting for poll leads with plausibly-exogenous macroeconomic variables we find that a one standard deviation increase in a government's poll lead leads to a 30 to 60% decline in coverage. We also find suggestive evidence that this effect is demand driven.

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The Effect of the Internet on Newspaper Readability

Abdallah Salami & Robert Seamans
NYU Working Paper, September 2014

Abstract:
How has the Internet affected newspaper content? We build a dataset that matches newspaper readability measures ["the level of education required in order to comprehend a written text"] to Internet penetration at the county-year level from 2000-2008. We document a positive relationship between Internet penetration and newspaper readability. This result appears remarkably robust. The relationship is evident in non-parametric graphs of the raw data, annual cross-sections and panel data models. Our cross section results rely on an instrumental variables approach that uses lightning strikes to instrument for Internet penetration. Thus, contrary to a commonly held belief that the Internet is "dumbing down" content, we find evidence supporting the opposite hypothesis: newspaper content appears to be getting more sophisticated in response to increased Internet penetration.

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Dynamic Representation in the American States, 1960–2012

Devin Caughey & Chris Warshaw
MIT Working Paper, October 2014

Abstract:
One of the most fundamental assumptions of democratic theory is that the views of citizens should influence government policy decisions. Previous studies have found a strong cross-sectional relationship between public opinion and state policy outputs. But the ultimate metric of responsiveness is the extent to which changes in popular preferences cause changes in public policies. In this paper, we reassess the quality of representation in the American states over the past half century using a large battery of historical evidence and new statistical techniques. We show that changes in the mass public’s policy views are associated with changes in state policy outputs. In addition, we evaluate the influence of institutions, such as direct democracy, term limits, and legislative professionalism. We find that term limits increase responsiveness, but legislative professionalism and direct democracy have no consistent impact on responsiveness. Our findings have large implications for both the study of representation and institutions in the American states.

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Cost-Benefit Analysis and Agency Independence

Michael Livermore
University of Chicago Law Review, Spring 2014, Pages 609-688

Abstract:
The presidential mandate that agency rule makings be subjected to cost-benefit analysis and regulatory review is one of the most controversial developments in administrative law over the past several decades. There is a prevailing view that the role of cost-benefit analysis in the executive branch is to help facilitate control of agencies by the Office of Information and Regulatory Affairs (OIRA). This Article challenges that view, arguing that cost-benefit analysis in fact helps preserve agency autonomy in the face of oversight. This effect stems from the constraints imposed on reviewers by the regularization of cost-benefit-analysis methodology and the fact that agencies have played a major role in shaping that methodology. The autonomy-preserving effect of cost-benefit analysis has been largely ignored in debates over the institution of regulatory review. Ultimately, cost-benefit analysis has ambiguous effects on agency independence, simultaneously preserving, informing, and constraining agency power.

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Popular Presidents Can Affect Congressional Attention, for a Little While

John Lovett, Shaun Bevan & Frank Baumgartner
Policy Studies Journal, forthcoming

Abstract:
Does the president have the ability to set the congressional agenda? Agenda setting is a prerequisite for influence, so this is an important element in understanding presidential–legislative relations. We focus on the State of the Union address and show that popular presidents can, indeed, cause Congress to shift attention to those topics most emphasized. The impact is tempered by divided government and time, however. No matter the state of divided government, however, popular presidents can direct congressional attention, at least for a little while. Unpopular presidents, by contrast, are irrelevant.

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Who is Empowering Who: Exploring the Causal Relationship Between Descriptive Representation and Black Empowerment

Shane Gleason & Christopher Stout
Journal of Black Studies, October 2014, Pages 635-659

Abstract:
Previous studies of descriptive representation have not been able to overcome the classic endogeniety problem. For example, do Black elected officials cause Blacks to be more empowered? Or are Black politicians only elected in contexts where Blacks are already empowered? We address this shortcoming by utilizing genetic matching and the 1996 National Black Election Study. Genetic matching creates a pseudo-experimental environment where Blacks in districts with Black elected officials are matched with similarly situated Blacks in districts without Black representation. This research design allows us to better assess the causality of descriptive representation and changes in political attitudes. This study provides strong evidence that higher levels of efficacy are a result of descriptive representation, rather than the cause of it. Thus, our study demonstrates Black office-holding at the congressional level empowers the Black electorate.

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Changing Deliberative Norms on News Organizations' Facebook Sites

Natalie (Talia) Jomini Stroud et al.
Journal of Computer-Mediated Communication, forthcoming

Abstract:
Comments posted to news sites do not always live up to the ideals of deliberative theorists. Drawing from theories about deliberation and group norms, this study investigates whether news organizations can affect comment section norms by engaging directly with commenters. We conducted a field study with a local television station in a top-50 Designated Market Area. For 70 political posts made on different days, we randomized whether an unidentified staff member from the station, a recognizable political reporter, or no one engaged with commenters. We assessed if these changes affected whether the comments (n = 2,403) were civil, were relevant, contained genuine questions, and provided evidence. The findings indicate that a news organization can affect the deliberative behavior of commenters.

