According to the Chicago Crime Commission (CCC), 729 people were slain gangland style in Cook County, Illinois during the Prohibition Era from 1919 to 1933. Using the CCC records, Chicago Police Department (CPD) homicide records (2012), and newspaper accounts, this study analyzed a variety of data about these killings, including the types of killings as well as the major reasons for the killings, such as bootlegging, gambling, labor racketeering, vice, or other criminal disputes. Many of the study's results contradicted conventional wisdom. For example, 43% of the killings were unrelated to organized crime. Also, only 40% of the killings were tied to bootlegging, and the victim belonged to one of the major bootlegging gangs in the area in only 40% of those cases. Therefore, while various members of Chicago's Prohibition Era gangs were killed, those casualties are much smaller than expected.

Chicago’s organized crime family emerged from the politically sponsored criminal activities of Jim Colosimo, which were concentrated in the city’s corrupt Levee District. Unwilling to take advantage of the lucrative opportunities that accompanied the passage of the Volstead Act (Prohibition), Colosimo was assassinated and replaced by Johnny Torrio who partnered with Al Capone to lead the organization. Capone and his allies outfought other gangs during the Beer Wars and assumed control over bootlegging and other criminal activities, becoming the largest criminal organization at the end of the 1920s. The Outfit was born during Frank Nitti’s reign, expanding its reach into labor racketeering, gambling, and extortion. The Outfit thrived from 1930 to 1960, virtually unscathed by law enforcement activities and unchallenged by rival criminal organizations. Changes in the city’s political structures, neighborhood compositions, as well as successful FBI investigations, forced the Outfit to contract its membership and activities during the previous 30 years.

Americans have had a love affair with gangsters since the 1920s. Romanticized in novels, movies, and television programs, they have been portrayed as outlaws, entrepreneurs, men of honor, and benevolent godfathers. Stereotypes of organized crime (OC) figures are an enduring feature of popular culture in the United States and so are myths about OC families and gangsters who populate them. This article confronts these myths as they apply particularly to Chicago's OC family known as the Outfit. Eight such myths are discussed: the Mafia is operating in America; OC families consist of only Italians; all members of OC families must take an oath; nobody testifies in OC families; drugs sales in OC families are prohibited; Al Capone was not the boss of his gang; the St. Valentine's Day Massacre was not a Capone operation; the Outfit helped elect President Kennedy.

The Bosman ruling and its aftermath allowed soccer players to move more freely between clubs in Europe. This study examines the performance of national and club teams in Europe before and after Bosman. Some national teams improved after the ruling while others became weaker, but the overall effects are small. At the club level, there is little evidence that the competitive balance of the domestic leagues in Europe was seriously harmed, although in the Champions League the top clubs appear to have become noticeably stronger.

The transportation revolution had several important effects on the antebellum political equilibrium. First, it caused western and southern political views to differ by bringing more easterners and European immigrants into the West. Second, it reduced the costs of rerouting western exports to the non-South, which decreased the expected costs to the West of conflict with the South. Third, it greatly increased western population, which brought more free states into the Union and changed the balance in the Senate. Fourth, it increased northern numerical superiority over the South, giving the North a major advantage if an armed conflict did occur. These changes led the West to ally with the East and caused the South to secede.

Several studies find a negative relation between the recovery rate and the default rate on high yield debt. It has been argued that this is due to inelastic demand for defaulted debt. This paper shows, based on definitional relations in the bond market, that the expected recovery rate is positively related (everything else equal) to the ex ante probability of default. Empirical evidence supports the model and indicates that it is useful in explaining the default rate as well as the recovery rate.

It has been asserted that, based on a pre-election agreement promising them favorable federal treatment, the Chicago Mob (known as the “Outfit”) was responsible for John Kennedy’s election in 1960. An examination of these claims indicates that the sources generally lack credibility and their accounts are implausible. Additionally, there is no evidence Outfit controlled wards/suburbs around Chicago or members of Outfit influenced labor unions voted unusually heavily Democratic in the 1960 presidential election. Therefore, if anything the Outfit “double crossed” the Kennedys by not delivering the promised votes, as opposed to vice-versa.

This article investigates the sensitivity analysis of mean-variance portfolio holdings to changes in the upper bounds. The optimization problem studied in this paper is, thus, constrained by a restriction that no more than certain portion of wealth can be invested in any one security. Our empirical results show that for both risk tolerant as well as for risk averse investors, the performance and expected returns of mean-variance efficient portfolios under the legal restrictions are lower and the variance are higher than the corresponding ones without the restriction.

