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Friday, September 4, 2015

It is so ordered

How Dark Is Dark? Bright Lights, Big City, Racial Profiling

William Horrace & Shawn Rohlin
Review of Economics and Statistics, forthcoming

Abstract:
Grogger and Ridgeway (2006) use the Daylight Savings Time shift to develop a police racial profiling test that is based on differences in driver race visibility and (hence) the race distribution of traffic stops across daylight and darkness. However, urban environments may be well-lit at night, eroding the power of their test. We refine their test using streetlight location data in Syracuse, NY, and the results change in the direction of finding profiling of black drivers. Our preferred specification suggests that the odds of a black driver being stopped (relative to nonblack drivers) increase 15% in daylight, compared to darkness.

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Race, law, and health: Examination of ‘Stand Your Ground’ and defendant convictions in Florida

Nicole Ackermann et al.
Social Science & Medicine, October 2015, Pages 194–201

Abstract:
Previous analyses of Stand Your Ground (SYG) cases have been primarily descriptive. We examine the relationship between race of the victim and conviction of the defendant in SYG cases in Florida from 2005-2013. Using a regression analytic approach, we allow for simultaneous examination of multiple factors to better understand existing interrelationships. Data was obtained from the Tampa Bay Times SYG database (237 cases) which was supplemented with available online court documents and/or news reports. After excluding cases which were still pending as of January 2015; had multiple outcomes (because of multiple suspects); and missing information on race of victim and weapon of victim, our final analytic sample has 204 cases. We chose whether the case resulted in a conviction as the outcome. We develop logistic regression models using significant bivariate predictors as candidates. These include race of the victim (White, non-White), whether the defendant could have retreated from the situation, whether the defendant pursued the victim, if the victim was unarmed, and who was the initiator of the confrontation. We find race of the victim to be a significant predictor of case outcome in this data set. After controlling for other variables, the defendant is two times (OR=2.1, 95% CI [1.07, 4.10]) more likely to be convicted in a case that involves White victims compared to those involving non-White victims. Our results depict a disturbing message: SYG legislation in Florida has a quantifiable racial bias that reveals a leniency in convictions if the victim is non-White, which provides evidence towards unequal treatment under the law. Rather than attempting to hide the outcomes of these laws, as was done in Florida, other states with SYG laws should carry out similar analyses to see if their manifestations are the same as those in Florida, and all should remediate any injustices found.

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Skin Color and the Criminal Justice System: Beyond Black-White Disparities in Sentencing

Traci Burch
Journal of Empirical Legal Studies, September 2015, Pages 395–420

Abstract:
This article analyzes sentencing outcomes for black and white men in Georgia. The analysis uses sentencing data collected by the Georgia Department of Corrections (GDC). Among first-time offenders, both the race-only models and race and skin color models estimate that, on average, blacks receive sentences that are 4.25 percent higher than those of whites even after controlling for legally-relevant factors such as the type of crime. However, the skin color model also shows us that this figure hides important intraracial differences in sentence length: while medium- and dark-skinned blacks receive sentences that are about 4.8 percent higher than those of whites, lighter-skinned blacks receive sentences that are not statistically significantly different from those of whites. After controlling for socioeconomic status in the race-only and race and skin color models the remaining difference between whites and dark- and medium-skinned blacks increases slightly, to 5.5 percent. These findings are discussed with respect to the implications for public policy and for racial hierarchy in the United States.

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Lost Proof of Innocence: The Impact of Confessions on Alibi Witnesses

Stéphanie Marion et al.
Law and Human Behavior, forthcoming

Abstract:
The present study investigated how alibi witnesses react in the face of an innocent suspect’s confession. Under the pretext of a problem-solving study, a participant and confederate completed a series of tasks in the same testing room. The confederate was subsequently accused of stealing money from an adjacent office during the study session. After initially corroborating the innocent confederate’s alibi that she never left the testing room, only 45% of participants maintained their support of that alibi once informed that the confederate had confessed (vs. 95% when participants believed the confederate had denied involvement). Even fewer (20%) maintained their corroboration when the experimenter insinuated that their support of the alibi might imply their complicity. The presence of a confession also decreased participants’ confidence in the accuracy of the alibi and their belief in the confederate’s innocence. These findings suggest that a police-induced confession can strip an innocent confessor of a vital source of exculpatory evidence. This effect may well explain the often-puzzling absence of exculpatory evidence in many cases involving wrongful conviction.

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Sentenced to Pretrial Detention: A Study of Bail Decisions and Outcomes

Meghan Sacks, Vincenzo Sainato & Alissa Ackerman
American Journal of Criminal Justice, September 2015, Pages 661-681

Abstract:
Previous research on bail practices has shown that both legal factors, such as offense severity and prior criminal record, and demographic factors such as race and age, exert a strong influence on bail decisions and outcomes. Using a novel application of Knowledge Discovery statistical methods, Bayesian probability analytics, this study utilized a sample of (n = 975) cases collected by New Jersey’s Criminal Disposition Commission, followed from arrest through disposition, to examine bail decisions made by judges and subsequent bail outcomes, i.e., whether defendant was able to meet financial bail requirements to secure release from jail. We found the following: Black and Hispanic defendants are more likely than their white counterparts to have to pay a financial bail requirement; modest differences between races with regards to bail amount set by the court; and that minority defendants, and especially Hispanic defendants, are at a disadvantage when it comes to being able to post bail and they are therefore much more likely than their white counterparts to be held in pretrial detention.

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How Judicial Identity Changes the Text of Legal Rulings

Michael Gill & Andrew Hall
Harvard Working Paper, June 2015

Abstract:
In the common-law tradition, word-usage in legal documents matters because of the principle of stare decisis, the doctrine that requires judges to read and interpret previous rulings relevant to the case at hand. Yet we understand very little of how legal authorities actually write legal texts. We analyze 22,773 cases from the United States Courts of Appeals, and we show how judicial identity affects the text of the written case rulings. We demonstrate that the random assignment of a female judge or of a non-white judge to U.S. Appellate Court panels causes systematic changes in the frequencies with which specific, legally-important words appear in the final ruling, along with the rates at which constitutional amendments and landmark Supreme Court cases are cited. Panels present different arguments — and thus leave a different legacy for future jurists to interpret — depending on the identity of the judges chosen by lot to preside over the case at hand.

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Trailblazers and Those That Followed: Personal Experiences, Gender, and Judicial Empathy

Laura Moyer & Susan Haire
Law & Society Review, September 2015, Pages 665–689

Abstract:
This article investigates one causal mechanism that may explain why female judges on the federal appellate courts are more likely than men to side with plaintiffs in sex discrimination cases. To test whether personal experiences with inequality are related to empathetic responses to the claims of female plaintiffs, we focus on the first wave of female judges, who attended law school during a time of severe gender inequality. We find that female judges are more likely than their male colleagues to support plaintiffs in sex discrimination cases, but that this difference is seen only in judges who graduated law school between 1954 and 1975 and disappears when more recent law school cohorts of men and women judges are compared. These results suggest that the effect of gender as a trait is tied to the role of formative experiences with discrimination.

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Testing Appellate Court Assignments as a Natural Experiment: Gender Induced Panel Effects in Sex-Discrimination Cases

Robert Erikson
Columbia University Working Paper, July 2015

Abstract:
The random assignment of judges in the US Appellate Courts has been underutilized in the study of court panel effects. The present study treats case assignment in the US Appellate Courts as a natural experiment, testing for panel effects of female judges in Title VII sex discrimination cases, comparing the votes of male fellow-panelists when the treatment judge is a female with the votes of fellow-panelists of the control judges who are male and of the same party as the female judge. All comparisons are within the same circuit and within the same two-year time window. The paper finds support for strong panel effects - that female judges influence the votes of male judges to be more liberal on sex discrimination cases.

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Does Public Financing Affect Judicial Behavior? Evidence From the North Carolina Supreme Court

Morgan Hazelton, Jacob Montgomery & Brendan Nyhan
American Politics Research, forthcoming

Abstract:
Many observers are concerned that campaign contributions could affect the decisions of elected judges. However, the empirical correlation between contributions and judicial decisions is consistent with two different explanations of judicial behavior: (a) money influences judges or (b) contributors choose to support candidates with a similar philosophical or legal perspective. In this article, we take advantage of North Carolina’s shift to a voluntary public finance system for state Supreme Court candidates to obtain more credible estimates of the contributions–behavior relationship. Applying a difference-in-differences research design, we provide evidence that justices who opted into public financing became relatively less favorable toward attorney donors. We also find partial support for our hypothesis that participating justices became more moderate in their voting patterns. Taken together, these findings suggest that public financing reduced responsiveness to donors among participating justices.

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Discretionary Searches, the Impact of Passengers, and the Implications for Police–Minority Encounters

Rob Tillyer & Charles Klahm
Criminal Justice Review, September 2015, Pages 378-396

Purpose: The current study examines whether a police officer’s decision to initiate a discretionary search is impacted by the presence of passengers. It also explores whether groups of minority citizens experience more frequent discretionary searches compared with other groups. These hypotheses are built on the theoretical foundation of officer suspicion, the group hazard hypothesis, the principles of symbolic interactionism, and Black’s theory of law.

Methods: Traffic stop data from a large, urban city are used to test these hypotheses. Multilevel, Bernoulli models are estimated to reflect the nested nature of the data. Data are analyzed in multiple ways to reflect the complex elements of police–citizen encounters.

Results: Results indicate that discretionary searches of a citizen are more likely when a passenger is present. While some group effects are also documented, minority groups are not more likely to be searched such that the presence of passengers appears to supersede the impact of race/ethnicity.

Conclusions: The presence of passengers during a police–citizen encounter has a substantial impact on the likelihood of a discretionary search. Race/ethnicity effects are limited to single-occupant drivers.

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Alcohol and remembering a hypothetical sexual assault: Can people who were under the influence of alcohol during the event provide accurate testimony?

Heather Flowe et al.
Memory, forthcoming

Abstract:
We examined the influence of alcohol on remembering an interactive hypothetical sexual assault scenario in the laboratory using a balanced placebo design. Female participants completed a memory test 24 hours and 4 months later. Participants reported less information (i.e., responded “don't know” more often to questions) if they were under the influence of alcohol during scenario encoding. The accuracy of the information intoxicated participants reported did not differ compared to sober participants, however, suggesting intoxicated participants were effectively monitoring the accuracy of their memory at test. Additionally, peripheral details were remembered less accurately than central details, regardless of the intoxication level; and memory accuracy for peripheral details decreased by a larger amount compared to central details across the retention interval. Finally, participants were more accurate if they were told they were drinking alcohol rather than a placebo. We discuss theoretical implications for alcohol myopia and memory regulation, together with applied implications for interviewing intoxicated witnesses.

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“Too Many Notes”? An Empirical Study of Advocacy in Federal Appeals

Gregory Sisk & Michael Heise
Journal of Empirical Legal Studies, September 2015, Pages 578–600

Abstract:
The warp and woof of U.S. law are threaded by the appellate courts, generating precedents on constitutional provisions, statutory texts, and common-law doctrines. Although the product of the appellate courts is regularly the subject of empirical study, less attention has been given to the sources and methods of appellate advocacy. Given the paramount place of written briefs in the appellate process, we should examine seriously the frequent complaint by appellate judges that briefs are too long and that prolixity weakens persuasive power. In a study of civil appeals in the U.S. Court of Appeals for the Ninth Circuit, we discover that, for appellants, briefs of greater length are strongly correlated with success on appeal. For the party challenging an adverse decision below, persuasive completeness may be more important than condensed succinctness. The underlying cause of both greater appellant success and accompanying longer briefs may lie in the typically complex nature of the reversible civil appeal. In light of our findings, the current proposal to reduce the limits on number of words in federal appellate briefs may cut more sharply against appellants. Experienced appellate advocates submit that familiarity with appellate courts, the honed ability to craft the right arguments with the appropriate style in briefing, and expertise in navigating the appellate system provide superior legal representation to clients. Our study lends support to this claim. We found a positive correlation between success and experience for lawyers representing appellees, thus warranting further study of lawyer specialization.

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US Supreme Court Law Clerks as Information Sources

Christopher Kromphardt
Journal of Law and Courts, September 2015, Pages 277-304

Abstract:
Justices use information from attorneys, amici, and the solicitor general to learn about cases. One source that has gone with little empirical scrutiny is their law clerks. I validate a measure of clerk preferences and analyze the role of information conveyed by clerks in shaping the justices’ votes on the merits. I report asymmetric support for the theory that clerks get what they want when they craft credible signals: the results support the conclusion that conservative clerks can influence vote direction. These findings bolster understanding of the role of information in hierarchical relationships and shine light on clerks’ roles.

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Elements of Professional Expertise: Understanding Relational and Substantive Expertise through Lawyers’ Impact

Rebecca Sandefur
American Sociological Review, forthcoming

Abstract:
Lawyers keep the gates of public justice institutions, particularly through their roles in formal procedures like hearings and trials. Yet, it is not clear what lawyers do in such quintessentially legal settings: conclusions from past research are bedeviled by a lack of clear theory and inconsistencies in research design. Conceptualizing litigation work in terms of professional expertise, I conduct a theoretically grounded synthesis of the findings of extant studies of lawyers’ impact on civil case outcomes. Using an innovative combination of statistical techniques — meta-analysis and nonparametric bounding — the present study transcends previous work to reveal a domain of consensus for lawyers’ effect on case outcomes and to explore why this effect varies so greatly across past studies. For the types of cases researched to date, knowledge of substantive law explains surprisingly little of lawyers’ advantage compared to lay people appearing unrepresented. Instead, lawyers’ impact is greatest when they assist in navigating relatively simple (to lawyers) procedures and where their relational expertise helps courts follow their own rules. Findings for law generalize to other professions, where substantive and relational expertise may shape the conduct and consequences of professional work.

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Assessing the Impact of Mexican Nativity on Sentence Length

Erin Orrick & Alex Piquero
Criminal Justice Policy Review, October 2015, Pages 643-664

Abstract:
Discussions about race/ethnicity and crime are controversial and not surprisingly, such controversies have extended to the immigration–crime link as well. The emerging quantitative knowledge base on this relationship however suggests that immigrant status may actually serve as a protective factor against (serious) criminal involvement. Largely absent from this line of research has been a consideration of how immigrant status, especially Mexican nativity, is related to criminal justice sentencing decisions. In this article, we use data from more than 12,000 U.S. state and federal prisoners to examine sentence length disparities between Mexican- and native-born citizens. Our primary finding is that while there may be some impact of being Mexican born on sentence length, the negligible differences indicate that offenders who are Mexican born are likely to receive shorter sentences than their native-born counterparts, controlling for a variety of legal and extralegal factors. Directions for future research are highlighted.

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The Effects of Civil Hate Speech Laws: Lessons from Australia

Katharine Gelber & Luke McNamara
Law & Society Review, September 2015, Pages 631–664

Abstract:
This article examines the effects of hate speech laws in Australia. Triangulating data from primary and secondary sources, we examine five hypothesized effects: whether the laws provide a remedy to targets of hate speech, encourage more respectful speech, have an educative or symbolic effect, have a chilling effect, or create “martyrs.” We find the laws provide a limited remedy in the complaints mechanisms, provide a framework for direct community advocacy, and that knowledge of the laws exists in public discourse. However, the complaints mechanism imposes a significant enforcement burden on targeted communities, who still regularly experience hate speech. We find a reduction in the expression of prejudice in mediated outlets, but not on the street. We find no evidence of a chilling effect and we find the risk of free speech martyrs to be marginal. We draw out the implications of these findings for other countries.

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Rules, Standards, and Lower Court Decisions

Joseph Smith & James Todd
Journal of Law and Courts, September 2015, Pages 257-275

Abstract:
This paper evaluates the impact of a higher court articulating doctrine as either a “rule” or a “standard.” The legal doctrine we evaluate concerns police searches based upon information supplied by confidential informants. The Supreme Court’s Aguilar-Spinelli test was a rule, and its Illinois v. Gates “totality of the circumstances” test is a standard. Using a data set of circuit court opinions from 1951 to 1999, we compare circuit-level implementation of these two doctrines. The results suggest that rules are more effective than standards at constraining ideological voting in lower courts.

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The Influence of Biomedical Information and Childhood History on Sentencing

JongHan Kim et al.
Behavioral Sciences & the Law, forthcoming

Abstract:
A recent trend in court is for defense attorneys to introduce brain scans and other forms of biomedical information (BI) into criminal trials as mitigating evidence. The present study investigates how BI, when considered in combination with a defendant's childhood information (CI), can influence the length of a defendant's sentence. We hypothesized that certain combinations of BI and CI result in shorter sentences because they suggest that the defendant poses less of a threat to society. Participants were asked to read accounts of the trial of a murder suspect and, based on the information therein, recommend a sentence as if they were the judge. The defendant was diagnosed with psychopathy, but biomedical information regarding that diagnosis was included or excluded depending on the BI condition. The defendant was further described as growing up in either a loving or abusive family. The results showed that, if BI was present in the trial account, the defendant from an abusive family was perceived as less of a threat to society and received a shorter recommended sentence than if the defendant had been from a loving family. If BI was absent from the account, the pattern was reversed: the defendant from a loving family was perceived as less of a threat to society and received a shorter recommended sentence than if he had been from an abusive family. Implications for the use of BI and CI in court trials are discussed, as well as their relationship to free will and the function of punishment as retribution and utility.

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Putting Bias Into Context: The Role of Familiarity in Identification

Rachel Searston, Jason Tangen & Kevin Eva
Law and Human Behavior, forthcoming

Abstract:
Previous demonstrations of context effects in the forensic comparison sciences have shown that the number of “match” responses a person makes can be swayed by case information. Less clear is whether these effects are a result of changes in accuracy (e.g., discrimination ability), a shift in response bias (e.g., tendency to say “match” or “no match”) or a mix of the 2. We present a series of experiments where we use a signal detection framework to examine the effects of case information (separately) on forensic comparison accuracy and response bias. We also explore the role of familiarity as 1 potential mechanism for case information to sway accuracy. In Experiment 1, case information about crimes perceived to be more severe swayed people to say “match” more, but had little bearing on their ability to discriminate matching and nonmatching fingerprint pairs. In Experiment 2, case information did affect accuracy when it was familiar (i.e., if a previous similar case was associated with a “match” then people were more likely to also rate the current case as a “match,” even though it was not). Even when we blinded people to all extrinsic case information in Experiment 3, accuracy was significantly affected by the familiarity of the fingerprints. These results demonstrate that contextual factors can have different (and independent) influences on accuracy and response bias and that even subtle information can affect accuracy if it is sufficiently similar to the case or trace at hand.

