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Liars can, when prompted, provide detailed statements. Ideally, interview protocols to improve lie-detection should (a) encourage forthcoming verbal strategies from truth tellers and (b) encourage withholding verbal strategies from liars. Previous research has investigated (a) but not (b). We designed an asymmetric information management (AIM) instruction—informing interviewees, inter alia, that more detailed statements are easier to accurately classify as genuine or fabricated—to encourage truth tellers to be verbally forthcoming and to encourage liars to be verbally withholding. Truth tellers (n = 52) and liars (n = 52) took part in one of two counterbalanced missions, and were assigned to either the AIM or control interviewing condition. Truth tellers provided (and liars withheld) more information in the AIM condition (compared to the control condition), and thus, discriminant analysis classificatory performance was improved. Therefore, a simple instruction can simultaneously modify the respective strategies of liars and truth tellers.

African American bankruptcy filers select Chapter 13 far more often than other debtors, who opt instead for Chapter 7, which has higher success rates and lower attorneys’ fees. Prior schola...

Life history theory proposes that it is adaptive for older people to shift investment away from reproductive effort (such as mating) to survivorship. However, it remains unclear whether the shift is also present at the psychological level. We investigated this question by comparing preferences for mate choice-relevant cues, sexually dimorphic facial images, between older (60 years and older, n = 92) and younger adults (18–40 years, n = 86). Results showed that older adults had significantly smaller preferences for sexually dimorphic faces of both sexes than young adults. Specifically, both older men and women showed no significant preferences for sexually dimorphic traits when judging opposite-sex faces, and smaller preferences for masculine male faces and feminine female faces when judging same-sex faces. Young adults generally showed strong preferences for masculine male faces and feminine female faces. In Study 2, we confirmed that the absent/reduced preferences in older adults for sexually dimorphic faces did not result from poor visual ability. The smaller preferences for sexually dimorphic facial cues in older adults compared to young adults suggest that older adults may shift away from mating-oriented psychology as they become less fertile.

Studies have demonstrated the importance of body weight in physical attractiveness, where thinness in women and leanness and muscularity in men are judged to be attractive. However, most research has focused on young adults, while less has investigated whether attractiveness judgments of body weight change with age. Here, we compared young and older adults' preferences for body physique in a Chinese population using 3D human body models. We found that the attractiveness judgments of body physique vary with age, where older adults have weaker preference for thinness in both male and female bodies than did young adults. These results present novel evidence that preferences for body size alters with age. We propose that the variation in preference for thinness is likely due to the difference in resource availability between generations.

Mating is a double-edged sword. It can have great adaptive benefits, but also high costs, depending on the mate. Disgust is an avoidance reaction that serves the function of discouraging costly mating decisions, for example if the risk of pathogen transmission is high. It should, however, be temporarily inhibited in order to enable potentially adaptive mating. We therefore tested the hypothesis that sexual arousal inhibits disgust if a partner is attractive, but not if he is unattractive or shows signs of disease. In an online experiment, women rated their disgust towards anticipated behaviors with men depicted on photographs. Participants did so in a sexually aroused state and in a control state. The faces varied in attractiveness and the presence of disease cues (blemishes). We found that disease cues and attractiveness, but not sexual arousal, influenced disgust. The results suggest that women feel disgust at sexual contact with unattractive or diseased men independently of their sexual arousal.

We develop a model of a firm in financial distress. Distress can be mitigated by filing for bankruptcy, which is costly, or preempted by restructuring, which is impeded by a collective action problem. We find that bankruptcy and restructuring are complements, not substitutes: Reducing bankruptcy costs facilitates restructuring, rather than crowding it out. And so does making bankruptcy more debtor-friendly, under a condition that seems likely to hold now in the United States. The model gives new perspectives on current relief policies (e.g., subsidized loans to firms in bankruptcy) and on long-standing legal debates (e.g., the efficiency of the absolute priority rule).

