Seminal Model Research Articles

The Term Structure of Interest Rates: Alternative Approaches and Their Implications for the Valuation of Contingent Claims

One of the most active areas of research in financial economics has been the modeling of the term structure of interest rates and its relationship to the pricing of contingent claims. There is a vast array of issues in the area, as well as a variety of perspectives, ranging from theoretical to practical. This article provides a general framework for the analysis of issues in the modeling of the term structure. Specifically, this article provides an overview of the conceptual issues and the empirical evidence in the area, based on an examination of five seminal models by Black, Scholes, and Merton; Vasicek; Cox, Ingersoll, and Ross; Ho and Lee; and Heath, Jarrow, and Morton. The article provides a synthesis of the area and suggests directions for future research.

Controlled attention sharing influences time estimation

A seminal attentional model of time estimation predicts that subjective duration will be positively correlated to the amount of attention given to temporal processing. This prediction holds under prospective conditions, in which one is forewarned that judgments of time will be asked, in contrast to retrospective conditions, in which such judgments are required after the relevant period without any prior warning. In three experiments, an attention-sharing method was used. Subjects were asked to control the amount of attention that they devoted to one or the other component of a dual-task paradigm. The first experiment involved word categorization and reproduction of duration. The following experiments, based on signal detection theory, required discrimination of both the duration and the intensity of a single stimulus, in the visual (Experiment 2) or the auditory (Experiment 3) modality. The results indicate that when the attention is directly controlled by the subject, the subjective duration shortens as the amount of attention devoted to the temporal task diminishes. The implications of these results for the possible existence of an internal timer are considered.

Rejoinder to Lancaster

Thomas Lancaster offers an insightful and profound discussion on the necessity of finding appropriate models in the study of newly evolving party systems in Europe. His commentary broadens, rather nicely, the scope and intent of my essay. He recognizes a major problem in the development of a broad body of comparative party systems literature; i.e., finding equilibrium between the generalities of broad-gauged theoretical models and the particulars of in-depth case studies. Professor Lancaster also recognizes another serious problem revolving around the capacity of models to answer and explain fully the nuances of each general context, in our case democratizing party systems in Eastern and Central Europe. While I was concerned primarily with the application of West European party systems models in the study of inchoate party systems of Central and East Europe, he takes my study a step further and suggests we look at not only the analytical value of the seminal West European party systems models, but also consider the application of theoretical frameworks employed in democratic transitions in European polities; e.g., Spain’s transition to democracy. Generally, Professor Lancaster anticipates the potential scope and depth of the academic debate that will evolve over the analytical value and utility of different types of models for the understanding of developing party systems in Central and Eastern Europe.

Spectroscopy of a chromophore coupled to a lattice of dynamic two-level systems. I. Absorption line shape

Frequency modulation of a dilute chromophore’s transition is a common mechanism of line broadening in condensed phases. In many different physical situations this frequency modulation arises from coupling of the chromophore to a collection of flipping two-level systems. In this paper we calculate the absorption line shape for such a chromophore when the two-level systems occupy the sites of a regular lattice. We consider both general and specific (dipolar) two-level system/chromophore interactions. We present both exact (numerical) and approximate (analytical) expressions for the line shape as a function of the two-level system excitation probability, p, and the flip rate. We find that when p≪1 the line shape is Lorentzian for any value of the flip rate, and that when p=1/2 the chromophore’s fluctuating frequency is described approximately by a Gaussian random process, and that therefore the seminal stochastic model of Anderson and Kubo is applicable.

A note on the continuity of incentive schedules

This note develops a simple geometric argument suggesting that for every tax schedule in Mirrlees' (1971) seminal model of optimal income taxation there exists a continuous and nondecreasing schedule that achieves the same welfare distribution, granted the original schedule leaves every agent with at least one optimal choice. If the original schedule is also upper semi-continuous, then continuity of the schedule can be obtained without affecting any agent's set of optimal choices. Alternatively, these results can be interpreted in terms of a principal's incentive schedule for a single agent with unknown ability and preferences. The results are derived under more general conditions than those in Mirrlees (1971).

Socioeconomic Achievements of Former College Students

Colleges and universities are inextricably linked to social mobility in American society because they are entrusted with responsibility for both the education and the certification of youth [17]. There is abundant evidence supporting the centrality of schooling in the determination of intergenerational social mobility in American society [8, 18, 22]. Most of this evidence is derived from studies based on the seminal model of occupational attainment developed by Blau and Duncan [7] and the Wisconsin social-psychological model of attainment [26, 27]. These models postulate a dual role of schooling in the social mobility process. First, schooling plays an indirect role by serving a mediator or conduit by which the resources of the individual in the form of ability and family background are converted into earnings and occupational status [8, p. 186]. In this respect, schooling serves as an instrument of social-origin advantages [9]. Second, schooling plays a direct role in intergenerational social mobility that counters the stratifying effect of the former role. This is evident from findings indicating that differential levels of educational attainment yield differential levels of socioeconomic achievement among individuals with equivalent social backgrounds [12, 15, 16]. Thus, some portion of social-origin handicaps at birth may be overcome by schooling, and conversely, those persons benefitted at birth may lose their initial advantage through low levels of educational attainment.