Digital Commons Network^™

The Tax Reform Road Not Taken – Yet, Michael J. Graetz

Faculty Scholarship

The United States has traveled a unique tax policy path, avoiding value added taxes (VATs), which have now been adopted by every OECD country and 160 countries worldwide. Moreover, many U.S. consumption tax advocates have insisted on direct personalized taxes that are unlike taxes used anywhere in the world. This article details a tax reform plan that uses revenues from a VAT to substantially reduce and reform our nation’s tax system. The plan would (1) enact a destination-based VAT; (2) use the revenue produced by this VAT to finance an income tax exemption of $100,000 of family income and to …

A Direct Test Of Agency Theories Of Debt, Yilin Huang, Taylor D. Nadauld

Faculty Publications

When a firm is facing default, equity holders have incentives to engage in asset substitution, underinvest, or directly transfer wealth. Few papers document investment distortions on account of debt-equity agency conflicts, only that the threat of distortions influence ex ante financing costs. A non-agency RMBS deal represents an entity that is highly leveraged where, ex ante, equity holders know they will face default. This provides an ideal laboratory for testing whether the threat of default creates any of the distortions predicted in theory. We estimate agency costs associated with direct wealth transfers to range between $.011 and $.025 per dollar.

Peer Effects In Risk Aversion And Trust, Kenneth R. Ahern, Ran Duchin, Tyler Shumway

Faculty Publications

Existing evidence shows that risk aversion and trust are largely determined by environmental factors. We test whether one such factor is peer influence. Using random assignment of MBA students to peer groups and predetermined survey responses of economic attitudes, we find causal evidence of positive peer effects in risk aversion and no effects in trust. After the first year of the MBA program, the difference between an individual and her peers' average risk aversion is only 41% as large as the difference was before starting the MBA. Finding no peer effects in trust is consistent with recent research showing that …

Users Aren’T (Necessarily) Lazy: Using Neurois To Explain Habituation To Security Warnings, Bonnie Brinton Anderson, Anthony Vance, Brock Kirwan, David Eargle, Seth Howard

Faculty Publications

Warning messages are one of the last lines of defense in information security, and are fundamental to users’ security interactions with technology. Unfortunately, research shows that users routinely ignore security warnings. A key contributor to this disregard is habituation, the diminishing of attention through frequent exposure. However, previous research has examined habituation indirectly by observing its influence on security behavior, rather than measuring habituation itself.

We contribute by using functional magnetic resonance imaging (fMRI) to directly observe habituation as it occurs in the brain. Our results show that with repeated exposure to warnings, neural activity in the visual processing centers …

The Effects Of Team Flow On Performance: A Video Game Experiment, Mark Keith, Greg Anderson, Doug Dean, James Gaskin

Faculty Publications

Research on effective team work has traditionally explained team performance as a result of team cohesion and goal commitment. Team cohesion was originally defined as the general level of attraction the team members had to all others in their group. This social relations-based concept of team cohesion is generally a strong indicator of team performance. However, more recent research has stressed the importance of incorporating the team members’ mutual level of commitment to the team task as another sub-dimension of cohesion. When including task commitment, team cohesion is a somewhat weaker predictor of team performance (Beal et al., 2003). To …

Exploring Configurations Of Affordances: The Case Of Software Development, Aron Lindberg, James Gaskin, Nicholas Berente, Kalle Lyytinen

Faculty Publications

Affordances have been increasingly used in the information systems literature to account for the usage and effects of information technology. However, a review of the literature shows that the construct has remained nebulously defined, rarely used in anything but singular forms and with little consideration of context. This has resulted in a lack of cumulative research on affordances. We propose that affordances need to be considered not only individually, but also as configurations of multiple affordances. Through a sociomaterial sequence analysis of two software development teams – one waterfall and one agile - we build a framework for the study …

A Reply To "Hollow Spaces", George A. Bermann, Jack J. Coe Jr., Christopher R. Drahozal, Catherine A. Rogers

Faculty Scholarship

This short essay responds to Chip Brower's thoughtful and meticulous critique of Tentative Draft No. 2 of the Restatement Third of the U.S. Law of International Commercial Arbitration. While we appreciate the concerns he raises, we disagree with the conclusions he draws both about the Restatement and the drafting process. We address here what we understand to be Professor Brower's major criticisms of the work.