Policymakers have minimized the role of bankruptcy law in mitigating the financial fallout from COVID-19. Scholars too are unsure about the merits of bankruptcy, especially Chapter 11, in resolving business distress. We argue that Chapter 11 complements current stimulus policies for large corporations, such as the airlines, and that Treasury should consider making it a precondition for receiving government-backed financing. Chapter 11 offers a flexible, speedy, and crisis-tested tool for preserving businesses, financing them with government funds (if necessary), and ensuring that the costs of distress are borne primarily by investors, not taxpayers. Chapter 11 saves businesses and employment, not shareholders. For consumers and small businesses, however, bankruptcy should serve as a backstop to other policies, such as the CARES Act. Consumer bankruptcy law’s primary goal is to discharge debts, but that’s not what most consumers need right now. What they need is bridge financing, and perhaps forbearance, until the crisis ends, they get back to work, and they regain their ability to pay their debts again. These key policy levers—bridge financing and forbearance—are available in theory to small businesses in Chapter 11, especially if the government supplies the bridge financing when credit markets are dysfunctional. The practical reality is that bankruptcy is expensive for small businesses, which may deter them from using it in the first place. Equally important, our courts will be flooded if Chapter 11 is the primary rescue policy for small businesses.

Background: Alcohol intoxication has been associated with increases in risk taking behavior and more ambiguously, alterations in emotional perception. In the first study of its kind, we examine how theories of disgust can be used to help explain these effects.Methods: Using a single-blind procedure, participants (n=73) were randomly allocated to an alcohol (Males: 0.68g/kg; Females: 0.60g/kg) or placebo condition and then completed a psychometric measure of disgust (TDDS).Results: Results revealed a non-significant trend toward lower disgust sensitivity in the alcohol versus placebo condition. We did however find a significant negative correlation, whereby increases in breath alcohol level were associated with decreased pathogen disgust.Conclusions: These findings demonstrate a relationship between breath alcohol level and disgust sensitivity which could help explain differences in risk associated behavior.

When in a vulnerable situation (such as walking alone at night), an approaching person may be seen as ‘threatening’. Here, we are interested in how well participants’ judgments of threat reflected the trait aggression of approaching target people. We use two similar experiments to demonstrate and replicate the relationship between judgments of threat and target aggression. In both studies participants judged how threatening they found 22 approaching people (presented in videos). In Study One, participants judged the targets whilst sitting at a computer. In Experiment 2, participants were standing and were either oriented facing the videos, or oriented away from the videos so they had to look over their shoulder. This was to emulate a potentially threatening person approaching from behind. Across both studies, there was strong evidence that the average judgments of the threat posed by the approaching targets accurately reflected the targets’ trait aggression. It was also found that there was noteworthy variability in individual participants’ ability to detect aggression, with a few participants even having an inverse relationship between threat and the target’s aggression. This research demonstrates that judgments of how ‘threatening’ a person is can be used to accurately index trait aggression at a distance.

Sex hormones are thought to influence human mate preferences. Previous studies have reported mixed results regarding the association between men’s testosterone levels and their mate preferences. The present study investigated the effect of testosterone administration on men’s facial femininity preference. Heterosexual Chinese male participants (n = 140) received a single dose of 150 mg testosterone or placebo gel in a double-blind, placebo-controlled, between-participant design. Results showed that Chinese men demonstrated general preferences for feminized women’s faces, consistent with previous results from the Western population. More importantly, men showed stronger attraction to femininity in women’s faces three hours after testosterone administration than at the beginning of the session. In the placebo group, no significant change in facial femininity preferences was found between time points. These results indicate that exogenous testosterone increases men’s facial femininity preferences in a Chinese population.

Random case assignment is thought to be an important feature of decision-making in federal courts because it helps guard against favoritism (actual or perceived) toward particular parties or types of cases. In bankruptcy courts, cases are randomly assigned to both judges and trustees. In Chapter 7 cases, for example, the trustee is a quasi-judicial actor, typically a private-sector lawyer, who has been selected to audit the debtor's finances, find and liquidate assets, and police compliance with the law. We study three major bankruptcy jurisdictions (covering Chicago, Los Angeles, and parts of New York) and find that the random-assignment process for Chapter 7 trustees is failing in two of them (Chicago and New York). We introduce several measures of non-random assignment. Across all measures, random assignment is failing: Trustees within the same court have substantially different case characteristics, despite the purportedly random assignment process. We present evidence that the imbalance in case characteristics is caused by attorney manipulation: Attorneys strategically time their case filings to avoid or attract particular trustees ("trustee shopping"). By contrast, among cases filed by debtors who have not hired attorneys ("pro se filers"), there is no case imbalance across trustees. Because they do not engage in manipulation, pro se filers – who account for the bottom decile of income and asset values among Chapter 7 debtors – are the debtors most burdened by trustee-shopping by bankruptcy attorneys. We conclude by presenting evidence that trustee-shopping is less prevalent in Los Angeles due to differences in its random-assignment protocol.

