Professional Documents
Culture Documents
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .
http://www.jstor.org/page/info/about/policies/terms.jsp
.
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of
content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms
of scholarship. For more information about JSTOR, please contact support@jstor.org.
University of California Press is collaborating with JSTOR to digitize, preserve and extend access to Historical
Studies in the Physical and Biological Sciences.
http://www.jstor.org
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
.(11(7+/&$1(9$
'LVFRYHU\DVDVLWHIRUWKHFROOHFWLYHFRQVWUXFWLRQRIVFLHQWLFNQRZOHGJH
,17+(&2856(RIP\ZRUNRYHUWKHODVWWKLUW\\HDUV,KDYHUHSHDWHGO\QRWLFHG
WKDW ZKDW D VFLHQWLVW LV W\SLFDOO\ FUHGLWHG ZLWK KDYLQJ GLVFRYHUHG RIWHQ GLIIHUV
VLJQLFDQWO\IURPWKHZD\LQZKLFKWKHVFLHQWLVWKLPVHOIFKDUDFWHUL]HGKLVZRUN
6RPHWLPHVWKHGLVFRYHU\ZDVQRWUHFRJQL]HGDVVXFKE\FRQWHPSRUDULHVEXWUDWKHU
EHFDPHDWWDFKHGWRWKHVFLHQWLVWDWVRPHODWHUGDWH)RUWKHPRVWSDUW,WHQGHGWR
VHHVXFKLQVWDQFHVDVH[DPSOHVHLWKHURIFDUHOHVVKLVWRULRJUDSK\RURIWKHGLVWRU
WLRQVRIDVWRU\UHZULWWHQIURPDODWHUSHUVSHFWLYH0\WKLQNLQJEHJDQWRFKDQJHDV
,QRWLFHGWKDWLWZDVQRWMXVWKLVWRULDQVZKRZHUHJXLOW\RIUHWURVSHFWLYHGLVWRUWLRQ
EXWWKDWVXFKUHFDVWLQJVZHUHDQLQWULQVLFSDUWRIWKHVFLHQWLFHQWHUSULVHLWVHOI
0RUHUHFHQWO\DV,KDYHEHJXQWRH[DPLQHWKHSURFHVVHVE\ZKLFKWKHLGLRV\QFUDWLF
DQGWKRURXJKO\FRQWH[WXDOL]HGZRUNRILQGLYLGXDOVFLHQWLVWVEHFRPHVWUDQVPXWHG
LQWRWKHGHFRQWH[WXDOL]HGFRQVHQVXVWKDWVWDQGVIRUJHQHUDOO\DFFHSWHGVFLHQWLF
NQRZOHGJH,KDYHFRPHWRVHHKRZVXFKLQVWDQFHVFDQEHH[SORLWHGDVH[DPSOHVRI
KRZZKDWLVJHQHUDOO\DFFHSWHGDVVFLHQWLFNQRZOHGJHLVHVVHQWLDOO\WKHRXWFRPH
RIDSURFHVVE\ZKLFKNQRZOHGJHLVUHVKDSHGDVLWSDVVHVWKURXJKWKHKDQGVRI
SHRSOHZLWKGLIIHUHQWDJHQGDVKROGLQJGLIIHUHQWFRQFHSWXDODQGRQWRORJLFDOEHOLHIV
DQGXVLQJGLIIHUHQWODQJXDJH6XFKDGLVFRYHU\LVQRWDQDWRPL]HGFRQWULEXWLRQ
WRNQRZOHGJHWKDWRWKHUVQHHGPHUHO\UHFRJQL]HDQGDFFHSWEXWUDWKHUUHSUHVHQWV
'HSWRI+LVWRU\0F,YHU%OGJ81&*32%R[*UHHQVERUR1&
NOFDQHYD#XQFJHGX,DPLQGHEWHGWR-DQH6XJDUPDQ1LFN7RVKDQG7KHRGRUH$UDEDW]LV
IRUWKHLUFDUHIXOUHDGLQJRIWKLVSDSHUDQGIRUWKHLUVXJJHVWLRQVIRULPSURYHPHQW
,SXWTXRWHGSDVVDJHVEHWZHHQFRQYHQWLRQDOGRXEOHTXRWHVZRUGVXVHGLQVRPH
VSHFLDOVHQVHEHWZHHQVLQJOHTXRWHV*HUPDQZRUGVTXRWHGRXWRIWKHLUJUDPPDWLFDO
FRQWH[WKDYHEHHQUHGXFHGWRWKHLUIUHHVWDQGLQJIRUPV$QHTXDOVVLJQ LQWKHIRRWQRWH
FLWDWLRQVFRQQHFWVSDVVDJHVLGHQWLFDOH[FHSWIRUSRVVLEOHLQVLJQLFDQWGLIIHUHQFHVLQVSHOO
LQJ RU SXQFWXDWLRQ DQ DSSUHFLDEO\ HTXDOV VLJQ 5 FRQQHFWV SDVVDJHV WKDW DUH URXJKO\
HTXLYDOHQW RU RI ZKLFK RQH LV D WUDQVODWLRQ RI WKH RWKHU7KH *HUPDQ DEEUHYLDWLRQ E]Z
EH]LHKXQJVZHLVHUHSODFHVDPRUHFXPEHUVRPHFRQVWUXFWLRQXVLQJUHVSHFWLYHO\VRWKDW
WKHE]ZRIQRWHEHORZPHDQVSSDQGUHVSHFWLYHO\ZLWKUHJDUG
WRWKHLPPHGLDWHO\SUHFHGLQJUHIHUHQFHV,QFDVHVOLNH:LUNXQJE]ZDFWLRQVHHQRWH
EHORZLWPHDQVURXJKO\RUDVWKHFDVHPD\EH
+6369ROXPH3DUWSDJHV,661E\7KH5HJHQWVRIWKH8QLYHUVLW\
RI&DOLIRUQLD$OOULJKWVUHVHUYHG6HQGUHTXHVWVIRUSHUPLVVLRQWRUHSULQWWR5LJKWVDQG3HUPLVVLRQV
8QLYHUVLW\RI&DOLIRUQLD3UHVV&HQWHU6W6WH%HUNHOH\&$
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
DUHWURVSHFWLYHFKDUDFWHUL]DWLRQRIDFRPSOH[SURFHVVRIWUDQVIRUPDWLYHQHJRWLD
WLRQDFKDUDFWHUL]DWLRQWKDWVLPXOWDQHRXVO\IRUPDOL]HVWKHHVVHQWLDOFKDUDFWHURI
WKHGLVFRYHU\DQGFRQIHUVXSRQLWWKHVWDPSRIREMHFWLYLW\DVE\LPSOLFDWLRQDQ
DVSHFWRIWKHSK\VLFDOZRUOGWKDWZDVWKHUHZDLWLQJWREHGLVFRYHUHG,KRSHWKLV
VWXG\VGHWDLOHGKLVWRULFDODFFRXQWEDVHGRQDQH[WHQVLYHFDQYDVVLQJRIWKHSULPDU\
VRXUFHVZLOOEHUHFHLYHGDVDVXEVWDQWLDOFRQWULEXWLRQLQLWVRZQULJKWWRWKHOLWHUD
WXUHRQVFLHQWLFGLVFRYHU\WKDWFRQFHUQVLWVHOIZLWKWKHSURFHVVRIWUDQVIRUPDWLRQ
LQVFLHQWLVWVFRQFHSWLRQRIZKDWVRPHRQHDOOHJHGO\GLVFRYHUHG
0RVWRIWKHH[LVWLQJOLWHUDWXUHRQVFLHQWLFGLVFRYHU\GHDOVZLWKGLVFRYHU\DVD
FUHDWLYHSURFHVVSURSHUWRLQGLYLGXDOV$OWKRXJK,KDYHQRWKLQJDJDLQVWDWWHPSWVWR
XQGHUVWDQGVXFKFUHDWLYHSURFHVVHVP\IRFXVKHUHLVRQKRZWKHFRPELQHGZRUN
RIDQLQWHUDFWLQJFROOHFWLYLW\RIVFLHQWLVWVVKDSHVWKHLUXQGHUVWDQGLQJRIZKDWZDV
GLVFRYHUHGLQWHUPVRIZKLFKWKHYHU\FRQFHSWRIVFLHQWLFGLVFRYHU\SOD\VDQ
LPSRUWDQWUROHLQWKHFRGLFDWLRQRIDFFHSWHGVFLHQWLFNQRZOHGJH$QH[DPLQDWLRQ
RIWKHFUHDWLRQRIFDQRQLFDODWWULEXWLRQVRIGLVFRYHU\SURYLGHVDZLQGRZRQWRWKH
FROOHFWLYHFUHDWLRQRIVFLHQWLFNQRZOHGJH%HIRUHGHYHORSLQJWKHVHLQWHUSUHWLYH
DVSHFWVDQ\IXUWKHUDQGSODFLQJWKHPZLWKLQWKHLUSURSHUKLVWRULRJUDSKLFDOFRQWH[W
OHWPHSDVVLQUHYLHZVRPHRIWKHSDUWLFXODUVXSRQZKLFKP\LQWHUSUHWDWLRQUHVWV
,ZLOOWKHQVHHNWRSODFHP\H[DPSOHVDQGP\DQDO\VLVZLWKLQWKHKLVWRULRJUDSKL
FDOFRQWH[WRIDQDO\VHVRIVFLHQWLFGLVFRYHU\IURPDYDULHW\RIVRFLRORJLFDODQG
HSLVWHPRORJLFDODSSURDFKHV
567('$1'(/(&7520$*1(7,60
&DQHYDZDVDSUHOLPLQDU\SUHVHQWDWLRQRIVRPHRIWKHPDWHULDOWREHGHYHORSHGKHUHDW
JUHDWHUOHQJWK7RWKHWZRHSLVRGHVGLVFXVVHGKHUHLWDGGHGDWKLUGWKHORQJSURFHVVE\ZKLFK
-RKDQQ:LOKHOP5LWWHUFDPHWREHUHJDUGHGDVWKHGLVFRYHUHURIXOWUDYLROHWOLJKW7HOOLQJWKDW
VWRU\LQDGHTXDWHGHWDLOKHUHZRXOGKDYHSURGXFHGDQXQPDQDJHDEO\ORQJSDSHU
([DPSOHVRIPRGHUQFKDUDFWHUL]DWLRQVLQFOXGH0XLU3RUWHU5RRW
%HUQVWHLQ7D\ORU:KLWWDNHU+ROWRQ7,:LOOLDPV
E\-RKQ:+HULYHO&I%UHJHUUVWHGVGLVFRYHU\RIWKHPDJQHWLF
HOGRIWKHHOHFWULFFXUUHQWLQZDVDFRQYLQFLQJJUHDWVXFFHVVIRUWKHURPDQWLFSURJUDP
RIUHVHDUFK,QWKHWHUPLQRORJ\RIWKHWLPHZKLFKGLGQRW\HWNQRZWKHHOGFRQFHSWUVWHG
KDGWUDQVIRUPHGHOHFWULFLW\LQWRPDJQHWLVP7KHDQDFKURQLVPRI%UHJHUVUVWVHQWHQFHLV
REYLRXVWKHLQDSSURSULDWHQHVVRIKLVVHFRQGFODLPLVHYLGHQFHGLQ&DQHYDD
ZKHUHWKHGLVWLQFWLRQLVPDGHEHWZHHQWKHWUDQVIRUPDWLRQRIIRUFHV
DQGWKHFDOOLQJIRUWKRIRQHIRUFHE\DQRWKHUW\SLFDOO\VSRNHQRIE\UVWHG2QUVWHGV
ZRUNDQGLWVUHFHSWLRQVHH6WHLQOH
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
FRQVHTXHQWLDOO\IROORZHGXSRQKLVZRUN$PRQJLQYHVWLJDWRUVPRUHJHQHUDOO\
KRZHYHULWWRRNVRPHWLPHIRUERWKFRQFHSWXDOL]DWLRQDQGWHUPLQRORJ\WRDFKLHYH
VHWWOHGIRUP
-RKDQQ7RELDV0D\HUVUHSRUWLQWKH*|WWLQJLVFKHJHOHKUWH$Q]HL
JHQVSRNHRIUVWHGVGLVFRYHU\RIWKHFRQQHFWLRQEHWZHHQPDJQHWLVPDQGJDOYD
QLVP&KDUDFWHUL]LQJWKHPDWWHUVRPHZKDWPRUHH[SDQVLYHO\FRHGLWRUV-RKDQQ
6DORPR&KULVWRSK6FKZHLJJHUDQG-RKDQQ/XGZLJ*HRUJ0HLQHFNH
LQDXJXUDWHGDQHZVHULHVRIWKH-RXUQDOIU&KHPLHXQG3K\VLNWR
PDUNUVWHGVHSRFKPDNLQJGLVFRYHU\RIWKHFRQQHFWLRQEHWZHHQPDJQHWLVPDQG
HOHFWULFLW\DQGWKHFKHPLFDOSURFHVV4XLFNO\DGRSWLQJUVWHGVWHUPLQRORJ\LI
QRWZKROO\KLVFRQFHSWXDOL]DWLRQ6FKZHLJJHUSXEOLVKHGKLVUVWWZRFRQWULEXWLRQV
WRWKHYROXPHXQGHUWKHFDSWLRQWLWOHEHU(OHFWURPDJQHWLVPXV,QLQWURGXFLQJ
KLVWUDQVODWLRQRIUVWHGVDQQRXQFHPHQWDQGVHYHUDOHDUO\UHVSRQVHVWRLW$QQDOHQ
GHU3K\VLNHGLWRU/XGZLJ:LOKHOP*LOEHUWLQLWLDOO\LGHQWLHGUVWHGV
GLVFRYHU\SKHQRPHQRORJLFDOO\DVWKHDFWLRQV>:LUNXQJHQ@RIWKHFORVHGJDOYDQLF
HOHFWULFFLUFXLW>.UHLV@RQWKHPDJQHWLFQHHGOHDOWKRXJKIROORZLQJ$QGUp0DULH
$PSqUH DQG )UDQoRLV$UDJR KH TXLFNO\ DGRSWHG WKH
ODQJXDJHRIWKHHOHFWULFFXUUHQWZKLFKWKHQH[HUWHGPDJQHWL]LQJIRUFHV
$UDJRWKHDFWLRQZKLFKWKHYROWDLFFXUUHQWH[HUFLVHVRQDPDJQHWL]HGQHHGOH
)ORXUHQVWKHUHFLSURFDOLQXHQFHRIJDOYDQLVPDQGPDJQHWLVPDQGWKH
DFWLRQRIJDOYDQLVPRQPDJQHWLVP$PSqUHDQG*LOOHWGH/DXPRQW $P
SqUHFWKHDFWLRQRIWKHFRQQHFWLQJZLUHRIWKHYROWDLFSLOHRQWKHPDJQHWL]HG
QHHGOHDQGWKHDFWLRQEHWZHHQDPDJQHWDQGDYROWDLFFRQGXFWRUUHVS/D5LYH
WKHDFWLRQRIWKHFRQQHFWLQJZLUHRIWKHYROWDLFSLOHRQWKHPDJQHWL]HGQHHGOH$PSqUHDQG
%DELQHWD EWKHDFWLRQH[HUWHGE\WKHHOHFWULFFXUUHQWRQWKHPDJQHWL]HG
QHHGOH1RWHWKDWWKHUVWWZRFKDUDFWHUL]DWLRQVSUHFHGHGUVWHGVLQWURGXFWLRQRIWKHWHUP
HOHFWURPDJQHWLFDURXQG6HSWHPEHUFIUVWHGGDQGH
0D\HU,OHDUQHGRIWKLVVRXUFHIURP6WHLQOH,QDOHWWHUWRUVWHGRI
2FWREHU0D\HUKDGVSRNHQDERXWWKHODWWHUVGLVFRYHU\RQWKHDFWLRQ>(LQZLUNXQJ@
RI JDOYDQLVP RQ WKH PDJQHWLF QHHGOH UVWHG E ,Q WKH VDPH YHLQ -DPHV
&XPPLQJVSDSHU2QWKHFRQQH[LRQEHWZHHQJDOYDQLVPDQGPDJQHWLVPVSRNHRI3UR
IHVVRUUVWHGVGLVFRYHU\RIWKHDFWLRQRIWKH9ROWDLFSLOHRQWKH0DJQHWLF1HHGOHZLWKRXW
XVLQJWKHODQJXDJHRIHOHFWULFFXUUHQWRURIHOHFWURPDJQHWLVP&XPPLQJ
6FKZHLJJHUDQG0HLQHFNHL/DWHUWKDW\HDU6FKZHLJJHUUHSHDWHGKLVFKDUDFWHUL]DWLRQ
RIHOHFWURPDJQHWLVPDVWKHERQGWKURXJKZKLFKHOHFWULFDOPDJQHWLFDQGFKHPLFDODFWLRQV
DUHFRQQHFWHG6FKZHLJJHUD/DWHUVWLOOLQDSDSHU2QHOHFWURPDJQHWLVPLW
KDGEHFRPHDVLWZDVIRUPRVWSHRSOHWKHHIIHFWRIHOHFWULFLW\RQPDJQHWLVP6FKZHLJJHU
0HLQHFNHZDV6FKZHLJJHUVFRHGLWRUIURP
6FKZHLJJHUDE
*LOEHUWFIDQG&DUO:LOKHOP%|FNPDQQOLNHZLVHVSRNH
SKHQRPHQRORJLFDOO\RIUVWHGVGLVFRYHU\RIWKHDFWLRQV>:LUNXQJHQ@RIWKHFORVHGYRO
WDLFHOHFWULFFLUFXLW>.UHLV@RQWKHPDJQHWLFQHHGOHZLWKRXWDQ\WDONRIDQ\NLQGRIFXUUHQW
)ULHGULFK6WURPH\HUDFNQRZOHGJHGWKHLPSRUWDQFHRIUVWHGV
GLVFRYHU\RQWKHLQXHQFH>(LQXVV@RIHOHFWULFLW\RQWKHPDJQHWLFQHHGOHOHWWHUWRUVWHG
RI6HSWHPEHULQUVWHGE
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
)RXUPRQWKVDIWHUUVWHGVDQQRXQFHPHQWLQDSDSHURI1RYHPEHU
2QWKHPDJQHWLFSKHQRPHQDSURGXFHGE\HOHFWULFLW\+XPSKUH\'DY\
DVFULEHGWRUVWHGWKHGLVFRYHU\RIWKHIDFWRIWKHWUXHFRQQHFWLRQEHWZHHQ
HOHFWULFLW\DQGPDJQHWLVP+HODWHUZURWHSXUHO\GHVFULSWLYHO\RIWKHPDJQHWLF
SKQRPHQDSURGXFHGE\HOHFWULFLW\DQGRI>W@KHPDJQHWLVPSURGXFHGE\HOHF
WULFLW\ZLWKRXWXVLQJDQ\VSHFLDOWHUPWRUHIHUWRWKHQHZIDFWVGLVFRYHUHGE\0
2HUVWHG,QWKHVDPHYHLQ&KULVWRSK+HLQULFK3IDIIGHFODUHGLQ
WKDW>H@OHFWURPDJQHWLVPLVDVLWVQDPHDOUHDG\LPSOLHVDQGDVIROORZVE\LWVHOI
ZLWKRXWIXUWKHUGLVFXVVLRQIURPWKHIRUHJRLQJUHSUHVHQWDWLRQRIWKHIDFWVPDJQHWLVP
H[FLWHGE\HOHFWULFLW\HVSHFLDOO\E\JDOYDQLFHOHFWULFLW\ZKHUHE\WKHFRQFHSWRI
HOHFWURPDJQHWLVPZDVJLYHQDPHDQLQJVXEWO\GLIIHUHQWIURPUVWHGV,QKLV
IDPRXV&RVPRVOHFWXUHVRI$OH[DQGHUYRQ+XPEROGW
QRWHGWKDWUVWHGKDGGLVFRYHUHGWKHLGHQWLW\RIWKHHOHFWULFDQGPDJQHWLFIRUFHV
,QWKLVKHZDVSHUKDSVUHDGLQJEDFNRQWRUVWHGVGLVFRYHU\HLWKHUHFKRHVRIUVWHGV
WKHQIWHHQ\HDUROGERRN5HVHDUFKHVRQWKHLGHQWLW\RIWKHFKHPLFDODQGHOHFWUL
FDOIRUFHVRUZKDW$PSqUHKDGEHHQFODLPLQJIRUKLPVHOILQLQFUHDVLQJO\