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Fail-Safe Federalism

Sanford Gordon & Dimitri Landa
NYU Working Paper, September 2014

Abstract:
We explore the consequences for social welfare and the national political conflict of several key institutional features of federalism in the United States: supermajoritarian national institutions and permeable boundaries in the provision of by national and state governments, where the actions by the former can crowd out the latter. States with high demand for public good provision are better positioned to adjust state-level policies to accommodate local demand in the presence of low national provision than corresponding states with low demand in the presence of high national provision. This asymmetry implies that the level of federal provision preferred by moderate-demanders may be socially inefficient, and can exacerbate political polarization when national provision is gridlocked at a high level. Symmetric cross-state negative externalities can reduce conflict at the national level by generating consensus for national action; whereas positive externalities, or asymmetric negative externalities, can increase it. We also explore how, in a dynamic setting, exogenous shocks to demand can create inefficiencies while expanding the "gridlock interval" of national policies; and the limits of Coaseian bargaining over national public goods.

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The impact of government form on e-participation: A study of New Jersey municipalities

Yueping Zheng, Hindy Lauer Schachter & Marc Holzer
Government Information Quarterly, October 2014, Pages 653–659

Abstract:
During the past two decades, governments have started to use information and communication technologies (ICT) to offer a new forum for citizen involvement known as e-participation. The rapid development of e-participation has been attracting attention from many researchers. While a growing body of research has explored various factors impacting e-participation, few studies have examined the influence of government structures on the e-participation opportunities that jurisdictions offer users. To fill the research gap and begin investigating this relationship, we use data from 97 New Jersey municipalities to analyze the impact on e-participation of three local government structures: mayor-council, council-manager, and township. The results show that municipalities with the mayor-council form of government are more likely to have higher levels of e-participation offerings. We argue that the role of an elected executive in this structure facilitates the will to provide greater opportunities for citizens to participate online.

By KEVIN LEWIS | 09:00:00 AM

Thursday, November 13, 2014

Seizing the equal opportunity

Digit ratio (2D:4D) and gender inequalities across nations

John Manning, Bernhard Fink & Robert Trivers
Evolutionary Psychology, Fall 2014, Pages 757-768

Abstract:
Gender inequality varies across nations, where such inequality is defined as the disproportionate representation of one sex over the other in desirable social, economic, and biological roles (typically male over female). Thus in Norway, 40% of parliamentarians are women, in the USA 17%, and in Saudi Arabia 0%. Some of this variation is associated with economic prosperity but there is evidence that this cause and effect can go in either direction. Here we show that within a population the average ratio of index (2D) to ring (4D) finger lengths (2D:4D) — a proxy measure of the relative degree to which offspring is exposed in utero to testosterone versus estrogen — is correlated with measures of gender inequality between nations. We compared male and female 2D:4D ratios to female parliamentary representation, labor force participation, female education level, maternal mortality rates, and juvenile pregnancy rates per nation in a sample of 29 countries. We found those nations who showed higher than expected female fetal exposure to testosterone (low 2D:4D) and lower than expected male exposure to fetal testosterone (high 2D:4D) had higher rates of female parliamentary representation, and higher female labor force participation. In short, the more similar the two sexes were in 2D:4D, the more equal were the two sexes in parliamentary and labor force participation. The other variables were not as strongly correlated. We suggest that higher than expected fetal testosterone in females and lower fetal testosterone in males may lead to high female representation in the national labor force and in parliament.

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Of Age, Sex, and Money: Insights from Corporate Officer Compensation on the Wage Inequality Between Genders

David Newton & Mikhail Simutin
Management Science, forthcoming

Abstract:
This paper shows that the gender and age of the wage setter are crucial determinants of the disparity in wages between sexes. We document our findings using a data set on compensation of corporate officers that is uniquely suited for this analysis because officer wages are set by chief executive officers (CEOs). We show that CEOs pay officers of the opposite gender less than officers of their own gender, even when controlling for job characteristics. Older and male CEOs exhibit the greatest propensity to differentiate on the basis of sex. Female officers receive smaller raises if the firm is headed by a man. Our results suggest that CEO gender and age are economically more important determinants of officer compensation than are firm stock performance, stock volatility, or return on assets.

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Rethinking the Two-Body Problem: The Segregation of Women Into Geographically Dispersed Occupations

Alan Benson
Demography, October 2014, Pages 1619-1639

Abstract:
Empirical research on the family cites the tendency for couples to relocate for husbands’ careers as evidence against the gender neutrality of household economic decisions. For these studies, occupational segregation is a concern because occupations are not random by sex and mobility is not random by occupation. I find that the tendency for households to relocate for husbands’ careers is better explained by the segregation of women into geographically dispersed occupations rather than by the direct prioritization of men’s careers. Among never-married workers, women relocate for work less often than men, and the gender effect disappears after occupational segregation is accounted for. Although most two-earner families feature husbands in geographically clustered jobs involving frequent relocation for work, families are no less likely to relocate for work when it belongs to the wife. I conclude that future research in household mobility should treat occupational segregation occurring prior to marriage rather than gender bias within married couples as the primary explanation for the prioritization of husbands’ careers in household mobility decisions.

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Life Paths and Accomplishments of Mathematically Precocious Males and Females Four Decades Later

David Lubinski, Camilla Benbow & Harrison Kell
Psychological Science, forthcoming

Abstract:
Two cohorts of intellectually talented 13-year-olds were identified in the 1970s (1972–1974 and 1976–1978) as being in the top 1% of mathematical reasoning ability (1,037 males, 613 females). About four decades later, data on their careers, accomplishments, psychological well-being, families, and life preferences and priorities were collected. Their accomplishments far exceeded base-rate expectations: Across the two cohorts, 4.1% had earned tenure at a major research university, 2.3% were top executives at “name brand” or Fortune 500 companies, and 2.4% were attorneys at major firms or organizations; participants had published 85 books and 7,572 refereed articles, secured 681 patents, and amassed $358 million in grants. For both males and females, mathematical precocity early in life predicts later creative contributions and leadership in critical occupational roles. On average, males had incomes much greater than their spouses’, whereas females had incomes slightly lower than their spouses’. Salient sex differences that paralleled the differential career outcomes of the male and female participants were found in lifestyle preferences and priorities and in time allocation.

