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The Paradox of Publicity: How Awards Can Negatively Affect the Evaluation of Quality

April 16, 2014 Comments off

The Paradox of Publicity: How Awards Can Negatively Affect the Evaluation of Quality
Source: Social Science Research Network

Although increases in status often lead to more favorable inferences about quality in subsequent evaluations, in this paper, we examine a setting in which an increase to an actor’s status results in less favorable quality evaluations, contrary to what much of sociological and management theory would predict. Comparing thousands of reader reviews on Goodreads.com of 64 English-language books that either won or were short-listed for prestigious book awards between 2007 and 2011, we find that prizewinning books tend to attract more readers following the announcement of an award and that readers’ ratings of award-winning books tend to decline more precipitously following the announcement of an award relative to books that were named as finalists but did not win. We explain this surprising result, focusing on two mechanisms whereby signals of quality that tend to promote adoption can subsequently have a negative impact on evaluation. First, we propose that the audience evaluating a high-status actor or object tends to shift as a result of a public status shock, like an award, increasing in number but also in diverse tastes. We outline how this shift might translate into less favorable evaluations of quality. Second, we show that the increase in popularity that tends to follow a status shock is off-putting to some, also resulting in more negative evaluations. We show that our proposed mechanisms together explain the negative effect of status on evaluations in the context of the literary world.

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Last Words: A Survey and Analysis of Federal Judges’ Views on Allocution in Sentencing

April 15, 2014 Comments off

Last Words: A Survey and Analysis of Federal Judges’ Views on Allocution in Sentencing
Source: Social Science Research Network

Allocution — the penultimate stage of a criminal proceeding at which the judge affords defendants an opportunity to speak their last words before sentencing — is a centuries-old right in criminal cases, and academics have theorized about the various purposes it serves. But what do sitting federal judges think about allocution? Do they actually use it to raise or lower sentences? Do they think it serves purposes above and beyond sentencing? Are there certain factors that judges like or dislike in allocutions? These questions — and many others — are answered directly in this first-ever study of judges’ views and practices regarding allocution.

The authors surveyed all federal district judges in the United States. This Article provides a summary and analysis of the participants’ responses. Patterns both expected and unexpected emerged, including, perhaps most surprisingly, that allocution does not typically have a large influence on defendants’ final sentences. Most of the judges agreed, however, that retaining this often-overlooked procedural right remains an important feature of the criminal-justice process.

This Article also synthesizes judges’ recommendations for both defendants and defense attorneys aiming to craft the most effective allocution possible. Critical factors include preparing beforehand, displaying genuine remorse, and tailoring the allocution to the predilections of the sentencing judge.

IP in a World Without Scarcity

April 10, 2014 Comments off

IP in a World Without Scarcity
Source: Social Science Research Network

Things are valuable because they are scarce. The more abundant they become, they cheaper they become. But a series of technological changes is underway that promises to end scarcity as we know it for a wide variety of goods. The Internet is the most obvious example, because the change there is furthest along. The Internet has reduced the cost of production and distribution of informational content effectively to zero. In many cases it has also dramatically reduced the cost of producing that content. And it has changed the way in which information is distributed, separating the creators of content from the distributors.

More recently, new technologies promise to do for a variety of physical goods and even services what the Internet has already done for information. 3D printers can manufacture physical goods based on any digital design. Synthetic biology has automated the manufacture not just of copies of existing genetic sequences but any custom-made gene sequence, allowing anyone who want to create a gene sequence of their own to upload the sequence to a company that will “print” it using the basic building blocks of genetics. And advances in robotics offer the prospect that many of the services humans now provide can be provided free of charge by general-purpose machines that can be programmed to perform a variety of complex functions. While none of these technologies are nearly as far along as the Internet, they share two essential characteristics with the Internet: they radically reduce the cost of production and distribution of things, and they separate the informational content of those things (the design) from their manufacture. Combine these four developments – the Internet, 3D printing, robotics, and synthetic biology – and it is entirely plausible to envision a not-too-distant world in which most things that people want can be downloaded and created on site for very little money.

The role of IP in such a world is both controverted and critically important. IP rights are designed to artificially replicate scarcity where it would not otherwise exist. In its simplest form, IP law takes public goods that would otherwise be available to all and artificially restricts their distribution. It makes ideas scarce, because then we can bring them into the economy and charge for them, and economics knows how to deal with scarce things. So on one view – the classical view of IP law – a world in which all the value resides in information is a world in which we need IP everywhere, controlling rights over everything, or no one will get paid to create. That has been the response of IP law to the Internet so far.