H[SOLFLW ODQJXDJH IURP WKH IDOO RI RQ ,Q &ODXGH6HUYDLV0DWKLDV
3RXLOOHWGHVFULEHGWKHGLVFRYHU\RIHOHFWURPDJQHWLVPE\UVWHGLQ
ZKDWZDVE\WKHQFDQRQLFDOIDVKLRQDVKLVKDYLQJIRXQGWKHPHDQVRIFDXVLQJ
HOHFWULFLW\WRDFWRQPDJQHWLVPLQDVXUHDQGSHUPDQHQWPDQQHUUVWHGKLPVHOI
'DY\D+HZURWHPDWWHURIIDFWO\DERXWWKHSDVVDJHRIHOHFWULFLW\WKURXJKWKH
>FRPPXQLFDWLQJ@ZLUH,QDOHWWHURI1RYHPEHU7KRPDV<RXQJ
LQIRUPHGUVWHGWKDWWKH5R\DO6RFLHW\KDGDZDUGHGKLPLWV&RSOH\PHGDOIRU\RXUGLVFRYHU\
RIWKHFRQQH[LRQEHWZHHQHOHFWULFLW\DQGPDJQHWLVPUVWHGE
'DY\E
3IDII7KHSUHIDFHLVGDWHG2FWREHU7KHGLVFRYHU\RIHOHFWURPDJQH
WLVPZDVXQSUREOHPWLFDOO\DVVLJQHGWRUVWHGHJRQ+HODWHUVSRNHRIUVWHGLQ
&RSHQKDJHQVPDJQLFHQWGLVFRYHU\RIWKHH[FLWDWLRQRIPDJQHWLVPE\WKHJDOYDQLFHOHFWULF
FXUUHQW3IDII
+XPEROGW>@IURPWKHWKLUWHHQWKOHFWXUHRIFD0DUFK+H
DOVRVSRNHLQWHUPVRIWKHLGHQWLW\RIHOHFWULFLW\DQGPDJQHWLVPIURPWKHIRXUWHHQWK
OHFWXUHRIFD0DUFK
UVWHG-HDQ1LFRODV3LHUUH+DFKHWWHIROORZLQJ$PSqUHLQUHJDUG
LQJWKDWLGHQWLW\DVKDYLQJUVWEHHQGHPRQVWUDWHGE\$PSqUHVGLVFRYHU\RIWKHLQWHUDFWLRQ
EHWZHHQFXUUHQWFDUU\LQJZLUHVDQGKLVVXEVHTXHQWFRQVWUXFWLRQRIPDJQHWVRXWRIHOHFWULF
FXUUHQWVLQVLVWHGWKDWUVWHGVERRNGLGQRWLQDQ\ZD\HVWDEOLVKWKHLGHQWLW\RIPDJQHWLVP
DQGHOHFWULFLW\+DFKHWWHVHH$PSqUHVOHWWHUWRKLPRI1RYHPEHULQ
$PSqUH$PSqUHDQGKLVDOOLHVFRQWLQXHGWRFODLPWKLVLGHQWLW\DVKLV
GLVFRYHU\QRWUVWHGVVHH$PSqUH>@$PSqUHDQG*LOOHWGH/DXPRQW
$PSqUHF%ODLQYLOOH$PSqUHD
$PSqUHF$PSqUHE5'HODPEUH
F[[[YLLF[[[YLLLF[OYL$PSqUHE$QRQ\PRXV/D5LYH
5LIIDXOWLQ$PSqUHDQG%DELQHWDQ EQ
3RXLOOHWSWDQGUHVS)RURWKHUVLPLODUDQGHQWLUHO\UHSUHVHQWDWLYH
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
KRZHYHUKDGDGLIIHUHQWXQGHUVWDQGLQJRIZKDWWKHHOHFWURPDJQHWLVPZDVWKDWKH
KDGGLVFRYHUHGDQGQDPHG,QGHHGDORQJVLGHWKHHYHQWXDODFKLHYHPHQWRIWHUPL
QRORJLFDOFRQVHQVXVRQHRIWKHFKDUDFWHULVWLFDQGLPSRUWDQWIHDWXUHVDFFRPSDQ\LQJ
WKHDVVLPLODWLRQRIFRQFHSWXDOO\QRYHOGLVFRYHULHVLVWKHIDFWWKDWWHUPLQRORJLFDO
FRQWLQXLWLHVVRPHWLPHVPDVNSURIRXQGFRQFHSWXDOGLIIHUHQFHV
UVWHGVLQSXW
,QDSKUDVHTXLHWO\UHFDOOLQJUVWHGVLQYROYHPHQWZLWKWKHFRQFHSWXDOVFKHPHV
RI1DWXUSKLORVRSKLHWKHWLWOHRIUVWHGVDQQRXQFHPHQWUHIHUUHGWRWKHHIIHFWRI
WKHHOHFWULFDOFRQLFWRQWKHPDJQHWLFQHHGOHZKLOHWKHERG\RIWKDWIRXUSDJH
/DWLQSDSHUZDVDOPRVWHQWLUHO\GHVFULSWLYHRIWKHH[SHULPHQWVKHSHUIRUPHGWR
H[KLELWWKHFKDUDFWHULVWLFEHKDYLRURIWKHPDJQHWLFQHHGOHVXEMHFWWRWKHLQXHQFH
RIWKHOXPFRQMXQJHQVWKHFRQQHFWLQJZLUHRIWKHJDOYDQLFFLUFXLWUVWHG
GLGQRWWKHUHDIWHUPXFKXVHWKHWHUPFRQLFWXVHOHFWULFXVLQDQ\ODQJXDJHDQG
KLVFRQWHPSRUDULHVVHHPWRKDYHSDLGOLWWOHDWWHQWLRQWRKLVGHFODUDWLRQVWKDWWKH
HOHFWULFDOFRQLFWLVQRWFRQQHGWRWKHFRQQHFWLQJZLUHEXWDOVRWDNHVSODFHLQ
WKHFLUFXPMDFHQWVSDFHVSLUDOLQJDURXQGWKHFRQGXFWRUUVWHGVFRQFHSWLRQRI
DQHOHFWULFDOFRQLFWWKXVTXLFNO\EHFDPHDVVLPLODWHGWRWKHFXUUHQWYDULRXVO\
TXDOLHGDVHOHFWULFYROWDLFRUJDOYDQLFDVZLWQHVVHGDOUHDG\E\WKHWLWOHRIWKH
(QJOLVKWUDQVODWLRQ([SHULPHQWVRQWKHHIIHFWRIDFXUUHQWRIHOHFWULFLW\RQWKH
PDJQHWLFQHHGOH,QDSDSHURQKLV5HFHQWHOHFWURPDJQHWLFH[SHULPHQWVZULW
WHQLQ6HSWHPEHUDQGSXEOLVKHGLQ*HUPDQ)UHQFKDQG(QJOLVKYHUVLRQV
UVWHGLQWURGXFHGWKHDGMHFWLYHHOHFWURPDJQHWLFWKHQFHIRUWKIDYRUHGWRGHVFULEH
WKHQHZSKHQRPHQD,QDIROORZXSSDSHUD\HDUODWHUUVWHGFLWHGH[SHULPHQWVRI
WKFHQWXU\FKDUDFWHUL]DWLRQVRIWKHGLVFRYHU\DWWULEXWHGXQLTXHO\WRUVWHGVHH+RUQHU
0XQFNH0XQFNH:KHZHOO
%HFTXHUHO%DUORZ)RUEHV
7\QGDOO7KHQDPHLQGH[WR*HKOHU>@OLVWV
UVWHGDV(QWGHFNHUGHV(OHNWURPDJQHWLVPXV
6RPHRIWKHIROORZLQJDFFRXQWLVGUDZQIURP&DQHYDIRUWKFRPLQJ
UVWHGF,QDOHWWHURI-XO\WR&KULVWRSKHU+DQVWHHQUVWHG
UHIHUUHGWRWKHDFFRPSDQ\LQJFRS\RIWKH([SHULPHQWDDVKLVQRWLFHFRQFHUQLQJJDOYDQLVPV
PDJQHWLFDFWLRQUVWHGEVXJJHVWLQJWKDWKHKDGQRW\HWVHWWOHGRQDSUHIHUUHG
GHVLJQDWLRQ
UVWHGF>@>@ D+HRQFHVSRNHRIWKHRZ>FXUVXV@RIWKH
HOHFWULFDOIRUFHVLQWKHFRQQHFWLQJZLUH>@E]Z
UVWHGI7KH)UHQFK*HUPDQ,WDOLDQDQG'DQLVKWUDQVODWLRQVDOOSUHVHUYHGWKH
ODQJXDJH RI HOHFWULFDO FRQLFW UVWHG F UHSULQWV UVWHG F DQG LWV WUDQVODWLRQ
LQWRDOOWKHVHODQJXDJHV
UVWHGG DHJIURPWKHWLWOH,QWKHVHF
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
'DY\DQG$UDJRGHPRQVWUDWLQJWKDWWKHHOHFWURPDJQHWLFHIIHFWKHKDGGLVFRYHUHG
E\PHDQVRIDJDOYDQLFDSSDUDWXVFRXOGDOVREHSURGXFHGE\PHDQVRIIULFWLRQDO
HOHFWULFLW\KHQFHWKHH[SUHVVLRQHOHFWURPDJQHWLFHIIHFWLVQRZIXOO\MXVWLHGE\
H[SHULHQFH%XWEHIRUHIROORZLQJWKLVHOHFWURPDJQHWLFWKUHDGDQ\IXUWKHULWLV
QHFHVVDU\WRUHYLHZVRPHRIUVWHGVHDUOLHUFRQFHUQVFRQFHUQVWKDWZHUHWRLPSUHVV
DSHFXOLDUVWDPSRQKLVLQWHUSUHWDWLRQRIWKHQHZSKHQRPHQD
)URPHDUO\LQKLVFDUHHUUVWHGKDGVWUXJJOHGWRDWWDLQDV\VWHPDWLFXQGHU
VWDQGLQJRIWKHUHODWLRQVKLSDPRQJPDJQHWLVPHOHFWULFLW\WKHVRFDOOHGFKHPLFDO
SURFHVVKHDWDQGOLJKWHVSHFLDOO\LQWHUPVRIWKHLUGLIIHULQJIRUPVRIDFWLRQ
)ROORZLQJ)ULHGULFK:LOKHOP-RVHSK6FKHOOLQJLQKHVSHFX
ODWHGWKDWPDJQHWLVPHOHFWULFLW\DQGWKHFKHPLFDOSURFHVVFRUUHVSRQGWRWKHWKUHH
GLPHQVLRQVRIVSDFH
RQGSDUDJUDSKZKHUHWKH*HUPDQKDVHOHFWURPDJQHWLVFKDQGPDJQHWLVFKHOHFWULVFK
WKH)UHQFKKDVpOHFWURPDJQpWLTXHWZLFHWKH(QJOLVKPDJQHWLFDQGHOHFWURPDJQHWLF
LELG+HUHIHUUHGWRKLVHDUOLHUH[SHULPHQWVDVEHLQJRQWKHPDJQHWLFHIIHFW>:LUNXQJ
E]ZDFWLRQ)UHQFKDQG(QJOLVK@RIWKHJDOYDQLFDSSDUDWXVLELG)RUDEULHIHDUO\SHULRG
WKHUHZDVQRW\HWWHUPLQRORJLFDOFRQVHQVXV,QDOHWWHURI1RYHPEHUKLVIULHQG
-RKDQ*HRUJ)RUFKKDPPHUH[SUHVVHGKLVFXULRVLW\FRQFHUQLQJWKHQHZH[SHUL
PHQWVRQ*DOYDQR0DJQHWLVPXVUVWHGUVWHGKLPVHOIRQFHXVHGWKHIRUP
JDOYDQRPDJQHWLVFKUVWHGE DQRWXVHGLQWKH)UHQFKYHUVLRQ
+DYLQJLQLWLDOO\VSRNHQLQWHUPVRIWKHHOHFWURPDJQHWLFH[SHULPHQWVRI3URIUVWHGDQG
RIWKHHOHFWURPDJQHWLFSKHQRPHQDLQJHQHUDO%HHND$OEHUWXVYDQ%HHN
TXLFNO\FKDQJHGKLVWHUPLQRORJ\LQIDYRURIJDOYDQRPDJQHWLFH[SHULPHQWV
DQGSKHQRPHQD%HHNEFQRWHOHFWURPDJQHWLFWKH
WLWOHRIESUHVXPDEO\KDYLQJEHHQJLYHQWRYDQ%HHNVOHWWHUE\WKHHGLWRU&I%HHNHW
DOGLVFXVVHGEHORZLQQRWH$OWKRXJKWKHWHUPH[SpULHQFHVpOHFWURPDJQpWLTXHV
DSSHDUVLQWKHWLWOHWRERWKRI*HUDUG>DND*HUULW@0ROOVOHWWHUVIURPWKHVSULQJ
RIWRWKHHGLWRURIWKH-RXUQDOGHSK\VLTXHLWDSSHDUVLQWKHWH[WRIRQO\WKHVHFRQG
VXJJHVWLQJWKHHGLWRUVHDUOLHULPSRVLWLRQ0ROODE
UVWHG E HOHNWURPDJQHWLVFKH:LUNXQJ H[SDQGHG LQ F 5
GHIIHWpOHFWURPDJQpWLTXHFII6WHLQOHXQGHUVFRUHGWKH
IDFWWKDWUVWHGVFKDUDFWHUL]DWLRQRIWKHQHZSKHQRPHQDDVHOHFWURPDJQHWLFZDVQRW
WKHQWREHWDNHQIRUJUDQWHG'DY\GHPRQVWUDWHGWKDWWKHGLVFKDUJHRIIULFWLRQDOHOHFWULFLW\
WKURXJKDZLUHPDJQHWL]HVVPDOOVWHHOQHHGOHVLQWKHVDPHZD\DVWKHHOHFWULFFXUUHQWRI
DYROWDLFDSSDUDWXV'DY\D+HUHIHUUHGPDWWHURIIDFWO\WRWKHSKHQRPHQD
RIWKHSLOHDVHOHFWULFDODQGWRWKHSDVVDJHRIHOHFWULFLW\WKURXJKWKHZLUH2Q
1RYHPEHU$UDJRDQQRXQFHGRUDOO\DWWKH$FDGHP\RI6FLHQFHVWKDWKHKDGSURGXFHG
E\RUGLQDU\HOHFWULFLW\DOOWKHSKHQRPHQDRIPDJQHWLVPWKDWKHKDGDOUHDG\REVHUYHGXVLQJ
YROWDLFHOHFWULFLW\$QRQ\PRXVFI39>@7KHFRQWHPSRUDQHRXV
QRWLFHSXEOLVKHGLQWKHZLGHO\UHDG0RQLWHXUXQLYHUVHOUHSRUWHGWKDW$UDJRKDGPDJQHWL]HG
VWHHOQHHGOHVE\SDVVLQJDQHOHFWULFDOGLVFKDUJHWKURXJKDKHOLFDOO\ZRXQGZLUHHQFORVLQJ
WKHQHHGOHZLWKLQDJODVVWXEHZKLFKSUHVHQWVDQHZDQDORJ\EHWZHHQWKHPRGHVRIDFWLRQ
RIRUGLQDU\DQGYROWDLFHOHFWULFLWLHV$QRQ\PRXV%|FNPDQQQRWHG
<HOLQVFLWDWLRQRIWKLVVRXUFH
6HH&DQHYDIRUWKFRPLQJIRUDGLVFXVVLRQRIUVWHGEZKLFKDSSHDUVWRKDYHEHHQ
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
6FKHOOLQJKDVVKRZQWKDWWKUHHPRPHQWVPXVWEHGLVWLQJXLVKHGLQWKHFRQVWUXFWLRQ
RIPDWWHUE\DWWUDFWLYHDQGUHSXOVLYHIRUFHV7KHUVWLQZKLFKWKHRSSRVLWLRQRI
WKHVHWZRIRUFHVWDNHVSODFHRQO\LQWKHIRUPRIDOLQHWKHVHFRQGLQZKLFKLWH[LVWV
LQWKDWRIDVXUIDFHWKHWKLUGLQZKLFKWKHVHWZRLQWHUSHQHWUDWHHDFKRWKHUDQGWKXV
IRUPWKHODVWGLPHQVLRQRIVSDFHDQGPDWWHURUGHSWK7KXVWKHIXQFWLRQRIOHQJWK
PDQLIHVWVLWVHOIDVPDJQHWLVPWKHIXQFWLRQRIEUHDGWKDVHOHFWULFLW\WKHIXQFWLRQ
RIGHSWKDVLQWHUSHQHWUDWLRQRUWKHFKHPLFDOSURFHVV(DFKRIWKHVHG\QDPLFDO
SURFHVVHVLVWKHLQWHUSOD\RIWKHRSSRVLQJIXQGDPHQWDOIRUFHVLQDQRWKHUIRUP
+HDWDQGOLJKWUHPDLQHGGLIFXOWWRDVVLPLODWHWRDFRPPRQPRGHRIUHSUH
VHQWDWLRQZLWKWKHRWKHUWKUHHDJHQFLHVLQUVWHGWULHGWRUHODWHWKHPWRHDFK
RWKHULQWHUPVRIDGLIIHUHQFHLQWKHLQWHQVLW\RUVSHHGZLWKZKLFKWKHLUXQGHUO\LQJ
DFWLRQVWDNHSODFH0RUHIUXLWIXOO\IRUKLPLQKHKDGEHJXQWRVSHDNRIWKH
GLIIHUHQWIRUPVRIDFWLRQ:LUNXQJVIRUPHQRUIRUPVRIDFWLYLW\7KlWLJNHLWVIRUPHQ
LQZKLFKWKHRSSRVLQJIXQGDPHQWDOIRUFHVRIQDWXUHPDQLIHVWWKHPVHOYHV,WZDV
WKHSXUVXLWRIWKHVHVSHFXODWLRQVWKDWOHGKLPWRKLVGLVFRYHU\RIWKHLQWHUDFWLRQ
EHWZHHQDPDJQHWLFQHHGOHDQGWKHFRQQHFWLQJZLUHRIDJDOYDQLFFLUFXLW
,QKLVVHFRQG'DQLVKODQJXDJHGLVFXVVLRQRIWKDWZRUNUVWHGLQWHUSUHWHGWKH
QHZUHODWLRQVKLSVE\LQYRNLQJDQHFKRRIKLVQRWLRQRIIRUPRIDFWLRQ
:KDWZHKHUHDPRPHQWDJRFDOOHGHOHFWULFLW\LVQRWVRLQWKHZRUGVVWULFWHUPHDQ
LQJIRUWKHIRUFHWKDWLQWKHRSHQJDOYDQLFRUHOHFWULFFLUFXLWDFWHGLQDGLVWLQFWLYH
PDQQHUXQGHUDGLIIHUHQWIRUPWKDWZHFDOOWKHHOHFWULFRUJDOYDQLFDFWVKHUH
XQGHUDQHQWLUHO\GLIIHUHQWIRUPWKDWZHPRVWDSSURSULDWHO\FDOOWKHPDJQHWLFPHDQ
ZKLOHVLQFHPDJQHWLVPDFWVXQGHUWKHIRUPRIDVWUDLJKWOLQHWKDWLVWKHRSSRVLQJ
IRUFHVVHSDUDWHWKHPVHOYHVLQSUHFLVHO\RSSRVLWHGLUHFWLRQV>ZKLOH@WKHIRUFHV
KHUHRQWKHFRQWUDU\RZLQFHVVDQWO\LQWRHDFKRWKHUDQGIRUPDFLUFXODUFRXUVH
>.UHGVO|E@WKHDXWKRUKDVFDOOHGWKHDFWLRQGHDOWZLWKKHUHHOHFWURPDJQHWLVP
7KXVLWDSSHDUVKHUHWKDWIRUUVWHGWKHSULQFLSDOQHHGIRUDQHZWHUPVWHPPHG
IURPWKHXQSUHFHGHQWHGFLUFXODUIRUPRIWKHHOHFWURPDJQHWLFDFWLRQDQGQRWVRPXFK
IURPWKHIDFWWKDWLWUHSUHVHQWHGDQLQWHUDFWLRQEHWZHHQHOHFWULFLW\DQGPDJQHWLVP
7KHDSSUHFLDEO\H[SDQGHG*HUPDQDQG)UHQFKHVVD\VFRQWDLQLQJUVWHGVHDUO\
5HHFWLRQVRQHOHFWURPDJQHWLVPDOVRFKDUDFWHUL]HGLWLQWHUPVRILWVSHFXOLDU
IRUPRIDFWLRQ,QDQDFFRXQWRIKLVHOHFWURPDJQHWLFUHVHDUFKHVZULWWHQLQ
FRPSOHWHO\RYHUORRNHGXQWLOUHFHQWO\IRXQGE\7RUVWHQ6FKOLFKWNUXOO
6HHWKHDFFRXQWLQ&DQHYDDIRUGHWDLOVDQGUHIHUHQFHV
UVWHG D(OHFWULFLW\WKHQVWLOOXVXDOO\PHDQWVWDWLF
HOHFWULFLW\WKHODWWHUTXDOLFDWLRQFDPHVORZO\LQWRJHQHUDOXVHDIWHU$PSqUHLQWURGXFHGWKH
WHUPHOHFWURVWDWLFVLQRQZKLFKVHHEHORZ
UVWHGD
)URPDPRQJWKHPDQ\RFFXUUHQFHVRI:LUNXQJVIRUPVHHUVWHG
DIRUDUDUHURFFXUUHQFHRI7KlWLJNHLWVIRUPVHH
E]Z
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