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Phenotyping and Adolescence-to-Adulthood Transitions Among Latinos

Igor Ryabov & Franklin Goza
Race and Social Problems, December 2014, Pages 342-355

Abstract:
Phenotyping the system of prejudice and discrimination, which gives preference to European physical characteristics and devalues those of Amerindians, Africans, and Asians, affects the lives of many Latinos in the United States. This study examines the impact of phenotyping on academic and employment outcomes among Latino adolescents/young adults. Outcomes examined include the odds of graduating from high school, finding full-time employment after completing high school, and attending college. Socioeconomic status (measured at individual and school levels), family structure, quality of parent–child relationships, immigrant generational status, and other measures are included as controls. Multilevel modeling and logistic regression are utilized as analytical tools. Results indicate that, among Latinos, light skin and blue eyes are associated with better academic outcomes than having dark skin and brown eyes, while those with darker skin enter the labor market earlier than their light-skinned co-ethnics.

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Social externalities, overlap and the poverty trap

Young-Chul Kim & Glenn Loury
Journal of Economic Inequality, December 2014, Pages 535-554

Abstract:
Previous studies find that some social groups are stuck in poverty traps because of network effects. However, these studies do not carefully analyze how these groups overcome low human capital investment activities. Unlike previous studies, the model in this paper includes network externalities in both the human capital investment stage and the subsequent career stages. This implies that not only the current network quality, but also the expectations about future network quality affect the current investment decision. Consequently, the coordinated expectation among the group members can play a crucial role in the determination of the final state. We define “overlap” for some initial skill ranges, whereby the economic performance of a group can be improved simply by increasing expectations of a brighter future. We also define “poverty trap” for some ranges, wherein a disadvantaged group is constrained by its history, and we explore the egalitarian policies to mobilize the group out of the trap.

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Does Class Size Affect the Gender Gap? A Natural Experiment in Law

Daniel Ho & Mark Kelman
Journal of Legal Studies, June 2014, Pages 291-321

Abstract:
We study a unique natural experiment in which Stanford Law School randomly assigned first-year students to small or large sections of mandatory courses from 2001 to 2011. We provide evidence that assignment to small sections closed a slight (but substantively and highly statistically significant) gender gap existing in large sections from 2001 to 2008; that reforms in 2008 that modified the grading system and instituted small graded writing and simulation-intensive courses eliminated the gap entirely; and that women, if anything, outperformed men in small simulation-based courses. Our evidence suggests that pedagogical policy — particularly small class sizes — can reduce, and even reverse, achievement gaps in postgraduate education.

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Creativity from Constraint? How Political Correctness Influences Creativity in Mixed-Sex Work Groups

Jack Goncalo et al.
Administrative Science Quarterly, forthcoming

Abstract:
Most group creativity research is premised on the assumption that creativity is unleashed by removing normative constraints. As work organizations become increasingly diverse in terms of gender, however, this assumption needs to be reconsidered since mixed-sex interactions carry a high risk of offense. Departing from the assumption that normative constraints necessarily stifle creativity, we develop a theoretical perspective in which creativity in mixed-sex groups is enhanced by imposing a norm to be politically correct (PC) — a norm that sets clear expectations for how men and women should interact with one another. We present evidence from two group experiments showing that the PC norm promotes rather than suppresses members’ free expression of ideas by reducing the uncertainty they experience in mixed-sex work groups. These results highlight a paradoxical consequence of the PC norm: A term that has been used to undermine expectations to censor offensive language as a threat to free speech actually provides a normative foundation upon which demographically heterogeneous work groups can freely exchange creative ideas. We discuss the implications of our findings for managing creativity in diverse groups and under conditions of uncertainty, and the counterintuitive role that normative constraints play in that process.

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Women and Power: Unpopular, Unwilling, or Held Back?

Pablo Casas-Arce & Albert Saiz
Journal of Political Economy, forthcoming

Abstract:
We use Spain’s Equality Law, which mandates a 40 percent female quota on electoral lists, to test for the existence of agency problems between party leaders and their constituents regarding women’s political representation. The law was enacted by the Social-Democratic Party after the surprise parliamentary electoral results following the Madrid terrorist bombings in 2004. It was therefore completely unexpected by local political organizations. The quota only applied to towns with populations above 5,000 and forced heterogeneous growth in the number of female candidates by party. Using pre- and post-quota data by party and municipality, we implement a triple-difference design and find that female quotas resulted in slightly better electoral results for the parties that started out with fewer women, and hence were most affected by the quota. Our evidence suggests the existence of agency problems that hinder female representation in political institutions, because party leaders were not maximizing electoral results prior to the introduction of the quota.