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Blame Conformity: Innocent Bystanders Can Be Blamed for a Crime as a Result of Misinformation from a Young, but Not Elderly, Adult Co-Witness

Craig Thorley
PLoS ONE, July 2015

Abstract:
This study examined whether or not exposing an eyewitness to a co-witness statement that incorrectly blames an innocent bystander for a crime can increase the likelihood of the eyewitness subsequently blaming the innocent bystander for the crime. It also examined whether or not the perceived age of the co-witness influences this effect. Participant eyewitnesses first watched a video of a crime featuring a perpetrator and an innocent bystander. They then read one of six bogus co-witness statements about the crime. All were presented as having been written by a female co-witness and they differed in terms of her age (young adult or elderly) and who she blamed for the crime (the perpetrator, the innocent bystander, or nobody). One week later the participants were asked who committed the crime. When the young adult co-witness had blamed the innocent bystander just over 40% of participants subsequently did the same. Few participants (less than 8%) in the other conditions subsequently blamed the innocent bystander. The elderly co-witness was also rated as less credible, less competent, and less accurate than the younger co-witness suggesting eyewitnesses were less likely to be influenced by her incorrect statement as they perceived her to be a less reliable source of information. The applied implications of these findings are discussed.

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Information Integration Theory, Juror Bias, and Sentence Recommendations Captured Over Time in a Capital Trial

Victoria Estrada-Reynolds, Jennifer Gray & Narina Nuñez
Applied Cognitive Psychology, forthcoming

Abstract:
Initial juror verdicts have been shown to predict final verdicts, leading researchers to conclude that jurors seek confirmatory information during trial (confirmation bias) or distort information to fit pre-existing biases (pre-decisional distortion). However, Information Integration Theory suggests that individuals are not distorting/ignoring this information, and instead, information influences judgments in the direction of the message. The current study sought to test these competing theories in a juror setting. Mock jurors were presented with the sentencing phase of a capital trial and were asked to give sentence recommendations at eight different time points. Additionally, they were grouped by their pretrial bias as being pro-defense, neutral, or pro-prosecution. Results showed support for Information Integration Theory; although jurors' pretrial bias predicted final sentence, sentence recommendations were affected in the direction of the testimony presented throughout the trial (e.g., pro-defense testimony lowered death penalty decisions across all groups). Implications and future directions are discussed.

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Racial Disparity in Juvenile Diversion: The Impact of Focal Concerns and Organizational Coupling

Rebecca Ericson & Deborah Eckberg
Race and Justice, forthcoming

Purpose: Interpretations of focal concerns and “loose coupling” are used to explain juvenile diversion decisions by police and prosecutors from a large metropolitan county in the Midwest.

Methods: Juveniles eligible for police diversion are compared to those actually diverted using a population of juveniles arrested in eight police urban and suburban agencies. Multinomial logistic regression is used to analyze data on juveniles referred for charging in the same county.

Results: Non-White juveniles were significantly less likely to be diverted by police, formally entering them into the juvenile justice system earlier than their White counterparts. Prosecutors charged, rather than diverted, non-White juveniles significantly more frequently than White juveniles, particularly for theft cases.

Conclusion: The racial disparity observed may result from differing focal concerns and loose coupling in the first stages of the justice system.

By KEVIN LEWIS | 09:00:00 AM

Thursday, September 3, 2015

My bad

What’s in a name? The toll e-signatures take on individual honesty

Eileen Chou
Journal of Experimental Social Psychology, November 2015, Pages 84–95

Abstract:
People cherish and embrace the symbolic value that their unique handwritten signature holds. Technological advances, however, have led organizations to reject traditional handwritten signatures in favor of the efficiency and convenience of e-signatures. This research directly investigates the possibility that while many common e-signatures may objectively perform the same function as signing by hand, they do not exert the same symbolic weight in subsequent decision making. Seven studies consistently demonstrate these e-signatures’ ineffectiveness for curbing individual dishonesty — one of the essential purposes of a signature. Furthermore, the effects are caused by their inadequate ability to evoke the signer’s self-presence. Results also identify one form of e-signature that can preserve this crucial psychological connection. Meta-analyses across studies conducted for this research establish the reliability and robustness of the associations between common forms of e-signatures, self-presence, and dishonesty. By systematically examining whether, why, and which e-signatures abet cheating, findings illuminate an unexplored — but critical — consequence of a practice that is prevalent worldwide.

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Hormones and Ethics: Understanding the Biological Basis of Unethical Conduct

Jooa Julia Lee et al.
Journal of Experimental Psychology: General, forthcoming

Abstract:
Globally, fraud has been rising sharply over the last decade, with current estimates placing financial losses at greater than $3.7 trillion annually. Unfortunately, fraud prevention has been stymied by lack of a clear and comprehensive understanding of its underlying causes and mechanisms. In this paper, we focus on an important but neglected topic — the biological antecedents and consequences of unethical conduct — using salivary collection of hormones (testosterone and cortisol). We hypothesized that preperformance cortisol levels would interact with preperformance levels of testosterone to regulate cheating behavior in 2 studies. Further, based on the previously untested cheating-as-stress-reduction hypothesis, we predicted a dose–response relationship between cheating and reductions in cortisol and negative affect. Taken together, this research marks the first foray into the possibility that endocrine-system activity plays an important role in the regulation of unethical behavior.

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An Emotional-Freedom Defense of Schadenfreude

Earl Spurgin
Ethical Theory and Moral Practice, August 2015, Pages 767-784

Abstract:
Schadenfreude is the emotion we experience when we obtain pleasure from others’ misfortunes. Typically, we are not proud of it and admit experiencing it only sheepishly or apologetically. Philosophers typically view it, and the disposition to experience it, as moral failings. Two recent defenders of Schadenfreude, however, argue that it is morally permissible because it stems from judgments about the just deserts of those who suffer misfortunes. I also defend Schadenfreude, but on different grounds that overcome two deficiencies of those recent defenses. First, my defense accounts for the wide range of circumstances in which we experience Schadenfreude. Those circumstances often involve feelings and judgments that are less noble and admirable than judgments regarding just deserts. Second, it accounts for the sheepish or apologetic feelings that commonly accompany Schadenfreude. The two recent defenses can account for those feelings only by holding that they are mistaken or misguided. In opposition to those who view Schadenfreude as a moral failing, I argue that it is morally permissible unless it is part of a causal chain that produces an immoral act. The moral permissibility of the emotion is necessary in order for individuals to have the emotional freedom that, in turn, is necessary for their well-being. Schadenfreude’s moral status is similar to a sexual fetish’s. Like a fetish, experiencing Schadenfreude is not immoral in itself, but sharing and discussing it with others is immoral in many contexts.

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The Enhancement of Children versus Circumcision: A Case of Double Moral Standards?

Tobias Hainz
Bioethics, September 2015, Pages 507–515

Abstract:
The application of enhancement technologies to children and non-medical infant male circumcision are both topics that enjoy the continuous attention of bioethical research but are usually discussed in isolation from each other. Yet one can show that three major arguments used by opponents of the enhancement of children are also applicable to circumcision. These arguments are based on the insecurity of these procedures, the child's right to an open future, and human nature as a foundation of human dignity. People who reject the enhancement of children because of these arguments but accept circumcision hold mutually inconsistent moral convictions or apply double moral standards to these cases. This is particularly important when legislative systems treat the enhancement of children and circumcision in a considerably different manner, which is true for many contemporary legislative systems. At least three strategies can be adopted in order to avoid such inconsistencies, two of which, however, fail for various reasons. According to a third, more promising strategy, circumcision should be subsumed under human enhancement and treated like other enhancement technologies. This strategy justifies restrictions on, but not the prohibition of circumcision. Furthermore, proponents of circumcision should be prepared for future technologies that provide similar benefits as circumcision but are not as contentious as this intervention, so that, in the future, circumcision could become more and more unacceptable.

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The Benefits of Group-based Pride: Pride Can Motivate Guilt in Intergroup Conflicts among High Glorifiers

Noa Schori-Eyal et al.
Journal of Experimental Social Psychology, November 2015, Pages 79–83

Abstract:
Group-based guilt and acknowledging responsibility for collective moral transgressions are an important part of conflict resolution. However, they are not a common phenomenon. This is particularly true during intergroup conflict, and among those group members who glorify their group and see it as superior to others. In the current research we investigated ways to increase group-based guilt among group members who tend to glorify their group. We reasoned that satisfying the motivation behind group glorification may counteract its negative association with group-based guilt. In two studies, conducted during the 2014 Gaza war, we demonstrated that inducing conflict-related group-based pride among high glorifiers can increase group-based guilt for group actions during the same conflict; effectively regulating one group-based emotion by regulating another. The possible mechanism and implications are discussed.

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Intergroup emotional similarity reduces dehumanization and promotes conciliatory attitudes in prolonged conflict

Melissa McDonald et al.
Group Processes & Intergroup Relations, forthcoming

Abstract:
Creating a sense of interpersonal similarity of attitudes and values is associated with increased attraction and liking. Applying these findings in an intergroup setting, though, has yielded mixed support. Theorizing from a social identity perspective suggests that highlighting intergroup similarity may lead to increased antipathy to the extent that it is perceived as a threat to one’s unique social identity. To circumvent this process, we examine the influence of emotional similarity, rather than attitudinal or value similarity, with the expectation that the short-term nature of emotions may evoke less threat to one’s social identity. Moreover, given the importance of emotions in intergroup humanization processes, we expected that emotional similarity would be associated with greater conciliatory attitudes due to an increase in humanization of the outgroup. We report results from two studies supporting these predictions. Following exposure to an anger-eliciting news story, Jewish Israeli participants were given information that their own emotional reaction to the story was similar (or not) to an individual member of the outgroup (Study 1: Palestinian citizen of Israel) or the outgroup as a whole (Study 2: Palestinians of the West Bank). As predicted, emotional similarity was associated with increased humanization of the outgroup, and a subsequent increase in one’s willingness to support conciliatory political policies toward the outgroup. We conclude that emotional similarity may be a productive avenue for future intergroup interventions, particularly between groups where differences in attitudes and values are foundational to the intergroup conflict.

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Awe, the small self, and prosocial behavior

Paul Piff et al.
Journal of Personality and Social Psychology, June 2015, Pages 883-899

Abstract:
Awe is an emotional response to perceptually vast stimuli that transcend current frames of reference. Guided by conceptual analyses of awe as a collective emotion, across 5 studies (N = 2,078) we tested the hypothesis that awe can result in a diminishment of the individual self and its concerns, and increase prosocial behavior. In a representative national sample (Study 1), dispositional tendencies to experience awe predicted greater generosity in an economic game above and beyond other prosocial emotions (e.g., compassion). In follow-up experiments, inductions of awe (relative to various control states) increased ethical decision-making (Study 2), generosity (Study 3), and prosocial values (Study 4). Finally, a naturalistic induction of awe in which participants stood in a grove of towering trees enhanced prosocial helping behavior and decreased entitlement compared to participants in a control condition (Study 5). Mediational data demonstrate that the effects of awe on prosociality are explained, in part, by feelings of a small self. These findings indicate that awe may help situate individuals within broader social contexts and enhance collective concern.

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Moral parochialism and contextual contingency across seven societies

Daniel Fessler et al.
Proceedings of the Royal Society: Biological Sciences, 22 August 2015

Abstract:
Human moral judgement may have evolved to maximize the individual's welfare given parochial culturally constructed moral systems. If so, then moral condemnation should be more severe when transgressions are recent and local, and should be sensitive to the pronouncements of authority figures (who are often arbiters of moral norms), as the fitness pay-offs of moral disapproval will primarily derive from the ramifications of condemning actions that occur within the immediate social arena. Correspondingly, moral transgressions should be viewed as less objectionable if they occur in other places or times, or if local authorities deem them acceptable. These predictions contrast markedly with those derived from prevailing non-evolutionary perspectives on moral judgement. Both classes of theories predict purportedly species-typical patterns, yet to our knowledge, no study to date has investigated moral judgement across a diverse set of societies, including a range of small-scale communities that differ substantially from large highly urbanized nations. We tested these predictions in five small-scale societies and two large-scale societies, finding substantial evidence of moral parochialism and contextual contingency in adults' moral judgements. Results reveal an overarching pattern in which moral condemnation reflects a concern with immediate local considerations, a pattern consistent with a variety of evolutionary accounts of moral judgement.

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Adopting the ritual stance: The role of opacity and context in ritual and everyday actions

Rohan Kapitány & Mark Nielsen
Cognition, December 2015, Pages 13–29

Abstract:
Rituals are a pervasive and ubiquitous aspect of human culture, but when we naïvely observe an opaque set of ritual actions, how do we come to understand its significance? To investigate this, across two experiments we manipulated the degree to which actions were ritualistic or ordinary, and whether or not they were accompanied with context. In Experiment 1, 474 adult participants were presented with videos of novel rituals (causally opaque actions) or control actions (causally transparent) performed on a set of objects accompanied with neutral-valance written context. Experiment 2 presented the same video stimuli but with negative and aversive written context. In both experiments ritualized objects were rated as physically unchanged, but more ‘special’ and more ‘desirable’ than objects subjected to control actions, with context amplifying this effect. Results are discussed with reference to the Ritual Stance and the Social-Action hypothesis. Implications for both theories are discussed, as are methodological concerns regarding the empirical investigation of ritual cognition. We argue that causally opaque ritual actions guide the behavior of naïve viewers because such actions are perceived as socially normative, rather than with reference to supernatural intervention or causation.

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Perceived moral responsibility for attitude-based discrimination

Liz Redford & Kate Ratliff
British Journal of Social Psychology, forthcoming

Abstract:
This research investigated judgements of moral responsibility for attitude-based discrimination, testing whether a wrongdoer's mental states – awareness and foresight – are central determinants of culpability. Participants read about and judged a target person who was described as consciously egalitarian, but harbouring negative attitudes that lead him to treat African Americans unfairly. Two studies showed that participants ascribed greater moral responsibility for discrimination when the target was aware of having negative attitudes than when he was unaware. Surprisingly, moral judgements were equally harsh towards a target who was explicitly aware that his bias could influence his behaviour as a target who was not. To explain this result, a second study showed that the path from awareness to moral responsibility was mediated by perceptions that the target had an obligation to foresee his discriminatory behaviour, but not by perceptions of the target's actual foresight. These results suggest that bias awareness influences moral judgements of those who engage in attitude-based discrimination because it obligates them to foresee harmful consequences. The current findings demonstrate that moral judges consider not just descriptive facts, but also normative standards regarding a wrongdoer's mental states.

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Inability and Obligation in Moral Judgment

Wesley Buckwalter & John Turri
PLoS ONE, August 2015

Abstract:
It is often thought that judgments about what we ought to do are limited by judgments about what we can do, or that “ought implies can.” We conducted eight experiments to test the link between a range of moral requirements and abilities in ordinary moral evaluations. Moral obligations were repeatedly attributed in tandem with inability, regardless of the type (Experiments 1–3), temporal duration (Experiment 5), or scope (Experiment 6) of inability. This pattern was consistently observed using a variety of moral vocabulary to probe moral judgments and was insensitive to different levels of seriousness for the consequences of inaction (Experiment 4). Judgments about moral obligation were no different for individuals who can or cannot perform physical actions, and these judgments differed from evaluations of a non-moral obligation (Experiment 7). Together these results demonstrate that commonsense morality rejects the “ought implies can” principle for moral requirements, and that judgments about moral obligation are made independently of considerations about ability. By contrast, judgments of blame were highly sensitive to considerations about ability (Experiment 8), which suggests that commonsense morality might accept a “blame implies can” principle.

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Lifting the veil of ignorance: An experiment on the contagiousness of norm violations

Andreas Diekmann, Wojtek Przepiorka & Heiko Rauhut
Rationality and Society, August 2015, Pages 309-333

Abstract:
Norm violations can be contagious. Previous research analyzed two mechanisms of why knowledge about others’ norm violations triggers its spread: (1) actors lower their subjective beliefs about the probability or severity of punishment or (2) they condition their compliance on others’ compliance. While earlier field studies could hardly disentangle both effects, we use a laboratory experiment which eliminates any punishment threat. Subjects (n = 466) can throw a die and are paid according to their reported number. Our design rules out any possibility of personal identification so that subjects can lie about their thrown number and claim inflated payoffs without risking detection. The aggregate distribution of reported payoffs allows the estimation of the extent to which the honesty norm is violated. We compare two treatment conditions in which subjects are informed about lying behavior of others with a control condition without information feedback. Observations from a subsequent die throw reveal that knowledge about liars triggers the spread of lying compared to the control condition. Results from a follow-up experiment show that this effect is moderated by subjects’ beliefs about the prevalence of norm violations of others. Our results demonstrate the contagiousness of norm violations, where actors imitate norm violations of others under the exclusion of strategic motives.

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Individual differences in physiological flexibility predict spontaneous avoidance

Amelia Aldao, Katherine Dixon-Gordon & Andres De Los Reyes
Cognition and Emotion, forthcoming

Abstract:
People often regulate their emotions by resorting to avoidance, a putatively maladaptive strategy. Prior work suggests that increased psychopathology symptoms predict greater spontaneous utilisation of this strategy. Extending this work, we examined whether heightened resting cardiac vagal tone (which reflects a general ability to regulate emotions in line with contextual demands) predicts decreased spontaneous avoidance. In Study 1, greater resting vagal tone was associated with reduced spontaneous avoidance in response to disgust-eliciting pictures, beyond anxiety and depression symptoms and emotional reactivity. In Study 2, resting vagal tone interacted with anxiety and depression symptoms to predict spontaneous avoidance in response to disgust-eliciting film clips. The positive association between symptoms and spontaneous avoidance was more pronounced among participants with reduced resting vagal tone. Thus, increased resting vagal tone might protect against the use of avoidance. Our findings highlight the importance of assessing both subjective and biological processes when studying individual differences in emotion regulation.

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Do as I say, not as I’ve done: Suffering for a misdeed reduces the hypocrisy of advising others against it

Daniel Effron & Dale Miller
Organizational Behavior and Human Decision Processes, November 2015, Pages 16–32

Abstract:
Not everyone who has committed a misdeed and wants to warn others against committing it will feel entitled to do so. Six experiments, a replication, and a follow-up study examined how suffering for a misdeed grants people the legitimacy to advise against it. When advisors had suffered (vs. not suffered) for their misdeeds, observers thought advisors had more of a right to advise and perceived them as less hypocritical and self-righteous; advisees responded with less anger and derogation; and advisors themselves felt more comfortable offering strong advice. Advisors also strategically highlighted how they had suffered for their wrongdoing when they were motivated to establish their right to offer advice. Additional results illustrate how concerns about the legitimacy of advice-giving differ from concerns about persuasiveness. The findings shed light on what prevents good advice from being disseminated, and how to help people learn from others’ mistakes.

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The curious tale of Julie and Mark: Unraveling the moral dumbfounding effect

Edward Royzman, Kwanwoo Kim & Robert Leeman
Judgment and Decision Making, July 2015, Pages 296–313

Abstract:
The paper critically reexamines the well-known “Julie and Mark” vignette, a stylized account of two college-age siblings opting to engage in protected sex while vacationing abroad (e.g., Haidt, 2001). Since its inception, the story has been viewed as a rhetorically powerful validation of Hume’s “sentimentalist” dictum that moral judgments are not rationally deduced but arise directly from feelings of pleasure or displeasure (e.g., disgust). People’s typical reactions to the vignette are alleged to support this view by demonstrating that individuals are prone to become morally dumbfounded (Haidt, 2001; Haidt, Bjorklund, & Murphy, 2000), i.e., they tend to “stubbornly” maintain their disapproval of the act without supporting reasons. In what follows, we critically reassess the traditional account, predicated on the notion that, among other things, most subjects simply fail to be convinced that the siblings’ actions are truly harm-free, thus having excellent reasons to disapprove of these acts. In line with this critique, 3 studies found that subjects 1) tended not to believe that the siblings’ actions were in fact harmless; 2) notwithstanding that, and in spite of holding a number of “counterargument-immune” reasons, subjects could be effectively maneuvered into exhibiting all the trademark signs of a morally dumbfounded state (which they subsequently recanted), and 3) with subjects’ beliefs about harm and standards of normative evaluation properly factored in, a more rigorous assessment procedure yielded a dumbfounding estimate of about 0. Based on these and related results, we contend that subjects’ reactions are wholly in line with the rationalist model of moral judgment and that their use in support of claims of moral arationalism should be reevaluated.