Wisdom of Crowds: The Value of Stock Opinions Transmitted Through Social Media

April 3, 2014 Comments off

Wisdom of Crowds: The Value of Stock Opinions Transmitted Through Social Media
Source: Social Science Research Network

Social media has become a popular venue for individuals to share the results of their own analysis on financial securities. This paper investigates the extent to which investor opinions transmitted through social media predict future stock returns and earnings surprises. We conduct textual analysis of articles published on one of the most popular social-media platforms for investors in the United States. We also consider the readers’ perspective as inferred via commentaries written in response to these articles. We find that the views expressed in both articles and commentaries predict future stock returns and earnings surprises.

Eyes in the Aisles: Why is Cap’N Crunch Looking Down at My Child?

April 3, 2014 Comments off

Eyes in the Aisles: Why is Cap’N Crunch Looking Down at My Child?
Source: Social Science Research Network

To what extent do cereal spokes-characters make eye contact with children versus adults, and does their eye contact influence choice? The shelf placement and eye positioning of 86 cereal spokes-characters were evaluated in ten grocery stores in the Eastern United States. In Study 1, we calculated the average height of cereal boxes on the shelf for adult- versus children-oriented cereals (48 versus 23-in.) and the inflection angle of spokes-characters’ gaze (0.4 versus -9.6 degrees). We found that cereal characters on children- (adult-) oriented cereals make incidental eye contact at children’s (adults’) eye level. In Study 2, we showed that eye contact with cereal spokes-characters increased feelings of trust and connection to the brand, as well as choice of the brand over competitors. Currently, many of the cereals targeted towards children are of the heavily sugared, less healthy variety. One potential application of this finding would be to use eye contact with spokes-characters to promote healthy choices and healthier food consumption.

Junk Justice: A Statistical Analysis of 4,400 Lawsuits Filed by Debt Buyers

April 1, 2014 Comments off

Junk Justice: A Statistical Analysis of 4,400 Lawsuits Filed by Debt Buyers
Source: Social Science Research Network

Debt buyers have flooded courts nationwide with collection lawsuits against consumers. This article reports the findings from the broadest in-depth study of debt buyer litigation outcomes yet undertaken. The study demonstrates that in debt buyer cases, (1) the vast majority of consumers lose the vast majority of cases by default the vast majority of the time; (2) consumers had no lawyer in ninety-eight percent of the cases; and (3) those who filed a notice that they intended to defend themselves without an attorney fared poorly, both in court and in out of court settlements.

This study challenges the notion that there is an “adversary system” within the context of debt buyer lawsuits. The findings suggest that no such adversary system exists for most defendants in consumer debt cases. Instead, these cases exist in a “shadow system” with little judicial oversight, which results in mass produced default judgments.

The procedural and substantive due process problems which are endemic in debt buyer cases call for heightened awareness and remedial action by the bench, the bar, and the academy. As lawyers who are “public citizens, with a special responsibility for the quality of justice,” the profession can do better. This article proposes suggestions for further study, and several common sense reforms.

What Makes Lawyers Happy? Transcending the Anecdotes with Data from 6200 Lawyers

March 24, 2014 Comments off

What Makes Lawyers Happy? Transcending the Anecdotes with Data from 6200 Lawyers
Source: Social Science Research Network

Attorney well-being and depression are topics of great concern, but there has been no theory-driven empirical research to guide lawyers and law students seeking well-being. This article reports a unique study establishing a hierarchy of five tiers of factors for lawyer well-being, including choices in law school, legal career, and personal life, and psychological needs and motivations established by Self-Determination Theory. Data from several thousand lawyers in four states show striking patterns, repeatedly indicating that common priorities on law school campuses and among lawyers are confused or misplaced. Factors typically afforded most attention and concern, those relating to prestige and money (income, law school debt, class rank, law review, and USNWR law school ranking) showed zero to small correlations with lawyer well-being. Conversely, factors marginalized in law school and seen in previous research to erode in law students (psychological needs and motivation) were the very strongest predictors of lawyer happiness and satisfaction. Lawyers were grouped by practice type and setting to further test these findings. The group with the lowest incomes and grades in law school, public service lawyers, had stronger autonomy and purpose and were happier than those in the most prestigious positions and with the highest grades and incomes. Additional measures raised concerns: subjects did not broadly agree that judge and lawyer behavior is professional, nor that the legal process reaches fair outcomes. Specific explanations and recommendations for lawyers, law teachers, and legal employers are drawn from the data, and direct implications for attorney productivity and professionalism are explained.