Most previous research into the attractiveness of women’s bodies has relied on static stimuli such as line drawings or photographs, particularly focusing on the role of body-mass index (BMI) and waist-to-hip ratio (WHR). However, real attractiveness judgments are invariably made on moving bodies, and movement may contain important information about attractiveness. We measured the importance of movement in attractiveness judgments by using motion-capture to isolate dynamic cues from 37 female walkers, and compare ratings of 75 participants made on these, static photographs, and the original videos. Multiple regression analysis revealed that both dynamic and static cues were important in the attractiveness of women’s bodies. Furthermore, BMI and WHR predicted attractiveness, but BMI was more important in dynamic rather than static cues, while WHR was important for both static and dynamic cues. These findings suggest that movement is plays a crucial part in the attractiveness of female bodies and cannot be ignored in studies of human mate choice. Furthermore, dynamic and static cues may contain differential information related to female body shape, which further research should attempt to elucidate.

Previous correlational research shows that childhood adversity is associated with earlier age of reproduction in humans and other species. Such studies, however, cannot show that stressful conditions cause earlier reproduction. Using the cold-pressor task, we built on previous work to test the idea that acute stress influences human reproductive and marital ideals, and that individual stress responses depend on adaptive life history strategies shaped by exposure to adversity during childhood. Acute stress shifted ideal ages of first birth and marriage to earlier ages. We also tested a competing hypothesis, whether stress had a more general impact on time preference, but found no evidence that it did. Furthermore, there was an interaction between childhood adversity and acute stress. Individuals who reported more exposure to childhood adversity responded to acute stress by reporting even earlier reproductive ideals. These findings offer experimental evidence that physiological stress can alter reproductive decision making in humans.

African American bankruptcy filers are more likely to select Chapter 13 than other debtors, who opt instead for Chapter 7, which has higher success rates and lower attorney fees. Prior scholarship blames racial discrimination by bankruptcy attorneys. We present an alternative explanation: Chapter 13 offers benefits, including retention of assets such as cars and driver's licenses, that are more valuable to African American debtors because they have relatively long commutes. We take advantage of a 2011 policy in Chicago, which suspended driver's licenses of consumers with large traffic-related debts. The policy produced a large increase in Chapter 13 filings, especially by African Americans. Two mechanisms explain the disparate racial impact: African Americans were more likely to have traffic-related debts and they incurred greater costs from license suspension due to their relatively long commutes. When we match African Americans to other debtors with similar commutes, we find no racial difference in the propensity to file for Chapter 13. These findings suggest that racial disparities in bankruptcy reflect racial disparities in commuting.

In the past decade, there have been increasing concerns over the effects of pharmaceutical compounds in the aquatic environment, however very little is known about the effects of antidepressants such as the selective serotonin re-uptake inhibitors (SSRIs). Many biological functions within invertebrates are under the control of serotonin, such as reproduction, metabolism, moulting and behaviour. The effects of serotonin and fluoxetine have recently been shown to alter the behaviour of the marine amphipod, Echinogammarus marinus (Leach, 1815). The purpose of this study was to observe behavioural and transcriptional modifications in this crustacean exposed to the two most prescribed SSRIs (fluoxetine and sertraline) and to develop biomarkers of neurological endocrine disruption. The animals were exposed to both drugs at environmentally relevant concentrations from 0.001 to 1μg/L during short-term (1h and 1day) and medium-term (8 days) experiments. The movement of the amphipods was tracked using the behavioural analysis software during 12min alternating dark/light conditions. The behavioural analysis revealed a significant effect on velocity which was observed after 1h exposure to sertraline at 0.01μg/L and after 1 day exposure to fluoxetine as low as 0.001μg/L. The most predominant effect of drugs on velocity was recorded after 1 day exposure for the 0.1 and 0.01μg/L concentrations of fluoxetine and sertraline, respectively. Subsequently, the expression (in this article gene expression is taken to represent only transcription, although it is acknowledged that gene expression can also be regulated at translation, mRNA and protein stability levels) of several E. marinus neurological genes, potentially involved in the serotonin metabolic pathway or behaviour regulation, were analysed in animals exposed to various SSRIs concentrations using RT-qPCR. The expression of a tryptophan hydroxylase (Ph), a neurocan core protein (Neuc), a Rhodopsin (Rhod1) and an Arrestin (Arr) were measured following exposure to fluoxetine or sertraline for 8 days. The levels of Neuc, Rhod1 and Arr were significantly down-regulated to approximately 0.5-, 0.29- and 0.46-fold, respectively, for the lower concentrations of fluoxetine suggesting potential changes in the phototransduction pathway. The expression of Rhod1 tended to be up-regulated for the lower concentration of sertraline but not significantly. In summary, fluoxetine and sertraline have a significant impact on the behaviour and neurophysiology of this amphipod at environmentally relevant concentrations with effects observed after relatively short periods of time.