KHSUHVHQWHGKLVSULQFLSDOGLVFRYHU\DVWKHIXQGDPHQWDOODZRIHOHFWURPDJQHWLVP
YL]WKDWWKHPDJQHWLFHIIHFWRIWKHHOHFWULFDOFXUUHQWKDVDFLUFXODUPRWLRQURXQG
LW)HZLIDQ\RIKLVFRQWHPSRUDULHVZRXOGOLNHO\KDYHVRFKDUDFWHUL]HGWKHHV
VHQWLDOIHDWXUHRIHOHFWURPDJQHWLVP
,QWKRVH*HUPDQDQG)UHQFKHVVD\VUVWHGIXUWKHUUHIHUUHGWRHOHFWURPDJQHWLVP
DVDSHFXOLDUVWDWHRIWKHJDOYDQLFFRQQHFWLQJZLUH+HUHDVRQHGDVIROORZV
6LQFHQHZHOHFWULFLW\LVFHDVHOHVVO\GHYHORSHGLQWKHJDOYDQLFSLOHWKHGLVFKDUJHV
PXVWEHUHJDUGHGDVDFHDVHOHVVO\UHQHZHGJLYHDQGWDNH7KHSHFXOLDUVWDWHRIWKH
IRUFHVRFFXUULQJLQWKHGLVFKDUJLQJFRQGXFWRULQZKLFKWKH\DFWDVHOHFWURPDJ
QHWLFIRUFHVWKXVVHHPVWRPHWREHDVWDWHRIFHDVHOHVVPRWLRQ>HLQXQDXIK|UOLFK
EHZHJWHU@,QWKHPDJQHWKRZHYHUWKHVHVDPHIRUFHVDSSHDUWRGHYLDWHIURPWKH
HOHFWURPDJQHWLFIRUPRIDFWLRQRQO\LQVRIDUDVWKH\DUHIRXQGLQDQDOPRVWUHVWLQJ
VWDWHDQGIRUPQRFORVHGFLUFOH
$JDLQVWWKHWKHRU\RIWUDQVYHUVDOPDJQHWLVPRI$XVWULDQFKHPLVW-RKDQQ-R
VHSK3UHFKWOZKLFKH[SODLQHGUVWHGVVRFDOOHGHOHFWURPDJQHWLF
DFWLRQLQWHUPVRIWKHSODFHPHQWRIHQGWRHQGORRSVRIVPDOOPDJQHWVDURXQGWKH
FLUFXPIHUHQFHRIWKHFRQQHFWLQJZLUHZLWKRXWLQYRNLQJDQ\K\SRWKHWLFDOHOHFWULF
FXUUHQWUVWHGVDLGKHSUHIHUUHGWRUHWDLQWKHQDPHHOHFWURPDJQHWLVPIRUWKHVWDWH
RIWKHHOHFWULFDOO\WUDYHUVHGFRQGXFWRUEHFDXVHQRZKHUHLQVXFKDFRQGXFWRUGRHV
DPDJQHWLFSROHDSSHDUDQGEHFDXVHWKHFRQWLQXDOSURGXFWLRQRIQHZHOHFWULFLW\LQ
WKHJDOYDQLFDSSDUDWXVUHTXLUHVWKDWZHDOVRDVVXPHDUHQHZHGHOHFWURPDJQHWLVPDQ
XQLQWHUUXSWHGFLUFXODUFRXUVH>.UHLVODXI@RIHOHFWULFDOIRUFHVLQWKHFRQGXFWRUXQGHU
WKHPDJQHWLFIRUPRIDFWLRQ2QO\ZKHUHWKHFLUFXODUFRXUVHLVLQWHUUXSWHGZLWKRXW
WKHFHVVDWLRQRIWKHRSSRVLQJGLUHFWLRQVRIDFWLYLW\GRHVDFWXDOPDJQHWLVPDULVH
+HUHWDLQHGWKHODQJXDJHRIIRUPRIDFWLRQDQGWKHLPDJHRIWKHVSLUDOPRWLRQ
RIWKHHOHFWURPDJQHWLFDFWLRQLQWKHODVWRIKLVFRQWULEXWLRQVWRWKHH[SRVLWLRQDQG
H[SOLFDWLRQRIWKHQHZSKHQRPHQDTXRWLQJKLPVHOIIURPKLV/DWLQDQQRXQFHPHQW
LQVXSSRUWRIKLVFODLPWKDWHOHFWURPDJQHWLVPIRUPVDFLUFXODUFRXUVHKXQFFRQ
LFWXPJ\URVSHUDJHUH%XWUVWHGHDUO\OHIWWKHGHYHORSPHQWRIWKLVQHZHOG
WRRWKHUVDQGKLVSHFXOLDUFRQFHSWXDOL]DWLRQRIWKHSKHQRPHQDHPERGLHGLQKLV
XQGHUVWDQGLQJRIWKHPHDQLQJDQGVLJQLFDQFHRIWKHWHUPHOHFWURPDJQHLVPGLHG
UVWHGD D
UVWHGE DF I3IDIIZDVWKH
H[WUHPHO\UDUHFRPPHQWDWRUZKRUHFRJQL]HGWKDWUVWHGEHOLHYHGWRQGLQWKHP>LHWKH
QHZHOHFWURPDJQHWLFSKHQRPHQD@DVLWZHUHRQO\DSDUWLFXODUIRUPRIDFWLRQRIWKHXQLYHUVDO
IRUFHVRIQDWXUH3IDII
UVWHG D
UVWHGF GQRXYHOpWDWFIIQHZFRQGLWLRQ7KLV
SDVVDJHLVQRWLQE
UVWHGE DF5GI
UVWHGE DF GFLUFXODWLRQI
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
ZLWKRXWLVVXHH[FHSWSRVVLEO\DVJRGIDWKHUWR0LFKDHO)DUDGD\V
FRQFHSWLRQRIDFLUFXODUPDJQHWLFHOG
,IUVWHGVFHQWUDOLQWHUHVWZDVLQGHHGLQLGHQWLI\LQJWKHIRUPRUPRGHRIDFWLRQ
RIWKHQHZO\GHWHFWHGHOHFWURPDJQHWLFVWDWHLQZKLFKWKHXQLYHUVDORSSRVLQJIRUFHV
RIQDWXUHPDQLIHVWWKHLUDFWLYLW\LQDQGDURXQGWKHFRQQHFWLQJZLUHRIDJDOYDQLF
FLUFXLWDQGLQDVVLPLODWLQJWKLVIRUPRIDFWLRQWRWKHQHYHUIXOO\IRUPDOL]HGFRQ
FHSWXDOVFKHPHKHKDGZRUNHGWRGHYHORSRYHUWKHSUHYLRXVWZRGHFDGHVWKHQZH
PXVWUHFRQVLGHUZKDWZHPHDQE\VD\LQJWKDWUVWHGGLVFRYHUHGHOHFWURPDJQH
WLVP+HGLGLQGHHGGLVFRYHUWKDWDPDJQHWLFQHHGOHLVGHHFWHGE\VRPHDFWLRQ
SUHVHQWLQWKHFRQQHFWLQJZLUHEXWWKDWZDVQRWWKHPHDQLQJRIWKHGLVFRYHU\IRU
KLP:KLOHKHDSSOLHGWKHWHUPHOHFWURPDJQHWLVPWRKLVSDUWLFXODUWKHRU\RIWKH
IRUPRIDFWLRQRIVSLUDOLQJHOHFWURPDJQHWLFDFWLYLW\RWKHUVDSSOLHGLWVLPSO\WRWKH
QHZSKHQRPHQD$QGWKDWLVWKHPHDQLQJWKDWKDVFRPHGRZQWRXVVDQFWLRQHG
E\ORQJVWDQGLQJFRQVHQVXV
7KHZLGHUUHVSRQVHWRUVWHGVGLVFRYHU\
$PDWWHURIWHUPLQRORJ\UHHFWLQJDGLIIHUHQFHLQSULPDU\IRFXVRIDWWHQWLRQ
VHSDUDWHG$PSqUHVWKHRU\IURPUVWHGV*DOYDQL]HGLQWRIHYHULVKDFWLYLW\XSRQ
KHDULQJRIUVWHGVGLVFRYHU\HDUO\LQ6HSWHPEHU$PSqUHVHHPVIURPWKH
EHJLQQLQJWRKDYHDYRLGHGXVLQJUVWHGVTXLFNFRLQDJHHOHFWURPDJQHWLF/LNH
PRVWRIKLV)UHQFKDQG*HUPDQFROOHDJXHVLQLWVUVWDQGXQSXEOLVKHGSUHVHQWDWLRQ
WRWKH$FDGHP\RQ6HSWHPEHU$PSqUHVSRNHRIWKHUHFLSURFDODFWLRQRI
JDOYDQLVPDQGWKHPDJQHWGLVFRYHUHGE\02HUVWHGDQGRIWKHUHFLSURFDODFWLRQ
RIDPDJQHWDQGDJDOYDQLFFRQGXFWRU6HHNLQJWRUHGXFHWKHQHZSKHQRPHQD
WRWZRIXQGDPHQWDODFWLRQVWKHGLUHFWLYHDFWLRQDQGWKHDWWUDFWLYHRUUHSXOVLYH
DFWLRQEHWZHHQPDJQHWDQGJDOYDQLFFRQGXFWRUKHGHVFULEHGKLVDSSDUDWXVIRUWKH
PDJQHWLFRJDOYDQLFDWWUDFWLRQVDQGUHSXOVLRQVZLWKPRELOHPDJQHWV%\WKHQH[W
PHHWLQJRQ6HSWHPEHU$PSqUHVDWWHQWLRQKDGVKLIWHGWRKLVDWWHPSWHGUHGXF
WLRQRIPDJQHWLVPWRJDOYDQLFFXUUHQWVDQGWRWKHGHPRQVWUDWLRQRIWKHDWWUDFWLRQ
DQGUHSXOVLRQRIJDOYDQLFFXUUHQWVWKHPVHOYHV3UHVXPDEO\EHFDXVHKLVFHQWUDO
3UHFKWOVZRUNLVGLVFXVVHGEHORZ
UVWHGH:LUNXQJVIRUP DUHVS)RUWKH
/DWLQVHHUVWHGF>@ D
)RUDUDUHSDVVLQJUHIHUHQFHWRWKHHOHFWURPDJQHWLFIRUFHRIWKHHDUWKVHH$PSqUH
E 'HODPEUHF[OLL7KHHOHFWURPDJQHWLFH[SHULPHQWVUHIHUUHGWRLQWKHWLWOH
RI$PSqUHFDQGGZHUHSUREDEO\VRGHVFULEHGE\WKHHGLWRUVDVWKHWHUPPDNHV
QRDSSHDUDQFHLQWKHERG\RIHLWKHUSDSHU
6WHLQOH:RUNLQJIURPGLVRUGHUHGDQGFKDRWLFPDQXVFULSWV6WHLQOH
KDVPDVWHUIXOO\UHFRQVWUXFWHGWKHOLNHO\WH[WVRI$PSqUHVSUHVHQWDWLRQVRIDQG
6HSWHPEHU6WHLQOHV+DELOLWDWLRQVVFKULIWZKRVHFHQWUDOFRQFHUQZDVWKHFRQQHF
WLRQEHWZHHQVWDELOL]HGFRQFHSWIRUPDWLRQDQGH[SHULPHQWFRQWDLQVDQ
H[FHOOHQWWUHDWPHQWRI$PSqUHVHDUOLHVWZRUN
6WHLQOH
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
SUHRFFXSDWLRQTXLFNO\EHFDPHWKHLQWHUDFWLRQEHWZHHQVRRQWREHUHQDPHGHOHF
WULFFXUUHQWVKHWKHUHDIWHUGLGQRWHPSOR\WKHODQJXDJHRIPDJQHWLFRJDOYDQLF
RUPDJQHWLFRHOHFWULFRUZKDWHYHUDQGKHODUJHO\LJQRUHGUVWHGVWHUPLQRORJ\
RIHOHFWURPDJQHWLF7KHIDFWWKDW$PSqUHVELWWHUULYDO%LRWHYHQWXDOO\DSSOLHG
UVWHGVWHUPHOHFWURPDJQHWLFWRWKHQHZO\GLVFRYHUHGIRUFHVDQGSKHQRPHQD
VKHGVDGGLWLRQDOOLJKWRQZKDWZDVSHUFHLYHGWREHDWVWDNHLQXVLQJRUDYRLGLQJ
WKHWHUP
,WZDVQRWXQWLO$SULOWKDW$PSqUHHPSOR\HGWKHWHUPVHOIFRQVFLRXVO\
WRGHVFULEHWKHSKHQRPHQDGLVFRYHUHGE\UVWHG7KLVQHZJHQUHRIDFWLRQKDV
UHFHLYHGWKHQDPHRIHOHFWURPDJQHWLFDFWLRQEHFDXVHLQWKHUVWH[DPSOHRIVXFK
DQDFWLRQWKHRQHUVWHGREVHUYHGLWH[SUHVVHVLWVHOIEHWZHHQDPDJQHWDQGWKH
HOHFWULFFRQGXFWLQJZLUHZKLFKMRLQVWKHWZRH[WUHPLWLHVRIWKHSLOH+HKDGD
JRRGUHDVRQWREUHDNKLVSULRUVLOHQFHIRULQDIRRWQRWHWRWKLVVHQWHQFHKHLQWURGXFHG
KLVRZQQHRORJLVPVWRPDUNWKHGLVWLQFWLYHQHVVRIKLVWKHRU\
6LQFH,GLVFRYHUHGWKHPXWXDODFWLRQRIWZRYROWDLFFRQGXFWRUVZKLFKLVFOHDUO\RI
WKHVDPHQDWXUHDVWKDWRIDFRQGXFWRURQDPDJQHWL]HGEDUDQGZKLFKDFWZLWKRXW
WKHDVVLVWDQFHRIDQ\PDJQHWWKHQDPHHOHFWURPDJQHWLFDFWLRQZKLFK,XVHKHUH
RQO\ WR FRQIRUP P\VHOI WR >FXVWRPDU\@ XVDJH ZRXOG QR ORQJHU EH VXLWDEOH WR
GHVLJQDWHWKLVVRUWRIDFWLRQ,EHOLHYHLWVKRXOGEHGHVLJQDWHGE\WKHQDPHHOHFWUR
G\QDPLFDFWLRQ7KLVQDPHH[SUHVVHVWKHIDFWWKDWWKHSKHQRPHQDRIDWWUDFWLRQDQG
UHSXOVLRQWKDWFKDUDFWHUL]HLWDUHSURGXFHGE\HOHFWULFLW\LQPRWLRQLQWKHYROWDLF
FRQGXFWRUVZKHUHDVWKHZKROO\GLIIHUHQWDWWUDFWLRQVDQGUHSXOVLRQVRIRUGLQDU\
HOHFWULFLW\SUHVXSSRVHRQO\WKHXQHTXDOGLVWULEXWLRQRIWKHWZRHOHFWULFXLGVDWUHVW
LQWKHERGLHVZKHUHWKH\PDQLIHVWWKHPVHOYHVDQGWKXVRIIHUXVWKLVRWKHUPRGHRI
DFWLQJRIWKHVHXLGVWKDWKDVORQJEHHQNQRZQDQGZKLFKRQHVKRXOGGLVWLQJXLVK
IURPWKHSUHFHGLQJRQHE\JLYLQJLWWKHQDPHHOHFWURVWDWLFDFWLRQ
UVWHGDQG$PSqUHERWKQRWHZRUWK\FRLQHUVRIQHZWHUPVHDFKVRXJKWOLWHUDOO\
WRFRPHWRWHUPVZLWKWKHSKHQRPHQDDQGWKHLUH[SODQDWLRQWKDWKHUHJDUGHGDVKLV
6WHLQOH6WHLQOHORFDWHG$PSqUHVFKDQJHRIWHUPLQRORJ\IURPJDOYDQLF
FXUUHQWWRHOHFWULFFXUUHQWWRWKHWZRZHHNVEHWZHHQ6HSWHPEHUDQG2FWREHU
%LRWWKHUVWDQGWKLUGRIWKHVHUHIHUHQFHVFRUUHVSRQGWRWKH
UHZRUNLQJRIWKLVPHPRLULQ%LRW>@7KHVKRUWQRWLFHVRI%LRW
DQG)pOL[6DYDUWVDQG$PSqUHVPHPRLUVRI2FWREHUZHUHSXEOLVKHG
LQWKH-RXUQDOGHSK\VLTXHXQGHUWKHFRPPRQKHDGLQJ([SpULHQFHVpOHFWURPDJQpWLTXHV
DWHUPQHLWKHURIWKHPZRXOGWKDQOLNHO\KDYHFKRVHQ>%LRWDQG$PSqUH@%LRWV
RZQFKRLFHZRXOGDSSHDUWRKDYHEHHQWKHPDJQHWLVPRIWKH9ROWDLFSLOH>%LRW@D
E
$PSqUHD5>@+HDOVRHPSOR\HGWKHWHUPpOHFWURPDJQpWLTXH
LQ$PSqUHE
$PSqUHD >@:KHUHKHRULJLQDOO\KDGVSRNHQRIWKHJHQHUDO
ODZVRIWKHHOHFWURPDJQHWLFDFWLRQWKHUHSULQWHGYHUVLRQKDGLQVWHDGWKHJHQHUDOODZVRI
WKHHOHFWURG\QDPLFDFWLRQE]Z,QUHSULQWLQJLQKLV5HFXHLODOHWWHUWR*DVSDUGGH
/D5LYHWKDWWKHODWWHUKDGKDGSXEOLVKHGXQGHUDWLWOHUHIHUULQJWRHOHFWURPDJ
QHWLFH[SHULPHQWVZKLOHWKHOHWWHUSURSHURQO\VSRNHRIHOHFWURG\QDPLFSKHQRPHQD
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
LQWHOOHFWXDOSURSHUW\$PSqUHVUHMHFWLRQRIHOHFWURPDJQHWLFLQIDYRURIHOHF
WURG\QDPLFUHHFWHGKLVFRQYLFWLRQERWKWKDWPDJQHWVDUHDFROOHFWLRQRIFLUFXODU
HOHFWULFFXUUHQWVDQGWKDWWKHSULPLWLYHLQWHUDFWLRQPXVWWKHUHIRUHEHXQGHUVWRRG
WREHWKDWEHWZHHQFXUUHQWFDUU\LQJZLUHVMXVWDVUVWHGVFRLQDJHUHHFWHGKLV
FRQYLFWLRQWKDWHOHFWURPDJQHWLVPUHSUHVHQWVDQHZDQGGLVWLQFWLYHKHOLFDOIRUPRI
DFWLRQRIWKHXQLYHUVDOIRUFHVRIQDWXUH
*HRUJ:LOKHOP0XQFNHVDUWLFOHRQ(OHFWURPDJQHWLVPLQ
*HKOHUVSK\VLFDOHQF\FORSHGLDHFKRHGWKHE\WKHQVWDQGDUGXQGHUVWDQGLQJRIWKH
WHUPHYHQDVLWQRWHGDFXOWXUDOGLIIHUHQFHLQWHUPLQRORJ\(OHFWURPDJQHWLVPODWHU
PRVWO\FDOOHGHOHFWURG\QDPLVP>VLF@E\WKH)UHQFKGHVLJQDWHVWKHWRWDOLW\RIWKRVH
PDJQHWLFSKHQRPHQDZKLFKDUHSURGXFHGE\HOHFWULFLW\RUWKHLQWHUDFWLRQRIHOHFWUL
HGERGLHVDQGPDJQHWVRQHDFKRWKHU7KHIRUPHUWHUPGHVLJQDWHVWKHPDWWHU
SUHFLVHO\DQGFRPSOHWHO\ZKHUHDVWKHODWWHUKDVQRWKLQJWRUHFRPPHQGLWKDW
LQVLFKJDUNHLQHQHPSIHKOHQGHQ*UXQGUVWHGVHOHFWURPDJQHWLFSKHQRPHQD
FRXOG EH UHQGHUHG HOHFWURG\QDPLF RQO\ YLD$PSqUHV K\SRWKHWLFDO FXUUHQWORRS
H[SODQDWLRQRIFRQYHQWLRQDOPDJQHWLVP
$OWKRXJK UVWHGV XQGHUVWDQGLQJ RI HOHFWURPDJQHWLVP DV D SHFXOLDU KHOLFDO
IRUPRIDFWLRQRIWKHXQLYHUVDOIRUFHVRIQDWXUHZDVQHYHUJHQHUDOO\UHFRJQL]HG
PXFKOHVVDFFHSWHGWKHWHUPKHFRLQHGZDVTXLFNO\WDNHQXSDQGZHOOQLJKXQL
YHUVDOO\DSSOLHGWRWKHSKHQRPHQDKHKDGGLVFRYHUHGZLWKWKHQRWDEOHH[FHSWLRQ
RI$PSqUHDQGKLVIROORZHUV'XULQJWKHHDUO\VLQ*HUPDQ\LQSDUWLFXODUDQ
DSSUHFLDEOHQXPEHURIUHVHDUFKHUVGHYHORSHGDWKHRU\RIHOHFWURPDJQHWLVPEDVHGRQ
WKHYLHZWKDWWKHJDOYDQLFHOHFWULFFXUUHQWZKRVHH[LVWHQFHLQWKHFRQQHFWLQJZLUH
RIWKHJDOYDQLFFLUFXLWZDVJUDQWHGE\PRVWLIQRWTXLWHDOOHIIHFWVDVHSDUDWLRQRI
WKHDVWUDODQGERUHDOPDJQHWLFXLGVLQWKHZLUHWRSURGXFHDSHFXOLDUGLVWULEXWLRQ