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Cytokine responses and math performance: The role of stereotype threat and anxiety reappraisals

Neha John-Henderson, Michelle Rheinschmidt & Rodolfo Mendoza-Denton
Journal of Experimental Social Psychology, January 2015, Pages 203–206

Abstract:
This research independently manipulated two potential attenuators of stereotype threat – reappraisal of anxiety and test framing – to explore their independent and combined effects. Female participants took a difficult math exam that was described as gender-biased or gender-fair and were told that anxious arousal could positively impact performance or were given no information regarding arousal. Levels of the cytokine Interleukin-6 (IL-6), an immune marker of inflammation, were measured in oral mucosal transudate (OMT) both before and after the exam. Our findings indicate that directing reappraisal of physiological arousal attenuated increases in IL-6 across test framing conditions, and was especially effective under stereotype threat (i.e., gender-biased test condition). Reappraisal also mapped onto better test performance in the threat condition. Together, these findings provide insight into the unique and interactive effects of two situational interventions meant to reduce stereotype threat, indexed here by both physiological and performance-based correlates of threat.

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Executive Gender Pay Gaps: The Roles of Board Diversity and Female Risk Aversion

Mary Ellen Carter, Francesca Franco & Mireia Gine
Boston College Working Paper, October 2014

Abstract:
Prior research finds mixed evidence about whether a pay gap exists between female and male executives. We examine trends in gender pay gaps and explore gender bias in the boardroom and female executives’ appetite for compensation risk as possible explanations for these gaps. Using ExecuComp and RiskMetrics data from 1996-2010, we find evidence that female executives receive significantly lower compensation levels than males but that greater female representation on boards mitigates these gaps. We also find evidence that females accept pay packages with lower compensation incentives. Unlike the gaps in compensation levels, the incentives gaps do not change over time nor does gender diversity on the board reduce these gaps. These findings are consistent with gender-specific risk aversion, as captured by ex-post equity incentives, being an innate characteristic that is not mitigated by board diversity.

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Affirmative Action and Stereotypes in Higher Education Admissions

Prasad Krishnamurthy & Aaron Edlin
NBER Working Paper, October 2014

Abstract:
We analyze how admission policies affect stereotypes against students from disadvantaged groups. Many critics of affirmative action argue that lower admission standards cause such stereotypes and suggest group-blind admissions as a remedy. We show that when stereotypes result from social inequality, they can persist under group-blind admissions. In such cases, eliminating stereotypes perversely requires a higher admission standard for disadvantaged students. If a school seeks both to treat students equally and limit stereotypes, the optimal admission policy would still impose a higher standard on disadvantaged students. A third goal, such as equal representation, is required to justify group-blind admissions. Even when there is such a third goal, group-blind admissions are optimal only when the conflicting goals of equal representation and limiting stereotypes exactly balance. This is an implausible justification for group-blind admission because it implies that some schools desire higher standards for disadvantaged students. Schools that do not desire such higher standards will typically find some amount of affirmative action to be optimal.

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Unintended Effects of Anonymous Resumes

Luc Behaghel, Bruno Crepon & Thomas Le Barbanchon
American Economic Journal: Applied Economics, forthcoming

Abstract:
We evaluate an experimental program in which the French public employment service anonymized resumes for firms that were hiring. Firms were free to participate or not; participating firms were then randomly assigned to receive either anonymous resumes or name-bearing ones. We find that participating firms become less likely to interview and hire minority candidates when receiving anonymous resumes. We show how these unexpected results can be explained by the self-selection of firms into the program and by the fact that anonymization prevents the attenuation of negative signals when the candidate belongs to a minority.

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Gender Differences in the Willingness to Compete Emerge Early in Life and Persist

Matthias Sutter & Daniela Glätzle-Rützler
Management Science, forthcoming

Abstract:
Gender differences in the willingness to compete have been identified as one important factor in explaining gender differences in labor markets and within organizations. We present three experiments with a total of 1,570 subjects, ages three to 18 years, to investigate the origins of this gender gap. In a between-subjects design we find that boys are more likely to compete than girls as early as kindergarten and that this gap prevails throughout adolescence. Re-examining the behavior of 316 subjects in a within-subjects design two years later, we show that these gender differences also largely persist over a longer time period and can thus be considered stable. Controlling for subjects' abilities in the different tasks, their risk attitudes, and expected performance, the gender gap in the willingness to compete is estimated in the range of 10–20 percentage points. We discuss the implications of our findings for policy interventions and organizational management.

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Women’s Representation in Science Predicts National Gender-Science Stereotypes: Evidence From 66 Nations

David Miller, Alice Eagly & Marcia Linn
Journal of Educational Psychology, forthcoming

Abstract:
In the past 40 years, the proportion of women in science courses and careers has dramatically increased in some nations but not in others. Our research investigated how national differences in women’s science participation related to gender-science stereotypes that associate science with men more than women. Data from ∼350,000 participants in 66 nations indicated that higher female enrollment in tertiary science education (community college or above) related to weaker explicit and implicit national gender-science stereotypes. Higher female employment in the researcher workforce related to weaker explicit, but not implicit, gender-science stereotypes. These relationships remained after controlling for many theoretically relevant covariates. Even nations with high overall gender equity (e.g., the Netherlands) had strong gender-science stereotypes if men dominated science fields specifically. In addition, the relationship between women’s educational enrollment in science and implicit gender-science stereotypes was stronger for college-educated participants than participants without college education. Implications for instructional practices and educational policies are discussed.