By KEVIN LEWIS | 09:00:00 AM

Wednesday, September 2, 2015

Coffers

Capitalizing patriotism: The Liberty loans of World War I

Sung Won Kang & Hugh Rockoff
Financial History Review, April 2015, Pages 45-78

Abstract:
Although taxes were raised substantially in the United States during World War I, recourse was had to five bond issues, the famous Liberty loans, to finance the bulk of war expenditures. The Secretary of the Treasury, William Gibbs McAdoo, hoped to create a broad market for the Liberty bonds and to limit their yields by following an aggressive policy of 'capitalizing patriotism'. He called on everyone from Wall Street bankers to the Boy Scouts to volunteer for campaigns to sell the bonds. The campaigns have become legendary. Some of the nation's best-known artists were recruited to draw posters depicting the contribution to the war effort to be made by buying bonds, and giant bond rallies featuring Hollywood stars were organized. These efforts, however, enjoyed limited success. The yields on the Liberty bonds were kept low mainly by making the bonds tax exempt and by making sure that a large proportion of them were purchased directly or indirectly by the Federal Reserve, turning the Federal Reserve into an engine of inflation. Patriotism proved to be a weak, although not powerless, offset to normal market forces.

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The Influence of Political Bias in State Pension Funds

Daniel Bradley, Christos Pantzalis & Xiaojing Yuan
Journal of Financial Economics, forthcoming

Abstract:
Using a sample of state pension funds' equity holdings, we find evidence of not only local bias, but also bias towards politically-connected stocks. Political bias is detrimental to fund performance. State pension funds have longer holding durations of politically-connected local firms and display disposition behavior in these positions. Political bias is positively related to the percentage of politically-affiliated trustees on the board and Congressional connections. The more politically-affiliated trustees on the board, the more the fund shifts toward risky asset allocations. Overall, our results imply that political bias is likely costly to taxpayers and pension beneficiaries.

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Debt and Creative Destruction: Why Could Subsidizing Corporate Debt Be Optimal?

Zhiguo He & Gregor Matvos
Management Science, forthcoming

Abstract:
The existing theoretical literature provides little justification for a corporate debt subsidy. We illustrate the welfare benefit of this subsidy and study how the social costs and benefits change with the duration of industry distress. In our model, two firms engage in socially wasteful competition for survival in a declining industry. Firms differ on two dimensions: exogenous productivity and endogenously chosen amount of debt financing, resulting in a two-dimensional war of attrition. Debt financing increases incentives to exit, which, although costly for the firm, is socially beneficial. These benefits decline as industry distress shortens. Our normative model sheds light on why the debt tax subsidy still persists around the world. Analogously, the model can also rationalize a seemingly ad hoc feature of the U.S. tax system, which subsidizes the conflict of interest between debt and equity regarding firm liquidation.

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The Response of Deferred Executive Compensation to Changes in Tax Rates

Aspen Gorry et al.
Journal of Public Economics, forthcoming

Abstract:
Given the increasing use of stock options in executive compensation, we examine how taxes influence the choice of compensation and document that income deferral is an important margin of adjustment in response to tax rate changes. To account for this option in the empirical analysis, we explore deferral by estimating how executives' choice of compensation between current and deferred income depends on changes in tax policy. Our empirical results suggest a significant impact of taxes on the composition of executive compensation.

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In Tandem or Out of Sync? Academic Economics Research and Public Policy Measures

Lea-Rachel Kosnik
Contemporary Economic Policy, forthcoming

Abstract:
This paper investigates whether academic research attention to certain policy-related measures (including gross domestic product, unemployment, and inflation) is correlated with empirical measurements of the measures themselves. In other words, when unemployment rises, does research attention to the matter increase? Or do economists pursue research (in the short run) relatively uninfluenced by policy shocks on the ground? Text analysis implies that economic attention to key policy terms does correlate with empirical movements of the terms in most instances; however, the stronger and more consistent correlation is between use of policy terms in the literature and discussion of them by the broader public.

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Government Economic Policy, Sentiments, and Consumption

Atif Mian, Amir Sufi & Nasim Khoshkhou
NBER Working Paper, July 2015

Abstract:
We examine how consumption responds to changes in sentiment regarding government economic policy using cross-sectional variation across counties in the ideological predisposition of constituents. When the incumbent party loses a presidential election, individuals in counties more ideologically predisposed toward the losing party experience a dramatic and discontinuous relative decrease in optimism on government economic policy. Using the interaction of constituent ideology in a county with election timing as an instrument, we estimate the impact of government policy sentiment shocks on consumer spending, and we find a very small effect that cannot be statistically distinguished from zero. The small magnitude of the effect is estimated precisely. For example, we can reject the hypothesis that pessimism regarding government economic policy effectiveness during the Great Recession had as large an effect on consumption as the negative shock to household net worth coming from the collapse in house prices.

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Do CIO IT Budgets Explain Bigger or Smaller Governments? Theory and Evidence from U.S. State Governments

Min-Seok Pang, Ali Tafti & M.S. Krishnan
Management Science, forthcoming

Abstract:
Given the recent concern on "big governments" and rising budget deficits in the United States and European nations, there has been a fundamental economic debate on the proper boundary and role of governments in a society. Inspired by this debate, we study the relationship between information technology (IT) and government size. Drawing on a broad range of the literature from multiple disciplines such as information systems, industrial organization, and political sciences, we present several theoretical mechanisms that explain the impact of IT on government expenditures. Using a variety of data on IT spending and state government expenditures, we find that greater IT investments made by a state chief information officer (CIO) are associated with lower state government spending. It is estimated that on average, a $1 increase in state CIO budgets is associated with a reduction of as much as $3.49 in state overall expenditures. This study contributes to the literature by identifying a key technological factor that affects government spending and showing that IT investments can be a means to restrain government growth.

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Proposition 13: An Equilibrium Analysis

Ayse Imrohoroglu, Kyle Matoba & Selale Tuzel
University of Southern California Working Paper, August 2015

Abstract:
In 1978, California passed one of the most significant tax changes initiated by voters in the United States. Proposition 13 lowered property tax rates and restricted future property tax increases. In this paper, we study the implications of Proposition 13 on house prices, housing turnover, and household welfare. In our benchmark calibration, the introduction of Proposition 13 leads to a 25% increase in house prices and a 4% decrease in the moving rates. We find that elimination of Proposition 13 in a revenue-neutral way leads to small changes in house prices and modest increases in mobility but large welfare gains.

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The Optimal Use of Government Purchases for Macroeconomic Stabilization

Pascal Michaillat & Emmanuel Saez
NBER Working Paper, July 2015

Abstract:
This paper extends Samuelson's theory of optimal government purchases by considering the contribution of government purchases to macroeconomic stabilization. We consider a matching model in which unemployment can be too high or too low. We derive a sufficient-statistics formula for optimal government purchases. Our formula is the Samuelson formula plus a correction term proportional to the government-purchases multiplier and the gap between actual and efficient unemployment rate. Optimal government purchases are above the Samuelson level when the correction term is positive -- for instance, when the multiplier is positive and unemployment is inefficiently high. Our formula indicates that US government purchases, which are mildly countercyclical, are optimal under a small multiplier of 0.03. If the multiplier is larger, US government purchases are not countercyclical enough. Our formula implies significant increases in government purchases during slumps. For instance, with a multiplier of 0.5 and other statistics calibrated to the US economy, when the unemployment rate rises from the US average of 5.9% to 9%, the optimal government purchases-output ratio increases from 16.6% to 19.8%. However, the optimal ratio increases less for multipliers above 0.5 because with higher multipliers, the unemployment gap can be filled with fewer government purchases. For instance, with a multiplier of 2, the optimal ratio only increases from 16.6% to 17.6%.

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Risky Business: The Decline of Defined Benefit Pensions and Firms' Shifting of Risk

Adam Cobb
Organization Science, forthcoming

Abstract:
Since the early 1980s, employment in the United States has undergone significant transformation as the large corporations that once safeguarded employees with stable jobs and rewards for loyalty have replaced these employment relationships with ones based on cost containment and flexibility. One important consequence of these developments is that firms have abdicated their role as a critical risk bearer in society. Although evidence suggests that firms have increasingly shifted market risks onto their workforce, to date, there have been few detailed analyses exploring what factors have driven this phenomenon. This study adds to our understanding of why firms have transferred risk to their employees by examining the decline of a highly institutionalized practice wherein large U.S. firms used to bear retirement risk: the defined benefit (DB) pension plan. Through a detailed analysis, I show that variance in the presence, power, and interests of shareholders and employees at the firm level differentially affect a firm's willingness to shift the risk of retirement onto its workers. Specifically, I demonstrate empirically that different types of shareholders have differential effects on a firm's retirement practices, suggesting that the changing equity ownership structure of large U.S. firms has played a key role in how risk is allocated between workers and firms. Declines in employee power have also played a role because firm levels of unionization positively affect rates of DB participation for both unionized and nonunionized workers.

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Has Regulation of Charitable Foundations Thrown the Baby Out With the Bath Water?

Benjamin Marx
Journal of Public Economics, September 2015, Pages 63-76

Abstract:
Regulations to curb tax avoidance and evasion through charitable foundations have been in place since the Tax Reform Act of 1969. Newly-compiled longitudinal data makes it possible to estimate the effects of these regulations by comparing affected and unaffected foundations before and after the reform. Donations and entry dropped precipitously. Proxy variables suggest significant deterrence of abuses, but half of the decline in donations can be explained by the increased cost of running a foundation. The results highlight the potential for large reductions in the benefits of regulation when the cost of compliance affects externality-producing actions such as charitable giving.

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Psychological Frictions and the Incomplete Take-Up of Social Benefits: Evidence from an IRS Field Experiment

Saurabh Bhargava & Dayanand Manoli
American Economic Review, forthcoming

Abstract:
We address the puzzle of incomplete take-up with a large policy experiment conducted in collaboration with the IRS. The experiment assesses whether confusion, informational complexity, and stigma contribute to low take-up in a setting in which costs of claiming are otherwise minimal. We specifically evaluate response to experimental mailings which notified 35,050 tax-filers, unresponsive to a first mailed reminder, of $26m in unclaimed EITC benefits. Overall, merely receiving a second mailing prompted 0.22 of recipients to claim. Simplifying information and increasing the salience of benefit information substantially improved response but attempts to reduce perceived costs of stigma, application, and audits did not. The experiment, observation that low-earners were disproportionately harmed by complexity, and mechanisms implied by an accompanying survey, suggest the failure to claim in this setting is attributable, at least in part, to a deficit in program awareness and understanding, and an aversion to program complexity. These findings, along with a second survey which hints of broader generalizability, emphasize the need for economic models which recognize the role of "psychological frictions" the decision to take-up.

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Voluntary Disclosure of Evaded Taxes - Increasing Revenues, or Increasing Incentives to Evade?

Dominika Langenmayr
Journal of Public Economics, forthcoming

Abstract:
Many countries apply lower fines to tax evading individuals when they voluntarily disclose the tax evasion they committed. I model such voluntary disclosure mechanisms theoretically and show that while such mechanisms increase the incentive to evade taxes, they nevertheless increase tax revenues net of administrative costs. I confirm the importance of administrative costs in a survey of German competent local tax authorities. I then test the effects of voluntary disclosure on the tax evasion decision, using the introduction of the 2009 offshore voluntary disclosure program in the U.S. for identification. The analysis confirms that the introduction of voluntary disclosure increases tax evasion.

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Regional Impact of Public Transportation Infrastructure: A Spatial Panel Assessment of the U.S. Northeast Megaregion

Zhenhua Chen & Kingsley Haynes
Economic Development Quarterly, August 2015, Pages 275-291

Abstract:
This research examines the regional impact of public transportation infrastructure in the northeast megaregion of the United States: public highways, railways, transit, and airports. Infrastructure stock is valued in monetary terms from 1991 to 2009. A spatial panel approach with fixed effects is adopted to test the hypothesis of spillovers by controlling for spatial dependence. The result suggests that transportation infrastructure, in general, does have a significant impact on regional economic growth, most of which is from spillover effects. Highways have an overwhelming influence through local effects and spillover effects. The impacts from public railways and airports are significant, but transit impacts are insignificant, although a positive spillover effect is found.

By KEVIN LEWIS | 09:00:00 AM

Tuesday, September 1, 2015

Going native

Is the Romantic–Sexual Kiss a Near Human Universal?

William Jankowiak, Shelly Volsche & Justin Garcia
American Anthropologist, forthcoming

Abstract:
Scholars from a wide range of human social and behavioral sciences have become interested in the romantic–sexual kiss. This research, and its public dissemination, often includes statements about the ubiquity of kissing, particularly romantic–sexual kissing, across cultures. Yet, to date there is no evidence to support or reject this claim. Employing standard cross-cultural methods, this research report is the first attempt to use a large sample set (eHRAF World Cultures, SCCS, and a selective ethnographer survey) to document the presence or absence of the romantic–sexual kiss (n = 168 cultures). We defined romantic–sexual kissing as lip-to-lip contact that may or may not be prolonged. Despite frequent depictions of kissing in a wide range of material culture, we found no evidence that the romantic–sexual kiss is a human universal or even a near universal. The romantic–sexual kiss was present in a minority of cultures sampled (46%). Moreover, there is a strong correlation between the frequency of the romantic–sexual kiss and a society's relative social complexity: the more socially complex the culture, the higher frequency of romantic–sexual kissing.

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Culture and Suicide Acceptability: A Cross-National, Multilevel Analysis

Steven Stack & Augustine Kposowa
Sociological Quarterly, forthcoming

Abstract:
Cultural perspectives on suicidality have been largely marked by work explaining variability in suicide acceptability in the United States using structural variables including marital status and demographics, and limited symbolic or values orientations such as feminism, political liberalism, and civil liberties. The present article applies recent developments in comparative cultural sociology to the problem of suicidality. The central hypothesis is that cultural approval of suicide is related to a general cultural axis of nations (self-expressionism) encompassing several values orientations such as tolerance and post-materialism. Data are from Wave 4 of the World Values Surveys and refer to 53,275 individuals nested in 56 nations. Controls are incorporated from previous studies and include structural and demographic constructs. A hierarchical linear regression model determined that the degree of individual-level adherence to the values of self-expressionism predicted suicide acceptability (SA), independent of controls including ones interpretable from Durkheimian perspectives. Furthermore, persons high in individual-level self-expressionism nested in like-minded nations were relatively high in SA. The analysis of the subject is expanded to 56 nations representing all major culture zones and varied levels of economic/political development. It determined that SA is shaped by a new, broad cultural construct, self-expressionism whose impact is independent of Durkheimian familial and religious integration.

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Immorality East and West: Are Immoral Behaviors Especially Harmful, or Especially Uncivilized?

Emma Buchtel et al.
Personality and Social Psychology Bulletin, forthcoming

Abstract:
What makes some acts immoral? Although Western theories of morality often define harmful behaviors as centrally immoral, whether this is applicable to other cultures is still under debate. In particular, Confucianism emphasizes civility as fundamental to moral excellence. We describe three studies examining how the word immoral is used by Chinese and Westerners. Layperson-generated examples were used to examine cultural differences in which behaviors are called “immoral” (Study 1, n = 609; Study 2, n = 480), and whether “immoral” behaviors were best characterized as particularly harmful versus uncivilized (Study 3, N = 443). Results suggest that Chinese were more likely to use the word immoral for behaviors that were uncivilized, rather than exceptionally harmful, whereas Westerners were more likely to link immorality tightly to harm. More research into lay concepts of morality is needed to inform theories of moral cognition and improve understanding of human conceptualizations of social norms.

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Modern Attitudes Toward Older Adults in the Aging World: A Cross-Cultural Meta-Analysis

Michael North & Susan Fiske
Psychological Bulletin, September 2015, Pages 993-1021

Abstract:
Prevailing beliefs suggest that Eastern cultures hold older adults in higher esteem than Western cultures do, due to stronger collectivist traditions of filial piety. However, in modern, industrialized societies, the strain presented by dramatic rises in population aging potentially threatens traditional cultural expectations. Addressing these competing hypotheses, a literature search located 37 eligible papers, comprising samples from 23 countries and 21,093 total participants, directly comparing Easterners and Westerners (as classified per U.N. conventions) in their attitudes toward aging and the aged. Contradicting conventional wisdom, a random-effects meta-analysis on these articles found such evaluations to be more negative in the East overall (standardized mean difference = −0.31). High heterogeneity in study comparisons suggested the presence of moderators; indeed, geographical region emerged as a significant moderating factor, with the strongest levels of senior derogation emerging in East Asia (compared with South and Southeast Asia) and non-Anglophone Europe (compared with North American and Anglophone Western regions). At the country level, multiple-moderator meta-regression analysis confirmed recent rises in population aging to significantly predict negative elder attitudes, controlling for industrialization per se over the same time period. Unexpectedly, these analyses also found that cultural individualism significantly predicted relative positivity — suggesting that, for generating elder respect within rapidly aging societies, collectivist traditions may backfire. The findings suggest the importance of demographic challenges in shaping modern attitudes toward elders — presenting considerations for future research in ageism, cross-cultural psychology, and even economic development, as societies across the globe accommodate unprecedented numbers of older citizens.

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The irreversibility of sensitive period effects in language development: Evidence from second language acquisition in international adoptees

Gunnar Norrman & Emanuel Bylund
Developmental Science, forthcoming

Abstract:
The question of a sensitive period in language acquisition has been subject to extensive research and debate for more than half a century. While it has been well established that the ability to learn new languages declines in early years, the extent to which this outcome depends on biological maturation in contrast to previously acquired knowledge remains disputed. In the present study, we addressed this question by examining phonetic discriminatory abilities in early second language (L2) speakers of Swedish, who had either maintained their first language (L1) (immigrants) or had lost it (international adoptees), using native speaker controls. Through this design, we sought to disentangle the effects of the maturational state of the learner on L2 development from the effects of L1 interference: if additional language development is indeed constrained by an interfering L1, then adoptees should outperform immigrant speakers. The results of an auditory lexical decision task, in which fine vowel distinctions in Swedish had been modified, showed, however, no difference between the L2 groups. Instead, both L2 groups scored significantly lower than the native speaker group. The three groups did not differ in their ability to discriminate non-modified words. These findings demonstrate that L1 loss is not a crucial condition for successfully acquiring an L2, which in turn is taken as support for a maturational constraints view on L2 acquisition.