Pay Disparity, External Pay Alternatives and Turnover of the Second Best Paid Executive

March 18, 2014 Comments off

Pay Disparity, External Pay Alternatives and Turnover of the Second Best Paid Executive
Source: Social Science Research Network

We contribute to the intersection of top executive turnover and compensation research by investigating pay structure implications on turnover, focusing on the second best-paid executive as the one being closest to winning the tournament for the best-paid position. Building on tournament theory and using competing-risks survival regression, we develop and test hypotheses with regard to the effects of pay disparity among a firm’s top executives and external pay alternatives on the exit of the second best-paid executive. For a sample of S&P 500 firms in the 14-year period between 1993 and 2006, we find that comparisons with higher paid executives and external pay alternatives matter for individuals’ decisions whether to stay in or to leave a pay tournament, whereas comparisons to lower paid executives do not.

Who Believes that Astrology is Scientific?

March 5, 2014 Comments off

Who Believes that Astrology is Scientific?
Source: Social Science Research Network

Who believes that astrology is scientific and who believes that it is not scientific at all? This paper uses representative samples of the adult general public to challenge two of the most common assumptions of political psychology: (1) that a belief in astrology is such a good indicator of conservatism that it is appropriate to use as a measure of conservatism itself; and (2) that Republicans and conservatives tend to hold views opposing science. Data from the 2012 General Social Survey are analyzed and demographic correlates of a belief in astrology are reported by age, gender, education, and region of the country, as well as by political party and conservative-liberal orientation. Also reported are which political groups know that the Earth revolves around the Sun.

HarvardX and MITx: The First Year of Open Online Courses, Fall 2012-Summer 2013

February 20, 2014 Comments off

HarvardX and MITx: The First Year of Open Online Courses, Fall 2012-Summer 2013
Source: Social Science Research Network

HarvardX and MITx are collaborative institutional efforts between Harvard University and MIT to enhance campus-based education, advance educational research, and increase access to online learning opportunities worldwide. Over the year from the fall of 2012 to the summer of 2013, HarvardX and MITx launched 17 courses on edX, a jointly founded platform for delivering massive open online courses (MOOCs). In that year, 43,196 registrants earned certificates of completion. Another 35,937 registrants explored half or more of course content without certification. An additional 469,702 registrants viewed less than half of the content. And 292,852 registrants never engaged with the online content. In total, there were 841,687 registrations from 597,692 unique users across the first year of HarvardX and MITx courses. This report is a joint effort by institutional units at Harvard and MIT to describe the registrant and course data provided by edX in the context of the diverse efforts and intentions of HarvardX and MITx instructor teams.

Inequality, the Great Recession, and Slow Recovery

February 4, 2014 Comments off

Inequality, the Great Recession, and Slow Recovery
Source: Social Science Research Network

Rising inequality reduced income growth for the bottom 95 percent of the income distribution beginning about 1980, but that group’s consumption growth did not fall proportionally. Instead, lower saving led to increasing balance sheet fragility for the bottom 95 percent, eventually triggering the Great Recession. We decompose consumption and saving across income groups. The consumption-income ratio of the bottom 95 percent fell sharply in the recession, consistent with tighter borrowing constraints. The top 5 percent ratio rose, consistent with consumption smoothing. The inability of the bottom 95 percent to generate adequate demand helps explain the slow recovery.

Death Row Confessions and the Last Meal Test of Innocence

January 29, 2014 Comments off

Death Row Confessions and the Last Meal Test of Innocence
Source: Social Science Research Network

Post hoc analyses of Rector v. Arkansas have regularly highlighted that the defendant requested that part of his last meal be saved so that he could it eat later. While the observation is typically raised as part of arguments that Rector was incompetent and unfit for execution, the more basic fact is that commentators have drawn important inferences about Rector’s mental state from how he treated his last meal. In this essay, we draw upon multiple disciplines in order to apply the same inferential logic to a much broader sample and explore the question of whether traditionally customized last meals might offer signals of defendants’ guilt or innocence. To investigate this, the content of last-meal requests and last words reported for people executed in the United States during a recent five-year period were examined. Consistent with the idea that declination of the last meal is equivalent to a signal of (self-perceived) innocence, those who denied guilt were 2.7 times as likely to decline a last meal than people who admitted guilt (29% versus 8%). Consistent with the complementary theory that people who admit guilt are relatively more “at peace” with their sentence, these individuals requested 34% more calories of food than the rest of the sample (2786 versus 2085 calories). A third finding is that those who denied guilt also tended to eat significantly fewer brand-name food items. Previous discussions of last meals have often lacked quantitative measurements; however, this systematic analysis shows that last meal requests offer windows into self-perceived or self-proclaimed innocence. Knowing one’s last meal request and one’s last words can provide valuable new variables for retrospectively assessing the processes that led to past executions.

