Member–Union Relations and Union Satisfaction

This paper examines the importance of various facets of satisfaction with union representation in determining overall satisfaction with the union. Samples of union members from Iowa and Sweden are used in the analysis. The results clearly support the view that member–union relations is a major determinant of overall satisfaction with union representation.     

Poison Put Bonds: An Analysis of Their Economic Role

This article examines the effect of issuing debt with and without “poison put” covenants on outstanding debt and equity claims for the period 1988 to 1989. The analysis shows that “poison put” covenants affect stockholders negatively and outstanding bondholders positively, while debt issued without such covenants has no effect. The study also finds a negative relationship between stock and bond returns for firms issuing poison put debt. These results are consistent with a “mutual interest hypothesis,” which suggests that the issuance of poison put debt protects managers and, coincidentally, bondholders, at the expense of stockholders.     

Residential Electricity Demand in Rural Areas: The Role of Conservation Actions,Engineering Factors and Economic Variables

A model of residential electricity demand using economic, engineering, and conservation variables was tested using data from a sample of rural residential customers served by eighteen rural electric membership cooperatives in central and southern Indiana. Electricity usage was found to be dependent upon past energy conservation efforts, even when household income, electricity prices, appliance stocks, space heating and cooling stocks, and housing characteristics were taken into account. The investigation also developed a ranking of receptivity to alternative conservation strategies. It supports public and private policies which are directed toward improving consumer attitudes toward energy conservation.     

The Evolving Disclosure Landscape: How Changes in Technology,the Media,and Capital Markets Are Affecting Disclosure

Recent changes in technology and the media are causing significant changes in how capital markets assimilate and respond to information. We identify important themes in the disclosure literature and use this as a framework to discuss the conference papers that appear in this volume. These papers examine how managers’ disclosure practices are being affected by changes in technology, the media, and capital markets. While this work makes important progress, we discuss how continuing technological change and the emergence of new forms of media offer further opportunities for research on the role of disclosure in capital markets.     

As Luck Would Have It: The Effect of the Vietnam Draft Lottery on Long‐Term Career Outcomes

Using an original data set matching individual birthdays to Vietnam War draft lottery numbers, I study how the random lottery number assignment affects representation in a sample of top corporate executives decades after the war’s end. I find that men with lottery numbers placing them at risk of induction are underrepresented among top U.S. executives in the 1990s. In contrast, I find that high draft risk is positively correlated with indicators of human capital such as earnings and speed of reaching the executive ranks. If the executives are viewed as the winners of a multi‐stage elimination tournament that selected on productivity, these results are consistent with the hypothesis that draft risk led to a mean‐reducing spread in the productivity distribution of draft‐eligible males.     

Price and Volume Reactions to Public Information Releases: An Experimental Approach Incorporating Traders' Subjective Beliefs*

This paper examines how market prices, volume, and traders' dividend expectations respond to public information releases in laboratory markets for a long-lived financial asset. The objective is to study deviations from the symmetric information risk-neutral rational expectations (RE) benchmark, which predicts no trade in such settings. The results of a series of double-auction and call markets are reported in which traders manage a portfolio of cash and asset shares over 15 rounds of trading. A public signal regarding the value of the liquidating dividend is released every third round, and traders' subjective expectations of the liquidating dividend are elicited each round as cash-motivated forecasts. We find that, despite the public dividend signal, traders' dividend forecasts are heterogeneous. Forecasts and prices both underreact to the public signals, with prices under-reacting more than forecasts. In general, price changes are not closely associated with public signals, and there is greater excess price volatility in double auctions than in call markets. Forty-three percent of trades are inconsistent with the trader's forecasts, and inconsistent trades occur more frequently in the double-auction markets. On average, approximately 10 percent of the outstanding shares are traded in each round, and trading volume is increasing in the mean absolute forecast revision and decreasing in the contemporaneous dispersion in forecasts. These results suggest that differential processing of the public signal and/or speculative trading for short-term gain may help to explain why symmetric information RE predictions are often not supported in empirical and experimental settings. They also suggest that market reactions to public information releases may be influenced by market microstructure.