There is a strong contemporary association between high heels and female sexuality. We investigated the hypothesis that one motivation for women wearing high heels is that it artificially increases the femininity of gait. We isolated the effects of heels on gait using point-light methodology. Females were recorded walking in flat shoes and high heels. Participants viewed point-light videos of the women wearing the two types of shoe. Participants judged the females in the heels condition as significantly more attractive (with a large effect size) than the females in the flat shoe condition. Biomechanical analyses revealed that wearing high heels led to increased femininity of gait including reduced stride length and increased rotation and tilt of the hips. We conclude that high heels exaggerate sex specific aspects of female gait and women walking in high heels could be regarded as a supernormal stimulus.

Physical attractiveness is suggested to be an indicator of biological quality and therefore should be stable. However, transient factors such as gaze direction and facial expression affect facial attractiveness, suggesting it is not. We compared the relative importance of variation between faces with variation within faces due to facial expressions. 128 participants viewed photographs of 14 men and 16 women displaying the six basic facial expressions (anger, disgust, fear, happiness, sadness, surprise) and a neutral expression. Each rater saw each model only once with a randomly chosen expression. The effect of expressions on attractiveness was similar in male and female faces, although several expressions were not significantly different from each other. Identity was 2.2 times as important as emotion in attractiveness for both male and female pictures, suggesting that attractiveness is stable. Since the hard tissues of the face are unchangeable, people may still be able to perceive facial structure whatever expression the face is displaying, and still make attractiveness judgements based on structural cues.

Individuals in large groups do not always contribute equally to group decision making. This may be due to constraints on conversational group size, as when a group is comprised of more than 4 people, it spontaneously fissions into smaller groups within which conversations take place. Thus, if conversations are attempted in larger groups, some individuals will not be part of the spontaneously forming discursive subgroup and, consequently, may not contribute to group decision making. Here, using a mock jury paradigm, the effect of hierarchically subdividing groups to mimic the spontaneous formation of optimally sized conversational groups (while maintaining an overarching group size of 12) was tested. Individuals in the subdivided condition reported greater equality of contribution to the decision-making process than individuals in the control condition, and experienced less inhibition from participation due to the activities of others.

Sexual dimorphism in the human face has been linked to attractiveness, and computer-graphic techniques have been useful in this field by allowing experimental manipulation of dimorphism. However, a limitation of much research is its reliance on static pictorial stimuli, whereas real faces are dynamic, as is much courtship behaviour throughout nature. Furthermore, little is known about possible interactions between static and dynamic facial cues and attractiveness. We adapted well-established face-morphing technology to manipulate sexual dimorphism in male and female dynamic facial displays depicting prosocial and antisocial behaviour. Masculinised and feminised versions of these videos were presented as a two-alternative forced choice task to measure preferences. Feminised female videos were preferred in both movement contexts, as expected. More surprisingly, no directional preference for masculinity or femininity was evident for the male videos in either context. Further analysis showed that the movement of the faces (prosocial vs. antisocial) had no effect on attractiveness ratings. Results were the same with static stimuli and did not conflict with findings from the wider literature using static faces. These findings suggest that the new technique we describe is a valid way to manipulate facial shape in videos and can now be widely applied to future studies of facial morphing.