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The “State” of Equal Employment Opportunity Law and Managerial Gender Diversity

Julie Kmec & Sheryl Skaggs
Social Problems, November 2014, Pages 530-558

Abstract:
Women’s underrepresentation in management is a persistent social problem. We take a new approach to understanding the lack of managerial gender diversity by investigating how U.S. state equal employment opportunity laws are related to women’s presence in upper and lower management. We draw on data from 2010 EEO-1 reports documenting managerial sex composition in U.S. work establishments and a state employment law database to answer our research questions. State mandates are found to be differentially associated with upper- versus lower-level managerial gender diversity. Establishments in states with an equal pay law, or that once ratified the ERA, employ more women in upper management than those in states without such a law or in nonratifying states, but this holds only in establishments in industries that typically employ women. In contrast, establishments in states that require anti-discrimination workplace postings employ fewer women in upper-management than those in states without such a requirement. State equal pay laws, especially those adopted before federal equal pay legislation, family responsibility discrimination protections, and past ERA ratification are positively associated with women’s lower-level managerial presence. Conversely, state expanded family and medical leave coverage, prohibited sex discrimination, and specific posting rules are negatively associated with women’s presence in lower management. Results hold net of establishment, state, firm, and industry factors. We discuss the meaning behind differences across managerial level and the role of state regulation in moving toward greater managerial gender equity.

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Gender Pay Gap and Employment Sector: Sources of Earnings Disparities in the United States, 1970–2010

Hadas Mandel & Moshe Semyonov
Demography, October 2014, Pages 1597-1618

Abstract:
Using data from the IPUMS-USA, the present research focuses on trends in the gender earnings gap in the United States between 1970 and 2010. The major goal of this article is to understand the sources of the convergence in men’s and women’s earnings in the public and private sectors as well as the stagnation of this trend in the new millennium. For this purpose, we delineate temporal changes in the role played by major sources of the gap. Several components are identified: the portion of the gap attributed to gender differences in human-capital resources; labor supply; sociodemographic attributes; occupational segregation; and the unexplained portion of the gap. The findings reveal a substantial reduction in the gross gender earnings gap in both sectors of the economy. Most of the decline is attributed to the reduction in the unexplained portion of the gap, implying a significant decline in economic discrimination against women. In contrast to discrimination, the role played by human capital and personal attributes in explaining the gender pay gap is relatively small in both sectors. Differences between the two sectors are not only in the size and pace of the reduction but also in the significance of the two major sources of the gap. Working hours have become the most important factor with respect to gender pay inequality in both sectors, although much more dominantly in the private sector. The declining gender segregation may explain the decreased impact of occupations on the gender pay gap in the private sector. In the public sector, by contrast, gender segregation still accounts for a substantial portion of the gap. The findings are discussed in light of the theoretical literature on sources of gender economic inequality and in light of the recent stagnation of the trend.

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Bias in the Legal Profession: Self-Assessed versus Statistical Measures of Discrimination

Heather Antecol, Deborah Cobb-Clark & Eric Helland
Journal of Legal Studies, June 2014, Pages 323-357

Abstract:
Legal cases are won or lost on the basis of statistical discrimination measures, but workers’ perceptions of discriminatory behavior are important for understanding labor supply decisions. Workers who believe that they have been discriminated against are more likely to leave their employers, and workers’ perceptions of discrimination likely drive formal complaints to the Equal Employment Opportunity Commission. Yet the relationship between statistical and self-assessed measures of discrimination is far from obvious. We expand on the previous literature by using data from the After the J.D. study to compare standard Blinder-Oaxaca measures of earnings discrimination to self-reported measures of client discrimination, other work-related discrimination, and harassment. Our results indicate that conventional measures of earnings discrimination are not closely linked to the racial and gender bias that new lawyers believe they have experienced on the job. Moreover, statistical earnings discrimination does not explain the disparity in self-assessed bias across gender and racial groups.

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Inequality in Skill Development on College Campuses

Josipa Roksa
Research in Social Stratification and Mobility, forthcoming

Abstract:
While patterns of inequality in access and attainment in higher education are well documented, sociologists have left largely unexplored the question of disparities in skill development during college. Following a cohort of students across 23 four-year institutions from entry into college through their senior year, we examine inequalities in development of general collegiate skills. Findings indicate that despite unequal starting points, students from less educated families gain skills at the same rate as those from more educated families. African-American students, in contrast, enter college with lower levels of general collegiate skills than their white peers and gain less over time. A substantial portion, but not all, of the African-American/white gap in general collegiate skills is explained by academic preparation and selectivity of the institutions attended. Notably, African-American and white students experience similar benefits from being academically prepared and attending more selective institutions. These findings provide valuable insights for research and policy concerned with inequality in higher education.

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Racial Wage Disparity in US Cities

Craig Kerr & Randall Walsh
Race and Social Problems, December 2014, Pages 305-327

Abstract:
This paper estimates the conditional wage gaps between black and white full-time male workers at the metropolitan statistical area (MSA) level using data from the 1990 and 2000 U.S. Censuses. The magnitudes of the wage gaps are found to vary substantially across location. As predicted in Becker's (The economics of discrimination, University of Chicago Press, Chicago, 1957) seminal theory on wage discrimination, we find that the wage gaps are greater in MSAs that have a larger proportion of black workers in the labor force. This is the most consistent result across all specifications and years. We also find the gaps to be greater where there is an overrepresented black population in jail and a more segregated population if the MSA is in the South. The proportion of workers covered by a collective bargaining agreement in the private sector is associated with greater relative black earnings. We find that although the relationship between race and wages has diminished over time as famously suggested in Wilson (The declining significance of race: Blacks and changing American institutions, University of Chicago Press, Chicago, 1978), the significance of race remains.