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Historical Legacies of Interethnic Competition: Anti-Semitism and the EU Referendum in Poland

Volha Charnysh
Comparative Political Studies, forthcoming

Abstract:
How do historical legacies shape contemporary political outcomes? The article proposes a novel attitudinal mechanism through which distant interethnic competition can influence political preferences in the present. It theorizes that historically conditioned predispositions at the local level can moderate the effects of national-level framing of a policy issue. Using Poland as a test case, I show that subnational variation in support for EU accession was influenced by populist claims about the increase in Jewish influence in the postaccession period. Anti-Semitic cues resonated with voters in areas with historically large Jewish populations and a contentious interethnic past, where latent anti-Semitism persisted throughout the communist period. To provide evidence for this argument, the article draws on rich historical and contemporary data at the county, town, and individual level of analysis and utilizes novel research methods.

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Changes in Chinese Culture as Examined Through Changes in Personal Pronoun Usage

Takeshi Hamamura & Yi Xu
Journal of Cross-Cultural Psychology, August 2015, Pages 930-941

Abstract:
For the last several decades, Chinese society has experienced transformative changes in its social ecology. Is Chinese culture more individualistic today as a result? The current research examined this question by cross-temporally examining the usage of Chinese personal pronouns associated with individualism–collectivism. A Chinese corpus encompassing the period from 1950 to 2008 was analyzed using the Google Ngram Viewer. Cross-temporal changes in the usages of personal pronouns conceptually associated with individualism–collectivism were non-linear and highly similar to the patterns found for pronouns and non-pronoun words unassociated with individualism–collectivism. Follow-up analyses that disentangled these patterns indicated an increasing usage of individualistic pronouns and a decreasing usage of collectivistic pronouns in recent decades.

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The Effects of Self-Enhancement and Self-Improvement on Recovery From Stress Differ Across Cultural Groups

William Tsai, Jessica Chiang & Anna Lau
Social Psychological and Personality Science, forthcoming

Abstract:
Extant research shows that individuals can reflect either adaptively or maladaptively over negative experiences. However, few studies have examined how culture influences this process. We examined the effects of self-enhancement and self-improvement reflection on emotional and physiological recovery from a laboratory social stressor among 56 Asian Americans (interdependent cultural group) and 58 European Americans (independent cultural group). The extent to which people gained emotional and physiological benefits from self-reflection depended on whether the self-reflection processes were congruent with individuals’ heritage cultural backgrounds. When there was a cultural match, participants showed improved emotional recovery, quicker return to baseline levels of cortisol, and greater persistence following the stressor. These findings provide evidence suggesting culturally distinct processes through which individuals recover from negative experiences.

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The Academic Gap: An International Comparison of the Time Allocation of Academically Talented Students

Matthew Makel et al.
Gifted Child Quarterly, July 2015, Pages 177-189

Abstract:
Despite growing concern about the need to develop talent across the globe, relatively little empirical research has examined how students develop their academic talents. Toward this end, the current study explored how academically talented students from the United States and India spend their time both in and out of school. Indian students reported spending roughly 11 more hours on academics than their U.S. peers during the weekend in both STEM (science, technology, engineering, and math) and non-STEM topics. U.S. students reported spending about 5.4 more hours than their Indian peers on non-STEM academics during the week, leaving an approximately 7-hour-a-week academic gap between U.S. and Indian students. Additionally, U.S. students reported using electronics over 14 hours per week more than their Indian peers. Indian students also reported having control over a greater proportion of their time during the week than U.S. students did. Generally, there were far more cross-cultural differences than gender differences. These results inform discussions on how academically talented students develop within educational systems as well as what each culture supports in and out of school.

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Mutual and Non-Mutual Social Support: Cultural Differences in the Psychological, Behavioral, and Biological Effects of Support Seeking

Shu-wen Wang & Anna Lau
Journal of Cross-Cultural Psychology, August 2015, Pages 916-929

Abstract:
Social support seeking is not uniformly beneficial for different cultural groups, and in fact, is experienced as less helpful and more distressing for Asians and Asian Americans compared with European Americans. However, relationship factors that may attenuate this cross-cultural difference are little understood. We examined the effects of mutual (i.e., interdependent) and non-mutual support on psychological, biological, and behavioral stress responses to support seeking using a laboratory stressor paradigm. Findings show that across all three distress indicators, East Asian Americans were more benefited when they construed support as mutual versus non-mutual, whereas European Americans’ response did not differ by support condition. Furthermore, the data support previous research showing that Asian Americans are more likely to seek support from discretionary (i.e., peers) than obligatory ties (i.e., parents). Our discussion addresses cultural differences in the priority placed on mutuality, interdependence, and harmony in relationships, and their implications for how people construe their relationships. Future areas for research are discussed.

By KEVIN LEWIS | 09:00:00 AM

Monday, August 31, 2015

Company policy

Active Ownership

Elroy Dimson, Oğuzhan Karakaş & Xi Li
Review of Financial Studies, forthcoming

Abstract:
We analyze an extensive proprietary database of corporate social responsibility engagements with U.S. public companies from 1999-2009. Engagements address environmental, social, and governance concerns. Successful (unsuccessful) engagements are followed by positive (zero) abnormal returns. Companies with inferior governance and socially conscious institutional investors are more likely to be engaged. Success in engagements is more probable if the engaged firm has reputational concerns and higher capacity to implement changes. Collaboration among activists is instrumental in increasing the success rate of environmental/social engagements. After successful engagements, particularly on environmental/social issues, companies experience improved accounting performance and governance and increased institutional ownership.

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Shareholder Activism of Public Pension Funds: The Political Facet

Yong Wang & Connie Mao
Journal of Banking & Finance, November 2015, Pages 138-152

Abstract:
This paper studies the political incentive of public pension funds in shareholder activism. Using a sample of shareholder proposals from 1993-2013 and a hand-collected data set of the political variables of public pension funds, we document evidence consistent with the "political attention hypothesis." We find that the number of politicians on public pension fund boards is significantly positively related to the frequency with which portfolio firms are targeted. Moreover, the frequency of social-responsibility proposals by public pension funds increases significantly, as the funds have a greater number of board members running for election to public office. However the frequency of corporate governance proposals is not related to the number of board members running for elections to public office. Furthermore, we document that political connection between a portfolio firm and a public pension fund mitigates the firm's likelihood of being targeted by the fund with social-responsibility proposals. This result supports the "political contribution hypothesis." The paper provides direct evidence that public pension-fund board members employ shareholder proposals to enhance their political capital.

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Come Aboard! Exploring the Effects of Directorships in the Executive Labor Market

Steven Boivie et al.
Academy of Management Journal, forthcoming

Abstract:
In this study, we examine the question: What do executives gain from serving on boards? We propose that board service will benefit non-CEO level executives in the executive labor market by acting as a certification mechanism and also by providing access to unique knowledge, skills, and connections. We argue that non-CEO executives who gain directorships will be more likely to be promoted to CEO both inside and outside their home firm, will be more likely to be promoted internally, and will receive higher pay from their home firms. To test our ideas, we employ propensity score matching to construct a longitudinal sample of 2,104 top executives of large, publicly traded companies in the United States over the period 1996 to 2012. Results provide consistent support for our theory.

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Reassessing board member allegiance: CEO replacement following financial misconduct

David Gomulya & Warren Boeker
Strategic Management Journal, forthcoming

Abstract:
We examine how board members' reactions following financial misconduct differ from those following other adverse organizational events, such as poor performance. We hypothesize that inside directors and directors appointed by the CEO may be particularly concerned about their reputation following deceptive financial practices. We demonstrate that directors more closely affiliated with the CEO are more likely to reduce their support for the CEO following financial misconduct, increasing the likelihood of CEO replacement. Enactment of the Sarbanes-Oxley Act similarly alters governance dynamics by creating a greater expectation for sound corporate governance. We demonstrate our findings in U.S. public firms that restated their financial earnings during a twelve-year period before and after the passage of Sarbanes-Oxley.

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Competition of the Informed: Does the Presence of Short Sellers Affect Insider Selling?

Massimo Massa et al.
Journal of Financial Economics, forthcoming

Abstract:
We study how the presence of short sellers affects the incentives of the insiders to trade on negative information. We show it induces insiders to sell more (shares from their existing stakes) and trade faster to preempt the potential competition from short sellers. An experiment and instrumental variable analysis confirm this causal relationship. The effects are stronger for "opportunistic" (i.e., more informed) insider trades and when short sellers' attention is high. Return predictability of insider sales only occurs in stocks with high short-selling potential, suggesting that short sellers indirectly enhance the speed of information dissemination by accelerating trading by insiders.

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When in Rome, Look like Caesar? Investigating the Link between Demand-Side Cultural Power Distance and CEO Power

Ryan Krause, Igor Filatotchev & Garry Bruton
Academy of Management Journal, forthcoming

Abstract:
Agency theory-grounded research on boards of directors and firm legitimacy has historically viewed CEO power as de-legitimating, often taking this fact for granted in theorizing about external assessors' evaluations of a firm. With few exceptions, this literature has focused exclusively on capital market participants (e.g., investors, securities analysts) as the arbiters of a firm's legitimacy and has accordingly assumed that legitimate governance arrangements are those derived from the shareholder-oriented prescriptions of agency theory. We extend this line of research in new ways by arguing that customers also externally assess firm legitimacy, and that firms potentially adjust their governance characteristics to meet customers' norms and expectations. We argue that the cultural-cognitive institutions prevalent in customers' home countries influence their judgments regarding a firm's legitimacy, such that firms competing heavily in high-power distance cultures are more likely to have powerful CEOs, with CEO power a source of legitimacy - rather than illegitimacy - among customers. We also argue that the more dependent a firm is on its customers and the more salient cultural power distance is as a demand-side institutional norm, the greater this relationship will be. Data from 151 U.S. semiconductor and pharmaceutical firms over a 10-year period generally support our predictions.

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Corporate Governance and the Firm's Workforce

Inessa Liskovich
Princeton Working Paper, May 2015

Abstract:
This paper uses matched employer-employee data to study the effects of corporate governance on the earnings and composition of the firm's workforce. I build a new dataset that links over 2,000 public companies to their employees in Texas. Focusing on shareholder-sponsored proposals, I measure stronger corporate governance using the passage of proposals to declassify the board of directors. I find that vote passage lowers firm's average employee earnings by 11%, directionally consistent with the previous literature. This has often been interpreted as wage decreases for individual workers. However, I show that this decrease is driven in a large part by the changing composition of the workforce. Firms shift from higher-trajectory to more stable, lower-trajectory employees. This evidence suggests that stronger corporate governance does not simply cause a wealth transfer from employees to shareholders. Instead, it causes real changes in the types of employees selected and retained by the firm.

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The Compensation Benefits of Corporate Cash Holdings

Yingmei Cheng et al.
Florida State University Working Paper, July 2015

Abstract:
We show that corporate cash holdings have a significantly positive impact on executive compensation, distinct from the well-documented relation between performance and compensation. An increase of cash holdings by 10% of assets corresponds to about $2.7 million additional CEO total compensation. This relation is driven primarily by discretionary compensation components such as bonus and option-based compensation. In companies with weaker governance, the relation between cash holdings and executive compensation is even stronger. Using awards and losses associated with corporate litigation as exogenous shocks to the firms' cash, we show that CEO compensation readily responds to these changes in cash holdings.

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Insider Trading: Does Being a Neighbor of the Securities and Exchange Commission Matter?

Xuesong Hu, Xin Wang & Baohua Xin
Managerial and Decision Economics, forthcoming

Abstract:
Using a perception-based crime deterrence approach, we present evidence that corporate insiders located closer to the Securities and Exchange Commission regional offices trade less frequently on their own company's stocks, while they earn higher abnormal returns from such insider transactions. These results are robust to several additional tests. Our further analysis indicates that such differences in trading profitability are mitigated during the periods of a high level of legal jeopardy such as the periods around earnings announcements and mergers and acquisitions. These findings are consistent with the view that Securities and Exchange Commission oversight has an impact on insiders' trading behavior by influencing their perceptions of sanctions risk.

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Tournament incentives and corporate fraud

Lars Helge Haß, Maximilian Müller & Skrålan Vergauwe
Journal of Corporate Finance, forthcoming

Abstract:
This paper identifies a new incentive for managers to engage in corporate fraud stemming from the relative performance evaluation feature of CEO promotion tournaments. We document higher propensities to engage in fraud for firms with strong tournament incentives (as proxied for by the CEO pay gap). We posit that the relative performance evaluation feature of CEO promotion tournaments creates incentives to manipulate performance, while the option-like character can motivate managers to engage in risky activities. We thereby extend previous corporate fraud literature that focuses mainly on equity-based incentives and reports mixed findings. Our results are robust to using different fraud samples, and controlling for other known determinants of fraud as well as manager skills.

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Managerial Overconfidence and Corporate Risk Management

Tim Adam, Chitru Fernando & Evgenia Golubeva
Journal of Banking & Finance, November 2015, Pages 195-208

Abstract:
We examine whether managerial overconfidence can help explain the observed discrepancies between the theory and practice of corporate risk management. We use a unique dataset of corporate derivatives positions that enables us to directly observe managerial reactions to their (speculative) gains and losses from market timing when they use derivatives. We find that managers increase their speculative activities using derivatives following speculative cash flow gains, while they do not reduce their speculative activities following speculative losses. This asymmetric response is consistent with the selective self-attribution associated with overconfidence. Our time series approach to measuring overconfidence complements cross-sectional approaches currently used in the literature. Our results show that managerial overconfidence, which has been found to influence a number of corporate decisions, also affects corporate risk management decisions.

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The Real Effects of Hedge Fund Activism: Productivity, Asset Allocation, and Labor Outcomes

Alon Brav, Wei Jiang & Hyunseob Kim
Review of Financial Studies, forthcoming

Abstract:
This paper studies the long-term effect of hedge fund activism on firm productivity using plant-level information from the U.S. Census Bureau. A typical target firm improves production efficiency in the 3 years after intervention, with stronger improvements in business strategy-oriented interventions. Plants sold after intervention improve productivity significantly under new ownership, suggesting that capital redeployment is an important channel for value creation. Employees of target firms experience stagnation in work hours and wages despite an increase in labor productivity. Additional tests refute alternative explanations attributing the improvement to mean reversion, management's voluntary reforms, industry consolidation shocks, or activists' stock-picking abilities.

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When Experts Become Liabilities: Domain Experts on Boards and Organizational Failure

Juan Almandoz & András Tilcsik
Academy of Management Journal, forthcoming

Abstract:
How does the presence of domain experts on a corporate board - directors whose primary professional experience is within the focal firm's industry - affect organizational outcomes? We argue that under conditions of significant decision uncertainty, a higher proportion of domain experts on a board may detract from effective decision making and thus increase the probability of organizational failure. Building on exploratory interviews with board members and CEOs, we derive hypotheses from this argument in the context of local banks in the United States. We predict that the greater the level of decision uncertainty - due to rapid asset growth or operation in less predictable markets - the stronger the relationship between the proportion of banking expert directors and the probability of bank failure. Longitudinal analyses of 1,307 banks between 1996 and 2012 support this prediction, even after accounting for both the overall level of professional diversity among directors and banks' different propensities to have an expert-heavy board. We discuss implications for the key dimensions of board composition, the conditions under which the professional background of directors is more or less consequential, and the mechanisms whereby board composition affects organizational outcomes.

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Corporate Governance and Executive Compensation for Corporate Social Responsibility

Bryan Hong, Zhichuan Frank Li & Dylan Minor
Harvard Working Paper, August 2015

Abstract:
We link the corporate governance literature in financial economics to the agency cost perspective of Corporate Social Responsibility (CSR) to derive theoretical predictions about the relationship between corporate governance and the existence of executive compensation incentives for CSR. We test our predictions using novel executive compensation contract data, and find that firms with more shareholder-friendly corporate governance are more likely to provide compensation to executives linked to firm social performance outcomes. Also, providing executives with incentives for CSR is associated with a higher level of engagement in CSR activities at the firm level. The findings provide evidence identifying corporate governance as a determinant of managerial incentives for social performance, and suggest that CSR activities are more likely to be beneficial to shareholders, as opposed to an agency cost.

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Corporate Social Responsibility and Social Capital

Anand Jha & James Cox
Journal of Banking & Finance, forthcoming

Abstract:
When corporations make an effort to be socially responsible beyond what is required by the law, this effort is often described as strategic - made mainly for the shareholders' or managers' benefit. A large body of literature corroborates this belief. But, could the incentives for corporate social responsibility (CSR) come from an altruistic inclination fostered by the social capital of the region in which the firm is headquartered? We investigate whether this phenomenon exists by examining the association between the social capital in the region and the firm's CSR. We find that a firm from a high social capital region exhibits higher CSR. This result suggests that the self-interest of shareholders or mangers does not explain all of the firm's CSR, but the altruistic inclination from the region might also play a role.

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Disproportionate Insider Control and Board of Director Characteristics

Lindsay Baran & Arno Forst
Journal of Corporate Finance, forthcoming

Abstract:
We comprehensively examine characteristics of the board of directors in firms characterized by disproportionate insider control. Specifically, we investigate whether board of director characteristics contribute to, or attenuate, the known negative association between a divergence of insider voting and cash flow rights and firm value. Using a new hand-collected sample of U.S. dual-class firms between 2000 and 2012, we find that disproportionate insider control is negatively associated with board experience, independence and the tenure/age of directors. These findings support an entrenchment, rather than a substitution explanation, which would require stronger board monitoring as the extent of agency conflicts increases. Moreover, mediation analyses reveal that negative board characteristics act as one channel for the previously established negative association between disproportionate insider control and firm value.

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Segment Disclosure Transparency and Internal Capital Market Efficiency: Evidence from SFAS No. 131

Young Jun Cho
Journal of Accounting Research, September 2015, Pages 669-723

Abstract:
Using the adoption of SFAS 131, I examine the effect of segment disclosure transparency on internal capital market efficiency. SFAS 131 requires firms to define segments as internally viewed by managers, thereby improving the transparency of managerial actions in internal capital allocation. I find that diversified firms that improved segment disclosure transparency by changing segment definitions upon adoption of SFAS 131 experienced an improvement in capital allocation efficiency in internal capital markets after the adoption of SFAS 131. In addition, I find that the improvement in internal capital market efficiency was greater for firms that suffered more severe agency problems before the adoption of SFAS 131 and also for firms whose managers faced stronger incentives to improve efficiency after the adoption of SFAS 131. My results suggest that more transparent segment information can help resolve agency conflicts in the internal capital markets of diversified firms, thus improving investment efficiency.

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Bonus-Driven Repurchases

Yingmei Cheng, Jarrad Harford & Tianming (Tim) Zhang
Journal of Financial and Quantitative Analysis, June 2015, Pages 447-475

Abstract:
Using a large hand-collected database of chief executive officer (CEO) bonus structures, we find that when a CEO's bonus is directly tied to earnings per share (EPS), his company is more likely to conduct a buyback. This effect is especially pronounced when a company's EPS is right below the threshold for a bonus award. Share repurchasing increases the probability the CEO receives a bonus and the magnitude of that bonus, but only when bonus pay is EPS based. Bonus-driven repurchasing firms do not exhibit positive long-run abnormal returns.