Vaccine Risk Perceptions and Ad Hoc Risk Communication: An Empirical Assessment

January 29, 2014 Comments off

Vaccine Risk Perceptions and Ad Hoc Risk Communication: An Empirical Assessment
Source: Social Science Research Network

This Report presents empirical evidence relevant to assessing the claim—reported widely in the media and other sources—that the public is growing increasingly anxious about the safety of childhood vaccinations. Based on survey and experimental methods (N = 2,316), the Report presents two principal findings: first, that vaccine risks are neither a matter of concern for the vast majority of the public nor an issue of contention among recognizable demographic, political, or cultural subgroups; and second, that ad hoc forms of risk communication that assert there is mounting resistance to childhood immunizations themselves pose a risk of creating misimpressions and arousing sensibilities that could culturally polarize the public and diminish motivation to cooperate with universal vaccination programs. Based on these findings the Report recommends that government agencies, public health professionals, and other constituents of the public health establishment (1) promote the use of valid and appropriately focused empirical methods for investigating vaccine-risk perceptions and formulating responsive risk communication strategies; (2) discourage ad hoc risk communication based on impressionistic or psychometrically invalid alternatives to these methods; (3) publicize the persistently high rates of childhood vaccination and high levels of public support for universal immunization in the U.S.; and (4) correct ad hoc communicators who misrepresent U.S. vaccination coverage and its relationship to the incidence of childhood diseases.

The Effect of Medical Marijuana Laws on Crime

January 13, 2014 Comments off

The Effect of Medical Marijuana Laws on Crime
Source: Social Science Research Network

In this paper we analyze the effect of medical marijuana laws on crimes in the US. Using the National Incident Based Reporting System, we exploit daily quasi-experimental variation in state legislation to establish the effect of drug liberalization on crime reports and arrests. As expected, we find that drug crimes decrease. Contrary to expectations, the introduction of such laws in a given state or neighboring state decreases the count of assault and property crimes and has no effect on sexual crimes. This is consistent with price drops and lower risk, associated with the acquiring of drugs. When we explore the effect of seizures of cocaine, we find that quantities decrease, hinting that these drugs are rather complements than substitutes for dealers. We perform several robustness checks and further explore the effect through synthetic control methods.

The Determinants of Rising Inequality in Health Insurance and Wages

December 26, 2013 Comments off

The Determinants of Rising Inequality in Health Insurance and Wages
Source: Social Science Research Network

What has caused the rising gap in health insurance coverage by education in the U.S. over the last thirty years? How does the employment-based health insurance market interact with the labor market? What are the effects of social insurance such as Medicaid? By developing and structurally estimating an equilibrium model, I find that the interaction between labor market technological changes and the cost growth of medical services explains 60% to 70% of the gap. Using counterfactual experiments, I also evaluate the impact of further Medicaid eligibility expansion and employer mandates introduced in the Affordable Care Act on labor and health insurance markets.

Director Gender and Mergers and Acquisitions

November 27, 2013 Comments off

Director Gender and Mergers and Acquisitions
Source: Social Science Research Network

Does director gender influence CEO empire building? Does it affect the bid premium paid for target firms? Less overconfident female directors less overestimate merger gains. As a result, firms with female directors are less likely to make acquisitions and if they do, pay lower bid premia. Using acquisition bids by S&P 1500 companies during 1997-2009 we find that each additional female director is associated with 7.6 percent fewer bids, and each additional female director on a bidder board reduces the bid premium paid by 15.4 percent. Our findings support the notion that female directors help create shareholder value through their influence on acquisition decisions. We also discuss other possible interpretations of our findings.

An Experiment in Hiring Discrimination Via Online Social Networks

November 21, 2013 Comments off

An Experiment in Hiring Discrimination Via Online Social Networks
Source: Social Science Research Network