RIPDJQHWLFSROHVDURXQGWKHFLUFXPIHUHQFHRIWKHZLUHDVWDWHWKDWDFTXLUHGWKH
QDPHWUDQVYHUVDOPDJQHWLVP,IWKLVFRQFHSWXDOL]DWLRQKDGWULXPSKHGZHZRXOG
OLNHO\QRZUHJDUGUVWHGDVWKHGLVFRYHUHURIWUDQVYHUVDOPDJQHWLVP
$ QXPEHU RI YDULDQWV RI WKLV EDVLF LGHD ZDV GHYHORSHG EHJLQQLQJ ZLWK
6FKZHLJJHUVLGHQWLFDWLRQRIDGRXEOHPDJQHWLFSRODULW\SHUSHQGLFXODUWRWKH
$PSqUHLQVWUXFWHGWKHUHDGHUWRUHSODFHWKHRIIHQGLQJZRUGVZLWKHOHFWURG\QDPLF$PSqUH
I>@HUUDWD7KHVHQWLPHQWRIWKHSDVVDJHTXRWHGLQWKHWH[WLVUHSHDWHG
LQDIRRWQRWHWRWKHWLWOHRIKLVQH[WSDSHU([SHULPHQWVUHODWLYHWRQHZHOHFWURG\QDPLF
SKHQRPHQD$PSqUHG H5>@
6WHLQOHVFODLPWKDW$PSqUHDGRSWHGUVWHGVODQJXDJHRIHOHFWURPDJ
QHWLFDIWHUKDYLQJLQLWLDOO\FKDUDFWHUL]HGWKHHIIHFWVDVJDOYDQRPDJQHWLFLVPLVWDNHQRQ
WZRFRXQWVDVQRWHGDERYH$PSqUHQHYHUDGRSWHGUVWHGVWHUPDQGWKHWHUPKHHHWLQJO\
XVHGLQKLVUVWSUHVHQWDWLRQRI6HSWHPEHUDQGDSSDUHQWO\QRZKHUHHOVHZDV
PDJQHWRJDOYDQLF7KHIXUWKHULPSOLFDWLRQWKDW$PSqUHFKRVHJDOYDQRPDJQHWLFRYHU
UVWHGVHOHFWURPDJQHWLFLJQRUHVWKHIDFWWKDW$PSqUHVXVDJHSUHGDWHGWKHDSSHDUDQFHRI
UVWHGVFRLQDJHWKHUHOHYDQWSDSHUUVWHGHKDYLQJDUULYHGLQ3DULVRQ6HS
0XQFNH
0XQFNH
2QWKHRULHVRIWUDQVYHUVDOPDJQHWLVPVHH&DQHYDE
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
GLUHFWLRQRIWKHHOHFWULFFXUUHQWLQHYHQWKHQHVWZLUHV$WDURXQGWKHVDPH
WLPH-|QV-DNRE%HU]HOLXVZDVVLPLODUO\DQDO\]LQJZKDWKHFDOOHG
WKHPDJQHWLFSRODULW\RIWKHFRQQHFWLQJZLUHRUUDWKHUPRUHJUDSKLFDOO\RID
UHFWDQJXODUPHWDOVWULSZKLFKGLVFKDUJHVWKHJDOYDQLFDSSDUDWXVE\LPDJLQLQJ
DVLPSOHDUUDQJHPHQWRIWZRPDJQHWVVLWXDWHGKHDGWRIRRWDWULJKWDQJOHVWRWKH
GLUHFWLRQRIWKHFRQGXFWRU7KHVDPHJHQHUDOFRQFHSWXDOL]DWLRQXQGHUOD\%LRWV
PDWKHPDWLFDODQDO\VLVRIWKHPDJQHWL]DWLRQLPSUHVVHGRQPHWDOVE\HOHFWULFLW\
LQPRWLRQ3UHFKWOGLUHFWRURIWKH3RO\WHFKQLVFKHV,QVWLWXWLQ9LHQQDZDVDQ
HQHUJHWLFSURSRXQGHURIDWKHRU\RIWUDQVYHUVDOPDJQHWLVPLQWKHHDUO\VEH
JLQQLQJZLWKDSDSHURI)HEUXDU\5HIHUULQJWKHUHWRUVWHGVGLVFRYHU\RI
DVKHSXWLWWKHPDJQHWLVPRIWKHFRQQHFWLQJZLUHRIWKHYROWDLFFLUFXLWKHVRXJKW
WRH[SODLQWKHSKHQRPHQDLQWHUPVRIWUDQVYHUVDOPDJQHWLVPVLQWKHZLUH
3UHFKWOUHSUHVHQWHGWKHSKHQRPHQDVFKHPDWLFDOO\E\VPDOOPDJQHWVDUUDQJHGKHDG
WRWDLODURXQGDFURVVVHFWLRQDOFLUFXPIHUHQFHRIWKHFRQQHFWLQJZLUHVHHJXUH
+HH[SODLQHGWKHSKHQRPHQDE\SRVLWLQJWKHSUHVHQFHRIDQLQQLWHQXPEHU
RIPDJQHWLFSROHVDORQJWKHFRQQHFWLQJZLUHVXFKWKDWLQFURVVVHFWLRQRSSRVLWH
SROHVDOWHUQDWHDURXQGWKHFLUFXPIHUHQFHDVUHSUHVHQWHGLQJXUH
$OWKRXJK3UHFKWOGLGQRWH[SODLQZK\KHGHFOLQHGWRXVHWKHWHUPHOHFWUR
PDJQHWLVPKLVH[SUHVVHGLQWHQWLRQWRDYRLG$PSqUHVDQGUVWHGVK\SRWKHVLV
RIDQHOHFWULFFXUUHQWVXJJHVWVWKDWKHZLVKHGWRDYRLGWKHLQDSSURSULDWHFRQQRWD
WLRQRIHOHFWULFDOVLQFHWKHSKHQRPHQDZHUHLQKLVPLQGSXUHO\PDJQHWLF,Q
6FKZHLJJHUEFI$OWKRXJKQRWSURSHUO\DWKHRU\RIWUDQVYHUVDOPDJQHWLVP
-RKDQQ-DFRE&DVLPLU%XFKVHDUO\SDSHUOLNHZLVHGHIHQGHGWKHLGHDWKDWIUHH
PDJQHWLVPLVSURGXFHGLQWKHZLUHE\WKHHOHFWURFKHPLFDOSURFHVVRIWKHFORVHGFLUFXLW
%XFK
%HU]HOLXVDDQGEUHSUHVHQWVLPLODUYHUVLRQVRIEDVLFDOO\WKHVDPHGLVFXVVLRQ
2QO\LQWKH)UHQFKGLGKHRQFHXVHWKHDGMHFWLYHWUDQVYHUVDOHLQFRQQHFWLRQZLWKWKH
FURVVVHFWLRQDOGLDJUDPRIWKHLPDJLQHGGLVWULEXWLRQRIPDJQHWLFSROHVD $P
SqUHF7KHFDSWLRQWLWOHRIWKH*HUPDQYHUVLRQUHDGVEHUGLHHOHNWURPDJQHWLVFKH
3RODULWlWWKRXJK%HU]HOLXVKLPVHOIGLGQRWXVHUVWHGVZRUG
%LRW IURP WKH WLWOH KH UHJXODUO\ WHUPHG WKH SKHQRPHQD GLVFRYHUHG E\ UVWHG
HOHFWURPDJQHWLF
3UHFKWO,QWKLVWKHUVWRIKLVVHYHUDOSDSHUVRI3UHFKWO
VSRNH PRUH RIWHQ RI WKH WUDQVYHUVDOH 0DJQHWLVPHQ RU 7UDQVYHUVDO0DJQHWLVPHQ
LQWKHFRQQHFWLQJZLUHZKLFKWKXVEHFDPHD7UDQVYHUVDO0DJQHW>@WKDQRIWKH
7UDQVYHUVDO0DJQHWLVPXVRIWKHZLUH
5HGUDZQIURP3UHFKWOSO9J,DPLQGHEWHGWR5XWK.DW]HQVWHLQIRUSUHSDULQJ
WKLVDQGWKHRWKHUJXUHV7KHSRRUTXDOLW\RIWKHFRSLHV,ZDVDEOHWRREWDLQRIWKHRULJLQDOV
SUHYHQWHGWKHLUGLUHFWUHSURGXFWLRQKHUH
5HGUDZQIURP3UHFKWOSO9J
3UHFKWO+HUHLWHUDWHGWKLVDGYDQWDJHLQ3UHFKWO,QDORQJ
IRRWQRWH*LOEHUWHQWHUWDLQHGWKHVXJJHVWLRQWKDWWKHK\SRWKHVLVRIDVLPSOHHOHFWULFFXUUHQW
LQWKHJDOYDQLFHOHFWULFFLUFXLW>LV@PHUHO\DFWLRQWKDWIDFLOLWDWHVWKHVWDUWRIWKHLQYHVWLJD
WLRQLQ3UHFKWOTXRWHRQ
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
),*3UHFKWOVVFKHPDIRUWKHGLVWULEXWLRQRIWUDQVYHUVDOPDJQH
WLVPDURXQGWKHFLUFXPIHUHQFHRIWKHFRQQHFWLQJZLUHRIDYROWDLF
SLOH
),*$VLQJXUHKHUHVKRZLQJWKHDOWHUQDWLRQRIQRUWKDQGVRXWKSROHVDURXQGWKH
ZLUH
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
DVHFRQGSDSHUH[SUHVVHGQRZPRUHH[FOXVLYHO\LQWKHODQJXDJHRIWUDQVYHUVDO
PDJQHWLVP 3UHFKWO PRYHG VRPHZKDW FORVHU WR UVWHGV WHUPLQRORJ\ ZKHQ KH
DSSOLHGKLVFRQFHSWLRQRIWKHSK\VLFDOFRQVWLWXWLRQRIWKHHOHFWULFPDJQHWLFFRQ
QHFWLQJ ZLUH WR WKH H[SODQDWLRQ RI WKH HOHFWULFPDJQHWLF SKHQRPHQD \HW KH
FRQVLVWHQWO\SUHIHUUHGKLVGHVLJQDWLRQHOHFWULFDOPDJQHWLVPWRWKHWDFLWO\DYRLGHG
HOHFWURPDJQHWLVP%\WHUPLQRORJLFDOLPSOLFDWLRQKHVDZWKHSKHQRPHQDDV
FRQVHTXHQFHVRIPDJQHWLVPQRWDVUVWHGKDGLQWHQGHGDVDQHZIRUPRIDFWLRQ
FDOOHGHOHFWURPDJQHWLVP
,Q0XQFNHDGYDQFHGKLVRZQDQDO\VLVRIWKHVWDWHRIDPHWDOOLFFRQGXFWRU
VXEMHFWWRDVLQJOHRUGRXEOHFXUUHQWRIHOHFWULFLW\WKHFRQGXFWRUDFTXLUHVIRXU
PDJQHWLFDOO\SRODUOLQHVUXQQLQJSDUDOOHOWRWKHORQJLWXGLQDOD[LVWKHOLNHQDPHG
SRODUHQGVRIZKLFKDUHGLDPHWULFDOO\RSSRVHG$VKHUHSKUDVHGLWYHPRQWKV
ODWHU>W@KHHOHFWULFFXUUHQWWUDQVIRUPVWKHFRQGXFWLQJZLUHIRUWKHWLPHRILWVSDV
VDJH>'XUFKVWU|PHQ@LQWRDGRXEOHWUDQVYHUVDOPDJQHW$V0XQFNHHPSKDVL]HG
WKHDSSHDORIVXFKFRQFHSWLRQVOD\LQZKDWDSSHDUHGWRWKHLUSURSRQHQWVDVWKHLU
GLUHFWUHSUHVHQWDWLRQRIWKHSKHQRPHQD
$ODUJHQXPEHURISK\VLFLVWVVHHLQWKHFRQGXFWLQJZLUHRIHOHFWULFLW\QRWKLQJEXWD
WUDQVYHUVDOPDJQHWZLWKQRUWKDQGVRXWKPDJQHWLFSRODULWLHVUXQQLQJSDUDOOHOWRWKH
D[LV,WUHDOO\DQQRXQFHVLWVHOIVRFOHDUO\DVVXFKERWKLQWKLVLWVVLPSOHVWIRUPDV
LQSDUWLFXODULQLWVKHOLFDOWXUQLQJVWKURXJKWKHGHFLVLYHQRUWKDQGVRXWKSRODULW\
WKDWWKHQDSSHDUVRQHLWKHUVLGHWKDWWKLVVLPSOHVWRIDOOPRGHVRIH[SODQDWLRQKDG
WRQGPDQ\DGKHUHQWVDOOWKHPRUHDVLWKDVLPSRUWDQWVXSSRUWLQWKHELSRODULW\RI
DOONQRZQPDJQHWLFSKHQRPHQD$FFRUGLQJO\HYHU\FURVVVHFWLRQRIWKHHOHFWULF
FRQGXFWRUIRUPVDVXUIDFHLQZKLFKDURXQGWKHPLGGOHRIWKHHOHFWULFFXUUHQWOLH
WKHRSSRVLQJPDJQHWLFSROHVWKHQXPEHURIZKLFKLVJLYHQYHU\GLIIHUHQWO\E\
WKHDGKHUHQWVRIWKLVYLHZ
4XRWLQJDQRWKHUSURSRQHQWRIVXFKDWKHRU\WRWKHHIIHFWWKDWLWLVVLPSO\D
IDFWQRWFDSDEOHRIIXUWKHUH[SODQDWLRQWKDWWKHHOHFWULFFXUUHQWDOZD\VDFWVWR
H[FLWHWUDQVYHUVDOPDJQHWLVP>WUDQVYHUVDOPDJQHWLVFKHUUHJHQGZLUNW@0XQFNH
QRWHGWKDWWKHVHWKHRULHVOLNHWKRVHRIUVWHGDQG)DUDGD\SURFHHGLQWKHLUH[SOD
QDWLRQVIURPWKHUVWIXQGDPHQWDOH[SHULPHQWZKHUHE\WKH\RVWHQVLEO\DYRLGHG
DQ\VSHFXODWLRQDVWRWKHQDWXUHRIHOHFWULFLW\RUPDJQHWLVP6XFKLGHDVQHYHU
JDLQHGPXFKFXUUHQF\RXWVLGHWKH*HUPDQVSHDNLQJVFLHQWLFFRPPXQLW\DQGWKHLU
DSSHDOTXLFNO\ZDQHGDV$PSqUHVHOHFWURG\QDPLFWKHRU\JDLQHGJURXQGEXWIRUD
WLPHWKH\ZHUHDVHULRXVFRQWHQGHUIRUWKHH[SODQDWLRQRIZKDWYLUWXDOO\HYHU\RQH
UHFRJQL]HGDVHOHFWURPDJQHWLFSKHQRPHQD
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
%XWQRWHYHU\RQHDQGQRW\HW,QUHSRUWVUHDGWRWKH%HUOLQ$FDGHP\LQ'HFHP
EHUDQG)HEUXDU\2QWKHPDJQHWLVPRIWKHJDOYDQLFFLUFXLW7KRPDV
-RKDQQ6HHEHFNH[SORUHGWKHUHODWLRQVKLSEHWZHHQZKDWKHWHUPHG
WKHPDJQHWLFSRODUL]DWLRQRUWHQVLRQH[KLELWHGE\WKHFRQQHFWLQJZLUHLQLWV
DFWLRQRQDPDJQHWLFQHHGOHDQGWKHHOHFWULFWHQVLRQRUSRODUL]DWLRQRIWKH
YROWDLFSLOHDVUHYHDOHGE\WKHDFWLRQRIWKHRSHQSLOHRQDQHOHFWURVFRSH)URP
DVHULHVRIH[SHULPHQWVGHVLJQHGWRFRUURERUDWHUVWHGVFODLPVKHFRQFOXGHGWKDW
D SHFXOLDU >HLJHQWKPOLFK@ PDJQHWLF SRODUL]DWLRQ LQGHSHQGHQW RI DOO H[WHUQDO
LQXHQFHVH[LVWVLQWKHFORVHGJDOYDQLFFLUFXLWQRWEHLWQRWHGLQMXVWWKHFRQ
QHFWLQJ ZLUH<HW D FRPSDULVRQ RI WKH HOHFWULF DQG PDJQHWLF WHQVLRQV RI SLOHV
FRPSRVHGRIYDU\LQJQXPEHUVDQGVL]HVRISODWHV\LHOGHGQRFRQVLVWHQWFRUUHOD
WLRQV,WZRXOGUHTXLUH2KPVZRUNWRPDNHVHQVHRIKLVQGLQJV,QGHHGDGU\
SLOHRIFRXSOHVRIRQHLQFKGLDPHWHUGLVNVSURGXFHGXSRQFORVLQJQRDFWLRQDW
DOORQDPDJQHWLFQHHGOHDOWKRXJKLWVHOHFWULFWHQVLRQZKHQRSHQHOLFLWHGDQLP
PHGLDWHDQGVWURQJUHVSRQVHLQDJROGOHDIHOHFWURVFRSH6HHEHFNWKXVFRQFOXGHG
WKDWWKHQHXWUDOL]DWLRQRI(DQG(LQDPHWDOOLFFRQGXFWRUFDQQRWEHUHJDUGHGDV
WKHHVVHQWLDOFRQGLWLRQIRUWKHH[FLWDWLRQRIPDJQHWLVPLQLW)URPDQDGGLWLRQDO
VHULHVRIUDWKHUFUXGHH[SHULPHQWVKHFRQFOXGHGUDWKHUWKDWWKHPDJQHWLFWHQVLRQ
RIDJDOYDQLFFLUFXLWLVSURSRUWLRQDOWRLWVFKHPLFDODFWLRQDQGWKHUHIRUHWKHPDJ
QHWLFQHHGOHFDQEHHPSOR\HGWRGHWHUPLQHWKHHQHUJ\>(QHUJLH@RIWKHFKHPLFDO
SURFHVV)RU6HHEHFNWKHHVVHQWLDOGLVFRYHU\RIUVWHGDQG$UDJRZDVWKDWE\
PHDQRIHOHFWULFLW\PDJQHWLVPLVH[FLWHGLQDOOPHWDOV([SOLFLWO\UHMHFWLQJWKH
QRWLRQWKDWWKHLULGHQWLW\KDGWKHUHE\EHHQSURYHQDV$PSqUHKDGYLJRURXVO\
PDLQWDLQHGKHFRQFOXGHG1RWHOHFWULFLW\SHUVHQRWWKHQHXWUDOL]DWLRQRI(
DQG(DORQHEXWWKHDOWHUDWLRQWKHUHE\HIIHFWHGLQWKHLQWHUQDOVWDWHRIERGLHVLVWKH
FDXVHRIWKHLUPDJQHWLVP1RWVXUSULVLQJO\6HHEHFNGHFOLQHGWRDGRSWUVWHGV
WHUPHOHFWURPDJQHWLVP
1RU ZDV KH DORQH 3DXO (UPDQV WKHRU\ RI ELSRODU WUDQVYHUVDO
PDJQHWLVPZDVFRQVWUXFWHGWRDFFRXQWIRUZKDWKHWHUPHGWKHHOHFWURFKHPLFDO
PDJQHWLVP RI WKH JDOYDQLF FLUFXLW SUHIHUULQJ KLV WHUP RYHU HOHFWURPDJQHWLF
EHFDXVHVRPHSLOHVFDQSURGXFHHOHFWULFEXWQRWPDJQHWLFSKHQRPHQD(YHQE\
DURXQG$XJXVWQHDUO\D\HDUDIWHUUVWHGKDGLQWURGXFHGWKHODQJXDJHRI
6HHEHFN PDJQHWLVFKH 3RODULVDWLRQ
PDJQHWLVFKH6SDQQXQJHOHNWULVFKH6SDQQXQJHOHNWULVFKH
3RODULVDWLRQ
6HHEHFN
6HHEHFN
6HHEHFN
6HHEHFN2Q$UDJRVZRUNVHHQRWHDERYH
6HHEHFN
(UPDQTXRWH$IHZPRQWKVHDUOLHUKHGODXGHGWKHLP
SRUWDQFHRIUVWHGVGLVFRYHU\RIDSUDFWLFDOO\SURYHQWUDQVLWLRQ>hEHUJDQJ@RIHOHFWULFLW\
WRPDJQHWLVPOHWWHURI'HFHPEHUWRUVWHGLQUVWHGE
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
6((%(&.$1'7+(502(/(&75,&,7<
2QHLPSRUWDQWUHVHDUFKHUZKRSXUVXHGOHDGVRSHQHGXSE\UVWHGVZRUNZDV
WKH%HUOLQ3ULYDWPDQQDQGDFDGHPLFLDQ7KRPDV-RKDQQ6HHEHFNZKRPWKHZRUOGV
RIVFLHQFHDQGVFKRODUVKLSKRQRUDVWKHGLVFRYHUHURIWKHUPRHOHFWULFLW\+HQFHLQ
VWXG\LQJ*HUPDQZRUNLQHOHFWULFLW\GXULQJWKHUVWKDOIRIWKHQLQHWHHQWKFHQWXU\