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Corporate Litigation and Executive Turnover

Joseph Aharony, Chelsea Liu & Alfred Yawson
Journal of Corporate Finance, forthcoming

Abstract:
We examine executive turnover following environmental, antitrust, intellectual property (IP), and contractual lawsuits filed against their companies. We find that companies' responses to lawsuits depend on the nature of the allegations. In particular, contractual lawsuits are followed by increased turnover of CEOs and inside directors, whereas following environmental and IP lawsuits, only outside directors tend to depart. Antitrust lawsuits are followed by increased appointments of inside directors. We also find that lawsuit merit and pecuniary demands for damages play a role in determining executive turnover. In addition, we find some evidence of reduced CEO compensation following lawsuits. Overall, we provide insights into the effectiveness of the executive labor market in responding to alleged corporate wrongdoing.

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Board Structure and Monitoring: New Evidence from CEO Turnovers

Lixiong Guo & Ronald Masulis
Review of Financial Studies, forthcoming

Abstract:
We use the 2003 NYSE and NASDAQ listing rules for board and committee independence as a quasinatural experiment to examine the causal relations between board structure and CEO monitoring. Noncompliant firms forced to raise board independence or adopt a fully independent nominating committee significantly increased their forced CEO turnover sensitivity to performance relative to compliant firms. Nominating committee independence is important even when firms had an independent board, and the effect is stronger when the CEO is on the committee. We conclude that greater board independence and full independence of nominating committees lead to more rigorous CEO monitoring and discipline.

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The Effects of Securities Class Action Litigation on Corporate Liquidity and Investment Policy

Matteo Arena & Brandon Julio
Journal of Financial and Quantitative Analysis, April 2015, Pages 251-275

Abstract:
The risk of securities class action litigation alters corporate savings and investment policy. Firms with greater exposure to securities litigation hold significantly more cash in anticipation of future settlements and other related costs. The result is due to firms accumulating cash in anticipation of lawsuits and not a consequence of plaintiffs targeting firms with high cash levels. The market value of cash is lower for firms exposed to litigation risk. Corporate investment decisions are also affected by litigation risk, as firms reduce capital expenditures in response. Our results are robust to endogeneity concerns and possible spurious temporal effects.

By KEVIN LEWIS | 09:00:00 AM

Sunday, August 30, 2015

Vibes

Physically Scarce (vs. Enriched) Environments Decrease the Ability to Tell Lies Successfully

Leanne ten Brinke, Poruz Khambatta & Dana Carney
Journal of Experimental Psychology: General, forthcoming

Abstract:
The successful detection of deception is of critical importance to adaptive social relationships and organizations, and perhaps even national security. However, research in forensic, legal, and social psychology demonstrates that people are generally very successful deceivers. The goal of the current research was to test an intervention with the potential to decrease the likelihood of successful deception. We applied findings in the architectural, engineering, and environmental sciences that has demonstrated that enriched environments (vs. scarce ones) promote the experience of comfort, positive emotion, feelings of power and control, and increase productivity. We hypothesized that sparse, impoverished, scarcely endowed environments (vs. enriched ones) would decrease the ability to lie successfully by making liars feel uncomfortable and powerless. Study 1 examined archival footage of an international sample of criminal suspects (N = 59), including innocent relatives (n = 33) and convicted murderers (n = 26) emotionally pleading to the public for the return of a missing person. Liars in scarce environments (vs. enriched) were significantly more likely to reveal their lies through behavioral cues to deception. Study 2 (N = 79) demonstrated that the discomfort and subsequent powerlessness caused by scarce (vs. enriched) environments lead people to reveal behavioral cues to deception. Liars in scarce environments also experienced greater neuroendocrine stress reactivity and were more accurately detected by a sample of 66 naïve observers (Study 3). Taken together, data suggest that scarce environments increase difficulty, and decrease success, of deception. Further, we make available videotaped stimuli of Study 2 liars and truth-tellers.

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Mental Representations of Weekdays

David Ellis, Richard Wiseman & Rob Jenkins
PLoS ONE, August 2015

Abstract:
Keeping social appointments involves keeping track of what day it is. In practice, mismatches between apparent day and actual day are common. For example, a person might think the current day is Wednesday when in fact it is Thursday. Here we show that such mismatches are highly systematic, and can be traced to specific properties of their mental representations. In Study 1, mismatches between apparent day and actual day occurred more frequently on midweek days (Tuesday, Wednesday, and Thursday) than on other days, and were mainly due to intrusions from immediately neighboring days. In Study 2, reaction times to report the current day were fastest on Monday and Friday, and slowest midweek. In Study 3, participants generated fewer semantic associations for “Tuesday”, “Wednesday” and “Thursday” than for other weekday names. Similarly, Google searches found fewer occurrences of midweek days in webpages and books. Analysis of affective norms revealed that participants’ associations were strongly negative for Monday, strongly positive for Friday, and graded over the intervening days. Midweek days are confusable because their mental representations are sparse and similar. Mondays and Fridays are less confusable because their mental representations are rich and distinctive, forming two extremes along a continuum of change.

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Feeling good, searching the bad: Positive priming increases attention and memory for negative stimuli on webpages

Kai Kaspar, Ricardo Ramos Gameiro & Peter König
Computers in Human Behavior, December 2015, Pages 332–343

Abstract:
Emotional impacts on attention arises in the form of externally and internally loaded forms. The former relates to the emotional valence of the sensory stimulus. The latter refers to the emotional state of the subject. We investigated their influence and interaction. Seventy-two subjects had been emotionally primed by a sequence of positive or negative images before they observed webpages of an online news portal. Each webpage contained positive and negative emotion-laden stimuli to be recalled in a memory test. We captured effects on overt attention, saccadic parameters, and explorative behavior. Furthermore, we related memory performance to characteristic gaze behavior. We found an attentional preference and a better memory performance for negative stimuli that was more pronounced after a positive mood induction. Importantly, increased attention correlated positively with recall performance on an individual level, but only after a positive mood induction. Moreover, the evaluation of the news-portal’s hedonic quality and overall appeal, but not of usability, was affected by subjects’ emotional states. We concluded that in contrast to previously reported mood-congruent preferences in young adults’ attention, there are complementary effects of internally and externally loaded emotions with the tendency that positive priming increases attention and memory for negative stimuli.

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Sadness Impairs Color Perception

Christopher Thorstenson, Adam Pazda & Andrew Elliot
Psychological Science, forthcoming

Abstract:
Past research has shown that emotion can influence low-level visual processes, including color perception, that may play a role in higher-order vision. Moreover, the prevalence of linguistic pairings between emotions and color words suggests that emotional experience and color perception may be linked. The purpose of the present research was to test whether emotion influences color perception. We did this by experimentally manipulating emotion with video clips in two experiments (specifically, sadness and amusement in Experiment 1, and sadness and neutral emotion in Experiment 2) and measuring color perception (specifically, accuracy in identifying desaturated colors). The results of both experiments showed that sadness impaired color perception along the blue-yellow color axis but not along the red-green color axis.

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The Spatial Scaffold: The Effects of Spatial Context on Memory for Events

Jessica Robin, Jordana Wynn & Morris Moscovitch
Journal of Experimental Psychology: Learning, Memory, and Cognition, forthcoming

Abstract:
Events always unfold in a spatial context, leading to the claim that it serves as a scaffold for encoding and retrieving episodic memories. The ubiquitous co-occurrence of spatial context with events may induce participants to generate a spatial context when hearing scenarios of events in which it is absent. Spatial context should also serve as an excellent cue for memory retrieval. To test these predictions, participants read event scenarios involving a highly familiar or less familiar spatial context, or person, which they were asked to imagine and remember. At recall, locations were more effective memory cues than people, and both were better when they were highly familiar. Most importantly, when no locations were specified at study, participants exhibited a spontaneous tendency to generate a spatial context for the scenarios, while rarely generating a person. Events with spatial context were remembered more vividly and described in more detail than those without. Together, the results favor the view that spatial context plays a leading role in remembering events.

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Facial Action and Emotional Language: ERP Evidence that Blocking Facial Feedback Selectively Impairs Sentence Comprehension

Joshua Davis, Piotr Winkielman & Seana Coulson
Journal of Cognitive Neuroscience, forthcoming

Abstract:
There is a lively and theoretically important debate about whether, how, and when embodiment contributes to language comprehension. This study addressed these questions by testing how interference with facial action impacts the brain's real-time response to emotional language. Participants read sentences about positive and negative events (e.g., “She reached inside the pocket of her coat from last winter and found some (cash/bugs) inside it.”) while ERPs were recorded. Facial action was manipulated within participants by asking participants to hold chopsticks in their mouths using a position that allowed or blocked smiling, as confirmed by EMG. Blocking smiling did not influence ERPs to the valenced words (e.g., cash, bugs) but did influence ERPs to final words of sentences describing positive events. Results show that affectively positive sentences can evoke smiles and that such facial action can facilitate the semantic processing indexed by the N400 component. Overall, this study offers causal evidence that embodiment impacts some aspects of high-level comprehension, presumably involving the construction of the situation model.

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Walkable Distances Are Bioenergetically Scaled

Jonathan Zadra, Arthur Weltman & Dennis Proffitt
Journal of Experimental Psychology: Human Perception and Performance, forthcoming

Abstract:
In perceiving spatial layout, the angular units of visual information are transformed into linear units appropriate for specifying size and extent. This derivation of linear units from angular ones requires geometry and a ruler. Numerous studies suggest that the requisite perceptual rulers are derived from the observer’s body. In the case of walkable extents, it has been proposed that people scale distances to the bioenergetic resources required to traverse the extents relative to the bioenergetic resources currently available. The current study sought to rigorously test this proposal. Using methods from exercise physiology, a host of physiological measures were recorded as participants engaged in exercise on 2 occasions: once while provided with a carbohydrate supplement and once with a placebo. Distance estimates were made before and after exercise on both occasions. As in previous studies, the carbohydrate manipulation caused decreased distance estimates relative to the placebo condition. More importantly, individual differences in physiological measures that are associated with physical fitness predicted distance estimates both before and after the experimental manipulations. Results suggest that walkable distances are bioenergetically scaled.

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Who does Red Bull give wings to? Sensation seeking moderates sensitivity to subliminal advertisement

Gaëlle Bustin et al.
Frontiers in Psychology, June 2015

Abstract:
This study assessed whether subliminal priming of a brand name of a drink can affect people’s choices for the primed brand, and whether this effect is moderated by personality traits. Participants with different levels of sensation seeking were presented subliminally with the words Red Bull or Lde Ublr. Results revealed that being exposed to Red Bull lead on average to small increases in participants’ preferences for the primed brand. However, this effect was twice as strong for participants high in sensation seeking and did not occur for participants low in sensation seeking. Going beyond previous research showing that situational factors (e.g., thirst, fatigue…) can increase people’s sensitivity to subliminal advertisement, our results suggest that some dispositional factors could have the same potentiating effect. These findings highlight the necessity of taking personality into account in non-conscious persuasion research.

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Sleep and Native Language Interference Affect Non-Native Speech Sound Learning

Sayako Earle & Emily Myers
Journal of Experimental Psychology: Human Perception and Performance, forthcoming

Abstract:
Adults learning a new language are faced with a significant challenge: non-native speech sounds that are perceptually similar to sounds in one’s native language can be very difficult to acquire. Sleep and native language interference, 2 factors that may help to explain this difficulty in acquisition, are addressed in 3 studies. Results of Experiment 1 showed that participants trained on a non-native contrast at night improved in discrimination 24 hr after training, while those trained in the morning showed no such improvement. Experiments 2 and 3 addressed the possibility that incidental exposure to perceptually similar native language speech sounds during the day interfered with maintenance in the morning group. Taken together, results show that the ultimate success of non-native speech sound learning depends not only on the similarity of learned sounds to the native language repertoire, but also to interference from native language sounds before sleep.

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Is 9 louder than 1? Audiovisual cross-modal interactions between number magnitude and judged sound loudness

Doug Alards-Tomalin et al.
Acta Psychologica, September 2015, Pages 95–103

Abstract:
The cross-modal impact of number magnitude (i.e. Arabic digits) on perceived sound loudness was examined. Participants compared a target sound's intensity level against a previously heard reference sound (which they judged as quieter or louder). Paired with each target sound was a task irrelevant Arabic digit that varied in magnitude, being either small (1, 2, 3) or large (7, 8, 9). The degree to which the sound and the digit were synchronized was manipulated, with the digit and sound occurring simultaneously in Experiment 1, and the digit preceding the sound in Experiment 2. Firstly, when target sounds and digits occurred simultaneously, sounds paired with large digits were categorized as loud more frequently than sounds paired with small digits. Secondly, when the events were separated, number magnitude ceased to bias sound intensity judgments. In Experiment 3, the events were still separated, however the participants held the number in short-term memory. In this instance the bias returned.

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Using Single-Neuron Recording in Marketing: Opportunities, Challenges, and an Application to Fear Enhancement in Communications

Moran Cerf et al.
Journal of Marketing Research, August 2015, Pages 530-545

Abstract:
This article introduces the method of single-neuron recording in humans to marketing and consumer researchers. First, the authors provide a general description of this methodology, discuss its advantages and disadvantages, and describe findings from previous single-neuron human research. Second, they discuss the relevance of this method for marketing and consumer behavior and, more specifically, how it can be used to gain insights into the areas of categorization, sensory discrimination, reactions to novel versus familiar stimuli, and recall of experiences. Third, they present a study designed to illustrate how single-neuron studies are conducted and how data from them are processed and analyzed. This study examines people's ability to up-regulate (i.e., enhance) the emotion of fear, which has implications for designing effective fear appeals. The study shows that the firing rates of neurons previously shown to respond selectively to fearful content increased with emotion enhancement instructions, but only for a video that did not automatically evoke substantial fear. The authors discuss how the findings help illustrate which conclusions can and cannot be drawn from single-neuron research.

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Inattentional Blindness and Individual Differences in Cognitive Abilities

Carina Kreitz et al.
PLoS ONE, August 2015

Abstract:
People sometimes fail to notice salient unexpected objects when their attention is otherwise occupied, a phenomenon known as inattentional blindness. To explore individual differences in inattentional blindness, we employed both static and dynamic tasks that either presented the unexpected object away from the focus of attention (spatial) or near the focus of attention (central). We hypothesized that noticing in central tasks might be driven by the availability of cognitive resources like working memory, and that noticing in spatial tasks might be driven by the limits on spatial attention like attention breadth. However, none of the cognitive measures predicted noticing in the dynamic central task or in either the static or dynamic spatial task. Only in the central static task did working memory capacity predict noticing, and that relationship was fairly weak. Furthermore, whether or not participants noticed an unexpected object in a static task was only weakly associated with their odds of noticing an unexpected object in a dynamic task. Taken together, our results are largely consistent with the notion that noticing unexpected objects is driven more by stochastic processes common to all people than by stable individual differences in cognitive abilities.

By KEVIN LEWIS | 09:00:00 AM

Saturday, August 29, 2015

When push comes to shove

A Natural Experiment to Determine the Crowd Effect Upon Home Court Advantage

Christopher Boudreaux, Shane Sanders & Bhavneet Walia
Journal of Sports Economics, forthcoming

Abstract:
Spectator effects represent a central concept in (behavioral) sports economics. A thorough understanding of the phenomenon promises to further our understanding as to the nature of performance production under pressure. In traditional home advantage studies, it is difficult to isolate the net crowd effect upon relative team performance. In a typical sports setting, multiple factors change at once for a visiting team. Experimental evidence suggests that supportive crowds may hinder task performance. In that it serves as home stadium to two National Basketball Association teams, the Staples Center in Los Angeles offers a rare natural experiment through which to isolate the crowd effect upon competitive output. Each team possesses equivalent familiarity with built environment, and teams face similarly sparse travel demands prior to games between one another. However, the team designated as "home team" in a contest enjoys a largely sympathetic crowd due primarily to season ticket sales. Moreover, crowd effects are sizable in motivating a home team win, raising the likelihood of such an event by between an estimated 21 and 22.8 percentage points. The point estimate implies that essentially the entire home advantage between the two teams is attributable to the crowd effect.

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Prospective Randomized Study of the Effect of Music on the Efficiency of Surgical Closures

Shelby Lies & Andrew Zhang
Aesthetic Surgery Journal, forthcoming

Objective: The goal of this study is to evaluate the effect of music on simple wound closure.

Methods: Plastic surgery residents were asked to perform layered closures on pigs' feet with and without their preferred music playing. Simple randomization was used to assign residents to the music playing first or music playing second group. The time to complete the repair was measured and repairs were graded by blinded faculty. Results were analyzed to determine significant differences in time to complete the task and quality of repair. Participants were retested in a second session with music played in the opposite order to evaluate consistency.

Results: Listening to preferred music decreased repair time by 8% for all plastic surgery residents (p = 0.009). Subgroup analysis demonstrated even more significant improvement in speed for senior residents (PGY 4-6), resulting in a 10% decrease in repair time (p = 0.006). The quality of repair was also better in the music group, at 3.3 versus 3.1 (p = 0.047). Retesting revealed results remained significant whether music was played first or second.

Conclusions: Playing preferred music made plastic surgery residents faster in completing wound closure with a 10% improvement in senior residents. Music also improved quality of repair as judged by blinded faculty. Our study showed that music improves efficiency of wound closure, which may translate to healthcare cost savings.

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The role of mortality awareness in heroic enactment

Simon McCabe, Ryan Carpenter & Jamie Arndt
Journal of Experimental Social Psychology, November 2015, Pages 104-109

Abstract:
Despite being derived from the work of cultural anthropologist Ernest Becker and the breadth of research it has inspired, terror management theory (TMT) has yet to programmatically examine a major focus of Becker's writings: the relationship between mortality concerns and heroism. The present research investigates whether mortality reminders motivate behavior linked with heroism, and whether such behavior functions to decrease thoughts of death. Findings indicate that after reminders of death and linking pain tolerance to heroism, participants reported less pain on a cold pressor task (CPT). Further, those reminded of death and given false-feedback indicating heroic performance on the CPT, i.e., significant levels of pain tolerance, had lower death thought accessibility. Findings are discussed as generative for heroism research, informing a motivation underlying heroic enactment, and also theoretically important for TMT, informing how heroism may promote attainment of cultural values even in the face of adversity.

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Squeezed in the Middle: The Middle Status Trade Creativity for Focus

Michelle Duguid & Jack Goncalo
Journal of Personality and Social Psychology, forthcoming

Abstract:
Classical research on social influence suggested that people are the most conforming in the middle of a status hierarchy as opposed to the top or bottom. Yet this promising line of research was abandoned before the psychological mechanism behind middle-status conformity had been identified. Moving beyond the early focus on conformity, we propose that the threat of status loss may make those with middle status more wary of advancing creative solutions in fear that they will be evaluated negatively. Using different manipulations of status and measures of creativity, we found that when being evaluated, middle-status individuals were less creative than either high-status or low-status individuals (Studies 1 and 2). In addition, we found that anxiety at the prospect of status loss also caused individuals with middle status to narrow their focus of attention and to think more convergently (Study 3). We delineate the consequences of power and status both theoretically and empirically by showing that, unlike status, the relationship between power and creativity is positive and linear (Study 4). By both measuring status (Studies 2 and 3) and by manipulating it directly (Study 5), we demonstrate that the threat of status loss explains the consequences of middle status. Finally, we discuss the theoretical implications of our results for future research on status and problem solving on tasks that require either focus or flexibility.