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Teacher (Mis)Perceptions of Preschoolers’ Academic Skills: Predictors and Associations With Longitudinal Outcomes

Courtney Baker et al.
Journal of Educational Psychology, forthcoming

Abstract:
Preschool teachers have important impacts on children’s academic outcomes, and teachers’ misperceptions of children’s academic skills could have negative consequences, particularly for low-income preschoolers. This study utilized data gathered from 123 preschool teachers and their 760 preschoolers from 70 low-income, racially diverse centers. Hierarchical linear modeling was utilized to account for the nested data structure. Even after controlling for children’s actual academic skill, older children, children with stronger social skills, and children with fewer inattentive symptoms were perceived to have stronger academic abilities. Contrary to hypotheses, preschoolers with more behavior problems were perceived by teachers to have significantly better pre-academic abilities than they actually had. Teachers’ perceptions were not associated with child gender or child race/ethnicity. Although considerable variability was due to teacher-level characteristics, child characteristics explained 42% of the variability in teachers’ perceptions about children’s language and preliteracy ability and 41% of the variability in teachers’ perceptions about math ability. Notably, these perceptions appear to have important impacts over time. Controlling for child baseline academic skill and child characteristics, teacher perceptions early in the preschool year were significantly associated with child academic outcomes during the spring both for language and preliteracy and for math. Study implications with regard to the achievement gap are discussed.

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Sex Hormones and Competitive Bidding

Burkhard Schipper
Management Science, forthcoming

Abstract:
We correlate competitive bidding and profits in symmetric independent private value first-price auctions with salivary testosterone, estradiol, progesterone, and cortisol in more than 200 subjects. Bids are significantly positively correlated and profits are significantly negatively correlated with basal salivary progesterone, but only for females who do not use hormonal contraceptives. Surprisingly, we have null findings for basal testosterone, estradiol, and cortisol for both males and females. We show that our finding for progesterone is not mediated by risk aversion or bidding mistakes. No hormone responds to total profits in the auctions except for a small positive response of the stress hormone cortisol in males.

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A step too far? Leader racism inhibits transgression credit

Dominic Abrams et al.
European Journal of Social Psychology, forthcoming

Abstract:
Prior research established that when in-group leaders commit serious transgressions, such as breaking enforceable rules or engaging in bribery, people treat them leniently compared with similarly transgressive regular group members or out-group leaders (‘transgression credit’). The present studies test a boundary condition of this phenomenon, specifically the hypothesis that transgression credit will be lost if a leader's action implies racist motivation. In study 1, in a corporate scenario, a transgressive in-group leader did or did not express racism. In study 2, in a sports scenario, an in-group or out-group leader or member transgressed rules with or without a racist connotation. Both studies showed that in-group transgressive leaders lost their transgression credit if their transgression included a racial connotation. Wider implications for constraining leaders' transgressions are discussed.

By KEVIN LEWIS | 09:00:00 AM

Wednesday, November 12, 2014

Modernity

Banks and Development: Jewish Communities in the Italian Renaissance and Current Economic Performance

Luigi Pascali
Review of Economics and Statistics, forthcoming

Abstract:
Are differences in local banking development long lasting? Do they affect economic performance? I answer these questions by relying on an historical development that occurred in Italian cities during the Renaissance. A change in Catholic doctrine led to the development of modern banks in those cities hosting Jewish communities. Using Jewish demography in 1500 as an instrument, I provide evidence of (1) extraordinary persistence in the level of banking development across Italian cities (2) substantial effects of local banks on per-capita income. Additional firm-level analyses suggest that banks exert large effects on aggregate productivity by reallocating resources toward more efficient firms.

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Climate and the slave trade

James Fenske & Namrata Kala
Journal of Development Economics, January 2015, Pages 19–32

Abstract:
African societies exported more slaves in colder years. Lower temperatures reduced mortality and raised agricultural yields, lowering slave supply costs. Our results help explain African participation in the slave trade, which predicts adverse outcomes today. We use an annual panel of African temperatures and port-level slave exports to show that exports declined when local temperatures were warmer than normal. This result is strongest where African ecosystems are least resilient to climate change. Cold weather shocks at the peak of the slave trade predict lower economic activity today. We support our interpretation using the histories of Whydah, Benguela, and Mozambique.

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The role of lactase persistence in precolonial development

Justin Cook
Journal of Economic Growth, December 2014, Pages 369-406

Abstract:
This paper argues that a genetic adaptation to the Neolithic Revolution led to differential levels of development in the precolonial era. The ability to digest milk, or to be lactase persistent, is conferred by a gene variant that is unequally distributed across the Old World. Milk provided qualitative and quantitative advantages to the diet that led to differences in the carrying capacities of respective countries. It is shown through a number of specifications that country-level variation in the frequency of lactase persistence is positively and significantly related to population density in 1,500 CE; specifically, a one standard deviation increase in the frequency of lactase persistent individuals (roughly 24 percentage points) is associated with roughly a 40 % increase in precolonial population density. This relationship is robust to a large number of sample specifications and potentially omitted variables.

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Longevity and the Rise of the West: Lifespans of the European Elite, 800-1800

Neil Cummins
London School of Economics Working Paper, September 2014

Abstract:
I analyze the age at death of 121,524 European nobles from 800 to 1800. Longevity began increasing long before 1800 and the Industrial Revolution, with marked increases around 1400 and again around 1650. Declines in violence contributed to some of this increase, but the majority must reflect other changes in individual behavior. The areas of North-West Europe which later witnessed the Industrial Revolution achieved greater longevity than the rest of Europe even by 1000 AD. The data suggest that the 'Rise of the West' originates before the Black Death.

