Formal Analysis of Multilateral Negotiations Over the Legal Status of the Caspian Sea

The Evolutionary Model for Multilateral Negotiations (EMMN) is utilized to identify the most likely outcome of the Caspian Sea negotiations. Since 1993, the five littoral states have been negotiating over the legal status of the Caspian Sea but have not reached any agreement, causing a Tragedy of the Commons to unfold. EMMN is a methodology that focuses on asymmetric multilateral negotiations, like those over the Caspian Sea, in which each negotiator seeks to reach the most preferable outcome for which he or she can gain enough support from other negotiators. An advantage of the EMMN approach is that it considers the power of the negotiators as a determining factor in the final resolution. The results of this analysis are compared with those of other studies on Caspian Sea conflict where the powers of decision makers are not taken into account.     

THE RELATIONSHIP BETWEEN ECONOMIC FREEDOM AND ECONOMIC DYNAMISM

We analyze the consequences of economic freedom on economic dynamism across U.S. states and over time. Using data from the Economic Freedom of North America index, we show that states with greater economic freedom have higher rates of gross and net job creation and establishment entry. The results are robust to the inclusion of many different control variables and alternative specifications, suggesting a connection between freedom and dynamism. This evidence supports theories in which government policies may impede business dynamism. (JEL 043, P16, R5)     

Investor Overconfidence and Trading Volume

The proposition that investors are overconfident about theirvaluation and trading skills can explain high observed tradingvolume. With biased self-attribution, the level of investoroverconfidence and thus trading volume varies with past returns.We test the trading volume predictions of formal overconfidencemodels and find that share turnover is positively related tolagged returns for many months. The relationship holds for bothmarket-wide and individual security turnover, which we interpretas evidence of investor overconfidence and the disposition effect,respectively. Security volume is more responsive to market returnshocks than to security return shocks, and both relationshipsare more pronounced in small-cap stocks and in earlier periodswhere individual investors hold a greater proportion of shares.(JEL G11, G12)     

Capabilities as marketable assets: A proposal for a functional categorization

While it is through creating and marketing products that firms achieve success, there are also significant opportunities for them to create value by exploiting the capabilities they utilize in creating products. However, seeing capabilities in this light demands new ways of thinking about product markets and marketing policies.     

PubMed: a brief tutorial for physicians

This article provides a brief overview of PubMed, an Internet search engine for peer reviewed medical literature. The examples illustrated here are designed for the life insurance medical director, but the examples can be easily modified for other literature searches commonly used by physicians, eg, diagnosis or treatment.     

Why is This Show so Dumb? Advertising Revenue and Program Content of Network Television

Economists have long debated how advertising should be treated in a rational-choice framework. Using unique data from the broadcast networks’ 1995 Fall Network Season, we find that sitcoms attract premia from advertisers, while news and police programs get discounted. We interpret our findings according to two important theoretical treatments of advertising. Because the broadcast networks forgo advertising-unfriendly program content, the cable channel HBO responds with a deliberate counter-programming niche strategy, explicitly airing programming with “darker” and “more difficult” advertising-unfriendly content.“The networks have essentially by given up on viewers with functional IQ’s.” – Dean Valentine, President of UPNThe views in this paper are my own and do not represent the views of the Federal Communications Commission, its Commissioners, or its staff.     

Local tax rebates,corporate tax burdens,and firm migration: Evidence from China

Conflicts of interest between local governments and the central administration in China have yielded many local policies that only serve the interests of local governments. The policy of first levying and then rebating taxes is an example of how local governments eschew the national tax regulations to boost local economies rather than national interests. In 2001, the Chinese government announced the termination of local tax rebates, which had some expected outcomes. We find that local governments complied with the new tax policy even though it no longer allowed local governments to grant tax incentives. However, some companies found ways to avoid the greater tax burdens by moving their business registration locations to tax havens. We also find that firms controlled by local governments were less likely to change registration locations. Our study examines the national tax regulation in China and explores how tax rules influence company decisions. In addition, we show that non-tax incentives, such as local economic development, may also influence company decisions.     

Are ex‐day dividend clientele effects dead? Dividend yield versus dividend size

We devise an approach to determine whether market microstructure or taxes influence ex-dividend behavior. We find that microstructure effects of automated limit order adjustments strongly influence ex-day prices for dividends less than or equal to a tick. For these dividends, after controlling for dividend size, we find no relation between price-drop-to-dividend ratio and dividend yield. For larger dividends, both microstructure and tax effects are found: Consistent with the microstructure story we find that between ticks, as dividend sizes increase (hence dividend yields increase), price-drop-to-dividend ratios decrease. However, consistent with the tax clientele hypothesis, when dividend size is fixed, a positive relation between price-drop-to-dividend ratio and yield is still seen.