PDQ\ \HDUV DJR , ZDV VWDUWOHGWR QG WKDW 6HHEHFNV ZHOONQRZQ GLVFRYHU\ RI
WKHUPRHOHFWULFLW\LQGLGQRWFRUUHVSRQGWRZKDWKHKLPVHOIWKRXJKWKHKDG
IRXQG:KDWKHREVHUYHGZDVWKHGHHFWLRQRIDPDJQHWLFQHHGOHDSSURSULDWHO\
SODFHGDORQJVLGHRQHRIWKHHOHPHQWVRIDFLUFXLWFRPSRVHGRIW\SLFDOO\EDUVRI
WZRGLIIHUHQWPHWDOVZKHQWKHMXQFWXUHEHWZHHQWKHPZDVKHDWHG:KDWKHGLGQRW
REVHUYHZDVWKHVLPXOWDQHRXVSURGXFWLRQRIFKHPLFDOHIIHFWVKHDWRUOLJKWLQ
RWKHUZRUGVWKHNLQGVRISKHQRPHQDWKHQDVVRFLDWHGZLWKWKHFXUUHQWRIHOHFWULF
LW\SURGXFHGE\DJDOYDQLFFLUFXLWDVFRQYHQWLRQDOO\DOWKRXJKQRWXQLYHUVDOO\VR
FRQFHLYHG:KDWKHEHOLHYHGKHKDGGLVFRYHUHGZDVDVDQQRXQFHGLQWKHWLWOHRI
3RJJHQGRUIIFRODQGUHSHDWHGO\WKHUHDIWHU+HFDOOHGKLVQHZLQVWUXPHQWRXU
JDOYDQRPHWHUDPDJQHWLVFKHU&RQGHQVDWRUFRO
3RJJHQGRUIIFRO
/LQGVD\DQG0DUJHQDX
([DPSOHVRIHDUO\DQGPRGHUQFDQRQLFDOFKDUDFWHUL]DWLRQVLQFOXGH%UHJHU
+HUPDQQE\/RWKDU6XKOLQJ-XQJQLFNHODQG0F&RUPPDFK
2VWZDOG6LHJHO:KHZHOO:KLWWDNHU
(YHQ1LHOVHQVH[FHOOHQWDFFRXQWRI6HHEHFNVZRUNZDVKHDGHG7KHGLVFRYHU\RIWKHUPR
HOHFWULFLW\1LHOVHQFIDOWKRXJKWKHDXWKRURWKHUZLVHPDGHDEXQGDQWO\
FOHDUWKDW6HHEHFNVDZWKHHIIHFWKHGLVFRYHUHGDVHVVHQWLDOO\PDJQHWLF7\QGDOO
UHSRUWHGWKDW7KRPDV6HHEHFNRI%HUOLQGLVFRYHUHGWKDWHOHFWULFFXUUHQWVPLJKWEHGHULYHG
IURPKHDWZKLFKJDYHULVHWRWKHFRQVWUXFWLRQRIWKHWKHUPRHOHFWULFSLOH-RKQ+HULYHO
ZURWHWKDW6HHEHFNVKRZHGWKDWWHPSHUDWXUHGLIIHUHQFHVFRXOGSURGXFHHOHFWULFFXUUHQWV
LQ7,:LOOLDPV
&DQHYDE
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
WKHPHPRLUKHSXEOLVKHGLQWKHPDJQHWLFSRODUL]DWLRQRIPHWDOVDQGDOOR\V
E\PHDQVRIWHPSHUDWXUHGLIIHUHQFH
$PLQRULW\YRLFHKDVORQJEHHQDZDUHWKDWWKHDSSURSULDWHFKDUDFWHUL]DWLRQRI
6HHEHFNVGLVFRYHU\GHYLDWHVIURPJHQHUDOO\DFFHSWHGXVDJH,QKLVPDJLVWHULDODQG
VWLOOXQVXUSDVVHG*HVFKLFKWHGHU3K\VLN)HUGLQDQG5RVHQEHUJHUZURWH
RI6HHEHFNVGLVFRYHU\RIWKHUPRPDJQHWLVPLQ:LWKWKHVHSKHQRPHQD
6HHEHFNFRQVLGHUHGDERYHDOODVZDVDSSURSULDWHIRUWKHWLPHWKHGLUHFWO\PDQL
IHVWHGPDJQHWLVPZKLFKDFFRUGLQJWRFRQWHPSRUDU\FRQFHSWLRQVKDGWREHH[FLWHG
LQWKHZLUHDORQJVLGHWKHHOHFWULFLW\DQGKHGHVFULEHGWKHSKHQRPHQDXQGHUWKH
QDPHWKHUPRPDJQHWLVP$QDPHZKLFKDIWHUWKHGLVFRYHU\RIJDOYDQLFLQGXFWLRQ
DQGWKHFRQFRPLWDQWDFFHSWDQFHRI$PSqUHVWKHRU\ZDVQDWXUDOO\QDOO\UHSODFHG
E\WKHFRUUHVSRQGLQJWKHUPRHOHFWULFLW\7KHIXOOVWRU\LVPRUHFRPSOLFDWHGDQG
5RVHQEHUJHUVH[SODQDWLRQRIWKHFRQFHSWVGLVSODFHPHQWPLVVHVDQLPSRUWDQWSDUW
RIWKHVXEMHFWVHDUOLHVWKLVWRU\QDPHO\UVWHGVVXFFHVVLQLPSUHVVLQJKLVVWDPS
RQWKHLQWHUSUHWDWLRQRIWKHSKHQRPHQD6HHEHFNEURXJKWWROLJKW:KHWKHUIROORZ
LQJ5RVHQEHUJHUVOHDGRUQRW,DQGPDQ\RWKHUVFRQWLQXHGZURQJO\WRUHSRUWWKDW
6HHEHFNWHUPHGWKHQHZSKHQRPHQDWKHUPRPDJQHWLVPZLWKRXWFLWLQJH[DPSOHV
RIWKDWXVDJHIURP6HHEHFNVRZQZRUN,WWXUQHGRXWWKDWWKHFRQFHSWXDODQGWHU
PLQRORJLFDOLGHQWLFDWLRQRIZKDW6HHEHFNKDGGLVFRYHUHGZDVDFRPSOH[SURFHVV
LQZKLFK6HHEHFNKLPVHOISOD\HGRQO\DODWHDQGLQHIIHFWXDOUROH%HFDXVHRIKLV
QHDUO\IRXU\HDUGHOD\LQSXEOLVKLQJKLVQGLQJVFRQFHSWXDODQGWHUPLQRORJLFDO
SRVVHVVLRQRIWKHQHZHOGIHOOWRRWKHUVDVZRUGRIKLVH[SHULPHQWDOQGLQJVOHDNHG
RXWDQGWKHQDWWUDFWHGWKHDWWHQWLRQRILQYHVWLJDWRUVWKURXJKRXW(XURSH
6HHEHFNDD$OWKRXJK(U]HQRUPDOO\PHDQVRUHVLWFDQDOVRUHIHUWR
PHWDOVHVSHFLDOO\EUDVVDQGEURQ]HLQDQ\FDVH6HHEHFNZRUNHGRQO\ZLWKPHWDOV
5RVHQEHUJHU
2QWKHQH[WSDJH5RVHQEHUJHUGLGWREHVXUHPRGLI\WKLVDVVHVVPHQWE\UHFRJQL]LQJ
UVWHGVDQG)RXULHUVDGYRFDF\RIWKHWHUPWKHUPRHOHFWULFIRUWKHSKHQRPHQDWKDWLQWKHLU
KDQGVXVLQJDPXOWLHOHPHQWSLOHZHUHH[WHQGHGWRLQFOXGHWKHNLQGRIFKHPLFDODFWLRQV
ORQJDVVRFLDWHGZLWKWKHHOHFWULFLW\RIWKHYROWDLFSLOH5RVHQEHUJHU
6WUHLW[Y[[LL+HUPDQQ&DQHYDE1LHOVHQ
&I)UDQNHOV'6%DUWLFOH%\IDU6HHEHFNVPRVWVLJQLFDQWGLVFRYHU\ZDVWKDW
RIWKHUPRHOHFWULFLW\RUWKHUPRPDJQHWLVPDVKHFDOOHGLWLQ+HGLGQRWKRZHYHU
EHOLHYHWKDWDQHOHFWULFFXUUHQWZDVDFWXDOO\VHWXSLQWKHELPHWDOOLFULQJVDQGSUHIHUUHGWR
GHVFULEHKLVHIIHFWDVWKHUPRPDJQHWLVP)UDQNHO)ROORZLQJ)UDQNHOVOHDG
DUH0XLULPSOLFLWO\DQG%UHJHUH[SOLFLWO\%UHJHUDGGHG,QWKH
WHUPLQRORJ\RIWKHWLPH6HHEHFNKDGWKXVWUDQVIRUPHGKHDWLQWRPDJQHWLVP$VSRLQWHG
RXWZLWKUHVSHFWWRUVWHGLQQRWHDERYHVXFKZDVQRWWKHZD\FRQWHPSRUDULHVW\SLFDOO\
VSRNH)ROORZLQJ:LOOLDPVOHDG1LHOVHQLQDSSURSULDWHO\DWWULEXWHGWR6HHEHFNDEHOLHILQ
WKHFRQYHUWLELOLW\RIIRUFHV1LHOVHQFLWLQJ/3:LOOLDPV6HHEHFN
VSRNHUDWKHURIWKHH[FLWDWLRQ(UUHJXQJRIIRUH[DPSOHPDJQHWLVPE\HOHFWULFLW\6HHEHFN
FLWHGDERYH
6RPHRIWKHIROORZLQJDFFRXQWLVGUDZQIURP&DQHYDIRUWKFRPLQJ)RUDQDFFXUDWH
VXPPDU\RI6HHEHFNVZRUNUVWHGVUROHLQVKDSLQJLWVLQWHUSUHWDWLRQDQGWKHGHOD\HGIXOO
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
(DUO\UHVSRUWVDQGUHVSRQVHV7KHDGYHQWRIWKHUPRHOHFWULFLW\
6HHEHFNUHSRUWHGKLVHDUO\QGLQJVDWWKUHHPHHWLQJVRIWKH$FDGHP\RI6FL
HQFHVLQ%HUOLQRQ$XJXVWDQG2FWREHUDQG7KHHDUOLHVWPHQWLRQRI
KLVZRUNLQSULQWVHHPVWRKDYHEHHQDQDQQRXQFHPHQWLQWKH$OOJHPHLQHSUHXLVFKH
6WDDWV]HLWXQJZKLFK$OH[DQGHU7LOORFKSLFNHGXSIRULQFOXVLRQLQWKH
,QWHOOLJHQFHDQGPLVFHOODQHRXVDUWLFOHVVHFWLRQRIWKH3KLORVRSKLFDOPDJD]LQH
KHWKHQHGLWHG8QGHUWKHKHDGLQJ0DJQHWLVPKHUHSRUWHG
7KLVHDUO\UHSRUWUHODWHG6HHEHFNVGLVFRYHU\WRWKHWKHUPDOGHSHQGHQFHRIPDJQH
WLVPLQDOOPHWDOVDQGPDQ\HDUWKV,WJLYHVQRLQVLJKWLQWRWKHSUHFLVHSKHQRPHQD
6HHEHFNZDVLQYHVWLJDWLQJ,WDOVRGHYHORSHGKLVZRUNVLPSOLFDWLRQVLQDGLUHFWLRQ
YHU\GLIIHUHQWIURPDSDWKWRVRPHWKLQJWKDWPLJKWEHFDOOHGWKHUPRHOHFWULFLW\
6FKZHLJJHUHGLWRURIWKH-RXUQDOIU&KHPLHXQG3K\VLNZDVSHUVRQDOO\LQ
IRUPHGRI6HHEHFNVZRUNLQWKHVSULQJRIDIWHUWKHSUHVHQWDWLRQRI6HHEHFNV
IRXUWKDQGODVWUHSRUWWRWKH%HUOLQ$FDGHP\RQ)HEUXDU\DQGUHSRUWHGRQLWLQ
DWDONEHIRUHWKH+DOOLVFKHQDWXUIRUVFKHQGH*HVHOOVFKDIWRQ0DUFK+RS
LQJWREHDEOHWRSXEOLVKDQH[WUDFWRIWKHSDSHU6HHEHFNDQWLFLSDWHGSXEOLVKLQJLQ
WKH$EKDQGOXQJHQRIWKH$FDGHP\6FKZHLJJHUKHOGRIISXEOLVKLQJKLVWDONZKLFK
WKHEURDGHUSXEOLFZDVLQIRUPHGRILQDVLQJOHVHQWHQFHEXULHGLQDUHSRUWRQWKH
*HVHOOVFKDIWVDFWLYLWLHVGHOLYHUHGE\LWVVHFUHWDU\RQ-XO\EXWQRWSXEOLVKHG
LQ6FKZHLJJHUV-RXUQDOXQWLO-DQXDU\RIWKHQH[W\HDU)LQDOO\3URI6FKZHLJJHU
UHSRUWHGRQWKHLPSRUWDQWGLVFRYHU\RIDOHDUQHGPHPEHURIRXU6RFLHW\LQ%HUOLQ
'U6HHEHFNZKRH[FLWHGOLYHO\PDQLIHVWDWLRQVRIPDJQHWLVPVROHO\E\WKHKHDWLQJ
DFFHSWDQFHRIWKHSKHQRPHQDDVWKHUPRHOHFWULFVHH)LQQ5
7LOORFK,KDYHQRWEHHQDEOHWRFRQVXOWWKH$OOJHPHLQHSUHXLVFKH6WDDWV]HL
WXQJGLUHFWO\
6FKZHLJJHU$QKDQJLQUVWHG.HIHUVWHLQ6FKZHLJJHUVDLGKHKDG
KHDUGRI6HHEHFNVZRUN]X2VWHUQDOWKRXJK(DVWHULQIHOORQ$SULODPRQWKDIWHU
WKHGDWHRIKLV+DOOHWDON
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
RIPHWDOVLQFRQWDFW1RWHWKDWLWZDVDJDLQPDJQHWLVPQRWHOHFWULFLW\WKDWZDV
H[FLWHGE\WKHDSSOLFDWLRQRIKHDWWRWKHPHWDOOLFMXQFWLRQ
(YHQEHIRUHWKDWPRGHVWO\FODULI\LQJUHSRUWDSSHDUHGLQSULQWDPRUHGHWDLOHG
DFFRXQWZDVSXEOLVKHGE\HGLWRU7KRPDV7KRPVRQRQWKHEDVLVRID
SHUVRQDOFRPPXQLFDWLRQIURPD01RUGHQVNLROGRI$ERQRZLQWKLVFRXQWU\
LQWKH2FWREHULVVXHRIWKH$QQDOVRISKLORVRSK\XQGHUWKHKHDGLQJ(OHFWUR
PDJQHWLFH[SHULPHQW7DNHDEDURIDQWLPRQ\DERXWHLJKWLQFKHVORQJDQGKDOI
DQLQFKVTXDUHFRQQHFWLWVH[WUHPLWLHVE\WZLVWLQJDSLHFHRIEUDVVZLUHURXQGWKHP
VRDVWRIRUPDORRSHDFKHQGRIWKHEDUKDYLQJVHYHUDOFRLOVRIWKHZLUH,IRQH
RIWKHH[WUHPLWLHVEHKHDWHGIRUDVKRUWWLPHZLWKDVSLULWODPSHOHFWURPDJQHWLF
SKHQRPHQDPD\EHH[KLELWHGLQHYHU\SDUWRILW7KRPVRQGLGQRWKHVLWDWHWR
DVVLPLODWH 6HHEHFNV REVHUYDWLRQV WR UVWHGV HOHFWURPDJQHWLF SKHQRPHQD +LV
UHSRUWZDVUHSULQWHGLQWZRRWKHU%ULWLVKMRXUQDOVHDUO\LQLQRQHRIZKLFK
WKHHGLWRUDGGHGDQRWH:HKDYHUHSHDWHGWKLVH[SHULPHQWZLWKHYHU\VXFFHVV
7KHEUDVVZLUHLVLQWKDWVWDWHZKLFKZRXOGEHSURGXFHGE\FRQQHFWLQJLWVKHDWHG
HQGZLWKWKHQHJDWLYHSROHRIDYROWDLFEDWWHU\DQGLWVFROGHQGZLWKWKHSRVLWLYH
SROH:LWKWKLVVWDWHPHQWDFOHDUPHQWDOSLFWXUHRIWKHQDWXUHRIWKHQHZSKH
QRPHQDZDVDYDLODEOHHYHQDVQRWLRQVRIZKDWWKHEDVLFSKHQRPHQRQFRQVLVWHG
LQFRQWLQXHGWRHYROYH
0HDQZKLOH UVWHG LQ %HUOLQ VLQFH WKH HQG RI 1RYHPEHU VSHQW WZR
PRUQLQJVDQGDQDIWHUQRRQZLWK6HHEHFNEHLQJVKRZQWKHQHZH[SHULPHQWVWKDW
UVWHGLPPHGLDWHO\UHJDUGHGDVFRQWLQXDWLRQVRIKLVRZQGLVFRYHU\%HIRUHKH
KDG WKH RSSRUWXQLW\ WR XQGHUWDNH KLV RZQ H[SHULPHQWV UVWHG SDVVHG WKURXJK
-HQDZKHUHKHLQIRUPHG-RKDQQ:ROIJDQJ'|EHUHLQHURI6HHEHFNV
ZRUN$IWHUUHSHDWLQJWKHPIRUKLPVHOI'|EHUHLQHULQIRUPHG*LOEHUWHGLWRURI
WKH$QQDOHQGHU3K\VLN,QDOHWWHURI-DQXDU\GHDOLQJZLWKDYDULHW\RI
GLVSDUDWHVXEMHFWVLQFOXGLQJDUHPDUNDEOHFKDQJHLQZRRGGXHWROLJKWQLQJDQG
D UHSHDWLQJ RI 6HHEHFNV H[SHULPHQWV RQ PDJQHWLF HOHFWURPRWRUV E\ PHDQV RI
KHDWLQJ'|EHUHLQHUZURWH
.HIHUVWHLQ,QDIRRWQRWHWR<HOLQVUVWSDSHURQWKHWRSLF*LOEHUWUHFRUGHGWKDW
ZKLOHLQ%HUOLQRYHU(DVWHU6HHEHFNKDGJLYHQKLPDUDWKHUFRPSOHWHRYHUYLHZRYHU
KLVPDJQHWRPRWLYH>PDJQHWRPRWRULVFK@H[SHULPHQWVZLWKFORVHGFLUFOHVRUDUFVFRPSRVHG
RIWZRPHWDOVRIZKLFKRQHHQGLVSDUWLDOO\ZDUPHG*LOEHUWLQ<HOLQF*LOEHUW
WRRKHOGRIISXEOLVKLQJWKHVHUHVXOWVLQWKHH[SHFWDWLRQWKDWVRPHWKLQJZRXOGEHIRUWKFRP
LQJIURP6HHEHFNKLPVHOI
77KRPVRQ+LVVRXUFHZDVSRVVLEO\1LOV*XVWDI1RUGHQVNM|OGD)LQQLVK
PLQLQJRIFLDO
77KRPVRQDTXRWHE
UVWHGOHWWHUVRI'HFHPEHUDQG$SULOWRKLVZLIHLQUVWHG
DQGDQGODWHULQSULQW7KHPRVWUHPDUNDEOHRIDOOWKHGLVFRYHULHVWRZKLFKWKDWRI
2HUVWHGKDVJLYHQRFFDVLRQLVQRGRXEWWKHWKHUPRHOHFWULFLW\GLVFRYHUHGLQE\'U
6HHEHFNUVWHG D
'|EHUHLQHUJXUHUHGUDZQIURPSO,J.DQG:VWDQGIRU.XSIHU
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
7KUHHZHHNVDJR3URI2HUVWHGW>VLF@IURP&RSHQKDJHQYLVLWHGPH$PRQJRWKHU
WKLQJVKHUHFRXQWHGWRPHWKDW'U6HHEHFNLQ%HUOLQKDGFRQVWUXFWHGGU\ULQJ
VKDSHGHOHFWULFFLUFXLWV>.HWWHQ@FRQVLVWLQJRIFRSSHUDQGDQWLPRQ\RUDUVHQLF
ELVPXWKDQGWKHOLNHZKLFKZKHQWKH\DUHKHDWHGRURQO\ZDUPHGE\WKHDPH
RIDQDOFRKROODPSRQWKHSODFHVZKHUHWKHWZRGLIIHUHQWPHWDOVDUHVROGHUHGWR
HDFKRWKHUDFWRQWKHPDJQHWLFQHHGOHHYHU\ELWDVVWURQJO\DVDYROWDLFFLUFXLW,
KDVWHQHGWRUHSHDWWKLVLQWHUHVWLQJREVHUYDWLRQDQGIRXQGLQIDFWWKDWZKHQDELV
PXWKURGLVVROGHUHGWRJHWKHURQERWKHQGVZLWKDEHQWVWULSRIFRSSHUVKHHWLQJDV
LQ)LJXUH3ODWH,>KHUHJXUH@DFLUFXLWLVIRUPHGZKLFKREWDLQVDPDJQHWLFDOO\
UHDFWLYHIRUFHPHUHO\WKURXJKWKHZDUPWKRIWKHKDQGRUQJHUWLSVZLWKZKLFK
RQHWRXFKHVRQHRIWKHVROGHUHGSODFHVDRUEVRWKDWDPDJQHWLFQHHGOHSODFHG