In the United States, few failing businesses invoke the Bankruptcy Code to reorganize or liquidate. Most use non-bankruptcy procedures to accomplish the same purposes. These procedures include voluntary agreements between the debtor and its creditors (workouts) and formal devices such as friendly foreclosures, bulk sales, and assignments for the benefit of creditors. This paper documents the importance of non-bankruptcy procedures using firm-level data from Cook County, Illinois. I find that these procedures are used by eighty percent of distressed small businesses. The paper also identifies the conditions under which a business chooses federal bankruptcy law over non-bankruptcy procedures. I model this choice - theoretically and empirically - as the outcome of a bargaining game between the debtor's owner and its senior lenders. The parties are more likely to consent to non-bankruptcy procedures when bargaining costs are low and when the debtor has maintained a close relationship with senior lenders, who trust the information provided by the owner. When the number of senior lenders is relatively large (raising bargaining costs) or when the debtor has defaulted on senior debt (thereby harming its relationship with lenders), senior lenders are more likely to push for a federal bankruptcy filing. Owners may also prefer a federal filing when in-bankruptcy rules give greater priority to particular creditors whom the owner would like to favor. These findings suggest that federal bankruptcy reforms, such as the Bankruptcy Abuse and Protection Act of 2005, will have two effects on distressed small businesses: They will impact outcomes in federal courts (intensive margin) as well as the debtor's choice between bankruptcy and non-bankruptcy procedures (extensive margin). Variation along the extensive margin can neutralize reforms in federal law, as when a reform designed to protect unsecured creditors raises the cost of federal law and induces businesses to use cheaper non-bankruptcy procedures instead.

Like facial structure, facial motion is a rich source of information for potential mates, but its relevance may vary across contexts. Perceived flirtatiousness (i.e. proceptivity) may offer information to females about various benefits offered by males, both direct and indirect, and may be weighted more heavily in a short-term mating context. However, proceptivity may interact with other desirable qualities. Prosocial tendencies (i.e. kindness) may offer direct benefits to potential mates and may effectively supersede proceptivity in a long-term mating context. We showed women wire-frame animations of shape-standardized male faces purportedly reporting statements that were either prosocial or antisocial. We asked participants to rate the animated faces for attractiveness in both long- and short-term mating contexts. We also asked a separate group of women to rate the perceived flirtatiousness of the animations. As expected, women prefer stimuli paired with prosocial statements. The weight placed ...

This preliminary study investigated whether individual differences in performance on a difficult social perception task (determining the sex of shape normalized, line drawn dynamic faces) are related to sex of observer, scores on an empathy quotient and scores on a systemizing quotient. Performance in the face perception task (N = 60) was above chance, indicating that participants could judge the sex of the degraded facial stimuli from dynamic information alone. There was a trend for women to be more accurate in their judgments of target sex than men, but regression analyses indicated that EQ scores alone predicted performance on the task. This study suggests that empathy may mediate sex differences in face perception abilities, and potentially other tasks in social perception.

Facial movement has received little attention in studies of human attractiveness, yet dynamic displays are an important aspect of courtship in many species. This experiment investigated whether facial movement could be used to identify sex, and whether the ease of identification was associated with attractiveness. We removed shape cues to sex by applying movement from individual faces to a standardised facial model. Participants were able to distinguish between male and female animations of this model at levels above chance. Furthermore, there was a positive association between ease of sex identification and attractiveness for female, but not male, faces. Analysis of facial movement suggested several behaviours that are more frequent in women than men (blinking, tilting, nodding, shaking, and amount of movement). Although some of these behaviours may be cues to sex identification, none alone was directly linked to attractiveness. Our findings suggest that feminine motion is attractive in female faces, but sexually recognisable movement has no clear influence on male attractiveness, in agreement with work on static faces employing composite images.

Many small businesses attempt to reorganize under Chapter 11 of the U.S. Bankruptcy Code, but most are ultimately liquidated instead. Little is known about this shutdown decision. It is widely suspected that the bankruptcy process exhibits a continuation bias, allowing failing businesses to linger under the protection of the court, which resists liquidation even when it is optimal. This paper examines the shutdown decision in a sample of Chapter 11 bankruptcy cases filed in a typical bankruptcy court over the course of a year. The presence of continuation bias is tested along several dimensions—the extent of managerial control over the bankruptcy process, the accuracy and speed with which viable and nonviable businesses are distinguished, and the characteristics of the hazard of shutdown compared with the predictions of a formal model. Contrary to conventional wisdom, the paper finds that continuation bias is either absent or empirically unimportant.

