Business Commons^™

Legal Risk And Insider Trading, Marcin Kacperczyk, Emiliano Sebastian Pagnotta

Research Collection Lee Kong Chian School Of Business

Do illegal insiders internalize legal risk? We address this question with hand-collected data from 530 SEC (the U.S. Securities and Exchange Commission) investigations. Using two plausibly exogenous shocks to expected penalties, we show that insiders trade less aggressively and earlier and concentrate on tips of greater value when facing a higher risk. The results match the predictions of a model where an insider internalizes the impact of trades on prices and the likelihood of prosecution and anticipates penalties in proportion to trade profits. Our findings lend support to the effectiveness of U.S. regulations' deterrence and the long-standing hypothesis that insider …

Too Much Of A Good Thing? A Governing Knowledge Commons Review Of Abundance In Context, Michael J. Madison, Brett M. Frischmann, Madelyn Sanfilippo, Katherine J. Strandburg

Articles

The economics of abundance, along with the sociology of abundance, the law of abundance, and so forth, should be re-framed, linked, and situated in a common context for empirical rather than conceptual research. Abundance may seem to be a new, big thing, between anxiety over information overload, Big Data, and related technological disruptions. But scholars know that abundance is an ancient phenomenon, which only seemed to disappear as twentieth century social science focused on scarcity instead. Restoring the study of abundance, and figuring out how to solve the problems that abundance might create, means shedding disciplinary blinders and going back …

Governing Medical Knowledge Commons - Introduction And Chapter 1, Katherine J. Strandburg, Brett M. Frischmann, Michael J. Madison

Book Chapters

Governing Medical Knowledge Commons makes three claims: first, evidence matters to innovation policymaking; second, evidence shows that self-governing knowledge commons support effective innovation without prioritizing traditional intellectual property rights; and third, knowledge commons can succeed in the critical fields of medicine and health. The editors' knowledge commons framework adapts Elinor Ostrom's groundbreaking research on natural resource commons to the distinctive attributes of knowledge and information, providing a systematic means for accumulating evidence about how knowledge commons succeed. The editors' previous volume, Governing Knowledge Commons, demonstrated the framework's power through case studies in a diverse range of areas. Governing Medical Knowledge …

Textual Analysis And Machine Leaning: Crack Unstructured Data In Finance And Accounting, Li Guo, Feng Shi, Jun Tu

Research Collection Lee Kong Chian School Of Business

In finance and accounting, relative to quantitative methods traditionally used, textual analysis becomes popular recently despite of its substantially less precise manner. In an overview of the literature, we describe various methods used in textual analysis, especially machine learning. By comparing their classification performance, we find that neural network outperforms many other machine learning techniques in classifying news category. Moreover, we highlight that there are many challenges left for future development of textual analysis, such as identifying multiple objects within one single document.

The Existence And Perception Of Redundancy In Consumer Information Environments, Michael D. Johnson, Jerome M. Katrichis

Michael D. Johnson

Two studies are reported which examine the existence of attribute redundancy as well as consumers' ability to perceive attribute redundancy in consumer information environments. The results of the first study suggest that attribute redundancy varies widely from product category to product category. The results of the second study suggest that consumers' ability to perceive attribute relationships improves with product knowledge. Unexpected was an observed U-shaped relationship between consumers' perceptions of attribute redundancy and attribute knowledge. Together the results suggest a number of policy implications regarding the value of consumer information programs.

The Choice Of Technology And Equilibrium Wage Rigidity, Haiwen Zhou

Economics Faculty Publications

In this general equilibrium model, firms engage in oligopolistic competition and choose increasing returns technologies to maximize profits. Capital and labor are the two factors of production. The existence of efficiency wages leads to unemployment. The model is able to explain some interesting observations of the labor market. First, even though there is neither long-term labor contract nor costs of wage adjustment, wage rigidity is an equilibrium phenomenon: an increase in the exogenous job separation rate, the size of the population, the cost of exerting effort, and the probability that shirking is detected will not change the equilibrium wage rate. …

Competition Policy And The Technologies Of Information, Herbert J. Hovenkamp

All Faculty Scholarship

When we speak about information and competition policy we are usually thinking about oral or written communications that have an anticompetitive potential, and mainly in the context of collusion of exclusionary threats. These are important topics. Indeed, among the most difficult problems that competition policy has had to confront over the years is understanding communications that can be construed as either threats to exclude or as offers to collude or facilitators of collusion.