EHWZHHQWKHWZRPHWDOV.DQG:DVWKHJXUHVKRZVLVEURXJKWWRDQHDVWHUO\RU
ZHVWHUO\GHYLDWLRQRIWRGHJUHHV
'|EHUHLQHUVGLDJUDPZDVWKHUVWSXEOLVKHGYLVXDOUHSUHVHQWDWLRQRIWKHQHZ
SKHQRPHQD 7KHLU FKDUDFWHUL]DWLRQ DV PDJQHWLF HOHFWURPRWRUV SUREDEO\ ZDV
*LOEHUWV:KDWWKHSKHQRPHQDFRQVLVWHGLQH[SHULPHQWDOO\ZDVQRORQJHULQGRXEW
+RZWKH\ZHUHWREHSURSHUO\FKDUDFWHUL]HGUHPDLQHGRSHQWKURXJKWKHV$
FOHDUFRQVHQVXVLQIDYRURIDWDFLWO\XQSUREOHPDWLFDOWKHUPRHOHFWULFZDVQRWEHLQJ
DFKLHYHGXQWLODIWHUDURXQGUVWHGVUROHLQWKLVSURFHVVZDVSLYRWDO
,Q3DULVVLQFH-DQXDU\UVWHGLQIRUPHGWKH3DULV$FDGpPLHGHV6FLHQFHV
RQ0DUFKRI6HHEHFNVQHZH[SHULPHQWVRQHOHFWURPDJQHWLFDFWLRQVDVWKH
SXEOLVKHGWLWOHKDGLW,WVUVWVHQWHQFHFRQWLQXHGWKHVXEWOHSURFHVVE\ZKLFK
UVWHGVRXJKWWRFRQWUROWKHLQWHUSUHWDWLRQRIWKRVHH[SHULPHQWV6HHEHFNDPHP
EHURIWKH%HUOLQ$FDGHP\KDVGLVFRYHUHGWKDWRQHFDQHVWDEOLVKDQHOHFWULFFLUFXLW
LQPHWDOVZLWKRXWWKHLQWHUSRVLWLRQRIDQ\OLTXLG2QHHVWDEOLVKHVWKHFXUUHQWLQWKLV
FLUFXLWE\GLVWXUELQJWKHHTXLOLEULXPRIWHPSHUDWXUH,QQRWLQJWKDW>R@QHFDQ
RQO\GHWHFWWKHVHHOHFWULFFXUUHQWVE\PHDQVRIWKHPDJQHWL]HGQHHGOHKHLQGLFDWHG
KLVWDFLWDFFHSWDQFHRIZKDWKDGE\WKHQEHFRPHWKHPRVWFRPPRQLQWHUSUHWDWLRQ
RIHOHFWURPDJQHWLVPDPRQJWKH)UHQFKDVKHWDFLWO\LJQRUHGWKHLVVXHYLWDOWRVRPH
*HUPDQVRIWKHOHJLWLPDF\RIVSHDNLQJLQWHUPVRIDQHOHFWULFFXUUHQWZKHQZKDW
LVREVHUYHGDUHPDJQHWLFHIIHFWV+HVXJJHVWHGVHYHUDOQHZFRLQDJHV)URPQRZ
RQLWZLOOGRXEWOHVVEHQHFHVVDU\WRGLVWLQJXLVKWKLVQHZFODVVRIHOHFWULFFLUFXLWVE\
DQG:LVPXWK
UVWHGD$QRQ\PRXVUHSRUWLQJRQWKHPHHWLQJRI0DUFKVD\V
UVWHGHQWHUWDLQHGWKH$FDGHP\ZLWKWKHZRUNWKDW6HHEHFNKDVMXVWGRQHRQHOHFWURPDJ
QHWLFSKHQRPHQD6HHWKHSUHFHGLQJFDKLHULHUVWHGD7KHUHSRUWZDVTXLFNO\
WUDQVODWHGLQWR*HUPDQUVWHGEDQG(QJOLVKUVWHGH*LOEHUWV*HUPDQWLWOH
VSRNHUDWKHURI6HHEHFNVHOHNWULVFKPDJQHWLVFKH9HUVXFKH
UVWHGD D
UVWHGD DUVWHGZDVDZDUHWKDW6HHEHFNKDGDQRWKHUWKHRU\
DERXWWKHVHHIIHFWVEXWLWLVQRWFOHDUWKDWKHKDGDYHU\GLVWLQFWLGHDRIZKDWWKDWWKHRU\ZDV
VHHKLVOHWWHURI$SULOWRKLVZLIHLQUVWHG
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
D : E
),*'|EHUHLQHUVUHSUHVHQWDWLRQWKHUVW
SXEOLVKHGRIWKHPDJQHWLFDFWLRQRID6HHEHFN
LDQELPHWDOOLFFLUFXLW
DQDSSURSULDWHWHUPDQGDVVXFK,SURSRVHWKHH[SUHVVLRQWKHUPRHOHFWULFFLUFXLWV
RUSHUKDSVWKHUPHOHFWULFDWWKHVDPHWLPHRQHZRXOGEHDEOHWRGLVWLQJXLVKWKH
JDOYDQLFFLUFXLWE\WKHQDPHK\GURHOHFWULFFLUFXLW
UVWHGTXLFNO\DEDQGRQHGKLVVKRUWOLYHGSUHIHUHQFHWKHUPHOHFWULFLQIDYRURI
WKHWHUPWKDWZRXOGHYHQWXDOO\EHFRPHWKHRQHPRVWFRPPRQO\DSSOLHGWRWKLVQHZ
FODVVRISKHQRPHQD7KXVKLVUHSRUWODWHUWKDWPRQWKRQKLVDQG-RVHSK)RXULHUV
H[SHULPHQWVLQFRQVWUXFWLQJFLUFXLWVRIPXOWLSOHSDLUVRIPHWDOVRSHQHG
ZLWKWKHQHZO\SUHIHUUHGODQJXDJHDVLWUHLQIRUFHGKLVYLHZRIWKHVXEMHFW,KDYH
KDGWKHKRQRURIVKRZLQJWKLVLOOXVWULRXVDVVHPEO\WKHUHPDUNDEOHH[SHULPHQWVE\
ZKLFK6HHEHFNKDVSURYHQWKDWRQHFDQHVWDEOLVKDQHOHFWULFFXUUHQWVLQDFLUFXLW
IRUPHGH[FOXVLYHO\RIVROLGFRQGXFWRUVPHUHO\E\GLVWXUELQJWKHHTXLOLEULXPRI
WHPSHUDWXUH:HDUHWKHUHIRUHLQSRVVHVVLRQRIDQHZNLQGRIHOHFWULFFLUFXLWZKLFK
FDQEHFDOOHGWKHUPRHOHFWULFFLUFXLWVLQGLVWLQFWLRQWRJDOYDQLFFLUFXLWVZKLFKLW
ZRXOGEHFRQYHQLHQWKHQFHIRUWKWRFDOOK\GURHOHFWULF7KHVFKHPDWLFJXUHVWKH\
SXEOLVKHGUHSUHVHQWLQJWKHLUELPHWDOOLFFLUFXLWVWZRRIZKLFKDUHUHSURGXFHGKHUH
DVJXUHVDQGKHOSHG[WKHVW\OL]HGYLVXDOLPDJHRIWKHUPRHOHFWULFFLUFXLWV
UVWHGVODWHU'DQLVKDFFRXQWUHSRUWHGLPSHUVRQDOO\LIQRWHQWLUHO\DFFXUDWHO\WKDW
>R@QHQRZFDOOVWKH6HHEHFNLDQFLUFXLWWKHWKHUPRHOHFWULFFLUFXLWDQGWKH*DOYDQLF
LQRSSRVLWLRQWKHUHWRWKHK\GURHOHFWULFFLUFXLWLQ'DQLVKRQHFRXOGFDOOWKHIRUPHU
UVWHGD D
$IWHUWKHLULQWURGXFWLRQUVWHGZHQWRQWRXVHWKHUPpOHFWULTXHVL[PRUHWLPHVWKHUPR
pOHFWULTXHQRWDJDLQ
UVWHGF D,QWKLVUHSRUWKHXVHGWKHUPRpOHFWULTXHH[FOXVLYHO\
DSSO\LQJLWWRFLUFXLWVFXUUHQWVDQGHOHPHQWVE]Z,QQHLWKHUWKLV
QRUKLVUVWUHSRUWGLGKH\HWXVHWKHQRXQWKHUPRHOHFWULFLW\,QDVHFWLRQHQWLWOHG7KHU
PRPDJQHWLVP EHFRPHV WKHUPRHOHFWULFLW\ 1LHOVHQ DVVHUWHG WKDW LW ZDV PDLQO\ WKURXJK
UVWHGVZULWLQJVWKDWQHZVRI6HHEHFNVWKHUPRHOHFWULFZRUNFLUFXODWHGWKURXJK(XURSH
1LHOVHQ
)LJXUHVUHGUDZQIURPUVWHGFSO>,,@JVDQG DJV
DQG
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
D F
E G
),*UVWHGDQG)RXULHUVVFKHPDWLFUHSUHVHQWDWLRQRIDELPHWDOOLF
WKHUPRHOHFWULFFLUFXLW
D E
E D
D E
),*$VLQJXUHKHUHVKRZLQJIRXUELPHWDOOLFWKHUPR
HOHFWULFHOHPHQWVFRQQHFWHGLQVHULHV
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
WKHYDUPHHOHFWULVNHWKHODWWHUWKHYDQGHOHFWULVNHFLUFXLW>.LGH@:ULWLQJLQ
UVWHGVIULHQG&KULVWRSKHU+DQVWHHQWRRNUVWHGVFKDUDFWHUL]DWLRQDV6HHEHFNV
'U6HHEHFNFDOOHGWKHVHSKHQRPHQDWKHUPRHOHFWULFWKHUVWHGLDQK\GURHOHFWULF
7KHYLVLELOLW\RIUVWHGVDXWKRUVKLSRIWKHVHQRQ6HHEHFNLDQWHUPVGLPLQLVKHG
HYHQDVWKH\ZHUHRQWKHLUZD\WREHFRPLQJXQSUREOHPDWLFGHVFULSWRUV
,QUHSRUWLQJRQ6HHEHFNVZRUNWR)DUDGD\LQDFRQWHPSRUDQHRXVO\SXEOLVKHG
OHWWHURI$SULO$PSqUHHPSOR\HGZLWKRXWFRPPHQWUVWHGVODQJXDJH
RIHOHFWULFFXUUHQWDQGWKHUPRHOHFWULFSLOH,QKLVUHSRUWRI$SULORQWKH
ZRUNRIWKH$FDGHP\LQ)RXULHUDQQRXQFHGWKDW6HHEHFNKDGVKRZQWKDW
WKHFRQWDFWRIGLVVLPLODUPHWDOVRIGLIIHUHQWWHPSHUDWXUHVLVVXIFLHQWWRRFFDVLRQ
YHU\QRWLFHDEOHPDJQHWLFHIIHFWVKHZHQWRQWRGHVFULEHKLVDQGUVWHGVH[SHUL
PHQWVRQWKHVHWKHUPRHOHFWULFDFWLRQVDQGWRVSHFXODWHRQWKHLUVLJQLFDQFHIRU
WKHH[SODQDWLRQRIWHUUHVWULDOPDJQHWLVP-RXUQDOGHSK\VLTXHHGLWRU+HQUL0DULH
'XFURWD\GH%ODLQYLOOHVVHYHUDOUHSRUWVH[SOLFLWO\IROORZHGUVWHGV
OHDGLQFKDUDFWHUL]LQJWKHHOHFWURPDJQHWLFDFWLRQVRIWKHWKHUPRHOHFWULFFLUFXLW
DVWKHUPRHOHFWULFHIIHFWVSURGXFHGE\WKHHOHFWULFLW\LQWKHFLUFXLW,QWKHDUWLFOH
7KHUPRHOHFWULFLW\WKDWUVWHGVHQWWR'DYLG%UHZVWHULQIRU
DQRQ\PRXVSXEOLFDWLRQLQWKH(GLQEXUJKHQF\FORSGLDKHEUXVKHGSDVW6HHEHFNV
FRQWLQXHGLQFOLQDWLRQQRWWRFRQVLGHUWKHHIIHFWWKXVSURGXFHGDVDWUXHHOHFWULFDO
FXUUHQWEXWDQHIIHFWVXLJHQHULVLQIRUPLQJKLVUHDGHUVWKDW3URIHVVRU2HUVWHG
KDV SURSRVHG WR FDOO WKH FXUUHQW GLVFRYHUHG E\ 'U 6HHEHFN WKH WKHUPRHOHFWUL
FDOFXUUHQWDQGLQFRQVHTXHQFHRIWKLVWRGLVWLQJXLVKWKHDFWLRQKLWKHUWRFDOOHG
*DOYDQLVPE\WKHQDPHRIWKH+\GURHOHFWULFDOFXUUHQW+HQFHZHKDYHQRZWKH
QDPHVWKHUPRHOHFWULFW\DQGK\GURHOHFWULFLW\WRZKLFKZHFRXOGDGGWKHQDPH
WULERHOHFWULFW\ IRU WKH HOHFWULFLW\ SURGXFHG E\ IULFWLRQ 7KH JXUHV KH WKHUH
UHSURGXFHGWRUHSUHVHQWWKHUPRHOHFWULFFLUFXLWVZHUHHVVHQWLDOO\LGHQWLFDOWRWKRVH
GUDZQIRUKLVDQG)RXULHUVUHSRUWRI
7KHDGYHQWRIWKHUPRPDJQHWLVP
$PRQJWKHHDUOLHVWDQGHDJHULVWWRSXUVXH6HHEHFNVOHDGZDV-XOLXV&RQUDGYRQ
<HOLQ%DYDULDQ2EHUQDQ]UDWDQGPHPEHURIWKH0XQLFK$FDGHP\RI
6FLHQFHV+DYLQJIRUVRPHWLPHEHHQLQWHUHVWHGLQH[SORULQJWKHUHODWLRQVKLSVDPRQJ
HOHFWULFLW\PDJQHWLVPKHDWDQGOLJKWE\WKHVXPPHURI<HOLQKDGQRWLFHG
WKDWDUHGKRWLURQURGEHFRPHVPDJQHWL]HGLQDQ\RULHQWDWLRQH[FHSWSHUSHQGLFXODU
UVWHGG D
+DQVWHHQ
$PSqUH
)RXULHU
%ODLQYLOOHEUHVSHFWLYHO\FIDOLL
UVWHG D
&IUVWHGSO';;,,,JV DJVWRUVWHGF
SO>,,@JV DJV
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
WRWKHPDJQHWLFPHULGLDQDQGKHZDVLQYHVWLJDWLQJ'RPHQLFR0RULFKLQLV
WKHQDOPRVWQLQH\HDUROGREVHUYDWLRQWKDWVWHHOQHHGOHVFDQEHPDJQHWL]HG
E\WKHYLROHWOLJKWIURPWKHVXQ)LQGLQJWKDWKHFRXOGPDJQHWL]HQHHGOHVZLWK
KHDWDORQH<HOLQFRQFOXGHGWKDWLQ0RULFKLQLVH[SHULPHQWVWKHHIIHFWZDVRZLQJ
QRWWRWKHYLROHWOLJKWSHUVHEXWWRWKHKHDWLWJHQHUDWHG8QDEOHKRZHYHUWRPDJ
QHWL]HURGVRIEUDVVFRSSHUVLOYHUDQGSODWLQXPE\HYHQYHU\VWURQJKHDWLQJKH
FRQFOXGHGWKDWLQDOOFDVHVWKHXOWLPDWHFDXVHRIWKHPDJQHWL]DWLRQZDVWKHHDUWKV
PDJQHWLVP+HZDVWKXVSULPHGWRUHVSRQGWRUVWHGVSHUVRQDOFRPPXQLFDWLRQ
RI6HHEHFNVDV\HWXQSXEOLVKHGQGLQJV$IWHUWKLVSUHOLPLQDU\ZRUN6HHEHFNV
QHZWKHUPHOHFWURPDJQHWLFH[SHULPHQWVDERXWZKLFKWKH3KLORVRSKLFDOPDJD]LQH
RIFRQWDLQVWKHUVWDOEHLWYHU\VXSHUFLDOQRWLFHDQGZLWKZKLFK,EHFDPH
PRUHIDPLOLDUWKURXJK3URIHVVRUUVWHGVSUHVHQFH>KHUHLQ0XQLFK@KDGWRDURXVH
P\DWWHQWLRQWRDKLJKGHJUHH$VVRRQDVUVWHGOHIW0XQLFK<HOLQXQGHUWRRN
KLV RZQ H[SHULPHQWV UHSRUWLQJ KLV UVW UHVXOWV WR WKH$FDGHP\ RQ -DQXDU\
,QDQHDUO\ZULWHXSRIKLVQGLQJV1HZH[SHULPHQWVRQWKHPDJQHWRPRWLYH
SURSHUW\RIWKHKHUHWRIRUHVRFDOOHGXQPDJQHWLFPHWDOVZKLFKERUHGLUHFWO\RQ
KLVSULRUFRQFHUQV<HOLQFRQWLQXHGWRUHIHUWR6HHEHFNVWKHUPHOHFWURPDJQHWLF
H[SHULPHQWVDVKHZHQWRQWRFODLPIRUKLPVHOIWKHGLVFRYHU\WKDWWKURXJKXQHTXDO
KHDWLQJDOOERGLHVDFTXLUHPDJQHWRPRWLYHSURSHUWLHV+HGHPRQVWUDWHGWKLVIDFW
E\IRUPLQJDFLUFXLWFRPSRVHGRIDVLQJOHPHWDOWKDWZKHQKHDWHGDWRQHSODFH
DQGFRROHGDWDQRWKHUSURGXFHGDGHHFWLRQRIDQDSSURSULDWHO\SODFHGPDJQHWLF
QHHGOHVHHJXUH+DYLQJGHWHFWHGDPDJQHWLFSRODUL]DWLRQE\KHDWLQJDEDURI
PHWDOQRWSDUWRIDFORVHGFLUFXLWKHQRWHGWKDW>E@LVPXWKPRVWVWULNLQJO\H[KLELWV
WKHSRODUL]DWLRQRFFXUULQJLQWKLVWKHUPRPDJQHWLVPRIPHWDOVZLWKDIRRWQRWH
JORVVLQJWKHSKUDVH7KHUPRPDJQHWLVPXVGHU0HWDOOH,WDSSHDUVWRPHWKDWZH
ZLOOWKXVKDYHWRGHQRWHLQDFKDUDFWHULVWLFIDVKLRQWKLVNLQGRIPDJQHWLFDFWLRQLQ
FRQWUDGLVWLQFWLRQWRWKHDOUHDG\NQRZQUVWHGLDQHOHFWURPDJQHWLVPRQDFFRXQWRI
LWVSHFXOLDUEHKDYLRU:KDWZDVDWVWDNHIRUKLPEHFDPHFOHDUHUVXEVHTXHQWO\+H
<HOLQGE)RUUHIHUHQFHWR0RULFKLQLVZRUNVHH&DQHYD
QZKHUHKLVQDPHLVPLVVSHOOHG0RULVKLQL
<HOLQE
<HOLQGFIE%XWDIWHUWKLVSUHOLPLQDU\ZRUN'U6HHEHFNV
WKHUPHOHFWURPDJQHWLFH[SHULPHQWVZLWKFORVHGSDUDOOHORJUDPVFRPSRVHGRIWZRGLIIHUHQW
PHWDOVZKLFKZKHQSDUWLDOO\KHDWHGVKRZDOOWKHFKDUDFWHULVWLFVRIWKHUVWHGLDQFRQQHFWLQJ
ZLUHPXVWQDWXUDOO\KDYHEHHQKLJKO\LQWHUHVWLQJDQGZHOFRPHWRPH)RUDQHDUOLHUSDVV
LQJUHIHUHQFHWRWKH6HHEHFNVFKHWKHUPHOHFWURPDJQHWLVFKH9HUVXFKHVHH<HOLQD
,QDOHWWHUWRKLVZLIHRI'HFHPEHUDVRIZKHQKHKDGEHHQLQ0XQLFKIRUIRXU
GD\VUVWHGUHSRUWHGKDYLQJPHW<HOLQUVWHG
<HOLQEGUVWHGLQ0XQLFKEHWZHHQ-HQDDQG3DULVVHQWDOHWWHUWR
KLVEURWKHUIURPWKHUHRQ-DQXDU\UVWHG
<HOLQF
)LJXUHUHGUDZQIURP<HOLQFSO9J
<HOLQF<HOLQGLGQRW\HWLOOXVWUDWHKLVH[SHULPHQWZLWKDJXUH
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
DWWDFKHGDVFKHPDWLFGLDJUDPRIWKHVRRQWREHGXEEHGWKHUPRPDJQHWLFDFWLRQ
RIDVLPSOHPHWDOOLFEDUWRKLVQH[WSDSHUSXEOLVKHGLQWKHVDPH+HIWRI*LOEHUWV
$QQDOHQ)LJXUHUHSUHVHQWVDEDURIELVPXWKRUDQ\RWKHURIWKHVRFDOOHGXQ
PDJQHWLFPHWDOV,IWKHHQG&%LVKHDWHGDQGWKHHQG$&FRROHGWKHZKROH