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Why did the Netherlands develop so early? The legacy of the Brethren of the Common Life

Semih Akçomak, Dinand Webbink & Bas ter Weel
Economic Journal, forthcoming

Abstract:
This research establishes a link between the Brethren of the Common Life (BCL), a religious community founded by Geert Groote in Deventer in the late fourteenth century, and the early economic development of the Netherlands. The BCL stimulated human capital accumulation. The historical analyses show that the BCL contributed to the high rates of literacy, to the high level of book production and to city growth in the Netherlands. These findings are supported by a set of OLS regressions and further corroborated by 2SLS estimates that use distance from Deventer as an instrument for the presence of the BCL.

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Indigenous Origins of Colonial Institutions

Luz Marina Arias & Desha Girod
Quarterly Journal of Political Science, Summer 2014, Pages 371-406

Abstract:
What are the origins of colonial forced labor? While extensive research investigates the effects of colonial forced labor on contemporary political and economic development, little is known about the origins of colonial forced labor. Based on historical accounts, we offer a simple formal model that emphasizes constraints facing profit-maximizing colonists. The model provides a novel explanation for colonial forced labor by demonstrating that local and foreign forced labor depended on different factors. Colonists used local, indigenous forced labor when they encountered an indigenous political administration that was already coercing labor. However, colonists used foreign forced labor, like African slavery in the Americas, when indigenous labor was not already organized and natural resources were present. Original data from 439 subnational territories covering the Americas support the hypotheses across a variety of model specifications. This study implies that differences in political and economic development today may predate European colonialism.

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Asia’s little divergence: State capacity in China and Japan before 1850

Tuan-Hwee Sng & Chiaki Moriguchi
Journal of Economic Growth, December 2014, Pages 439-470

Abstract:
This paper explores the role of state capacity in the comparative economic development of China and Japan. Before 1850, both nations were ruled by stable dictators who relied on bureaucrats to govern their domains. We hypothesize that agency problems increase with the geographical size of a domain. In a large domain, the ruler’s inability to closely monitor bureaucrats creates opportunities for the bureaucrats to exploit taxpayers. To prevent overexploitation, the ruler has to keep taxes low and government small. Our dynamic model shows that while economic expansion improves the ruler’s finances in a small domain, it could lead to lower tax revenues in a large domain as it exacerbates bureaucratic expropriation. To check these implications, we assemble comparable quantitative data from primary and secondary sources. We find that the state taxed less and provided fewer local public goods per capita in China than in Japan. Furthermore, while the Tokugawa shogunate’s tax revenue grew in tandem with demographic trends, Qing China underwent fiscal contraction after 1750 despite demographic expansion. We conjecture that a greater state capacity might have prepared Japan better for the transition from stagnation to growth.

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Asiaphoria Meets Regression to the Mean

Lant Pritchett & Lawrence Summers
NBER Working Paper, October 2014

Abstract:
Consensus forecasts for the global economy over the medium and long term predict the world’s economic gravity will substantially shift towards Asia and especially towards the Asian Giants, China and India. While such forecasts may pan out, there are substantial reasons that China and India may grow much less rapidly than is currently anticipated. Most importantly, history teaches that abnormally rapid growth is rarely persistent, even though economic forecasts invariably extrapolate recent growth. Indeed, regression to the mean is the empirically most salient feature of economic growth. It is far more robust in the data than, say, the much-discussed middle-income trap. Furthermore, statistical analysis of growth reveals that in developing countries, episodes of rapid growth are frequently punctuated by discontinuous drop-offs in growth. Such discontinuities account for a large fraction of the variation in growth rates. We suggest that salient characteristics of China — high levels of state control and corruption along with high measures of authoritarian rule — make a discontinuous decline in growth even more likely than general experience would suggest. China’s growth record in the past 35 years has been remarkable, and nothing in our analysis suggests that a sharp slowdown is inevitable. Still, our analysis suggests that forecasters and planners looking at China would do well to contemplate a much wider range of outcomes than are typically considered.

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The Politics of Capital Flight in the Global Economic Crisis

Thomas Pepinsky
Economics & Politics, November 2014, Pages 431–456

Abstract:
This paper studies the effects of economic governance and political institutions on portfolio investment during the Global Economic Crisis of 2008–2009. Leveraging a unique cross-national dataset on portfolio flows immediately following the collapse of Lehman Brothers in September 2008, it shows that countries with “better institutions” – those with more (or less) democratic, more (or less) constrained or more accountable political systems – were no less vulnerable to portfolio outflows than countries with “worse institutions.” However, countries with better governance prior to the crisis – those with better regulatory apparatuses, rule of law, property rights, and those considered less politically risky – experienced lower net portfolio capital outflows after Lehman. Governance is in fact the strongest predictor of portfolio capital flows during the global flight to liquidity, while political institutions perform poorly. The findings shed light onto the political factors that mediated how the collapse of Lehman affected national financial markets the world over, and have implications for literatures on the political economy of foreign investment, as well as for broader topics of institutions, governance, and economic performance.

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Labor Market Effects of Social Programs: Evidence from India's Employment Guarantee

Clément Imbert & John Papp
American Economic Journal: Applied Economics, forthcoming

Abstract:
We estimate the effect of a large rural workfare program in India on private employment and wages by comparing trends in districts that received the program earlier relative to those that received it later. Our results suggest that public sector hiring crowded out private sector work and increased private sector wages. We compute the implied welfare gains of the program by consumption quintile. Our calculations show that the welfare gains to the poor from the equilibrium increase in private sector wages are large in absolute terms and large relative to the gains received solely by program participants.