Surveys of U.S. employers suggest that numerous firms seek information about job applicants online. However, little is known about how this information gathering influences employers’ hiring behavior. We present results from two complementary randomized experiments (a field experiment and an online experiment) on the impact of online information on U.S. firms’ hiring behavior. We manipulate candidates’ personal information that is protected under either federal laws or some state laws, and may be risky for employers to enquire about during interviews, but which may be inferred from applicants’ online social media profiles. In the field experiment, we test responses of over 4,000 U.S. employers to a Muslim candidate relative to a Christian candidate, and to a gay candidate relative to a straight candidate. We supplement the field experiment with a randomized, survey-based online experiment with over 1,000 subjects (including subjects with previous human resources experience) testing the effects of the manipulated online information on hypothetical hiring decisions and perceptions of employability. The results of the field experiment suggest that a minority of U.S. firms likely searched online for the candidates’ information. Hence, the overall effect of the experimental manipulations on interview invitations is small. However, in the field experiment, we find significant discrimination against the Muslim candidate compared to the Christian candidate among employers in more politically conservative states and counties. These results are robust to controlling for firm characteristics, state fixed effects, and a host of county-level variables. We find no evidence of discrimination against the gay candidate relative to the straight candidate. Results from the online experiment are consistent with those from the field experiment: we find more evidence of bias among subjects who self-reported more conservative political party affiliation. The online experiment’s results are also robust to controlling for demographic variables. Results from both experiments should be interpreted carefully. Because conservative states and counties in our field experiment, and conservative party affiliation in our online experiment, are not randomly assigned, the result that discrimination is greater in more conservative areas and among more conservative online subjects should be interpreted as correlational, not causal.

Hat tip: PW

Destruction, Disinvestment, and Death: Economic and Human Losses Following Environmental Disaster

November 21, 2013 Comments off

Destruction, Disinvestment, and Death: Economic and Human Losses Following Environmental Disaster
Source: Social Science Research Network

The immediate physical damages caused by environmental disasters are conspicuous and often the focus of media and government attention. In contrast, the nature and magnitude of post-disaster losses remain largely unknown because they are not easily observable. Here we exploit annual variation in the incidence of typhoons (West-Pacific hurricanes) to identify post-disaster losses within Filipino households. We find that unearned income and excess infant mortality in the year after typhoon exposure outnumber immediate damages and death tolls roughly 15-to-1. Typhoons destroy durable assets and depress incomes, leading to broad expenditure reductions achieved in part through disinvestments in health and human capital. Infant mortality mirrors these economic responses, and additional findings — that only female infants are at risk, that sibling competition elevates risk, and that infants conceived after a typhoon are also at risk — indicate that this excess mortality results from household decisions made while coping with post-disaster economic conditions. We estimate that these post-typhoon “economic deaths” constitute 13% of the overall infant mortality rate in the Philippines. Taken together, these results indicate that economic and human losses due to environmental disaster may be an order of magnitude larger than previously thought and that adaptive decision-making may amplify, rather than dampen, disasters’ social cost.

Social Norms Versus Social Responsibility: False Expectations of Leniency in the Punishment of Transgressions

October 31, 2013 Comments off

Social Norms Versus Social Responsibility: False Expectations of Leniency in the Punishment of Transgressions
Source: Social Science Research Network

This paper combines experimental and field data to examine how those who transgress rules may elicit more stringent penalties from those with the authority to punish them if they appeal to relevant norms endorsing leniency. Specifically, we test how transgressors are punished when it’s their birthday: a day when social norms dictate people should be treated preferentially. We first use a scenario study to establish that individuals expect leniency on their birthday. We then show that, compared to other days, transgressors are penalized more severely when it’s their birthday, both by law enforcement (using more than 134,000 arrest records for drunk driving in Washington State) and by participants with the authority to penalize transgressions in an experimental lab setting. An additional experiment provides evidence that this effect is driven by psychological reactance rather than by overcompensation for potential bias. We discuss both the theoretical and practical implications of our findings.

Regulating Consumer Financial Products: Evidence from Credit Cards

October 25, 2013 Comments off

Regulating Consumer Financial Products: Evidence from Credit Cards
Source: Social Science Research Network

We analyze the effectiveness of consumer financial regulation by considering the 2009 Credit Card Accountability Responsibility and Disclosure (CARD) Act in the United States. Using an unique panel data set covering over 150 million credit card accounts, we find that regulatory limits on credit card fees reduced overall borrowing costs to consumers by an annualized 2.8% of average daily balances, with a decline of more than 10% for consumers with the lowest FICO scores. Consistent with a model of low fee salience and limited market competition, we find no evidence of an offsetting increase in interest charges or a reduction in access to credit. Taken together, we estimate that the CARD Act fee reductions have saved U.S. consumers $20.8 billion per year. We also analyze the CARD Act requirement to disclose the interest savings from paying off balances in 36 months rather than only making minimum payments. We find that this “nudge” increased the number of account holders making the 36-month payment value by 0.5 percentage points, with a similarly sized decrease in the number of account holders paying less than this amount.

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