Physical attractiveness is the perception of beautiful or sexually appealing characteristics in another individual. People around the world agree on aspects physical attractiveness, suggesting a basis in evolution. Different visual, auditory, and olfactory cues can plausibly be linked to evolutionary fitness, and the traits considered attractive might indicate good genes, health, or youth. Nevertheless, there are individual differences in attractiveness preferences, which can be linked to reproductive strategies or local ecological conditions. Keywords: beauty; evolution; mate choice; physical attractiveness

Intercreditor agreements frequently restrict the extent to which subordinated creditors can participate in the bankruptcy process by, for example, contesting liens of senior lenders, objecting to a cash collateral motion, or even exercising the right to vote on a plan of reorganization. Because intercreditor agreements can reorder the bargaining environment in bankruptcy, some judges have been unsure about their enforceability. Other judges have not hesitated to enforce the agreements, at least when they do not restrict the voting rights of subordinated creditors. This essay argues that intercreditor agreements are controversial because they pose a trade-off: they reduce bargaining costs (by limiting the participatory rights of subordinated creditors), but can give senior lenders outsized influence over the bankruptcy process, to the detriment of investors who were not party to the intercreditor agreement. The essay proposes several rules of thumb that might help judges navigate this trade-off.

This paper explores the role of capital structure in determining how households respond to unanticipated shocks. We draw on a novel dataset linking individual cancer records to high-quality administrative data on personal mortgages, bankruptcies, foreclosures, and credit reports. We find that cancer diagnoses induce a substantial increase in various measures of financial stress regardless of whether the patient carries health insurance. Foreclosure rates, for example, increase 65 percent during the five years following diagnosis. The effect, however, is concentrated among patients with low levels of housing equity. Highly leveraged households default, undergo foreclosure, or file for bankruptcy; less-levered households cope with health shocks by drawing on home equity and other sources of liquidity. These results point to the critical role of capital structure in determining how households respond to severe shocks. They also suggest that household leverage may merit as much policy attention as health insurance.

When a firm encounters financial distress, there is a significant possibility that, at some point, the firm itself should be shut down and its assets put to better use. But Chapter 11 and indeed all market-mimicking reorganization regimes other than a speedy auction entrust the shutdown decision to a bankruptcy judge who lacks information and expertise, as well as the ability to control the timing of her decisions. Understanding the costs of entrusting the shutdown decision to a bankruptcy judge is central to assessing any law of corporate reorganizations. This article models the shutdown decision as the exercise of a real option. The model suggests that the shutdown decision may loom so large in the early parts of the bankruptcy case that it erases any significant difference between Chapter 11 and many alternative market-mimicking regimes. All these regimes take more time than mandatory auctions and thus increase the cost of taking the shutdown decision away from a market actor. Moreover, the real option itself gives parties an incentive to withhold information. Only a system of mandatory auctions both limits the amount of time the shutdown option resides with an inexpert decision maker and forces insiders to give that decision maker sufficient information to value the option

During my first weeks as a graduate student in economics, a professor described the Coase Theorem as “nearly a tautology:” Assume a world in which bargaining is costless. If there are gains from trade, the Theorem tells us, the parties will trade. The initial assignment of property rights will not affect the final allocation because the parties will bargain (costlessly) to an efficient outcome. “How can that be a theorem?,” I remember thinking at the time.

Human mating and reproductive behaviour can vary depending on various mechanisms, including the local sex ratio. Previous research shows that as sex ratios become female-biased, women from economically deprived areas are less likely to delay reproductive opportunities to wait for a high-investing mate but instead begin their reproductive careers sooner. Here, we show that the local sex ratio also has an impact on female fertility schedules. At young ages, a female-biased ratio is associated with higher birth rates in the poorest areas, whereas the opposite is true for the richest areas. At older ages, a female-biased ratio is associated with higher birth rates in the richest, but not the poorest areas. These patterns suggest that female–female competition encourages poorer women to adopt a fast life-history strategy and give birth early, and richer women to adopt a slow life-history strategy and delay reproduction.