The Effects Of Social Networking Site (Sns) Use On College Students’ Friendship And Well-Being, Jin-Liang Wang, Linda A. Jackson, James Gaskin, Hai-Zhen Wang

Faculty Publications

The present study was conducted with two goals in mind: (1) to examine the influence of using different types of SNS use on users’ well-being, and (2) to examine the mediating roles of online self-disclosure and friendship quality in the relationship between types of SNS use and well-being. Participants were from two large 4-year undergraduate universities in Southwestern China. The study was conducted during Spring semester, 2013, using advertisements that described the nature of the research and indicated that compensation for participation was U10 (about $1.5 U.S.). Of the 402 students approached, 337 completed the survey (i.e., response rate was …

Investigating The Effect Of Insurance Fraud On Mouse Usage In Human-Computer Interactions, Martin Hibbeln, Jeffrey L. Jenkins, Christoph Schneider, Joseph S. Valacich, Markus Weinmann

Faculty Publications

The completion of online forms is the catalyst for many business and governmental processes. However, providing fraudulent information in such forms is pervasive, resulting in costly consequences for organizations and society. Furthermore, detecting fraudulent responses in online forms is often very difficult, time consuming, and expensive. This research proposes that analyzing users’ mouse movements may reveal when a person is being fraudulent. Namely, based on neuroscience and deception theory, the paper explains how deception may influence hand movements captured via the computer mouse. In an insurance fraud context, a study is conducted to explore these proposed relationships. The results suggest …

Heroes And Kings, By Charles Williams. Reviewed By Ryder Miller., Ryder Miller

Mythprint Book Reviews

Mythprint is the quarterly bulletin of the Mythopoeic Society, a nonprofit educational organization devoted to the study, discussion, and enjoyment of myth and fantasy literature, especially the works of J.R.R. Tolkien, C.S. Lewis, and Charles Williams. To promote these interests, the Society publishes three magazines, maintains a World Wide Web site, and sponsors the annual Mythopoeic Conference and awards for fiction and scholarship, as well as local discussion groups.

The Social Value Of Mortality Risk Reduction: Vsl Vs. The Social Welfare Function Approach, Matthew D. Adler, James K. Hammitt, Nicolas Treich

Faculty Scholarship

We examine how different welfarist frameworks evaluate the social value of mortality risk reduction. These frameworks include classical, distributively unweighted cost–benefit analysis—i.e., the “value per statistical life” (VSL) approach—and various social welfare functions (SWFs). The SWFs are either utilitarian or prioritarian, applied to policy choice under risk in either an “ex post” or “ex ante” manner. We examine the conditions on individual utility and on the SWF under which these frameworks display sensitivity to wealth and to baseline risk. Moreover, we discuss whether these frameworks satisfy related properties that have received some attention in the literature, namely equal value of …

The Governance Structure Of Shadow Banking: Rethinking Assumptions About Limited Liability, Steven L. Schwarcz

Faculty Scholarship

In an earlier article, I argued that shadow banking — the provision of financial services and products outside of the traditional banking system, and thus without the need for bank intermediation between capital markets and the users of funds — is so radically transforming finance that regulatory scholars need to rethink their basic assumptions. This article attempts to rethink the corporate governance assumption that owners of firms should always have their liability limited to the capital they have invested. In the relatively small and decentralized firms that dominate shadow banking, equity investors tend to be active managers. Limited liability gives …

Pen Pal, By Francesca Forrest. Reviewed By Susan Dorman., Susan Dorman

Mythprint Book Reviews

Mythprint is the quarterly bulletin of the Mythopoeic Society, a nonprofit educational organization devoted to the study, discussion, and enjoyment of myth and fantasy literature, especially the works of J.R.R. Tolkien, C.S. Lewis, and Charles Williams. To promote these interests, the Society publishes three magazines, maintains a World Wide Web site, and sponsors the annual Mythopoeic Conference and awards for fiction and scholarship, as well as local discussion groups.

State’S Rights, Last Rights, And Voting Rights, Guy-Uriel Charles, Luis Fuentes-Rohwer

Faculty Scholarship

There are two ways to read the Supreme Court’s decision in Shelby County Alabama v. Holder: as a minimalist decision or as a decision that undermines the basic infrastructure of voting rights policy, law, and jurisprudence. In this Article, we present the case for reading Shelby County as deeply destabilizing. We argue that Shelby County has undermined three assumptions that are foundational to voting rights policy, law, and jurisprudence. First, the Court has generally granted primacy of the federal government over the states. Second, the Court has deferred to Congress particularly where Congress is regulating at the intersection of race …