My topic here, however, is the relationship between information technologies and competition policy. Technological change can both induce and undermine the use of information to facilitate anticompetitive …

Governing Knowledge Commons -- Introduction & Chapter 1, Brett M. Frischmann, Michael J. Madison, Katherine J. Strandburg

Book Chapters

“Knowledge commons” describes the institutionalized community governance of the sharing and, in some cases, creation, of information, science, knowledge, data, and other types of intellectual and cultural resources. It is the subject of enormous recent interest and enthusiasm with respect to policymaking about innovation, creative production, and intellectual property. Taking that enthusiasm as its starting point, Governing Knowledge Commons argues that policymaking should be based on evidence and a deeper understanding of what makes commons institutions work. It offers a systematic way to study knowledge commons, borrowing and building on Elinor Ostrom’s Nobel Prize-winning research on natural resource commons. It …

Competition In Information Technologies: Standards-Essential Patents, Non-Practicing Entities And Frand Bidding, Herbert J. Hovenkamp

All Faculty Scholarship

Standard Setting is omnipresent in networked information technologies. Virtually every cellular phone, computer, digital camera or similar device contains technologies governed by a collaboratively developed standard. If these technologies are to perform competitively, the processes by which standards are developed and implemented must be competitive. In this case attaining competitive results requires a mixture of antitrust and non-antitrust legal tools.

FRAND refers to a firm’s ex ante commitment to make its technology available at a “fair, reasonable and nondiscriminatory royalty.” The FRAND commitment results from bidding to have one’s own technology selected as a standard. Typically the FRAND commitment is …

Competition In Information Technologies: Standards-Essential Patents, Non-Practicing Entities And Frand Bidding, Herbert J. Hovenkamp

All Faculty Scholarship

Standard Setting is omnipresent in networked information technologies. Virtually every cellular phone, computer, digital camera or similar device contains technologies governed by a collaboratively developed standard. If these technologies are to perform competitively, the processes by which standards are developed and implemented must be competitive. In this case attaining competitive results requires a mixture of antitrust and non-antitrust legal tools.

FRAND refers to a firm’s ex ante commitment to make its technology available at a “fair, reasonable and nondiscriminatory royalty.” The FRAND commitment results from bidding to have one’s own technology selected as a standard. Typically the FRAND commitment is …

Following The Herd: An Economic Analysis Of The Effects Of Herd Mentality On The U.S. Housing Bubble, Michael P. Spicer

Honors Theses

One focus of economics in the recent years has been the integration of human behavior, including that of herd behavior, into economic thought. Herd behavior can be defined as the way that individuals, who have private information, end up acting together as a group inadvertently, without planned action. It is thought to be caused by incomplete information and subsequently information cascades. Does this behavior exist, and if it does, did it have any effect on the recent housing market? The last twelve years provide a good opportunity to test whether or not herd behavior exists in the housing market, and …

Advertising Collusion In Retail Markets, Kyle Bagwell, Gea M. Lee

Research Collection School Of Economics

We analyze non-price advertising by retail firms, when the firms are privately informed about their respective costs of production. In a static advertising game, an advertising equilibrium exists in which lower-cost firms select higher advertising levels. In this equilibrium, informed consumers rationally employ an advertising search rule in which they buy from the highest- advertising firm, since lower-cost firms also select lower prices. In a repeated advertising game, colluding firms face a tradeoff: the use of advertising can promote productive efficiency but only if sufficient current or future advertising expenses are incurred. At one extreme, if firms pool at zero …

A Long Spell Of Uncertainty, John Austin, Chris Decker, Tom Doering, Ernie Goss, Bruce Johnson, Lisa Johnson, Ken Lemke, Franz Schwarz, Scott Strain, Eric Thompson, Keith Turner

Economics Faculty Publications

We find ourselves in a period of sustained economic uncertainty. Today, like 6 months ago, the U.S. economy is on the brink of a recession. Weakness in lending activity, coupled with weakness in the housing sector and related manufacturing industries has stymied economic growth since late 2007. At times, recession seems imminent. But, the official measures, such as quarterly gross domestic product, do not clearly signal that the economy is contracting. Further, prices are rising rapidly for food and energy. That is the uncertainty. Will 2008 be remembered as a recession year, or as a period of disappointing but slow …

Risk And Recovery, John Austin, Chris Decker, Tom Doering, Ernie Goss, Bruce Johnson, Lisa Johnson, Ken Lemke, Franz Schwarz, Scott Strain, Eric Thompson, Keith Turner

Economics Faculty Publications

The crisis in the housing and financial sectors has led to a dramatic slowdown in U.S. economic growth. Fourth quarter GDP growth and job growth are expected to be anemic and the economy may fall into recession in 2008. Indeed, several of the dozen members of the Nebraska Business Forecast Council do believe that the U.S. economy will likely slip into recession during 2008. However, the overall consensus of the Council is that the U.S. economy will avoid a recession. Economic growth will be slow in the first three quarters of 2008 before recovering in late 2008 and 2009.