Previous research on contemporary childbearing has identified a strong relationship between environmental conditions, such as economic deprivation, and early fertility. Less is known, however, about the social-psychological mechanisms that mediate these environmental predictors of early fertility at the individual level and the extent to which they are consistent with life history theory. The aim of this research was to determine how kin networks, mating and reproductive risk taking, discount preference, and perceptions of environmental risk predict individual differences in fertility preferences in a socioeconomically diverse sample of adolescents. Questionnaires were administered to 333 adolescents (245 female) between the ages of 13 and 19 years, attending schools in urban neighborhoods in Hampshire, United Kingdom. Individuals’ subjective life expectancy and perception of their environment better predicted fertility intentions than did structural measures of environmental quality. This suggests that by the time individuals reach adolescence they are monitoring the morbidity and mortality risk of their environment and are adjusting their reproductive ideals accordingly. Levels of grandparental investment also predicted parenting preferences, suggesting cooperative breeding may play a role in reproductive decision making. There was also evidence that patterns of risk taking behaviors could be adaptive to environmental conditions and some evidence that pro-natal attitudes, as opposed to knowledge of safe sexual practice, predict adolescents’ reproductive strategies. These findings suggest that studying individuals’ psychology from a life history perspective adds to my understanding of the persistently high rates of early reproduction within developed countries, such as the United Kingdom.

This paper assesses the importance of adverse health shocks as triggers of bankruptcy filings. We view car crashes as a proxy for health shocks and draw on a large sample of police crash reports linked to hospital admission records and bankruptcy case files. We report two findings: (i) there is a strong positive correlation between an individual's pre-shock financial condition and his or her likelihood of suffering a health shock, an example of behavioral consistency; and (ii) after accounting for this simultaneity, we are unable to identify a causal effect of health shocks on bankruptcy filing rates. These findings emphasize the importance of risk heterogeneity in determining financial fragility, raise questions about prior studies of "medical bankruptcy," and point to important challenges in identifying the triggers of consumer bankruptcy.

This article reviews recent developments in experimental facial attractiveness research. It outlines the important social consequences of facial attractiveness in social life and briefly reviews the structural factors associated with attractiveness in both sexes taking a theoretical perspective largely influenced by evolutionary biology. The study discusses individual differences in preferences from this theoretical perspective. Attractiveness is also affected by aspects of the face that are manifestly not static. Facial motion and expression involve changing configurations of the face and the execution of specific, discrete gestures that are likely to contribute to attractiveness and yet are largely neglected in the current literature. It shows how an evolutionary viewpoint is also useful when considering attractiveness judgments when expressive or dynamic cues are present in stimuli.

We investigate whether homeowners respond strategically to news of mortgage modification programs. We exploit plausibly exogenous variation in modification policy induced by U.S. state government lawsuits against Countrywide Financial Corporation, which agreed to offer modifications to seriously delinquent borrowers with subprime mortgages throughout the country. Using a difference-in-difference framework, we find that Countrywide's relative delinquency rate increased thirteen percent per month immediately after the program's announcement. The borrowers whose estimated default rates increased the most in response to the program were those who appear to have been the least likely to default otherwise, including those with substantial liquidity available through credit cards and relatively low combined loan-to-value ratios. These results suggest that strategic behavior should be an important consideration in designing mortgage modification programs.

We investigate whether homeowners respond strategically to news of mortgage modification programs by defaulting on their mortgages. We exploit plausibly exogenous variation in modification policy induced by U.S. state government lawsuits against Countrywide Financial Corporation, which agreed to offer modifications to seriously delinquent borrowers with mortgages throughout the country. Using a difference-in-difference framework, we find that Countrywide's relative delinquency rate increased more than ten percent per month immediately after the program's announcement. The borrowers whose estimated default rates increased the most in response to the program were those who appear to have been the least likely to default otherwise, including those with substantial liquidity available through credit cards and relatively low combined loan-to-value ratios. These results suggest that strategic behavior of borrowers should be an important consideration in designing mortgage modification programs.