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Missed Shots at the Free-Throw Line: Analyzing the Determinants of Choking Under Pressure

Mattie Toma
Journal of Sports Economics, forthcoming

Abstract:
Choking under pressure represents a phenomenon in which individuals faced with a high-pressure situation do not perform as well as would be expected were they performing under normal conditions. In this article, I identify determinants that predict a basketball player's susceptibility to choking under pressure. Identification of these determinants adds to our understanding of players' psychology at pivotal points in the game. My analysis draws on play-by-play data from ESPN.com that feature over 2 million free-throw attempts in women's and men's college and professional basketball games from the 2002-2013 seasons. Using regression analysis, I explore the impact of both gender and level of professionalism on performance in high-pressure situations. I find that in the final 30 seconds of a tight game, Women's National Basketball Association and National Basketball Association players are 5.81 and 3.11 percentage points, respectively, less likely to make a free throw, while female and male college players are 2.25 and 2.09 percentage points, respectively, less likely to make a free throw, though statistical significance cannot be established among National Collegiate Athletic Association women. The discrepancy in choking between college and professional players is pronounced when comparing male college players who do and do not make it to the professional level; the free-throw performance of those destined to go pro falls 6 percentage points more in high-pressure situations. Finally, I find that women and men do not differ significantly in their propensity to choke.

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Should I plan? Planning effects on perceived effort and motivation in goal pursuit

Julia Bayuk
Journal of Consumer Behaviour, forthcoming

Abstract:
This research investigates how forming a plan can have both beneficial and detrimental effects on people's motivation to pursue a goal. We propose that forming a plan makes the necessary steps to pursue a goal salient, directing attention to the effort involved in executing these steps, which ultimately affects perceptions of required effort and motivation. We theorize that the impact of forming plans on motivation in goal pursuit depends on the level of difficulty to achieve a goal. When a goal is relatively easy to achieve, planning should make goal pursuit seem less effortful, thereby decreasing motivation to pursue the goal. When a goal is more difficult to achieve, planning should make goal pursuit seem more effortful, which ironically should increase motivation to pursue it. Three studies demonstrate how plans influence motivation in the domains of losing weight and saving money.

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Yes I can: Expected success promotes actual success in emotion regulation

Yochanan Bigman et al.
Cognition and Emotion, forthcoming

Abstract:
People who expect to be successful in regulating their emotions tend to experience less frequent negative emotions and are less likely to suffer from depression. It is not clear, however, whether beliefs about the likelihood of success in emotion regulation can shape actual emotion regulation success. To test this possibility, we manipulated participants' beliefs about the likelihood of success in emotion regulation and assessed their subsequent ability to regulate their emotions during a negative emotion induction. We found that participants who were led to expect emotion regulation to be more successful were subsequently more successful in regulating their emotional responses, compared to participants in the control condition. Our findings demonstrate that expected success can contribute to actual success in emotion regulation.

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Does Sparing the Rod Spoil the Child? How Praising, Scolding, and Assertive Tone can Encourage Desired Behaviors

Amir Grinstein & Ann Kronrod
Journal of Marketing Research, forthcoming

Abstract:
In search for effective ways to encourage consumers to follow desired behaviors such as healthy eating, recycling or financial planning, marketers sometimes praise (e.g., You are doing great) and sometimes scold (e.g., You are not doing enough). However, the effectiveness of each approach in triggering behavior is not clear. A possible reason is that it is not only what you say that matters, but also how you say it: Praising and scolding can be performed with more/less assertive tone. This research introduces assertiveness as a moderator that can explain when praising or scolding would be more effective. Two field experiments in the context of hand hygiene and financial planning demonstrate that when communicators praise consumers, an assertive tone may be more effective in encouraging behavior, whereas scolding requires a non-assertive tone. These field findings are then replicated in a controlled laboratory experiment, which also provides click rates as an actual behavioral outcome.

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Nostalgia-Evoked Inspiration: Mediating Mechanisms and Motivational Implications

Elena Stephan et al.
Personality and Social Psychology Bulletin, forthcoming

Abstract:
Six studies examined the nostalgia-inspiration link and its motivational implications. In Study 1, nostalgia proneness was positively associated with inspiration frequency and intensity. In Studies 2 and 3, the recollection of nostalgic (vs. ordinary) experiences increased both general inspiration and specific inspiration to engage in exploratory activities. In Study 4, serial mediational analyses supported a model in which nostalgia increases social connectedness, which subsequently fosters self-esteem, which then boosts inspiration. In Study 5, a rigorous evaluation of this serial mediational model (with a novel nostalgia induction controlling for positive affect) reinforced the idea that nostalgia-elicited social connectedness increases self-esteem, which then heightens inspiration. Study 6 extended the serial mediational model by demonstrating that nostalgia-evoked inspiration predicts goal pursuit (intentions to pursue an important goal). Nostalgia spawns inspiration via social connectedness and attendant self-esteem. In turn, nostalgia-evoked inspiration bolsters motivation.

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Evidence for the negative impact of reward on self-regulated learning

Hillary Wehe, Matthew Rhodes & Carol Seger
Quarterly Journal of Experimental Psychology, November 2015, Pages 2125-2130

Abstract:
The undermining effect refers to the detrimental impact rewards can have on intrinsic motivation to engage in a behaviour. The current study tested the hypothesis that participants' self-regulated learning behaviours are susceptible to the undermining effect. Participants were assigned to learn a set of Swahili-English word pairs. Half of the participants were offered a reward for performance, and half were not offered a reward. After the initial study phase, participants were permitted to continue studying the words during a free period. The results were consistent with an undermining effect: Participants who were not offered a reward spent more time studying the words during the free period. The results suggest that rewards may negatively impact self-regulated learning behaviours and provide support for the encouragement of intrinsic motivation.

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Cross-Domain Effects of Guilt on Desire for Self-Improvement Products

Thomas Allard & Katherine White
Journal of Consumer Research, forthcoming

Abstract:
This research examines the notion that guilt, the negative emotion stemming from a failure to meet a self-held standard of behavior, leads to preferences for products enabling self-improvement, even in domains unrelated to the original source of the guilt. Examining consumer responses to real products, this research shows that such effects arise because guilt - by its focus on previous wrongdoings - activates a general desire to improve the self. This increase in desire for self-improvement products is only observed for choices involving the self (not others), is not observed in response to other negative emotions (e.g., shame, embarrassment, sadness, or envy), and is mitigated when people hold the belief that the self is nonmalleable. Building on past work that focuses on how guilt often leads to the motivation to alleviate feelings of guilt either directly or indirectly, the current research demonstrates an additional, novel downstream consequence of guilt, showing that only guilt has the unique motivational consequence of activating a general desire to improve the self, which subsequently spills into other domains and spurs self-improving product choices. These findings are discussed in light of their implications for research on the distinct motivational consequences of specific emotions and on consumer well-being.

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From Effort to Value: Preschool Children's Alternative to Effort Justification

Avi Benozio & Gil Diesendruck
Psychological Science, forthcoming

Abstract:
In the current studies, we addressed the development of effort-based object valuation. Four- and 6-year-olds invested either great or little effort in order to obtain attractive or unattractive rewards. Children were allowed to allocate these rewards to an unfamiliar recipient (dictator game). Investing great effort to obtain attractive rewards (a consonant situation) led 6-year-olds, but not 4-year-olds, to enhance the value of the rewards and thus distribute fewer of them to others. After investing effort to attain unattractive rewards (a dissonant situation), 6-year-olds cognitively reduced the dissonance between effort and reward quality by reappraising the value of the rewards and thus distributing fewer of them. In contrast, 4-year-olds reduced the dissonance behaviorally by discarding the rewards. These findings provide evidence for the emergence of an effort-value link and underline possible mechanisms underlying the primacy of cognitive versus behavioral solutions to dissonance reduction.

By KEVIN LEWIS | 09:00:00 AM

Friday, August 28, 2015

Let's get ready to rumble

Mimicry Is Presidential: Linguistic Style Matching in Presidential Debates and Improved Polling Numbers

Daniel Romero et al.
Personality and Social Psychology Bulletin, forthcoming

Abstract:
The current research used the contexts of U.S. presidential debates and negotiations to examine whether matching the linguistic style of an opponent in a two-party exchange affects the reactions of third-party observers. Building off communication accommodation theory (CAT), interaction alignment theory (IAT), and processing fluency, we propose that language style matching (LSM) will improve subsequent third-party evaluations because matching an opponent's linguistic style reflects greater perspective taking and will make one's arguments easier to process. In contrast, research on status inferences predicts that LSM will negatively impact third-party evaluations because LSM implies followership. We conduct two studies to test these competing hypotheses. Study 1 analyzed transcripts of U.S. presidential debates between 1976 and 2012 and found that candidates who matched their opponent's linguistic style increased their standing in the polls. Study 2 demonstrated a causal relationship between LSM and third-party observer evaluations using negotiation transcripts.

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Why Do We Think Politicians Are So Evasive? Insight From Theories of Equivocation and Deception, With a Content Analysis of U.S. Presidential Debates, 1996-2012

David Clementson
Journal of Language and Social Psychology, forthcoming

Abstract:
Politicians have a reputation for deception. Instead of blaming the politicians themselves, equivocation theory directs our attention to the situation in which politicians are asked questions. We draw on recent theories of deception detection - truth-default theory and information manipulation theory 2 - to propose that a reason we think politicians are so evasive might be because, ironically, we believe them when they accuse their opponents of evasiveness in equivocal situations. We perform a content analysis of the question-answer sequences (N = 810) in U.S. presidential debates 1996 to 2012. Our results indicate that politicians accuse each other of evasion to a significant degree. Meanwhile, they are not necessarily dodging questions to the extent that their overt allegations suggest. This study demonstrates how the predictions of equivocation theory and deception detection theories apply to the domain of U.S. presidential debates.

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Systemic Effects of Campaign Spending: Evidence From Corporate Contribution Bans in U.S. State Legislatures

Andrew Hall
Political Science Research and Methods, forthcoming

Abstract:
In this paper, I examine the systemic effects of campaign spending, looking at outcomes at the level of the legislature rather than the individual seat. Using a difference-in-differences design, I show that state-level corporate campaign contributions bans have a large effect on electoral outcomes at the legislature level. A one percentage-point increase in the Democratic (or Republican) party's share of all contributions in an electoral cycle is estimated to increase its share of the legislature by roughly half a percentage point. Policy outcomes as well as campaign finance reforms occur at the legislature level; understanding the systemic rather than individual-level effect of campaign spending is therefore directly relevant. Aggregating estimated effects of individual-level campaign finance would not produce this same estimate due to spillovers and other strategic dynamics. Taken together, the analyses suggest that contribution bans have important electoral effects and thus point to the systemic effects of campaign spending.

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Marshmallows and Votes: Childhood Non-Cognitive Skill Development and Adult Political Participation

John Holbein
Duke University Working Paper, July 2015

Abstract:
Recent research has shown that the "non-cognitive" skills children develop - such as the ability to self regulate or to interact in social settings - are critically important for success in school and in the labor force. Do non-cognitive skills also promote active participation in politics? In this paper I use multiple data sources to show that children who develop non-cognitive skills are more likely to participate in politics in adulthood than those who do not. Further, I explore whether non-cognitive skills are malleable and whether exogenous improvements in these increase participation downstream. To do so I use a unique 20-year field experiment. Matching participants to voter files, I show that this early-childhood intervention increased participants' adult turnout substantially: by 11-14 percentage points. These results suggest a refocusing of political socialization models on early childhood. During this critical early period, children develop the non-cognitive skills that encourage political participation later in life.

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The Ground Game in the 2012 Presidential Election

Seth Masket, John Sides & Lynn Vavreck
Political Communication, forthcoming

Abstract:
Relatively little research has examined the effects of campaign-led field activity in a competitive election. In this article, we leverage a unique data set containing the location of every Barack Obama and Mitt Romney field office and county-level data on the presidential vote to understand how communication with voters in the field may have affected the outcome of the 2012 presidential election. We find that the presence of Obama field offices was associated with greater Obama vote share at the county level, although we cannot detect a similar relationship for Romney field offices. We conduct additional robustness tests to address the potential limitations of these observational data. Ultimately, we conclude that even if Obama's field organization out-performed Romney's, the aggregate impact of Obama's field organization was not large enough to determine the outcome of the 2012 presidential election.

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Regular Voters, Marginal Voters and the Electoral Effects of Turnout

Anthony Fowler
Political Science Research and Methods, May 2015, Pages 205-219

Abstract:
How do marginal voters differ from regular voters? This article develops a method for comparing the partisan preferences of regular voters to those marginal voters whose turnout decisions are influenced by exogenous factors and applies it to two sources of variation in turnout in the United States - weather and election timing. In both cases, marginal voters are over 20 percentage points more supportive of the Democratic Party than regular voters - a significant divide. The findings suggest that the expansion or contraction of the electorate can have important consequences. Moreover, the findings suggest that election results do not always reflect the preferences of the citizenry, because the marginal citizens who may stay home have systematically different preferences than those who participate. Finally, the methods developed in the article may enable future researchers to compare regular and marginal voters on many different dimensions and in many different electoral settings.

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Parties and Electoral Performance in the Market for Political Consultants

Gregory Martin & Zachary Peskowitz
Legislative Studies Quarterly, August 2015, Pages 441-470

Abstract:
We investigate whether the hiring relationships of candidates and political consulting firms better resembles the predictions of the "adversarial" or "allied" models of consultant-party interaction. We find that the highest-quality consultants are not allocated to the most competitive races, consultant-candidate relationships persist even as candidates' electoral prospects change, and firms who work for challengers face a higher risk of market exit than firms working for incumbents. The market focuses entirely on win-loss records and ignores the information on consultant performance available in candidates' vote shares. These findings depict a market driven by individual candidate, rather than aggregate party, goals.

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Precinct Closing Times in Florida During the 2012 General Election

Michael Herron & Daniel Smith
Election Law Journal, forthcoming

Abstract:
The Supreme Court's decision in Shelby County v. Holder to strike down Section 4 of the Voting Rights Act has spurred a search for measures of election performance that extend beyond race-based registration and turnout rates. We contribute to this endeavor by studying patterns of precinct congestion in Florida during the 2012 General Election. With precinct closing times as proxies for congestion, our study covers 5,302 total Election Day precincts in Florida. We show that there was tremendous variance in closing times in Florida on Election Day in 2012 and that precincts with greater proportions of Hispanic voters closed disproportionately late. This finding holds even controlling for the number of pollworkers per precinct. Broadly speaking, voting place congestion in the 2012 General Election appears not to have affected all Floridians equally, and most notably the post-Shelby electoral environment in the United States continues to reflect racial disparities. With the loss of the Voting Rights Act's retrogression standard, our analysis illustrates how precinct congestion data can be used to assess whether different racial/ethnic groups face different barriers to voting.

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How Politicians Discount the Opinions of Constituents with Whom They Disagree

Daniel Butler & Adam Dynes
American Journal of Political Science, forthcoming

Abstract:
We argue that politicians systematically discount the opinions of constituents with whom they disagree and that this "disagreement discounting" is a contributing factor to ideological incongruence. A pair of survey experiments where state and local politicians are the subjects of interest show that public officials rationalize this behavior by assuming that constituents with opposing views are less informed about the issue. This finding applies both to well-established issues that divide the parties as well as to nonpartisan ones. Further, it cannot be explained by politicians' desires to favor the opinions of either copartisans or likely voters. A third survey experiment using a sample of voters shows that the bias is exacerbated by an activity central to representative governance - taking and explaining one's policy positions. This suggests that the job of being a representative exacerbates this bias.

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Heuristics, Heterogeneity and Green Choices Voting on California's Proposition 23

Harold Clarke, Euel Elliott & Marianne Stewart
Political Science Research and Methods, forthcoming

Abstract:
Ballot initiatives and referendums are increasingly popular methods for addressing important political issues. Studies of voting in these events has found that people rely on party leader and candidate image heuristics when deciding how to cast their ballots. Some analysts have argued that these effects are heterogeneous, being larger for people with lower levels of political knowledge. However, research in experimental economics and political psychology suggests that the impact of heuristics may be greater among more knowledgeable individuals. This paper investigates these rival hypotheses using survey data on voting in a ballot initiative to repeal California's climate change legislation. Analyses using methods appropriate for studying interaction effects in nonlinear multivariate models demonstrate that candidate heuristics are stronger among more knowledgeable people.

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"A Mom First and a Candidate Second": Gender Differences in Candidates' Self-Presentation of Family

Brittany Stalsburg & Mona Kleinberg
Journal of Political Marketing, forthcoming

Abstract:
Parenthood carries different consequences for men and women in politics. While the conventional wisdom is that motherhood is a liability for women candidates and fatherhood an asset for men, recent elections have called this idea into question. Specifically, Sarah Palin's candidacy and her cadre of "Mama Grizzlies" suggest that there may be times when motherhood can be an asset. We analyze how men and women present their families to voters by examining the campaign websites of congressional contenders in 2008 and 2010. The results indicate that despite the proliferation of mother candidates, women still tend to de-emphasize their children compared to their male colleagues, who are more likely to showcase their families, most notably in pictures. Moreover, we find that other factors like parental status, age of children, party, chamber, incumbency, and opponent gender also affect differences in candidates' propensity to use their families in campaigns.

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Economic Insecurity and Political Trust in the United States

Andrew Wroe
American Politics Research, forthcoming

Abstract:
Extant research demonstrates that citizens' evaluations of national economic performance play an important role in determining trust in politicians and political institutions, whereas evaluations of their own economic situation play a lesser or even negligible role. Utilizing American National Election Studies data and more apposite measures of personal economic privation during an age of globalization and de-industrialization, this article finds that the extent to which citizens perceive themselves and their families to be economically insecure has a statistically significant and substantial negative effect on political trust. Indeed, the effect at least matches those of macro-economic evaluations and party identification. This article therefore adds a new dimension to our understanding of the economy-trust nexus and contributes to the small but growing body of scholarship on insecurity's effects on political behavior.

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The Nationalization of Special Elections for the U.S. House of Representatives

Gibbs Knotts & Jordan Ragusa
Journal of Elections, Public Opinion and Parties, forthcoming

Abstract:
Scholars and political commentators have argued that special elections to the U.S. House of Representatives are national contests, serving as a referendum on the president's party and a predictor of future election outcomes (Sigelman 1981; Smith and Burnnell 2010). But the empirical record is mixed, with one leading study demonstrating that candidate and district characteristics alone explain special election outcomes (Gaddie, Bullock, and Buchanan 1999). We investigate this disagreement by comparing special election and open-seat results using new data for the period 1995-2014. We find that while candidate characteristics affect special election outcomes, presidential approval is predictive of special election outcomes as well. Furthermore, we find that the effect of presidential approval on special election outcomes has increased in magnitude from 1995 to 2014, with the 2002 midterm representing an important juncture in the nationalization of special elections. We conclude that special elections have developed into national contests since the 1970s and situate this development within broader electoral trends.