A Soft Landing And A Long Layover, John Austin, Chris Decker, Tom Doering, Ernie Goss, Philip Baker, Bruce Johnson, Lisa Johnson, Ken Lemke, Franz Schwarz, Scott Strain, Eric Thompson

Economics Faculty Publications

The U.S. economy achieved a soft landing in 2006. This was a desirable outcome. The economy needed a break from its rapid, and potentially inflationary, growth in 2004 and 2005, before taking off again. But, that new flight has been delayed. The aggregate economy has remained mired in slow growth in the first half of 2007. Pockets of the economy, such as the labor market, have been strong, but a weak housing sector has limited overall growth. Further, signs point to one or two more quarters of weaker growth, before the economy is able to take off again.

A Soft Landing, Steady Growth, And Accelerating Farm Income, John Austin, Chris Decker, Tom Doering, Ernie Goss, Nick Hernandez, Bruce Johnson, Ken Lemke, Franz Schwarz, Scott Strain, Eric Thompson, Keith Turner

Economics Faculty Publications

After years of accelerating growth, the U.S. economy achieved a soft landing in 2006. The rate of economic growth remained positive but slowed sufficiently to reduce inflation pressures and the need for further interest rate increases. At the same time the economy remained strong enough to continue the current expansion which has been in place since late 2001. Such a soft landing is vital because it should allow the economy to continue to expand for years to come, but with moderate inflation.

Pillars Of Growth In Nebraska's Non-Metropolitan Economy, Eric Thompson, Ernie Goss, Chris Decker, Cheryl A. Burkhart-Kriesel, Bruce Johnson, Ben Schmitz, Julian Neira, Pavel Jeutang

Economics Faculty Publications

Agriculture is a critical part of Nebraska’s economy, and changes in the fortunes of agriculture play an important role in the success of the state’s non-metropolitan regions. Trends toward consolidation and rising productivity in agriculture, however, have raised concerns about the future of non-metropolitan Nebraska. Some citizens and policymakers have begun to wonder if the economy can create sufficient job opportunities for non-metropolitan residents. The answer to this question depends not only upon the relative strength of the agricultural sector, but also upon the presence of other industries that can join agriculture as pillars for employment growth in non-metropolitan Nebraska. …

Manufacturing Rebounds, John Austin, Chris Decker, Tom Doering, Ernie Goss, Nick Hernandez, Bruce Johnson, Ken Lemke, Donis Petersan, Franz Schwarz, Eric Thompson, Keith Turner

Economics Faculty Publications

National economic conditions will continue to favor growth over the next three years, including sustained increases in manufacturing employment. Higher energy prices, particularly for oil, gasoline, and natural gas, will impact the economy, but probably only will moderate economic growth rather than cause a significant slowdown.

After rapid growth in 2004 and 2005, growth in real gross domestic product is expected to moderate in 2006-2008, due to higher long-term interest rates as well as higher energy prices. Real gross domestic product will grow 3 percent in 2006 and fall to 2.5 percent growth in later years. The housing market will …

Continued Growth In Nebraska, Saeed Ahmad, John Austin, Tom Doering, Ernie Goss, Bruce Johnson, Donis Petersan, Franz Schwarz, Eric Thomson, Keith K. Turner

Economics Faculty Publications

National economic conditions will continue to favor growth over the next three years. Increased business investment will combine with rising industrial production, expanding exports, and moderate increases in consumer spending to grow the economy. The rate of inflation is expected to increase as well. The rate of real (inflation-adjusted) growth will moderate compared to strong economic growth during 2004. Real gross domestic product will grow 3 percent to 3.5 percent over the next three years. High oil prices will remain a drain on the economy, siphoning spending from domestically produced goods and services. Fuel prices are expected to remain at …

Sustained Growth In Nebraska, Saeed Ahmad, John Austin, Tom Doering, Ernie Goss, Bruce Johnson, Mike Lundeen, Donis Petersan, Franz Schwarz, Eric Thompson, Keith K. Turner

Economics Faculty Publications

National Macroeconomic conditions are favorable for future expansion of income, employment, and revenue in Nebraska. In particular, the U.S. economy is now in the heart of an expansion expected to persist over the three year forecast period. The principal engine of growth will be a sustained expansion in private sector investment and consumption demand. However, the rate of growth in the national economy likely will be moderate rather than rapid. At least three factors will act to moderate growth. The first is higher energy prices. Rapid growth in global demand is expected to keep prices for oil and natural gas …