This paper documents the empirical distributions of daily trading volume prediction errors for several commonly used volume measures and expectation models for individual firms and for portfolios. The prediction errors for raw volume measures are significantly positively skewed, with thin left tails and fat right tails. However, natural log transformations of the volume measures are approximately normally distributed. For longer than one-day prediction intervals, recognition of autocorrelation in daily trading volume is advantageous for detecting abnormal trading. Results of analysis for clustering of events and for different size firms are also presented.

Don B. Panton, The Relevance of the Distributional Form of Common Stock Returns to the Construction of Optimal Portfolios: Comment, The Journal of Financial and Quantitative Analysis, Vol. 24, No. 1 (Mar., 1989), pp. 129-130

Returns computed with closing bid or ask prices that may not represent ‘true’ prices introduce measurement error into portfolio returns if investor buying and selling display systematic patterns. This paper finds systematic tendencies for closing prices to be recorded at the bid in December and at the ask in early January. After changing bid and ask prices are controlled for. this pattern results in large portfolio returns on the two trading days surrounding the end of the year, especially for low-price stocks. Other temporal return patterns (e.g. weekend and holiday effects) are also related to systematic trading patterns.

This article demonstrates that state collective bargaining laws are important determinants of union and nonunion public employee compensation. State laws that provide stronger bargaining rights and ensure closure to the bargaining process increase the direct effect of police unions on compensation. Moreover, indirect threat effects on the pay of nonunion police also increase with stronger bargaining laws. In each law category investigated, nonunion police receive most of the compensation premium enjoyed by unionized police. Previous studies that have not adequately controlled for these effects of bargaining laws have therefore underestimated the full effect of public-sector unions on compensation.

We consider an economy with pure factors of production, private ownership of endowments and constant returns to scale in production. Typically in such an economy, the weak axiom of revealed preference for market demand does not hold. The main reason for this is that the income distribution in such a private ownership economy depends too sensitively on the price system.

We provide an explanation of why convertibles are called long after the conversion value exceeds the call price. Delaying the call benefits the firm if enough investors are expected to delay their voluntary conversions. Consistent with this theory, we document that a substantial number of investors do not voluntarily convert when the common dividend exceeds the convertible's dividend plus its premium over conversion value. We find that firms would not have increased common stock returns by switching to the strategy of calling to force conversion as soon as possible. Surprisingly, we find that convertible preferreds frequently sell below conversion value.

comments and suggestions. Working papers of the Federal Reserve Bank of Cleveland are preliminary materials circulated to stimulate discussion and critical comment. The views stated herein are the author's and not necessarily those of the Federal Reserve Bank of Cleveland or of the Board of Governors of the

The purpose of this paper is to explore the welfare properties of dynastic equilibria. There are three central findings. First, under relatively weak conditions, welfare optima cannot be implemented as dynastic equilibria with positive levels of transfers. Second, intergenerational altruism ordinarily renders the objectives of social planners dynamically inconsistent, thereby making implementation of welfare optima problematic. Third, if a planner successfully resolves dynamic inconsistency by committing himself to respect the preferences of deceased generations, then, in a specific set of cases, dynastic equilibria are approximately welfare optimal. Copyright 1989 by The Review of Economic Studies Limited.

We study a union formation decision problem when workers consist of two groups distinguished by different productivities. Workers may form either a joint union or two separate unions. The whole decision process is modelled as an extensive-form bargaining game. Workers form a joint union when the sizes or productivities of the groups are similar. In the first case, there is a wage differential which is more (less) than proportional to the productivity difference if the size of the more productive is smaller (larger) than that of the less productive. In the second case, there is no wage differential.

Abstract ABSTRACT: A substantial accounting research literature seeks to explain the existence of alternative accounting methods and management's willingness to expend efforts lobbying to defend alternate methods. This paper investigates the association between management lobbying on accounting for oil and gas producing activities and the effect that the method may have on firm cash flows and on accounting numbers that are restricted by the terms of firm contracts, Full cost companies that lobbied at different stages of the deliberations on oil and gas accounting are compared with those that did not. The models and their classificatory success rates were statistically significant. Also, the models developed at each stage of the rule-making process provided statistically significant predictions for the other stages. This suggests that the contract and cash flow effects were stable predictors of lobbying by managers.