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Urban working-class food consumption and nutrition in Britain in 1904

Ian Gazeley & Andrew Newell
Economic History Review, forthcoming

Abstract:
This article re-examines the food consumption of working-class households in 1904 and compares the nutritional content of these diets with modern measures of adequacy. We find a fairly steep gradient of nutritional attainment relative to economic class, with high levels of vitamin and mineral deficiency among the very poorest working households. However, we conclude that the average unskilled-headed working household was better fed and nourished than previously thought. When proper allowance is made for the likely consumption of alcohol, household energy intakes were significantly higher still. We investigate the likely impact of contemporary cultural food distribution norms and conclude on the basis of the very limited evidence available that women may have received, on average, about 80 per cent of a man's share of the available food. We adjust energy requirements for likely higher physical activity rates and smaller stature and find that except among the poorest households, early twentieth-century diets were sufficient to provide energy for reasonably physically demanding work. These results are consistent with recent attempts to relate the available anthropometric evidence to long-run trends in food consumption. We also find that the lower tail of the household nutrition distribution drops away very rapidly, so that few households are estimated to have suffered severe food shortages.

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Gross Domestic Product, Science Interest, and Science Achievement: A Person × Nation Interaction

Elliot Tucker-Drob, Amanda Cheung & Daniel Briley
Psychological Science, November 2014, Pages 2047-2057

Abstract:
Maximizing science achievement is a critical target of educational policy and has important implications for national and international economic and technological competitiveness. Previous research has identified both science interest and socioeconomic status (SES) as robust predictors of science achievement, but little research has examined their joint effects. In a data set drawn from approximately 400,000 high school students from 57 countries, we documented large Science Interest × SES and Science Interest × Per Capita Gross Domestic Product (GDP) interactions in the prediction of science achievement. Student interest in science is a substantially stronger predictor of science achievement in higher socioeconomic contexts and in higher-GDP nations. Our results are consistent with the hypothesis that in higher-opportunity contexts, motivational factors play larger roles in learning and achievement. They add to the growing body of evidence indicating that substantial cross-national differences in psychological effect sizes are not simply a logical possibility but, in many cases, an empirical reality.

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A Disruption Mechanism for Bribes

Robert Cooter & Nuno Garoupa
Review of Law & Economics, September 2014, Pages 241–263

Abstract:
Crimes such as bribery require the cooperation of two or more criminals for mutual gain. Instead of deterring these crimes, the state should disrupt them by creating distrust among criminals so they cannot cooperate. In a cooperative crime with two criminals, the state should offer amnesty and a bounty to the criminal who first secures punishment of the other criminal. When the bounty exceeds the bribe, a bribed official gains less from keeping the bribe than from confessing and receiving the bounty. Consequently the person who pays the bribe cannot trust the person who takes it. The game’s unique equilibrium is non-cooperative and bribes disappear. We explore legal implications and practical challenges to this disruption mechanism.

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Seven Million Lives Saved: Under-5 Mortality Since the Launch of the Millennium Development Goals

John McArthur
Brookings Institution Working Paper, September 2014

Abstract:
To what extent have developing countries’ patterns in reducing under-5 mortality rates (U5MR) changed since the advent of the Millennium Development Goals (MDGs)? This paper investigates that question across multiple time horizons, with attention to the fact that countries’ progress had already begun to accelerate during the late 1990s compared to the early 1990s. The paper gives special consideration to countries the MDGs were primarily intended to support, including initially “Off Track” and low-income countries. Although only 21 percent of originally Off Track countries and 34 percent of originally low-income countries are now on a path to achieve the MDG target by 2015, at least 80 percent of each group has seen accelerated progress since 2001. Approximately 90 percent of countries in sub-Saharan Africa have accelerated. Most importantly, regression analysis indicates that cross-country trends since 2000 differ considerably from previous decades. The years since the launch of the MDGs include the first extended period in at least four decades during which rates of U5MR decline have not been negatively correlated with U5MR levels. Compared to a conservative counterfactual trend from 1996 to 2001, at least 7.5 million additional children’s lives are estimated to have been saved between 2002 and 2013. The results suggest that much of the greatest structural progress has been achieved by countries not likely to achieve the formal MDG targets, even if their progress might be linked to the pursuit of those targets. Implications are considered for setting U5MR targets through to 2030.

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Dealing with drainage: State regulation of drainage projects in the Dutch Republic, France, and England during the sixteenth and seventeenth centuries

Piet van Cruyningen
Economic History Review, forthcoming

Abstract:
In the early modern period the viability of large-scale drainage projects implemented by courtiers, officials, or merchants could be endangered by litigation or violent conflicts with landlords, commoners, cities, or water boards whose interests were harmed by the implementation of such projects. A comparison between the Dutch Republic, England, and France shows that the Dutch had developed institutions to deal with this efficiently. State patents for drainage granted compensation to all parties involved and precluded long drawn-out lawsuits. When large-scale drainage began in England and France from c. 1600 onwards, these states had no experience with drainage regulation. They had to find their way by trial and error. In England this led to lawsuits and riots by commoners that ruined several drainage schemes. The decentralized nature of the Dutch state turned out to be an advantage. Dutch politicians and entrepreneurs were used to compromises, and solutions could be adapted to local circumstances. In more centralized England and France this was more difficult to achieve. The Dutch also profited from the fact that territorial lords had already abolished common rights of usage in the coastal provinces in the late middle ages, thus removing an important source of conflict.

By KEVIN LEWIS | 09:00:00 AM


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