This paper examines the ability of rational economic factors to explain stock market volatility. A simple model of the economy under uncertainty identifies four determinants of stock market volatility: uncertainty about the price level, the riskless rate of interest, the risk premium on equity and the ratio of expected profits to expected revenues. In initial tests these variables have significant explanatory power and account for over 50 per cent of the variation in market volatility from 1929 to 1989. When the regression coefficients are allowed to vary over time using cluster regression, the four factors explain over 90 per cent of the variation in market volatility. The results are useful in explaining the past behavior of stock market volatility and in forecasting future volatility.

Many tests of the Peltzman hypothesis that regulation buffers the firm's cash flows examine the firm's equity beta. We model the asset beta and show that it (and the equity beta) are a function of several variables beyond those found in previous tests. Since these variables are also affected by regulation, tests of the Peltzman theory that do not hold these factors constant will be biased. The empirical tests in this paper hold other determinants of beta equal and find evidence consistent with the Peltzman buffering hypothesis and the model of beta.

This paper discusses the event study methodology, beginning with FFJR (1969), including hypothesis testing, the use of different benchmarks for the normal rate of return, the power of the methodology in different applications and the modeling of abnormal returns as coefficients in a (multivariate) regression framework. It also focuses on frequently encountered statistical problems in event studies and their solutions.

Although the academic literature has long argued that discounted cash flow methods are superior to other capital budgeting rules, these methods have only fairly recently come into widespread use. This article points out that there are both costs and benefits to using discounting rules such as net present value. Therefore, they may often not work better in practice than nondiscounting methods. Empirically, the use of discounting methods is positively correlated with market interest rates and the dissemination of information about these tools and negatively correlated with the degree of uncertainty in the economy, which is consistent with our hypotheses.

The asset beta of a firm is defined as the uncertainty about the firm's future value scaled by its current value. Empirically, beta is negatively related to a firm's size and concentration in its major product market. This relation has been interpreted as evidence that monopoly power affects beta. This paper shows that this empirical result is also consistent with competitive product markets where greater firm size and concentration are due to greater efficiency in production. Thus, the correlation between beta, firm size and concentration is not prima facie evidence of widespread monopoly power.

This article uses a variety of data in a simple regression framework to test various hypotheses about the regional differences in U.S. bank rates of return existing before 1915. We find that the observed pattern in the return differences is a function of the measures of bank returns used in previous studies, regional differences in economic conditions, restrictions on interstate branch banking, and private bank minimum capital requirements. These results are inconsistent with most of the bank monopoly-power hypotheses in the literature.

Previous articleNext article No AccessThe Sherman Antitrust Act and the Railroad CartelsJohn J. BinderJohn J. Binder Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by The Journal of Law and Economics Volume 31, Number 2Oct., 1988 Sponsored by The University of Chicago Booth School of Business and The University of Chicago Law School Article DOIhttps://doi.org/10.1086/467164 Views: 41Total views on this site Citations: 33Citations are reported from Crossref Copyright 1988 The University of ChicagoPDF download Crossref reports the following articles citing this article:Minh Phuong Doan, Piet Sercu Modelling multiperiod patterns in stock-market reactions to events, with an application to serial acquisitions, International Review of Financial Analysis 77 (Oct 2021): 101854.https://doi.org/10.1016/j.irfa.2021.101854Frédéric Le Roy, Patrick Sentis, Ariste Jerson The Impact of Conviction for Anti-Competitive Practices on Firm Valuation: A Contingency Approach, Managerial and Decision Economics 38, no.44 (May 2016): 534–546.https://doi.org/10.1002/mde.2801Randall K. 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This article examines the usefulness of stock returns in measuring the effects of regulation when the dates on which market expectations change are not known and standard sources, e.g., the Wall Street Journal, are used to choose announcement dates. Twenty major changes in regulatory constraint since 1887 are considered. Tests using either monthly or daily data are found to have surprisingly little ability to detect the effects of regulation. The evidence shows that formal regulatory announcements are generally anticipated in cases where it is unclear when expectations change.

A Multivariate Regression Model (MVRM) methodology to measure the effect of new information on asset prices was first suggested in Gibbons [1980, appendix H]. In this paper I outline the use of that methodology to measure abnormal returns and to test hypotheses about these returns. Included are advantages of the MVRM methodology over other event study methodologies and some of its problems in hypothesis testing.1 Section 2 discusses the MVRM technique relative to better-known methodologies. In section 3 I compare these methodologies and argue that the primary advantage of the MVRM is in testing joint hypotheses. Section 4 provides small sample evidence on several test statistics used in the MVRM; section 5 summarizes the paper.