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The search engine manipulation effect (SEME) and its possible impact on the outcomes of elections

Robert Epstein & Ronald Robertson
Proceedings of the National Academy of Sciences, 18 August 2015, Pages E4512-E4521

Abstract:
Internet search rankings have a significant impact on consumer choices, mainly because users trust and choose higher-ranked results more than lower-ranked results. Given the apparent power of search rankings, we asked whether they could be manipulated to alter the preferences of undecided voters in democratic elections. Here we report the results of five relevant double-blind, randomized controlled experiments, using a total of 4,556 undecided voters representing diverse demographic characteristics of the voting populations of the United States and India. The fifth experiment is especially notable in that it was conducted with eligible voters throughout India in the midst of India's 2014 Lok Sabha elections just before the final votes were cast. The results of these experiments demonstrate that (i) biased search rankings can shift the voting preferences of undecided voters by 20% or more, (ii) the shift can be much higher in some demographic groups, and (iii) search ranking bias can be masked so that people show no awareness of the manipulation. We call this type of influence, which might be applicable to a variety of attitudes and beliefs, the search engine manipulation effect. Given that many elections are won by small margins, our results suggest that a search engine company has the power to influence the results of a substantial number of elections with impunity. The impact of such manipulations would be especially large in countries dominated by a single search engine company.

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Selling to a Moving Target: Dynamic Marketing Effects in US Presidential Elections

Doug Chung & Lingling Zhang
Harvard Working Paper, June 2015

Abstract:
We examine the effects of various political campaign activities on voter preferences in the domain of US Presidential elections. We construct a comprehensive data set that covers the three most recent elections, with detailed records of voter preferences at the state-week level over an election period. We include various types of the most frequently utilized marketing instruments: two forms of advertising - candidate's own and outside advertising, and two forms of personal selling - retail campaigning and field operations. Although effectiveness varies by instrument and party, among the significant effects we find that a candidate's own advertising is more effective than outside advertising, and that advertising and retail campaigning work more favorably towards Republican candidates. In contrast, we find field operations to be more effective for Democratic candidates, primarily through get-out-the-vote efforts. We do not find any between-party differences in the effectiveness of outside advertising. Lastly, we also find a moderate but statistically significant carryover effect of campaign activities, indicating the presence of dynamics of marketing efforts over time.

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Seeing Spots: An Experimental Examination of Voter Appetite for Partisan and Negative Campaign Ads

John Henderson & Alexander Theodoridis
Yale Working Paper, July 2015

Abstract:
We utilize a novel experimental design to assess voter selectivity to political advertising. We randomly expose respondents to comparable positive or negative ads aired by Democratic or Republican candidates from the 2012 Presidential race and the 2013 Virginia Gubernatorial contest. The experiment closely mirrors real consumption of campaign information by allowing subjects to skip ads after five seconds, re-watch and share ads with friends. Using these measures of ad-seeking behavior, we find little evidence that negativity influences self-exposure to election advertising. We find partisans disproportionately tune out ads aired by their party's opponents, though this behavior is asymmetric: Republican-identifiers are more consistent screeners of partisan ads than Democrats. The results advance our understanding of selectivity, showing that party source, and not ad tone, interacts with partisanship to mediate campaign exposure. The findings have important implications about the role self-exposure to information plays in campaigns and elections in a post-broadcast era.

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A Policy-Oriented Electorate: Evaluations of Candidates and Parties in the Obama Elections Compared to the 1952-1980 Period

Martin Wattenberg & Sierra Powell
Presidential Studies Quarterly, September 2015, Pages 540-557

Abstract:
In a replication of Miller and Wattenberg's (1985) coding of American National Election Studies open-ended likes/dislikes questions, respondents' evaluations of candidates and parties are found to be especially policy oriented in 2008 and 2012. Compared to earlier elections without an incumbent, prospective policy evaluations were far more prevalent in 2008. Furthermore, voters' comments about the candidates in 2012 were more policy oriented than the elections of 1964 and 1972 in which challengers offered a stark policy choice to an incumbent president. We also find the public's likes and dislikes of the political parties focused heavily on policy considerations in the two Obama elections.

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Perceptions of Competence, Strength, and Age Influence Voters to Select Leaders with Lower-Pitched Voices

Casey Klofstad , Rindy Anderson & Stephen Nowicki
PLoS ONE, August 2015

Abstract:
Voters prefer leaders with lower-pitched voices because they are perceived as stronger, having greater physical prowess, more competent, and having greater integrity. An alternative hypothesis that has yet to be tested is that lower-pitched voices are perceived as older and thus wiser and more experienced. Here the relationships between candidate voice pitch, candidate age, and electoral success are examined with two experiments. Study 1 tests whether voters discriminate on candidate age. The results show that male and female candidates in their 40s and 50s, the time in the lifecycle when voice pitch is at its lowest, are preferred over candidates in their 30s, 60s, and 70s. Study 2 shows that the preference for leaders with lower-pitched voices correlates with the perception that speakers with lower voices are stronger, more competent, and older, but the influence of perception of age on vote choice is the weakest of the three.

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Kingmakers or Cheerleaders? Party Power and the Causal Effects of Endorsements

Thad Kousser et al.
Political Research Quarterly, September 2015, Pages 443-456

Abstract:
When parties make endorsements in primary elections, does the favored candidate receive a real boost in his or her vote share, or do parties simply pick the favorites who are already destined to win? To answer this question, we draw on two research designs aimed at isolating the causal effect of Democratic Party endorsements in California's 2012 primary election. First, we conduct a survey experiment in which we randomly assign a party endorsement, holding all other aspects of a candidate's background and policy positions constant. Second, we use a unique dataset to implement a regression discontinuity analysis of electoral trends by comparing the vote shares captured by candidates who barely won or barely lost the internal party endorsement contest. We find a constellation of evidence suggesting that endorsements do indeed matter, although this effect appears to be contingent upon the type of candidate and voter: endorsements matter most for candidates in their party's mainstream, and for voters who identify with that party and for independents. The magnitude of their impact is dramatically smaller than might be estimated from research designs less attuned to recent advances in causal inference.

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Obama, race, and the Republican landslide in 2010

Matthew Luttig
Politics, Groups, and Identities, forthcoming

Abstract:
In the 2010 midterm elections Republicans won in a landslide, making major gains in the Senate and winning the majority in the House. In this article, I assess one factor that contributed to the Republican Party's landslide in 2010: the political salience of racial animosity in the Obama era. In a historical analysis of voting in midterm elections, I find that racial animosity had a substantially larger effect on vote choice in 2010 than in past midterm elections. This effect persists in the face of many short-term factors and regardless of the race of the candidates themselves. I also show that racial animosity affected voter turnout in 2010, stimulating turnout among Republicans and diminishing turnout among Democrats. Consistent with research on presidential voting and opinion formation in the Obama era, these results suggest that one consequence of Obama's presidency was to increase the relevance of racial animosity in American politics.

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The American Public's Attention to Politics in Conflict and Crisis, 1880-1963

Robert Urbatsch
Journal of Interdisciplinary History, Autumn 2015, Pages 225-244

Abstract:
Parental naming practices in the United States have much to reveal about public attitudes, preoccupations, and reactions to current events. Evidence from the 2011 version of the Social Security Master Death File - a database that includes nearly all of the Americans who were alive between World War II and 2011 - reveals that newborns are more likely to acquire the name of a president after elections, assassination attempts, and declarations of war. Regression analysis comparing presidential names to polling data suggests that these trends reflect shifts in public approval of the president, implying that naming can provide important information about historical eras when direct measures are unavailable.

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Perceptions of Competence and the European Economic Crisis: A Micro-Level Analysis

Giacomo Chiozza & Luigi Manzetti
Political Research Quarterly, September 2015, Pages 457-473

Abstract:
This study provides micro-level evidence for the new theories of accountability under globalization. We analyze the micro-level logic that underpins political accountability in democratic countries with highly globalized economies. We contend that voters discount current economic conditions in evaluating incumbent leaders if they perceive the incumbent leader moving the country in the right direction. We test this argument with survey data from eight European countries in 2012, while controlling for potential alternative explanations associated with pocketbook, sociotropic, and clarity-of-responsibility factors. We find that valence considerations related to future directions in the country sustain positive evaluations of leaders' performance even in the face of negative evaluations of the economy.

By KEVIN LEWIS | 09:00:00 AM

Thursday, August 27, 2015

Standing out

Resource Wealth and Women’s Economic and Political Power in the U.S. States

Joel Simmons
Comparative Political Studies, forthcoming

Abstract:
Ross argues that oil wealth reduces women’s economic and political power, but critics maintain that accounting for a community’s attitudes toward gender equality makes the gendered resource curse disappear. This article disentangles the two perspectives by studying the effects of resource wealth on women’s economic and political status in the U.S. states, where resource wealth varies significantly while cultural differences are comparatively small. Data between 1997 and 2012 reveal evidence of a gendered resource curse, consistent with Ross. I also update the theory of the gendered resource curse by showing, via a culture-augmented labor-leisure model of workforce participation, that far from being irrelevant when accounting for varying attitudes toward gender roles, resource wealth and those patriarchal attitudes combine to suppress even more women’s economic and political influence. Data from the U.S. states support this expectation as well.

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Biased Perceptions of Racially Diverse Teams and Their Consequences for Resource Support

Robert Lount et al.
Organization Science, forthcoming

Abstract:
We examine whether observers hold biases that can negatively affect how racially diverse teams are evaluated, and ultimately treated, relative to racially homogeneous groups. In three experiments, which held the actual content of observed behavior constant across diverse and homogeneous teams, observers were less willing to allocate additional resources to diverse teams. Through applying both statistical mediation (Studies 1 and 2) and moderation-of-process methods (Study 3), our findings supported the expectation that biased perceptions of relationship conflict accounted for this reduced support of diverse teams. Implications for diverse teams in organizations are discussed.

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Apply Yourself: Racial and Ethnic Differences in College Application

Sandra Black, Kalena Cortes & Jane Arnold Lincove
NBER Working Paper, July 2015

Abstract:
Access to higher education begins with a student’s decision whether and where to apply to college. This paper examines racial and ethnic differences in college application behavior of high school graduates, using two recent graduation cohorts from Texas. We estimate racial and ethnic differences in the probability of applying to college, controlling for a student’s college readiness, high school quality, certainty of college admissions, and high school fixed effects. We then investigate racial and ethnic differences in the choice of where to apply. We enhance the typical model of college matching by considering the social setting and high school feeder patterns of state universities. We find that racial and ethnic gaps in application rates, particularly for Hispanic students, are not explained by differential levels of college readiness, high school quality, or information regarding college admission processes. When applying to college, minorities are influenced by more than just matching their academic ability to the institution, and prefer institutions with a large proportion of same race students and campuses where same race students from their high school have been successful in the past.

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Hiring Preferences in Online Labor Markets: Evidence of a Female Hiring Bias

Jason Chan & Jing Wang
University of Minnesota Working Paper, June 2015

Abstract:
Online labor marketplaces facilitate the efficient matching of employers and workers across geographical boundaries. The exponential growth of this nascent online phenomenon holds important social and economic implications, as the hiring decisions made on these online platforms implicate the incomes of millions of workers worldwide. Despite this importance, limited effort has been devoted to understanding whether potential hiring biases exist in online labor platforms and how they affect hiring outcomes. Using a novel proprietary dataset from a leading online labor platform, we investigate the impact of gender-based stereotypes on hiring outcomes. After accounting for endogeneity via a holistic set of job and worker controls, a matched sample approach, and a quasi-experimental technique, we find evidence of a positive hiring bias in favor of female workers. We find that the observed hiring bias diminishes as employers gain more hiring experience on the platform. Sub-analyses show that women are highly preferred in feminine-typed occupations, while men are only slightly preferred in masculine-typed occupations. Interestingly, women gain an advantage in gender-neutral jobs. We further run an experiment to uncover the underlying gender-specific traits that influence hiring outcomes. Our findings provide key insights for several groups of stakeholders including policymakers, platform owners, hiring managers, and workers. Managerial and practical implications are discussed.

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Communicating more than diversity: The effect of institutional diversity statements on expectations and performance as a function of race and gender

Leigh Wilton et al.
Cultural Diversity and Ethnic Minority Psychology, July 2015, Pages 315-325

Abstract:
The present studies examined whether colorblind diversity messages, relative to multicultural diversity messages, serve as an identity threat that undermines performance-related outcomes for individuals at the intersections of race and gender. We exposed racial/ethnic majority and minority women and men to either a colorblind or multicultural diversity statement and then measured their expectations about overall diversity, anticipated bias, and group task performance (Study 1, N = 211), as well as their expectations about distinct race and gender diversity and their actual performance on a math test (Study 2, N = 328). Participants expected more bias (Study 1) and less race and gender diversity (Study 2) after exposure to a colorblind versus a multicultural message. However, the colorblind message was particularly damaging for women of color, prompting them to expect the least diversity overall and to perform worse (Study 1), as well as to actually perform worse on a math test (Study 2) than the multicultural message. White women demonstrated the opposite pattern, performing better on the math test in the colorblind versus the multicultural condition, whereas racial minority and majority men’s performances were not affected by different messages about diversity. We discuss the importance of examining psychological processes that underscore performance-related outcomes at the junction of race and gender.

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Who Believes in Me? The Effect of Student-Teacher Demographic Match on Teacher Expectations

Seth Gershenson, Stephen Holt & Nicholas Papageorge
American University Working Paper, July 2015

Abstract:
Teachers are an important source of information for traditionally disadvantaged students. However, little is known about how teachers form expectations and whether they are systematically biased. We investigate whether student-teacher demographic mismatch affects high school teachers’ expectations for students’ educational attainment. Using a student fixed effects strategy that exploits expectations data from two teachers per student, we find that non-black teachers of black students have significantly lower expectations than do black teachers. These effects are larger for black male students and math teachers. Our findings add to a growing literature on the role of limited information in perpetuating educational attainment gaps.

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Does Protecting Older Workers from Discrimination Make It Harder to Get Hired? Evidence from Disability Discrimination Laws

David Neumark, Joanne Song & Patrick Button
NBER Working Paper, July 2015

Abstract:
We explore the effects of disability discrimination laws on hiring of older workers. A concern with anti-discrimination laws is that they may reduce hiring by raising the cost of terminations and – in the specific case of disability discrimination laws – raising the cost of employment because of the need to accommodate disabled workers. Moreover, disability discrimination laws can affect non-disabled older workers because they are fairly likely to develop work-related disabilities, yet are not protected by these laws. Using state variation in disability discrimination protections, we find little or no evidence that stronger disability discrimination laws lower the hiring of non-disabled older workers. We similarly find no evidence of adverse effects of disability discrimination laws on hiring of disabled older workers.

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Effects of Power on Mental Rotation and Emotion Recognition in Women

Tali Nissan, Oren Shapira & Nira Liberman
Personality and Social Psychology Bulletin, forthcoming

Abstract:
Based on construal-level theory (CLT) and its view of power as an instance of social distance, we predicted that high, relative to low power would enhance women’s mental-rotation performance and impede their emotion-recognition performance. The predicted effects of power emerged both when it was manipulated via a recall priming task (Study 1) and environmental cues (Studies 2 and 3). Studies 3 and 4 found evidence for mediation by construal level of the effect of power on emotion recognition but not on mental rotation. We discuss potential mediating mechanisms for these effects based on both the social distance/construal level and the approach/inhibition views of power. We also discuss implications for optimizing performance on mental rotation and emotion recognition in everyday life.

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A Difference-Education Intervention Equips First-Generation College Students to Thrive in the Face of Stressful College Situations

Nicole Stephens et al.
Psychological Science, forthcoming

Abstract:
A growing social psychological literature reveals that brief interventions can benefit disadvantaged students. We tested a key component of the theoretical assumption that interventions exert long-term effects because they initiate recursive processes. Focusing on how interventions alter students’ responses to specific situations over time, we conducted a follow-up lab study with students who had participated in a difference-education intervention 2 years earlier. In the intervention, students learned how their social-class backgrounds mattered in college. The follow-up study assessed participants’ behavioral and hormonal responses to stressful college situations. We found that difference-education participants discussed their backgrounds in a speech more frequently than control participants did, an indication that they retained the understanding of how their backgrounds mattered. Moreover, among first-generation students (i.e., students whose parents did not have 4-year degrees), those in the difference-education condition showed greater physiological thriving (i.e., anabolic-balance reactivity) than those in the control condition, which suggests that they experienced their working-class backgrounds as a strength.

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Student loans and racial disparities in self-reported sleep duration: Evidence from a nationally representative sample of US young adults

Katrina Walsemann, Jennifer Ailshire & Gilbert Gee
Journal of Epidemiology & Community Health, forthcoming

Background: Student loans are the second largest source of personal debt in the USA and may represent an important source of financial strain for many young adults. Little attention has been paid to whether debt is associated with sleep duration, an important health-promoting behaviour. We determine if student loans are associated with sleep duration. Since black young adults are more likely to have student debt and sleep less, we also consider whether this association varies by race.

Methods: Data come from the US National Longitudinal Survey of Youth 1997. The main analytic sample includes 4714 respondents who were ever enrolled in college and who reported on sleep duration in 2010. Most respondents had completed their college education by 2010, when respondents were 25 to 31 years old. Multivariable linear regression models assessed the cross-sectional association between student loans accumulated over the course of college and sleep duration in 2010, as well as between student debt at age 25 and sleep duration in 2010.

Results: Black young adults with greater amounts of student loans or more student debt reported shorter sleep duration, controlling for occupation, hours worked, household income, parental net worth, marital status, number of children in the household and other sociodemographic and health indicators. There was no association between student loans or debt with sleep for white or latino adults and other racial/ethnic groups.

Conclusions: Student loans may contribute to racial inequities in sleep duration. Our findings also suggest that the student debt crisis may have important implications for individuals’ sleep, specifically and public health, more broadly.

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Signaling Change During a Crisis: Refining Conditions for the Glass Cliff

Clara Kulich et al.
Journal of Experimental Social Psychology, November 2015, Pages 96–103

Abstract:
Research into the glass cliff indicates that adverse company circumstances, compared to favorable ones, increase the likelihood of women to be appointed in leadership positions. Study 1 refined the conditions under which a glass cliff occurs by demonstrating a preference for a female leader when a company’s performance was attributed to past leadership (an internal, controllable cause) but not when it was attributed to global economic circumstances (an external, uncontrollable cause). Study 2 replicated the glass cliff for a controllable context and revealed that the female candidate’s potential to signal change, rather than her quality and suitability as a leader, accounted for the preference of the female candidate. We conclude that women, as non-traditional leaders, are strategic choices of companies with the aim to signal change to the outside world (e.g., investors) when past leadership is held responsible for a crisis. However, they are not expected to actually impact on the company’s performance through their leadership quality.

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Women Don't Mean Business? Gender Penalty in Board Appointments

Isabelle Solal & Kaisa Snellman
INSEAD Working Paper, July 2015

Abstract:
This paper examines the relationship between board diversity and firm performance. Using 14 years of panel data on U.S. firms, we show that increasing gender diversity has no impact on objective measures of firm performance, but does result in a systematic decrease in the firm’s market value. We explain this finding by suggesting that the decision to appoint female directors will alter the market’s perception of the appointing firm. In a second panel study, we show that firms perceived to be committed to diversity similarly suffer a decrease in firm value. Finally, we show through an experiment that female board appointments are taken as a signal that the firm is motivated by social performance goals, to the detriment of pure profit maximization. Collectively, these three studies suggest that female board appointments are viewed as diversity measures, and as a signal of a broader commitment of the firm to social welfare goals, as opposed to strict shareholder value maximization. This mechanism, we argue, operates irrespective of the actual or perceived competence of the female nominee. We discuss the implications of our findings for future research on board diversity and firm performance.