The Dodd-Frank financial reform legislation creates an “Orderly Liquidation Authority” (OLA) that shares many features in common with the Bankruptcy Code. This is easy to overlook because the legislation uses a language and employs a decision-maker (both borrowed from bank regulation) that will seem foreign to bankruptcy lawyers. Our task in this essay is to identify the core congruities between OLA and the Code. In doing so, we highlight important differences and assess both their constitutionality and policy objectives. We conclude with a few thoughts on the likelihood that OLA will contribute to market stability.

General Motors (GM) has broken a record. The Big-Three automaker posted a phenomenal $23.5 billion loss for fiscal year 1992 (White, 1993, p. A3). Paradoxically, this world-record loss accompanied reports that GM generated income of $92 million from operations in 1992 (Dubrowski, 1993). The accounting data seem contradictory: How could GM incur a record loss when its operations are improving? The answer: GM recorded a “one-time hit.” Company executives recognized the cumulative effect of previously undisclosed liabilities for postretirement benefits -namely, a $20.8 billion obligation for retiree medical benefits. Prior to issuance of GM’s 1992 financial statements, these liabilities were off-balance sheet. That is, they existed outside the realm of financial reporting. GM is not alone. Many companies maintain off-balance sheet assets and liabilities. This essay explores some of the critical issues surrounding off-balance sheet risks (O&S&), namely, (1) the nature of OBSR, (2) managerial motivation to pursue off-balance sheet activities, (3) the importance of disclosing these activities, and (4) the Financial Accounting Standards Board (FASB) crusade to control OBSR.

Although they caused great controversy, the Chrysler and GM bankruptcies broke no new ground. They invoked procedures that are commonly observed in modern Chapter 11 reorganization cases. Government involvement did not distort the bankruptcy process; it instead exposed the reality that Chapter 11 offers secured creditors - especially those that supply financing during the bankruptcy case - control over the fate of distressed firms. Because the federal government supplied financing in the Chrysler and GM cases, it possessed the creditor control normally exercised by private lenders. The Treasury Department found itself with virtually the same, unchecked power that the FDIC exercises with respect to failing banks. The Chrysler and GM bankruptcies are cautionary tales about Chapter 11, not about government intervention. It may be time to entertain longstanding proposals for reforming the reorganization process.

This essay surveys important contributions to the economics of bankruptcy. It is an introductory chapter for a forthcoming volume (from Edward Elgar Press) that compiles the work of legal scholars as well as economists working in the field of corporate finance. The essay begins with the foundational theories of Baird, Jackson, and Rea and then collects scholarly work extending, testing, or revising those theories. At various points I identify questions that merit further study, particularly empirical testing.

Women’s preferences for facial structure vary over the menstrual cycle. Little is known, however, as to how preferences for behavior may be influenced by hormonal factors. Here, we demonstrate that social properties of facial motion influence attractiveness judgments in the absence of other cues, and that women’s preferences for these displays vary over the menstrual cycle, as has been demonstrated for structural traits of men’s faces in static stimuli. We produced shape-standardized facial models that were animated with male movement and assessed for flirtatiousness by 16 women and attractiveness by 47 women. In fertile phases of the menstrual cycle, women showed stronger preferences for flirtatious movement, but not for absolute movement. These data show that women (1) recognize specific mating-relevant social cues in male facial movement and (2) are differentially influenced by these cues at different phases of the menstrual cycle. This preference for flirtatiousness may promote the adaptive allocation of mating effort towards men who are, in turn, likely to respond positively.

Most nations have enacted statutes governing business liquidation and reorganization. These statutes are the primary focus when policymakers and scholars discuss ways to improve laws governing business failure. This focus is misplaced, at least for distressed small businesses in the United States. Evidence from a major credit bureau shows that over eighty percent of these businesses liquidate or reorganize without invoking the formal Bankruptcy Code. The businesses instead invoke procedures derived from the laws of contracts, secured lending, and trusts. These procedures can be cheaper and speedier than a formal bankruptcy filing, but they typically require unanimous consent of senior, secured lenders. This essay identifies the conditions under which a business owner is able to obtain lender consent. The empirical findings point to an important balance between a nation's formal insolvency statutes and alternative modes of liquidation and reorganization. This balance, the essay argues, should play a central role in any discussion of insolvency-law reform.