EDUDFWVRQDPDJQHWLFQHHGOHVXVSHQGHGDERYHLWFDXVLQJLWWRVZLQJLQRSSRVLWH
GLUHFWLRQVGHSHQGLQJRQZKLFKKDOIRIWKHEDULWLVRYHU
,Q<HOLQVWHUPLQRORJ\HOHFWURPDJQHWLFUHIHUUHGWRWKHDFWLRQRIWKHHOHF
WULFLW\VHWLQPRWLRQLQWKHFRQQHFWLQJZLUHRIDJDOYDQLFFLUFXLWRQDPDJQHWLF
QHHGOHZKHUHE\ KH H[SOLFLWO\ DFFHSWHG WKH H[SODQDWLRQ LQ WHUPVRI DQ HOHFWULF
FXUUHQWZKLOH KLV QHRORJLVP WKHUPHOHFWURPDJQHWLF UHIHUUHG WR WKH SKHQRP
HQRQ RI PDJQHWLF GHHFWLRQ SURGXFHG E\ KHDW DSSOLHG WR FLUFXLWV FRPSRVHG RI
HLWKHUWZRPHWDOVDV6HHEHFNKDGIRXQGRURQHDVKHGLVFRYHUHG6HHNLQJ
WRUHGXFH6HHEHFNVH[SHULPHQWVWRWKHLUVLPSOHVWIRUPKHIRXQGWKDWLIKHKHOG
GLVFVRIWZRPHWDOVEHWZHHQKLVQJHUVDPDJQHWLFQHHGOHVXVSHQGHGDERYHWKHP
UHJLVWHUHGDGHHFWLRQVHHJXUH3XUVXLQJKLVHDUOLHUSUHOLPLQDU\QGLQJ
WKDW D VLQJOH PHWDO DSSURSULDWHO\ KHDWHG VXIFHV WR SURGXFH PDJQHWRPRWLYH
DFWLRQV>RUHIIHFWV:LUNXQJHQ@KHIRXQGLQGHHGWKDWEDUVRIDOOPHWDOVEHFRPH
PDJQHWRPRWRUVDVORQJDVWKH\DUHXQHTXDOO\KHDWHGLQWZRSODFHV7KDWLV
RQHFRXOGSURGXFHDPDJQHWRPRWLYHHIIHFWZLWKRXWLWDSSHDUHGDFORVHGFLUFXLW
FDUU\LQJDQHOHFWULFFXUUHQW)XUWKHUPRUHURGVRIGLIIHUHQWFURVVVHFWLRQVGLGQRW
DOOH[KLELWPDJQHWRPRWLYHDFWLRQVVLPLODUWRWKRVHFLUFXODUO\V\PPHWULFDODFWLRQV
GLVSOD\HGE\DQUVWHGLDQFRQQHFWLQJZLUH7KHVHGLIIHUHQFHVSURPSWHGKLP
WRLQWURGXFHWKHWHUPWKHUPRPDJQHWLVPDOWKRXJKKHGLGQRWWKHUHE\ZLVKWR
GLVSXWHWKHOHJLWLPDF\RIWKHHIIHFWRIWKHQDWXUDOHOHFWULFLW\DURXVHGE\KHDWDQG
VHWLQPRWLRQRUWRIDLOWRUHFRJQL]HWKHSKHQRPHQRQLWVHOIDVSURSHUO\HOHFWURPDJ
<HOLQGJXUHUHGUDZQIURPSO9J
<HOLQG,QDQLQWURGXFWRU\IRRWQRWH*LOEHUWUHIHUUHGWRWKHVLPXOWDQHRXV
SXEOLFDWLRQRIUHODWHGDFFRXQWVE\YDQ%HHNDQGUVWHGLH%HHNDQGUVWHGF
RQ WKH UHPDUNDEOH WKHUPRPDJQHWLVP RI PHWDOV ZKRVH VWXG\ SURPLVHG WR JLYH D QHZ
GLUHFWLRQWRLQYHVWLJDWLRQVRIHOHFWURPDJQHWLVP*LOEHUWLQ<HOLQG+HDSSHDUV
DOUHDG\WREHDSSO\LQJ<HOLQVWHUPWRWKHWRWDOLW\RIWKHQHZSKHQRPHQD9DQ%HHNVOHWWHUV
WR*LOEHUWRIDQG$SULOVSRNHRQO\RIYHU\UHPDUNDEOHQHZJDOYDQLFPDJQHWLF
DFWLRQVPHGLDWHGE\KHDWDQGZHUHIRUWKHPRVWSDUWZKROO\GHVFULSWLYH%HHN
WKHFKDUDFWHUL]DWLRQRIWKHWLWOH1HZWKHUPRHOHFWULFPDJQHWLFDFWLRQVZRXOGVHHPWRKDYH
EHHQ*LOEHUWVIROORZLQJ<HOLQVUHFHQWFRLQDJH$OHWWHURI$SULOWRWKHHGLWRUVRI
WKH(GLQEXUJKSKLORVRSKLFDOMRXUQDO'DYLG%UHZVWHUDQG5REHUW-DPHVRQZDVVLPLODUO\
ODUJHO\GHVFULSWLYHRIWKHDXWKRUVUHSHWLWLRQDQGH[WHQVLRQRI6HHEHFNVH[SHULPHQWVWKH\
QRZKHUHXVHGWKHWHUPHOHFWURPDJQHWLFHPSOR\HGLQWKHWLWOH%HHNHWDO
)LJXUHDGDSWHGIURP<HOLQGSO9J
<HOLQGTXRWHVRQDQGUHVS
<HOLQGTXRWHRQ,QWKHSKHQRPHQDRIWKHUPRPDJQHWLVPKHDOVR
QRWHGDFRQQHFWLRQEHWZHHQWKHPDJQHWRPRWLYHDFWLRQRIPHWDOVWKHLUPRGHRIFU\VWDOOL]D
WLRQDQGHOHFWULFLW\<HOLQE
<HOLQGFIZKHUHKHFRQFOXGHG7KDWZLWKWKLVPDJQHWL]DWLRQE\KHDW
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
G F
H D E
),*<HOLQVUHSUHVHQWDWLRQRIDWKHUPHOHFWURPDJ
QHWLFFLUFXLWFRPSRVHGRIDVLQJOHPHWDO
&
$ %
),*<HOLQVUHSUHVHQWDWLRQRIWKHWKHUPRPDJQHWLVPRIDEDURIPHWDO
QHWLF(YLGHQWO\<HOLQGLGQRWLQWHQG7KHUPR0DJQHWLVPXVWRDSSO\WRWKHIXOO
UDQJHRISKHQRPHQDGLVFRYHUHGE\6HHEHFNEXWRQO\WRDQHZFODVVRIDFWLRQVKH
KDGGLVFRYHUHGWKDWGLGQRWDSSHDUWRLQYROYHDFORVHGHOHFWULFFLUFXLWDQGLQZKLFK
QRWUDFHRIIUHHHOHFWULFLW\FRXOGEHGHWHFWHG7KDWZDVQRWKRZHYHUWKHZD\
RWKHUVFDPHWRHPSOR\WKHWHUP
SHFXOLDULWLHVPDQLIHVWWKHPVHOYHVE\ZKLFKLWLVHVVHQWLDOO\GLVWLQJXLVKHGIURPWKHHOHFWUR
PDJQHWLVPGLVFRYHUHGE\UVWHGIRUZKLFKUHDVRQ,FDOOLWLQFRQWUDGLVWLQFWLRQWKHUHIURP
WKHUPRPDJQHWLVP6HHDOVR<HOLQE,QDQ$QKDQJWR/XGZLJ)ULHGULFK.lPW]
WUDQVODWLRQRIUVWHGFSXEOLVKHGLQWKH0D\LVVXHRIWKH-RXUQDO
IU&KHPLHXQG3K\VLN6FKZHLJJHUH[SODLQHGWKDW<HOLQKDGVHQWKLPDFRS\RIKLVSDSHU
RI$SULOLH<HOLQEEXWWKDWKHKDGQRW\HWPHQWLRQHGLWLQKLVMRXUQDOSHQG
LQJDJDLQWKHDQWLFLSDWHGSXEOLFDWLRQRIVRPHWKLQJE\6HHEHFNKLPVHOI,QWKLV$QKDQJKH
TXRWHGDQGFRPPHQWHGXSRQVHYHUDORI<HOLQVPRUHLPSRUWDQWQGLQJVFODLPLQJWKHPIRU
KLVIULHQG6HHEHFNWKHGLVFRYHUHURIWKHUPRPDJQHWLVPLQUVWHG>TXRWH
RQ@
<HOLQE<HOLQVUHDVRQLQJZDVFRUUHFWO\FDSWXUHGLQWKHHGLWRUVSUpFLVRIKLV'HU
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
),*<HOLQVGHPRQVWUDWLRQRIWKHGHHFWLRQRID
PDJQHWLFQHHGOHVXVSHQGHGDERYHGLVFVRIWZRPHWDOV
KHOGEHWZHHQWKHQJHUV
)RUH[DPSOHDOWKRXJKKHGLGQRWGLVFXVVWKHSKHQRPHQDLQDQ\GHWDLOLQKLVERRN
RQHOHFWURPDJQHWLVPRI3IDIIDSSOLHGWKHWHUPWKHUPRPDJQHWLVPEURDGO\WR
WKHH[FLWDWLRQRIPDJQHWLVPE\KHDWLQJ,Q6FRWODQGSK\VLFLDQ7KRPDV6WHZDUW
7UDLOORQHRIWKHUVWWRDGRSWWKHODQJXDJHRIWKHUPRPDJQHWLFDQG
WKHUPRPDJQHWLVPDSSOLHGWKHWHUPVZLWKRXWDQ\GLVFXVVLRQRIWHUPLQRORJLFDO
LVVXHVWRWKHFRQYHQWLRQDOUDQJHRISKHQRPHQDGLVFRYHUHGE\6HHEHFNHWDO
7KHUPRPDJQHWLVPXVSXEOLVKHGLQWKH%LEOLRWKqTXHXQLYHUVHOOHZKLFKPD\KDYHLQWURGXFHG
WKHWHUPWRWKH)UHQFKVSHDNLQJZRUOG<HOLQKDYLQJWKXVEHHQOHGWRFRQVLGHUWKHUXSWXUH
RIWKHHTXLOLEULXPRIWHPSHUDWXUHDVWKHSULQFLSDOFDXVHRIWKHHOHFWURPDJQHWLFDFWLRQRI
6HHEHFNVFLUFXLWGHWHUPLQHGWRWU\WKHHIIHFWRIWKLVUXSWXUHRQDFLUFXLWRURQDSLHFHRID
VLQJOHPHWDO+DYLQJHYHQWKHQREWDLQHGYHU\SURQRXQFHGHIIHFWVKHWKRXJKWLWQHFHVVDU\
WRGHVLJQDWHWKLVFODVVRISKHQRPHQDE\WKHQDPHWKHUPRPDJQHWLVP<HOLQI5
,QDOHWWHURI0D\WR*LOEHUWLQIRUPLQJKLPWKDWKHZRXOGVRRQUHFHLYH
DFRS\RIKLVSDSHURQWKHUPRPDJQHWLVPSUHVXPDEO\<HOLQE<HOLQUHSRUWHGKDYLQJ
MXVWUHFHLYHGWKH)HEUXDU\LVVXHRIWKH$QQDOHVGHFKLPLHFRQWDLQLQJUVWHGVVWDWHPHQWWKDW
KHOLNHZLVHDQGDVLWDSSHDUVHDUOLHUWKDQ,KDVIRXQGWKDWXQHTXDOKHDWLQJPDNHVDOO
PHWDOVLQWRHOHFWURPDJQHWV,UVWGLVFRYHUHGWKHSKHQRPHQDZLWKDVLPSOHFRSSHUDUFRQ
0DUFK<HOLQH6D\LQJLQHIIHFWWKDWDVHFRQGGLVFRYHUHULVVWLOODGLVFRYHUHU
<HOLQDVVHUWHGWKDWKHZRXOGFRQWLQXHWRUHJDUGDQGSUHVHQWKLPVHOIDVWKHGLVFRYHUHURIWKH
QHZSKHQRPHQDRIWKHUPRPDJQHWLVPZKLFKKHFKDUDFWHUL]HGDVYHU\LPSRUWDQWLQWKHLU
LPSOLFDWLRQVIRUJHRJHQ\DQGFU\VWDOIRUPDWLRQLELG
3IDIIFIYLL
7UDLOO
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
7UDLOOPD\KDYHEHHQLQXHQFHGE\WKHIDFWWKDWZKDWRQHREVHUYHGZDVDOZD\VWKH
PDJQHWLFDFWLRQRIDSDUWLFXODUDUUDQJHPHQW8QIRUWXQDWHO\KHFLWHGQRVRXUFHV
DQGLWUHPDLQVXQFOHDUZKHUHKHGHULYHG<HOLQVWHUPLQRORJ\IURPLIQRWIURPRQH
RI<HOLQV*HUPDQSXEOLFDWLRQV
,QWHUSUHWDWLRQVLQX[
,Q (QJODQG -DPHV &XPPLQJ SURIHVVRU RI FKHPLVWU\ DW &DP
EULGJHZDVDPRQJWKHUVWWRUHSHDWDQGH[WHQGWKHOLQHRIUHVHDUFKRSHQHGXSE\
6HHEHFNZKRVHZRUNKHVHHPVWRKDYHOHDUQHGRIHDUO\LQIURPWKHUHSULQWLQJ
RI7KRPDV7KRPVRQVVKRUWQRWLFHLQWKH4XDUWHUO\MRXUQDORIVFLHQFH-DQXDU\RU
3KLORVRSKLFDOPDJD]LQH)HEUXDU\7KHSDSHU&XPPLQJUHDGEHIRUHWKH&DP
EULGJH3KLORVRSKLFDO6RFLHW\RQ$SULOHQWLWOHG2QWKHGHYHORSPHQWRI
HOHFWURPDJQHWLVPE\KHDWUHYHDOHGWKHXQFHUWDLQW\RIKLVXQGHUVWDQGLQJRIZKDW
WKHQHZSKHQRPHQDZHUHHVVHQWLDOO\DERXW+HRSHQHGWKHSDSHUZLWKDQDQDORJ\
QRRQHHOVHLQYRNHG
7KHSURSHUW\ZKLFKWKH7RXUPDOLQHDQGDIHZRIWKHFU\VWDOOL]HGJHPVSRVVHVVRI
H[KLELWLQJWKHRSSRVLWHHOHFWULFLWLHVE\WKHDFWLRQRIKHDWDORQHKLVKLWKHUWREHHQ
FRQVLGHUHGDVSHFXOLDUWRWKRVHERGLHVEXWDUHFHQWH[SHULPHQWE\'U6HHEHFN
RI%HUOLQKDVSURYHGWKDWWKLVSRZHUVRIDUIURPEHLQJFRQQHGWRQRQFRQGXF
WRUVDVIURPDQDORJ\PLJKWKDYHEHHQVXVSHFWHGLVSRVVHVVHGE\RQHDWOHDVW
DPRQJVWDFODVVRIVXEVWDQFHVZKLFKDUHFRPSDUDWLYHO\SHUIHFWFRQGXFWRUVERWK
RIKHDWDQGHOHFWULFLW\
+HGLGQRWMXVWLI\WKHDSSURSULDWHQHVVRIDVVLJQLQJERWKWKHWKHUPDOH[FLWDWLRQRI
VWDWLFHOHFWULFLW\LQFU\VWDOVDQGWKHWKHUPDOH[FLWDWLRQRIHOHFWURPDJQHWLVPLQ
PHWDOVWRWKHVDPHSRZHU
)RUWKHPRVWSDUWZKDW&XPPLQJLQYHVWLJDWHGZDVLQKLVWHUPVWKHGHYHORS
PHQW RI HOHFWURPDJQHWLVP LQ PHWDOOLF FRQGXFWRUV E\ KHDWHOHFWURPDJQHWLVP
2IRQHDUUDQJHPHQWKHZURWH+HQFHWKHPDJQHWLFSRZHURIVXFKDFRPELQDWLRQH[WHQGV
WRVRPHGLVWDQFHIURPLWVVXUIDFHOLNHWKHPDJQHWLVPRIDFRPPRQPDJQHW7UDLOO
,QDQRWKHUFDVHWKHGHYLDWLRQRIWKHPDJQHWLFQHHGOHZDVVHHQDVVKRZLQJDVWURQJ
PDJQHWLFLQWHQVLW\RIWKHFRSSHUELVPXWKFLUFXLW(YHQDQDW\SLFDOXVHRIWKHUPR
HOHFWULF VXSSRUWV WKLV KXQFK $OO WKH SKHQRPHQD WHQG WR VKHZ WKDW D WKHUPRHOHFWULF
DSSDUDWXVEHFRPHVDUHDOPDJQHW7UDLOO+HQHYHUWKHOHVVIDYRUHG$PSqUHV
WKHRU\RIPDJQHWLVPEHLQJSURGXFHGE\HOHFWULFFXUUHQWVLELG
1HLWKHU&XPPLQJGQRU<HOLQIRUWKH)UHQFKDQG(QJOLVKUHQGHULQJV
RI<HOLQVUVWWKHUPRPDJQHWLVPSDSHUKDGDSSHDUHGDVRI1RYHPEHUWKHGDWH
RI7UDLOOVUVWSDSHU
7KHZRUGLQJRIWKHGHVFULSWLRQRI6HHEHFNVIXQGDPHQWDOH[SHULPHQWWKDWKHTXRWHV
ZLWKRXWJLYLQJDVRXUFHLQ&XPPLQJFLVLGHQWLFDOWRWKDWRI77KRPVRQDDQG
EWKHVHWKUHHGLIIHUIURP77KRPVRQLQKDYLQJKDOIDQLQFKWKLFNZKHUHWKH
ODWWHUKDVKDOIDQLQFKVTXDUH6HHWKHSDVVDJHTXRWHGDERYHDWQRWH
&XPPLQJF
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
UHYHDOHGDVUVWHGVKRZHGIRUJDOYDQLFFLUFXLWVE\WKHGHHFWLRQRIDPDJQHWLF
QHHGOH$WWKHVDPHWLPHKHRFFDVLRQDOO\VSRNHLQWHUPVFRPPRQWRWKHGD\RI
WKHFXUUHQWLQWKHQRWDEO\SUH6HHEHFNLDQJDOYDQLFFLUFXLWHYHQDVKLVWDFLW
SKHQRPHQRORJLFDOGLIGHQFHOHGKLPWRZULWHLQWHUPVRIWKHFXUUHQWRIHOHFWULFLW\
LIWKHUHEHVXFKDFXUUHQWLQWKHEDURIPHWDODQGWKHZLUHFRQQHFWLQJLWVHQGV
DQG RI WKH HOHFWULFLW\ RU UDWKHU HOHFWURPDJQHWLVP H[KLELWHG E\ ERWK EDU DQG
ZLUH &XPPLQJV H[SHULPHQWV LQFOXGHG PRVW LPSRUWDQWO\ WKRVH LQ ZKLFK DQ
HOHFWURPDJQHWLFDFWLRQZDVSURGXFHGE\KHDWLQJDURGZLUHDUUDQJHPHQWFRPSRVHG
RIDVLQJOHNLQGRIPHWDOIURPZKLFKKHFRQFOXGHGWKDWWKHK\SRWKHVLVRIHOHF
WULFLW\EHLQJH[FLWHGE\WKHFRQWDFWRIGLVVLPLODUPHWDOVLVZKDWHYHUSODXVLELOLW\
LWPD\SRVVHVVLQRWKHUFLUFXPVWDQFHVLQDSSOLFDEOHWRWKHFDVHRILWVGHYHORSPHQW
E\KHDW8QHTXDOKHDWLQJRIW\SLFDOO\DPHWDOEDUDQGQRWWKHKHDWLQJRID
PHWDOOLFMXQFWLRQZDVWKHNH\IDFWRU,QRWKHUZRUGVWKHQHZSKHQRPHQDUHVLVWHG
DVVLPLODWLRQWRWKRVHXVXDOO\DVFULEHGWRHOHFWULFLW\SURGXFHGE\FRQWDFWEHWWHUWR
VWD\ZLWKWKHH[SHULPHQWDOO\ZDUUDQWHGFRQFOXVLRQWKDWLQDOOWKHSHUIHFWFRQGXF
WRUVRIHOHFWULFLW\HOHFWURPDJQHWLVPPD\EHH[FLWHGE\WKHXQHTXDOGLVWULEXWLRQ
RIKHDW)RUWKHUHVW&XPPLQJVSDSHUFRQWDLQHGQRUHHFWLRQVRQLVVXHVRI
WHUPLQRORJ\RURQWRORJ\
%\-XO\&XPPLQJKDGUHFRQFHSWXDOL]HGWKHSKHQRPHQDKHZDVVWXG\LQJ
HYHQDVKHFRQWLQXHGWRDYRLGPDNLQJDQH[SOLFLWLVVXHRIWKDWUHFRQFHSWXDOL]DWLRQ
+HQRZFKDUDFWHUL]HGWKHHIIHFWVKHZDVVWXG\LQJQRWDVHOHFWURPDJQHWLFEXWDV
WKHUPRHOHFWULFKLVJRDOQRZZDVWRDUUDQJHPHWDOVLQDVLQJOHWKHUPRHOHFWULF