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An Evaluation of The Mellon Mays Undergraduate Fellowship's Effect on PhD Production at Non-UNCF Institutions

Sarah Prenovitz et al.
NBER Working Paper, August 2015

Abstract:
The Mellon Mays Undergraduate Fellowship Program (MMUF) was established in 1988 to encourage underrepresented minority (URM) students to pursue PhD study with an eye towards entering academia. Fellows have completed PhDs at high rates relative to other students, but they are selected for their interest and potential, so this reflects both the effects of the program and the abilities of the students themselves. In order to understand one impact of the program we investigate its causal effect - how many of its fellows earned PhDs who would not have done so without the MMUF’s support. In this paper we use restricted access administrative data from the Mellon Foundation and the National Science Foundation’s Survey of Earned Doctorates to investigate the effect of the MMUF on PhD completions by underrepresented minority students who graduate from participating institutions. We find no evidence that participation in the program causes a statistically significant increase in the PhD production rate of URM students and increases in larger than 0.4 percentage points lie outside a 95% confidence interval using our unweighted baseline estimates. We also do not find evidence that increasing the intensity of the program by adding more fellows increases the PhD production rate, which is particularly notable as this estimate is upward-biased: the number of fellows likely reflects the strength of the candidate pool in a given year.

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Game, set, and match: Do women and men perform differently in competitive situations?

Michael Jetter & Jay Walker
Journal of Economic Behavior & Organization, November 2015, Pages 96–108

Abstract:
This paper analyzes potential gender differences in competitive environments using a sample of over 100,000 professional tennis matches. Focusing on two phenomena of the labor and sports economics literature, we find robust evidence for (i) the hot-hand effect (an additional win in the most recent ten matches raises the likelihood of winning by 3.2 to 3.4 percentage points) and (ii) the clutch-player effect, as top players are excelling in Grand Slam tournaments, the most important events. Overall, we find virtually no gender differences for the hot-hand effect and only minor distinctions for the clutch-player effect.

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Identity, Overconfidence, and Investment Decisions

Francesco D'Acunto
University of California Working Paper, August 2015

Abstract:
Why are men more risk tolerant than women, and why do they invest more than women? I test whether identity stereotypes help explain this heterogeneity. I manipulate identity in a controlled environment by priming its salience to subjects. Men whose identity is primed take on more risk, and invest more often and more money than controls. The salience of male identity increases men's beliefs about experiencing good outcomes in a game of chance. Inducing overconfidence similarly makes men take on more risk and invest more. The effects are stronger for older cohorts of men, consistent with the notion that gender-identity stereotypes have become less stark over the last decades.

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Computing Whether She Belongs: Stereotypes Undermine Girls’ Interest and Sense of Belonging in Computer Science

Allison Master, Sapna Cheryan & Andrew Meltzoff
Journal of Educational Psychology, forthcoming

Abstract:
Computer science has one of the largest gender disparities in science, technology, engineering, and mathematics. An important reason for this disparity is that girls are less likely than boys to enroll in necessary “pipeline courses,” such as introductory computer science. Two experiments investigated whether high-school girls’ lower interest than boys in enrolling in computer science courses is influenced by stereotypes of the field. We further tested whether these stereotypes can be communicated by the physical classroom environment, and whether changing this environment alters girls’ interest. In 2 experiments (N = 269), a computer science classroom that did not project current computer science stereotypes caused girls, but not boys, to express more interest in taking computer science than a classroom that made these stereotypes salient. The gender difference was mediated by girls’ lower sense of belonging in the course, even beyond the effects of negative stereotype concerns, expectations of success, and utility value. Girls’ lower sense of belonging could be traced to lower feelings of fit with computer science stereotypes. Individual differences in fit with stereotypes predicted girls’ belonging and interest in a stereotypical, but not a nonstereotypical, classroom. Adolescence is a critical time for career aspirations. Girls may avoid computer science courses because current prevailing stereotypes of the field signal to them that they do not belong. However, providing them with an educational environment that does not fit current computer science stereotypes increases their interest in computer science courses and could provide grounds for interventions to help reduce gender disparities in computer science enrollment.

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Making Rights Work: Legal Mobilization at the Agency Level

Jennifer Woodward
Law & Society Review, September 2015, Pages 691–723

Abstract:
This article discusses how McCann's theory on legal mobilization and social change is generalizable to the legal decisions of agencies. I demonstrate how the Equal Employment Opportunity Commission (EEOC) routinely delayed and denied Title VII employment rights on the basis of sex and how this resulted in the formation of the National Organization for Women (NOW) to ensure that the sex provision of Title VII was enforced. The article also discusses the influence of NOW in shaping the first years of Title VII law and the organization's role in reversing EEOC decisions denying rights under the sex provision of the law.

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The Collateral Damage of Ambient Sexism: Observing Sexism Impacts Bystander Self-Esteem and Career Aspirations

Jill Bradley-Geist, Ivy Rivera & Susan Geringer
Sex Roles, July 2015, Pages 29-42

Abstract:
Prior research demonstrates detrimental effects of sexism on female targets’ well-being and career outcomes. Extending research on those targeted by sexism, the current study explored the collateral damage of ambient sexism on bystanders observing sexism directed at others. An experiment with 218 U.S. undergraduates at a large West-coast public university assessed how ambient sexism directed at a female job applicant impacted male and female bystanders’ self-esteem and career aspirations. Results generally supported theoretical predictions regarding the moderating impact of bystander gender on the relationship between ambient sexism and bystander well-being. As hypothesized, ambient hostile sexism more negatively impacted female bystanders than male bystanders with regard to performance-based state self-esteem. Performance-based self-esteem in turn predicted career aspirations such that lower performance-based state self-esteem predicted lower career aspirations: gender moderated this mediated relationship such that the indirect effect was more negative for female bystanders than male bystanders. Gender also moderated the relationship between ambient benevolent sexism and appearance-based state self-esteem. Women observing benevolent sexism tended to report enhanced appearance-based esteem relative to women in the hostile sexism and control conditions, whereas men observing benevolent sexism reported significantly lower appearance esteem than men in the hostile sexism and control conditions. In sum, the current study suggests that women and men bystanders are impacted differently by ambient benevolent and hostile sexism.

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Double Jeopardy Upon Resumé Screening: When Achmed Is Less Employable Than Aïsha

Eva Derous, Ann Marie Ryan & Alec Serlie
Personnel Psychology, Autumn 2015, Pages 659–696

Abstract:
Applicants belong to multiple categories (e.g., male, ethnic minority) and a complex set of factors affects category activation and inhibition when making hiring decisions. Two field experiments with recruiters who regularly engage in resumé screening showed that the role of multiple categories (applicants’ ethnicity and sex) in discrimination depended on job type and prejudice. Specifically, in both low- and high-demand (i.e., complex) jobs, Arab women were rated more favorably than Arab men, particularly when considering levels of client contact. Across both studies, recruiters high in explicit ethnic prejudice were discriminatory only when applicants’ job qualifications fit the job position less, lending support for the attributional-ambiguity effect. Implicit attitudes did not play a strong role. Our study findings point to the complex nature of multiple categorization effects in the hiring process. Implications are considered as to how to avert hiring discrimination during resumé screening.

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Organized Labor and the Unionization of Hispanic, Chinese, and Filipino Americans

Daniel Schneider
Labor Studies Journal, June 2015, Pages 169-195

Abstract:
This work adds a systematic understanding of the diverse relationships of immigrants and minorities to organized labor in the United States. Using Current Population Survey data from 1994 to 2013, I interrogate the unionization of Hispanic, Chinese, and Filipino Americans. In comparison to whites, native-born and established immigrant Hispanics have higher rates of unionization, Filipinos (both immigrant and native born) are much likelier to join unions, and Chinese immigrants are less likely to be unionized and more likely to leave unions. Labor market position continues to have a profound effect on unionization; however, solidaristic characteristics also shape patterns of unionization.

By KEVIN LEWIS | 09:00:00 AM

Wednesday, August 26, 2015

For hire

Why You Can't Find a Taxi in the Rain and other Labor Supply Lessons from Cab Drivers

Henry Farber
Quarterly Journal of Economics, forthcoming

Abstract:
I replicate and extend the seminal work of Camerer, et al (QJE 1997), who find that the wage elasticity of daily hours of work for New York City (NYC) taxi drivers is negative and conclude that their labor supply behavior is consistent with reference dependence. In contrast, my analysis of the complete record of all trips taken in NYC taxi cabs from 2009-2013 shows that drivers tend to respond positively to unanticipated as well as anticipated increases in earnings opportunities. Additionally, using a discrete choice stopping model, the probability of a shift ending is strongly positively related to hours worked but at best weakly related to income earned. I find substantial heterogeneity across drivers in their elasticities, but the estimated elasticities are generally positive and rarely substantially negative. I find that new drivers with smaller elasticities are more likely to exit the industry while drivers who remain learn quickly to be better optimizers (have positive labor supply elasticities that grow with experience). These results are consistent with the neoclassical optimizing model of labor supply and suggest that consideration of gain-loss utility and income reference dependence is not an important factor in the daily labor supply decisions of taxi drivers.

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Changes in the Distribution of Earnings Volatility

Shane Jensen & Stephen Shore
Journal of Human Resources, Summer 2015, Pages 811-836

Abstract:
Recent research has documented a rise in the volatility of individual labor earnings in the United States since 1970. Existing measures of this trend abstract from within-group latent heterogeneity, effectively estimating an increase in average volatility for observable groups. We decompose this average and find no systematic rise in volatility for the vast majority of individuals. Increasing average volatility has been driven almost entirely by rising earnings volatility of those with the most volatile earnings, identified ex ante by large past earnings changes. We characterize dynamics of the volatility distribution with a nonparametric Bayesian stochastic volatility model from Jensen and Shore (2011).

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What Do Right-to-Work Laws Do? Evidence from a Synthetic Control Method Analysis

Ozkan Eren & Serkan Ozbeklik
Journal of Policy Analysis and Management, forthcoming

Abstract:
Using the case study of Oklahoma and a recently developed econometric technique, we examine the impact of right-to-work (RTW) laws on state-level labor market outcomes. Our results show that the passage of RTW laws in Oklahoma decreased private sector unionization rates. Several other state outcomes including total employment rate and private sector average wages, on the other hand, were not affected by RTW laws. The findings for the private sector generally carry over to the manufacturing sector.

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Who Needs a Fracking Education? The Educational Response to Low-Skill Biased Technological Change

Elizabeth Cascio & Ayushi Narayan
NBER Working Paper, July 2015

Abstract:
Over the past decade, a technological breakthrough - hydraulic fracturing or "fracking" - has fueled a boom in oil and natural gas extraction by reaching shale reserves inaccessible through conventional technologies. We explore the educational response to fracking, taking advantage of the timing of its widespread introduction and the spatial variation in shale oil and gas reserves. We show that local labor demand shocks from fracking have been biased toward low-skilled labor and males, reducing the return to high school completion among men. We also show that fracking has increased high school dropout rates of male teens, both overall and relative to females. Our estimates imply that, absent fracking, the male-female gap in high school dropout rates among 17- to 18-year-olds would have narrowed by about 11% between 2000 and 2013 instead of remaining unchanged. Our estimates also imply an elasticity of high school completion with respect to the return to high school of 0.47, a figure below historical estimates. Explanations for our findings aside from fracking's low-skill bias - changes in school inputs, population demographics, and resource prices - receive less empirical support.

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Do Completed College Majors Respond to Changes in Wages?

Mark Long, Dan Goldhaber & Nick Huntington-Klein
Economics of Education Review, forthcoming

Abstract:
In an analysis connecting labor market earnings to college major choices, we find statistically significant relationships between changes in wages by occupation and subsequent changes in college majors completed in related fields of college study between 1982 and 2012. College majors (defined at a detailed level) are most strongly related to wages observed three years earlier, when students were college freshmen. The responses to wages vary depending on the extent to which there is a strong mapping of majors into particular occupations. We also find that women, blacks, Hispanics, and students with low test scores are less likely to respond to wage changes. These findings have implications for policy interventions designed to align students' major choices with labor market demand.

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Estimating the Education-Earnings Equation Using Geographic Variation

William Doyle & Benjamin Skinner
Vanderbilt University Working Paper, August 2015

Abstract:
We expand on the literature on the causal impact of postsecondary education on earnings by introducing a richer set of location-based measures as instruments for years of education. Utilizing data from the National Longitudinal Study of Youth, 1997, we implement six different sets of instruments based on geographic variation: presence of a four-year or two-year college in the county, inverse log distance to in-state two-year colleges, distance-weighted tuition and distance-weighted enrollment at in-state two-year colleges, and inverse log distance to all colleges. We find that these alternative measures yield differing estimates of the impact of educational attainment on earnings. Using our preferred measure of geographic variation, one additional year of postsecondary attainment results in a 9.5% increase in yearly earnings. We find a larger impact of postsecondary attainment for women, and no measurable impact of postsecondary attainment for men.

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A Re-examination of the Impact of the UK National Minimum Wage on Employment

Richard Dickens, Rebecca Riley & David Wilkinson
Economica, forthcoming

Abstract:
Early work on the national minimum wage (NMW) suggested that policymakers in the UK had succeeded in raising the pay of low-paid workers without impairing their employment prospects. This paper shows that when we focus on the most vulnerable workers, part-time females, the NMW appears to be associated with reductions in employment retention. These negative impacts were evident when the NMW was introduced and also when it was increased faster than average wages in the mid-2000s. We also show that these falls in employment among part-time females are exacerbated by the recession.

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House Money and Entrepreneurship

Sari Pekkala Kerr, William Kerr & Ramana Nanda
NBER Working Paper, August 2015

Abstract:
We examine the relationship between house prices and entrepreneurship using micro data from the US Census Bureau. Increases in house prices are often thought to drive entrepreneurship through unlocking the collateral channel for bank loans, but this interpretation is challenged by worries regarding omitted variable biases (e.g., rising local demand) or wealth effects (i.e., that people with more valuable homes are more likely to enter entrepreneurship for reasons other than access to collateral). We construct an empirical environment that utilizes very localized price changes, exploits variations in initial home values across residents in the same zip code, and embeds multiple comparisons (e.g., owners vs. renters, homestead exemption laws by state). For the United States during the 2000-2004 period, the link of home prices to the rate of entrepreneurship through home equity channels is modest in economic magnitude. This is despite a focus on a time period that experienced the largest concentration of US home price growth over the last two decades. Even when we do connect home equity to entrepreneurship, part of the effect is linked to an increased demand for entrepreneurship. While housing collateral plays a role in the entry that we observe, it does not seem to be a major barrier to entrepreneurship in our context.

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Bombs, homes, and jobs: Revisiting the Oswald hypothesis for Germany

Nikolaus Wolf & Paul Caruana-Galizia
Economics Letters, forthcoming

Abstract:
Andrew Oswald (1996) hypothesized that homeownership restricts commercial development and labor mobility, increasing unemployment. Instrumenting homeownership with WWII Allied bombing for a German regional panel, we find homeownership has a large positive effect on unemployment, and homeownership decreases labour mobility.

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Performance Pay and Workplace Injury: Panel Evidence

Benjamin Artz & John Heywood
Economica, forthcoming

Abstract:
Using panel survey data, we show cross-sectional evidence of an elevated risk of workplace injury for those paid piece rates and bonuses. While consistent with Adam Smith's behavioural conjecture, this could simply reflect sorting across workers or firms. In response we successively control for a risk proxy, for worker fixed effects and for worker with employer match fixed effects. No previous examination has controlled for such fixed effects or examined US survey data. The estimates indicate that injury risk increases substantially when blue-collar (manual) workers become paid by piece rates and bonuses.

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The surprisingly low importance of income uncertainty for precaution

Scott Fulford
European Economic Review, forthcoming

Abstract:
While it is common to use income uncertainty to explain household saving decisions, there is much disagreement about the importance of precautionary saving. This paper suggests that income uncertainty is not an important motive for saving, although households do have other precautionary reasons to save. Using a question from the Survey of Consumer Finances that asks how much households want for precautionary purposes, this paper shows that expressed household preferences, and liquid savings, are much lower than predicted by standard modeling assumptions. Households rarely list unemployment as a reason to save. Perceived income uncertainty does not affect liquid savings or precautionary preferences. Neither does being in an occupation with higher income volatility. Instead, households seem very concerned with expenditure shocks.

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Geographic Mobility and the Costs of Job Loss

Nicholas Jolly
B.E. Journal of Economic Analysis & Policy, forthcoming

Abstract:
This paper uses data from the 1968 through 1997 survey waves of the Panel Study of Income Dynamics to analyze how the long-term costs of job loss vary by a worker's post-displacement migration status. Results from the analysis show that those individuals who move within the first 2 years after a job loss experience lower earnings losses, lower reductions in hours worked, and smaller increases in time unemployed when compared to a group of displaced workers who are not geographically mobile during the early years following this life event. Workers who move within the first 2 years after displacement face a lower probability of homeownership when compared to their non-mobile counterparts. However, this lower probability is short-lived.

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The Impact of Home-Based Child Care Provider Unionization on the Cost, Type, and Availability of Subsidized Child Care in Illinois

Todd Grindal et al.
Journal of Policy Analysis and Management, forthcoming

Abstract:
In February 2005, Illinois became the first U.S. state to grant home-based child care providers (HBCPs) the right to form a labor union in order to bargain collectively with the state government. This policy inspired similar efforts across the country and represents a potentially important direction for child care policy. To date, the implications of labor unions for the cost, type, and availability of subsidized child care have not been evaluated empirically. In this study, we examine the impact of granting Illinois HBCPs the right to form a labor union on (a) the type of child care (licensed vs. license-exempt/home-based vs. center-based) used by subsidy-receiving Illinois infants and toddlers; (b) the per-child cost of subsidized child care for infants and toddlers; and (c) the percentage of Illinois infants and toddlers who use child care subsidies. To conduct these analyses, we combine data from the Current Population Survey with Child Care and Development Fund administrative records on U.S. infants and toddlers whose families received child care subsidies during the period from 2002 to 2008. We use both a traditional difference-in-differences as well as a comparative case study with a "synthetic" control group approach. The synthetic control group approach improves on traditional comparative case studies by providing a transparent, empirical approach for constructing the counterfactual, documenting comparison units' contribution to the synthetically created control group and detailing the degree to which the synthetic control group is, or is not, similar to the treated unit on preintervention measures of the outcome as well as on other selected characteristics. We find that subsidy-receiving Illinois infants and toddlers spent an average of between 6.4 and 7 percentage points more hours in licensed care settings, as compared to license-exempt settings, in the three years following child care unionization. We also find that between 0.7 and 1.1 percentage points fewer Illinois infants and toddlers used child care subsidies following unionization.

By KEVIN LEWIS | 09:00:00 AM


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