Weekly Top 5 Papers – December 18th, 2017

1. The Games They Will Play: Tax Games, Roadblocks, and Glitches Under the New Legislation by Reuven S. Avi-Yonah (University of Michigan Law School), Lily L. Batchelder (New York University School of Law), J. Clifton Fleming Jr. (Brigham Young University – J. Reuben Clark Law School), David Gamage (Indiana University Maurer School of Law), Ari D. Glogower (Ohio State University (OSU) – Michael E. Moritz College of Law), Daniel Jacob Hemel (University of Chicago – Law School), David Kamin (New York University School of Law), Mitchell Kane (New York University (NYU)), Rebecca M. Kysar (Brooklyn Law School; Fordham University School of Law), David S. Miller (Proskauer Rose LLP), Darien Shanske (University of California, Davis – School of Law), Daniel Shaviro (New York University School of Law) and Manoj Viswanathan (University of California Hastings College of the Law)

2. Should India Stay Away from the Fourth Revolution? by Gaurav Agrawal (Government of India)

The world stands at the cusp of another steam engine moment. Things and economic models as we know might totally change in next decades thanks to the revolution in Artificial Intelligence and other technologies. Many developing countries like India are resorting to banning these ostensibly to ‘protect jobs’. But what has history taught us? Every major technology change in past automated the jobs of thousand men and threatened to render them jobless. Still it ended up making the world a better place for everyone. In the paper we explore the why. We explain the mechanics of how Adam Smith’s invisible hand operates in such cases and ensures better jobs in the end. We also explore how no country can remain isolated due to global trade and capital flows. Adopting these technologies will only lead to transitory unemployment, banning these would make the country permanently poor. We explore what countries can do to reduce frictions which can make the transitory unemployment ‘sticky’.
A follow-up of these ideas would be to study under what conditions markets may reach a sub-optimal equilibrium rather than a full employment one or the transition process may become a painfully long one. – Guarav Agrawal

3. The Premature Demonization of Stock Repurchases by Clifford S. Asness (AQR Capital Management, LLC), Todd M. Hazelkorn (AQR Capital Management, LLC) and Scott A. Richardson (AQR Capital Management, LLC; London Business School)

4. A Revealed-Preferences Ranking of Law Schools by Christopher J. Ryan Jr. (Vanderbilt University, Peabody College – Higher Education Law & Policy) and Brian L. Frye (University of Kentucky – College of Law)

A couple of years ago, we noticed that the reputation scores used in the US News & World Report law school ranking methodology were very sticky. In other words, they change very little over time and are strongly correlated with previous years’ scores. This is troubling because the reputation scores account for 40% of a law school’s overall rank in the US News ranking methodology. Others have also noticed this problem and proposed alternative ranking systems intended to measure actual quality, rather than merely perceived quality. These ranking systems rely on factors like scholarly impact, bar passage, and employment outcomes, as objective measures of law school quality.
However, all of these ranking systems tell students which school they should attend, based on selected factors. None of them ask what factors students actually care about. So we asked ourselves whether we could create a ranking system that would show which school students actually chose to attend, in the hope of identifying the factors that actually matter to students.
The ranking system we created is quite simple. It ranks schools by measuring which schools matriculate students with the best entering credentials. Accordingly, it reflects the “revealed preferences” of the students. While we recognize that this ranking system measures subjective student preferences, rather than objective law school quality, it suggests that some schools are better at satisfying the preferences of matriculating students than others. Hopefully, it encourages further study of student preferences and their role in evaluating and predicting law school quality. It has been a treat for us both to see the conversation that our ranking system has generated. – Christopher Ryan

5. Deep Value  by Clifford S. Asness (AQR Capital Management, LLC), John M. Liew (AQR Capital Management, LLC), Lasse Heje Pedersen (AQR Capital Management, LLC; Copenhagen Business School – Department of Finance; New York University (NYU); Centre for Economic Policy Research (CEPR)) and Ashwin K. Thapar (AQR Capital Management, LLC)