Anonymity in Computer-Mediated Communication: More Contrarian Ideas with Less Influence

Anonymity is thought to be an important means for ensuring a free exchange of ideas by encouraging the expression of minority viewpoints. However, we suggest that anonymity’s reduction in awareness of others potentially affects the expression and interpretation of comments that are made during a discussion. In particular, anonymity will increase the likelihood that comments will be made that are contrary to the majority opinion while at the same time decreasing the effect that those contrary arguments have on other group member’s opinions. This paper reports experimental results showing that anonymity led to more overall participation in discussions of ethical scenarios. However, equality of member participation did not differ between anonymous and member-identified groups, and anonymous groups had significantly higher awareness-related comments. This leads to the conclusion that additional participation in anonymous groups accommodates reduced awareness rather than reflecting the increased participation of normally reticent group members. In addition, anonymity led to more arguments in support of questionable behavior, suggesting that the freeing effects of anonymity apply to the social desirability of arguments. Finally, there was less change in opinion under conditions of anonymity than when comments were identified, suggesting that anonymous arguments have less influence on opinions than identified comments.     

CBO’s Outlook for the Economy in February 2014

These remarks summarize the economic forecast and budget outlook that the Congressional Budget Office (CBO) published in February 2014. The discussion has not been updated to reflect subsequent economic and budget data or subsequent projections by CBO. Under an assumption that current laws governing federal taxes and spending remain in place, CBO projects that real GDP will expand by roughly 3 percent between the fourth quarter of 2013 and the fourth quarter of 2014—the largest rise in nearly a decade. Similar annual growth rates are projected through 2017. Nevertheless, CBO estimates that the economy will continue to have considerable slack for the next few years. To a large degree, the slow recovery of the labor market since the official end of the recession in 2009 reflects slow growth in the demand for goods and services. To a smaller degree, that slow recovery is the result of structural factors that stem from the recession and the subsequent weak growth of output but that are not directly related to the economy’s current cyclical weakness. The unemployment rate is expected to remain above 6.0 percent until late 2016. Moreover, labor force participation is projected to move only slowly back toward what it would be without the cyclical weakness in the economy. Beyond 2017, CBO expects that economic growth will be well below the average seen over the past several decades, primarily because of slower growth in the labor force arising from the aging of the population. Inflation, as measured by the change in the price index for personal consumption expenditures, is expected to remain at or below 2.0 percent throughout the next decade. Interest rates on Treasury securities are projected to increase in the next few years as the economy strengthens. The federal budget deficit has fallen sharply during the past few years, and it is on a path to decline further this year and next year. However, if current laws remain unchanged, the deficit will increase again after a few years because revenues are expected to grow at roughly the same pace as GDP whereas spending is expected to grow more rapidly. Federal debt held by the public is expected to equal 74 percent of GDP at the end of this year and close to 80 percent a decade from now.     

Experimental Methods for the General Economist: Five Lessons from the Lab

I review five primary results from experimental economics that impact the economics profession as a whole. These results regard the relative (un)importance of subject sophistication in laboratory markets, the importance of gender on economic outcomes, the propensity for humans to behave in less than fully rational ways, the importance of trading institutions on economic performance, and the behavioral relevance of economic theory. I find that economics as a profession has benefited from the use of experimental methods by fostering a dialogue between theorists and empiricists, better informing policy and improving data collection techniques.     

Convertible Bonds and Stock Liquidity

This paper shows that the probability of exercise of convertible bonds issued against a firm’s stock directly affects the liquidity of the stock itself. Using the ratio of absolute stock return to its dollar volume as a proxy for stock liquidity I demonstrate that there is a direct and positive relationship between conversion probability and stock liquidity while controlling for firm size, book to market equity value and firm beta. I describe the effect of unlisted convertible debt on the liquidity of listed firms in the US, Korea and Singapore. The effects of conversion probability on stock liquidity are less pronounced for smaller firms, which helps explain time series variations in the liquidity premiums for smaller firms over time. The relationship between convertibles and stock liquidity is mainly attributed to the expected increase in the number of shares available for trade upon conversion and the expected change in the capital structure of the firm.     

Monetary shocks, the exchange rate, and the trade balance

This paper investigates the response of the exchange rate and the trade balance to monetary policy innovations for the US economy during the period 1973:01–1993:12. The empirical findings indicate that contractionary monetary policy shocks lead to transitory appreciations of the real and the nominal exchange rate. Exchange rate appreciations that are caused by a temporary contractionary shock to monetary policy are correlated with a short-lived improvement in the trade balance which is then followed by a deterioration, giving support to the J-curve hypothesis.     

A Law and Finance Analysis of Hedge Funds

This paper empirically analyzes the impact of hedge fund regulation on fund structure and performance. The data indicate restrictions on the location of key service providers and permissible distributions via wrappers are associated with lower fund alphas, lower average monthly returns, and higher fixed fees. Furthermore, restrictions on the location of key service providers are associated with lower manipulation-proof performance measures, while wrapper distributions are associated with lower performance fees. As well, the data show standard deviations of monthly returns are lower among jurisdictions with restrictions on the location of key service providers and higher minimum capitalization requirements.     

Banks’ deferred tax assets during the financial crisis

Review of Quantitative Finance and Accounting - Prior studies have demonstrated that the net deferred tax liabilities of industrial firms are valued by market participants in a manner consistent...     

The Market Perception of Convertible Debt Versus Straight Debt: some Empirical Evidence from U.S. Firms and Non-U.S. Firms Listed in the U.S.

Accounting for convertible debt has long been a source of controversy in the accounting profession in the U.S. Current U.S. accounting rules require classifying convertible debt at date of issuance as entirely debt until conversion, despite numerous studies that assert that convertible debt is not entirely debt, but is a blend of debt and equity. Convertible debt has taken on international interest because of the issuance of International Accounting Standard (IAS) 32, Financial Instruments; Disclosure and Presentation, which prescribes reporting separate debt and equity components for convertible debt. This study examines convertible debt issued by U.S. firms and non-U.S. firms listed in the U.S. using a levels approach. Specifically, convertible debt is compared to straight debt and contrary to ex ante expectation, convertible debt was not found to be perceived as being significantly different than straight debt for U.S. firms for any years and is statistically different in only two of the six years tested for non-U.S. firms. The validity of this study's findings is underscored by its research design, which compares convertible debt and straight debt issued by the same firms. The findings suggest that investors regard reported amounts of convertible debt similar to straight debt in their assessment of firm value.