VHULHV GLIIHUHQW IURP HLWKHU WKH YROWDLF VHULHV RU WKH RUGHU RI FRQGXFWRUV RI
HOHFWULFLW\DQGKHDW1HLWKHUFLWLQJDVRXUFHIRUWKHQHZWHUPVQRUGLVFXVVLQJ
WKHLUVLJQLFDQFHKHXVHGERWKWKHUPRHOHFWULFDQGWKHUPRHOHFWULFLW\UHSHDWHGO\
DQGPDWWHURIIDFWO\ERWKLQWKLVDQGLQVXEVHTXHQWSDSHUV+HPD\KDYHEHHQ
&XPPLQJF,QRQHSODFHKHVSRNHFXULRXVO\RIWKHDJHQF\RIKHDW
LQH[FLWLQJWKHPDJQHWLFHOHFWULFLW\,QFORVLQJKLVSDSHUZLWKDTXHU\FRQFHUQLQJWKH
UHOHYDQFHRIWKHQHZSKHQRPHQDWRWKHREVHUYHGGLXUQDOYDULDWLRQVLQWKHHDUWKVPDJQHWLVP
KHVXPPDUL]HGKLVQGLQJVE\VD\LQJWKDW>P@DJQHWLVPDQGWKDWWRDFRQVLGHUDEOHH[WHQW
LW DSSHDUV LV H[FLWHG E\ WKH XQHTXDO GLVWULEXWLRQ RI KHDW DPRQJVW PHWDOOLF DQG SRVVLEO\
DPRQJVWRWKHUERGLHV
&XPPLQJFUHVS
&XPPLQJF
&XPPLQJF$VKRUWSDSHUKHZURWHODWHUWKDWPRQWKHFKRHGWKHSKHQRPHQR
ORJLFDOWRQHRIWKHRULJLQDOPHPRLU$OOWKHPHWDOVQRWH[FHSWLQJXLGPHUFXU\SURGXFHGD
GHYLDWLRQRIWKHPDJQHWLFQHHGOHRIDJDOYDQRVFRSHSURYLGHGWKHH[WUHPLWLHVRIWKHPHWDOOLF
EDUVHPSOR\HGZHUHDWGLIIHUHQWWHPSHUDWXUHV&XPPLQJD5E+H
ZDVXQDEOHWRGUDZDQ\FRQFOXVLRQVIURPDFRPSDULVRQRIWKHHOHFWURPDJQHWLFHIIHFWVDV
SURGXFHGE\KHDWDQGE\WKHXVXDOSURFHVVE]Z
&XPPLQJE5E
)RUODWHUH[DPSOHVRIKLVXVDJHVHH&XPPLQJFGD5
E,QWKHVHFRQGRIWKHVHDOHWWHURI1RYHPEHUWR7KRPDV7KRPVRQ
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
WKHUVWWRHPSOR\WKHQRXQWKHUPRHOHFWULFLW\LQDQ\ODQJXDJH7KHXQH[DPLQHG
PDWWHURIIDFWQHVVRI&XPPLQJVODQJXDJHLQKLVODWHUSDSHUVOHQWWKHFRQFHSWRI
WKHUPRHOHFWULFLW\WKHJLYHQQHVVRIDQREMHFWLYHUHDGLQJRIWKHSKHQRPHQD
7KH UVW DQG PRVW LPSRUWDQW )UHQFKPDQ WR MRLQ WKLV FRQYHUVDWLRQ ZDV WKH
SUROLF$QWRLQH&pVDU %HFTXHUHO ZKR ORQJ DYRLGHG WKH ODQJXDJH
RIWKHUPRHOHFWULFLW\WKDWUVWHGKDGLQWURGXFHGDIHZPRQWKVEHIRUH%HFTXHUHO
EHJDQKLVRZQUHVHDUFKHV7KDW%HFTXHUHOVFKLHILQWHUHVWLQWKHQHZSKHQRPHQD
GHULYHGIURPLWVUHOHYDQFHWRWKHODUJHUTXHVWLRQRISRVVLEOHFRQQHFWLRQVDPRQJ
WKHLPSRQGHUDEOHXLGVLVFOHDUIURPWKHRSHQLQJVHQWHQFHVRIKLVUVWSDSHU
LQWKLVDUHDUHDGDWWKH$FDGHP\RQ-XQH:KHQRQHVHHVPDJQHWLVP
KHDW>OHFDORULTXH@DQGOLJKWEHLQJSURGXFHGDWWKHVDPHWLPHDVHOHFWULFLW\RQH
LVOHGWREHOLHYHWKDWDOOWKHVHHIIHFWVDUHGXHWRRQHDQGWKHVDPHFDXVHGLYHUVHO\
PRGLHG7KLVGRFWULQHKDVDOUHDG\EHHQWDFLWO\DFFHSWHGE\DQXPEHURIVDYDQWV
RWKHUVSURIHVVLWSXEOLFO\EXWWKHIDFWVZKLFKVHUYHWRHVWDEOLVKLWDUHSHUKDSVQRW
\HWFRQFOXVLYHHQRXJKIRUXVWRFRQVLGHULWDVDGHPRQVWUDWHGWUXWK+HKLPVHOI
KDGEHJXQWRLQYHVWLJDWHZKHWKHUDUXSWXUHLQWKHVWDWHRIHTXLOLEULXPRIHOHFWULFLW\
FRXOGEHSURGXFHGZKHQMXVWPROWHQPHWDOZDVEURXJKWLQWRFRQWDFWZLWKPHWDODW
RUGLQDU\WHPSHUDWXUHV+HH[SHFWHGWRREVHUYHWKLVSKHQRPHQDLQDFFRUGDQFH
ZLWKKLVEHOLHIWKDWDSSUHFLDEOHHOHFWULFDOHIIHFWVRFFXUZKHQVXEVWDQFHVDUHDWWKH
&XPPLQJUHIHUUHGWRWKHURWDWLRQRIZLUHVE\WKHUPRHOHFWULFLW\ZKLOHWKHWLWOHSUHVXPDEO\
JLYHQE\7KRPVRQVSRNHRIWKHUPRPDJQHWLFURWDWLRQDWHUPWKHDXWKRUGLGQRWXVH
.lPW]V*HUPDQWUDQVODWLRQSXWWKHZRUGVWKHUPRPDJQHWLVFKH5RWDWLRQLQWR&XPPLQJV
WH[WZKHUHWKHDXWKRUKDGZULWWHQWKHURWDWLRQRIZLUHVE\WKHUPRHOHFWULFLW\&XPPLQJ
E3HWHU%DUORZTXLFNO\IROORZHG&XPPLQJVXVDJHLQDQH[SHUL
PHQWDOSDSHUVLPLODUO\EHUHIWRIDQ\WKHRUHWLFDORUWHUPLQRORJLFDOGLVFXVVLRQ%DUORZ
6RPHWLPHVKRUWO\WKHUHDIWHU%DUORZZURQJO\FODLPHGWKDW&XPPLQJKDGGLVWLQJXLVKHG
EHWZHHQ7KHUPR(OHFWULF0DJQHWLVPDQG+\>G@UR(OHFWULF0DJQHWLVP%DUORZ
+HDOVRVSRNHWKHUHRI6HHEHFNVKDYLQJGLVFRYHUHGDGLIIHUHQWSURFHVVIRUH[FLWLQJWKH
HOHFWURPDJQHWLFSRZHUDIHZSDJHVODWHUXQGHUWKHKHDGLQJ7KHUPR(OHFWULF0DJQHWLVP
>VLF@RI6HHEHFNVGLVFRYHU\WKDWDQHOHFWULFFLUFXLWPD\EHHVWDEOLVKHGLQPHWDOVZLWKRXW
WKHLQWHUSRVLWLRQRIDQ\OLTXLGZKHUHE\DQHOHFWULFFXUUHQWLVHVWDEOLVKHG%DUORZ
UHSRUWHGNQRZLQJRI6HHEHFNVZRUNRQO\WKURXJK%HHNHWDO7KHSXEOLFDWLRQ
RI6HHEHFNVPHPRLULQODWHDQGHDUO\DQGRQO\LQ*HUPDQDQGWKHGDWLQJRI
-):+HUVFKHO>@SXEOLVKHGLQWKHVDPHYROXPHRIWKH(QF\FORSGLDPHWURSROL
WDQDVXJJHVWWKDW%DUORZVSLHFHZDVSUREDEO\ZULWWHQFD
%HFTXHUHODERWKTXRWHV%HFTXHUHOZDVSUREDEO\LQXHQFHGE\$PSqUH
ZLWKUHJDUGWRDEHOLHILQWKHLQWHUFRQQHFWHGQHVVRIWKHWUDGLWLRQDOLPSRQGHUDEOHXLGVVHH
&DQHYDIRUWKLVEDFNJURXQG+HDOVRLPSOLFLWO\DGRSWHG$PSqUHVFRQFHSWLRQRIWKH
HOHFWULFFXUUHQWDVDVHULHVRIGHFRPSRVLWLRQVDQGUHFRPELQDWLRQVRIDQHOHFWULFXLG
FI%HTXHUHO RQ$PSqUHVYLHZVVHH&DQHYD
Q
%HFTXHUHODTXRWHRQ,QHDUOLHUZRUNFLWHGKHUHRQ%HFTXHUHO
KDGLQYHVWLJDWHGWKHGHYHORSPHQWRIHOHFWULFLW\E\SUHVVXUH
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
SRLQWRIFRPELQDWLRQDQGKLVDFFHSWDQFHRIWKHFRPPRQEHOLHIWKDWFKHPLFDODF
WLRQVDUHGXHWRWKHDFWLRQRIHOHFWULFDOIRUFHV
%HFTXHUHOWKXVSURSRVHGWRLQYHVWLJDWHKRZWKHPDQLIHVWDWLRQVRIHOHFWULFLW\
DQGPDJQHWLVPDUHPRGLHGE\WKHDFWLRQRIKHDWLQSDUWLFXODUZKHWKHUHOHYDWHG
WHPSHUDWXUHV SURGXFH DSSUHFLDEOH HOHFWULFDO HIIHFWV LQ PHWDOV 7KH 6HHEHFN KH
H[SOLFLWO\IROORZHGZDVWKH6HHEHFNZKRVHZRUNKDGEHHQVXEWO\UHLQWHUSUHWHGE\
RWKHUVHVSHFLDOO\UVWHG,ZLOOQRZH[DPLQHWKHDFWLRQRIDQHOHYDWHGWHPSHUD
WXUHRQWKHGHYHORSPHQWRIHOHFWULFLW\LQPHWDOOLFVXEVWDQFHV6HHEHFNPHPEHU
RI WKH$FDGHP\ RI %HUOLQ KDV DOUHDG\ PXFK RFFXSLHG KLPVHOI ZLWK UHVHDUFKHV
RQWKHLQXHQFHRIKHDWRQWKHGHYHORSPHQWRIHOHFWULFLW\E\FRQWDFW7KLVVDYDQW
KDVGLVFRYHUHGWKDWRQHFRXOGHVWDEOLVKDQHOHFWULFFLUFXLWLQPHWDOVZLWKRXWWKH
LQWHUSRVLWLRQRIDQ\OLTXLG7KURXJKRXWWKHSDSHU%HFTXHUHOVSRNHIUHTXHQWO\
DQGPDWWHURIIDFWO\DERXWWKHHOHFWULFFXUUHQWLQWKHFLUFXLWDQGDOWKRXJKKH
PHDVXUHGWKHFXUUHQWVVWUHQJWKE\WKHGHHFWLRQRIDPDJQHWLFQHHGOHVXVSHQGHG
IURPDWRUVLRQEDODQFHLQWKHFRLOVRIDPXOWLSOLHUKHQRZKHUHVSRNHLQWHUPVRI
DPDJQHWLFRUHOHFWURPDJQHWLFDFWLRQ7KLVWHUPLQRORJLFDODEVWLQHQFHPD\KDYH
VWHPPHG IURP KLV DFFHSWDQFH RI$PSqUHV UHGXFWLRQ RI PDJQHWLVP WR FLUFXODU
HOHFWULFFXUUHQWVZKLFKKHPHQWLRQHGLQFRQQHFWLRQZLWKDSDVVLQJVSHFXODWLRQ
DERXWWKHSURGXFWLRQRIHOHFWULFFXUUHQWVLQWKHJOREHUHVXOWLQJIURPWHPSHUDWXUH
GLIIHUHQFHVEHWZHHQVXFFHVVLYHVWUDWD
%HFTXHUHOH[WHQGHG6HHEHFNVQGLQJVE\GHPRQVWUDWLQJWKDWDQHOHFWULFFXUUHQW
FDQEHREWDLQHGXVLQJDFLUFXLWFRPSRVHGRIDVLQJOHPHWDOZKHWKHUFU\VWDOOL]HG
RUQRWZKHUHDV6HHEHFNDVUHSRUWHGE\UVWHGKDGVXFFHHGHGRQO\ZLWKPHWDOV
RIPDUNHGO\FU\VWDOOLQHWH[WXUH,QDODWHUZRUNKHFRQWLQXHGKLVH[SHULPHQWV
GHVLJQHGWRGLVFRYHUWKHODZVJRYHUQLQJWKHUHODWLRQVKLSEHWZHHQKHDWLQJDQGWKH
HOHFWULFFXUUHQWSURGXFHGRUDVKHSXWLWQRZDGRSWLQJ$PSqUHVODQJXDJHWKH
LQWHQVLW\RIWKHHOHFWURG\QDPLFIRUFHSURGXFHGE\DQHOHFWULFFXUUHQWWKDWWUDYHUVHV
%HFTXHUHOD)RUFLUFXLWpOHFWULTXHWKH*HUPDQWUDQVODWLRQKDGHOHNWULVFKHU
6WURP%HFTXHUHOF
%HFTXHUHOD
%HFTXHUHODUVWHGD D7KHHGLWRUVSUpFLVRI<HOLQV
7KHUPRPDJQHWLVPXVLQWKH%LEOLRWKqTXHXQLYHUVHOOHEHJDQE\QRWLQJWKDW>W@KHH[SHULPHQWV
UHSRUWHGLQ<HOLQVSDSHUZHUHPDGHRQWKHVDPHRFFDVLRQDQGDWDOPRVWWKHVDPHWLPHDV
WKRVHWKDWPDNHXSWKHVXEMHFWRIWKHSDSHUE\%HFTXHUHOLQVHUWHGLQWKH$QQDOHVGHFKLPLH
HWGHSK\VLTXHLVVXHIRU-XQHS%RWKSK\VLFLVWVZHUHOHGE\WKHGLVFRYHU\RIWKH
WKHUPRHOHFWULFFLUFXLWE\6HHEHFNWRWU\WKHHIIHFWRIRQO\DGLIIHUHQFHLQWHPSHUDWXUHIRU
GHYHORSLQJDQHOHFWURPDJQHWLFDFWLRQLQDVLQJOHPHWDO<HOLQI:LWKDQLFHU
FRQFHUQIRUSULRULWLHV6FKZHLJJHUQRWHGWKDW<HOLQKDGDQQRXQFHGKLVGLVFRYHU\DPRQWK
HDUOLHUWKDQ%HFTXHUHOZKRPKHFLWHGIURP%HFTXHUHOFDQG6FKZHLJJHULQ
UVWHG6LPLODUO\FRQFHUQHGZLWKKLVSULRULW\%HFTXHUHOSRLQWHGRXWLQKLVQH[W
SDSHUWKDWKHKDGFRPPXQLFDWHGKLVHDUOLHUSDSHUGXULQJWKHUVWGD\VRI0D\WRWKH%XUHDX
GHV/RQJLWXGHV%HFTXHUHOEFI%HFTXHUHOZKHUH6FKZHLJJHUVDLG
RQO\LQWKHPRQWKRI0D\
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
DPHWDOOLFFLUFXLW5HSHDWLQJLQKLVFRQFOXVLRQWKDWZKDWKHPHDVXUHGZDVWKH
LQWHQVLW\RIWKHHOHFWURG\QDPLFIRUFH%HFTXHUHOFRQWLQXHGWRSODFHWKHQHZSKH
QRPHQDZLWKLQWKHEURDGFRQWH[WRIHOHFWULFLW\LHHOHFWULFFXUUHQWVJHQHUDWHGE\
DQ\WKLQJWKDWGLVWXUEVWKHHOHFWULFDORUHOHFWURFKHPLFDOHTXLOLEULXP2QO\ODWHLQ
WKHGHFDGHGLGKHEHJLQWRVSHDNRIWKHWKHUPRHOHFWULFFXUUHQWVDQGWKHUPRHOHF
WULFSKHQRPHQDGLVFRYHUHGE\6HHEHFNLQWDFLWUHFRJQLWLRQRIWKHWHUPLQRORJLFDO
FRQVHQVXVGHYHORSLQJLQ)UDQFH,QKLVWUDLWpVRIWKHVDQGV%HFTXHUHO
UHSRUWHGLQZKROO\FRQYHQWLRQDOIDVKLRQWKDW6HHEHFNKDGGLVFRYHUHGWKHE\WKHQ
ZHOOHVWDEOLVKHGWKHUPRHOHFWULFSKHQRPHQDLQSDUWLFXODUKRZWRSURGXFHDQHOHFWULF
FXUUHQWE\PHDQVRIDWHPSHUDWXUHGLIIHUHQFHLQDELPHWDOOLFULQJ
7KLVEULHIH[FXUVXVLQWR%HFTXHUHOVZRUNRIDQGEH\RQGLQGLFDWHVWKH
JHQHUDOWXUQWKDWWKHFKDUDFWHUL]DWLRQRIWKHVHSKHQRPHQDHYHQWXDOO\ZRXOGWDNH$V
RIKRZHYHUWKHUHZDVVWLOOQRWHUPLQRORJLFDORUFRQFHSWXDOFRQVHQVXVDURXQG
WKHP:HUHWKH\WREHGHVFULEHGVLPSO\DQGJHQHULFDOO\DVHOHFWURPDJQHWLFLQWKH
PRUHSKHQRPHQRORJLFDOVHQVHWKDWUVWHGKDGLQWHQGHGZLWKLWVFRLQDJHRUSHU
KDSVPRUHVSHFLFDOO\DVWKHUPHOHFWURPDJQHWLFDV<HOLQSURSRVHG"2UZHUHWKH\
UDWKHUEHWWHUFKDUDFWHUL]HGDVWKHUPRHOHFWULFDVUVWHGFRQGHQWO\XUJHG"2WKHUV
EURDGHQHGWKHDSSOLFDWLRQRI<HOLQVPRUHUHVWULFWHGFRQFHSWRIWKHUPRPDJQHWLVP
WRFRYHUWKHVDPHHOGDVWKHUPRHOHFWULFLW\7KHVXEVWDQWLYHIRUPVZHUHEHFRPLQJ
PRUHFRPPRQWKDQWKHLQLWLDODGMHFWLYDOIRUPVWKHUPRPDJQHWLFDQGHVSHFLDOO\
WKHUPRHOHFWULF%HKLQGVXFKWHUPLQRORJLFDOPDWWHUVOD\XQFHUWDLQW\RYHUZKHWKHU
WKHSKHQRPHQDZHUHIXQGDPHQWDOO\HOHFWULFRUPDJQHWLFZKHWKHUPDJQHWLVPFRXOG
EHUHGXFHGWRHOHFWULFLW\DV$PSqUHVDLGDQGZKHWKHUDQGZKHUHRQHFRXOGVSHDN
RIDQHOHFWULFFXUUHQW1RUZHUHPDWWHUVEURXJKWFORVHUWRVHWWOHPHQWZKHQ6HHEHFNV
ORQJPHPRLUQDOO\PDGHLWVDSSHDUDQFHWRZDUGWKHHQGRI
6HHEHFNVEHODWHGLQSXW
7KHGLVFRYHU\6HHEHFNDQQRXQFHGLQWKHWLWOHRIKLVPHPRLUZDVWKH0DJQHWLF
SRODUL]DWLRQRIPHWDOVDQGDOOR\VE\PHDQVRIWHPSHUDWXUHGLIIHUHQFH,QUHSHDW
%HFTXHUHO
%HFTXHUHO
%HFTXHUHO &I3RXLOOHWSW
2QHFDOOVWKHUPRHOHFWULFSKHQRPHQDWKRVHWKDWUHVXOWIURPHOHFWULFFXUUHQWVWKDW
RQHFDQH[FLWHLQPHWDOVE\YDULDWLRQVLQWHPSHUDWXUHDORQH'U6HHEHFNGHPRQVWUDWHGWKH
H[LVWHQFHRIWKHVHFXUUHQWVLQWKH\HDU
%HFTXHUHO
,QSXEOLVKLQJORQJH[WUDFWVIURP6HHEHFNVSDSHUEHJLQQLQJLQWKH-DQXDU\LVVXH
RIWKH$QQDOHQGHU3K\VLNXQG&KHPLH3RJJHQGRUIIQRWHGDIWHUWKHWLWOHWKDWLWKDGMXVW
DSSHDUHG6HHEHFND
$V6HHEHFNH[SODLQHGWKHSXEOLVKHGSDSHUZDVDQH[WUDFWIURPIRXUOHFWXUHVGHOLYHUHG
DWWKH$FDGHP\RI6FLHQFHVLQ%HUOLQRQ$XJXVWDQG2FWREHUDQG
)HEUXDU\SOXVODWHUDGGLWLRQVLQWKHIRUPRIIRRWQRWHVDQGDQDGGHQGXP6HHEHFN
D E7KLVFODULFDWLRQLVRPLWWHGIURP6HHEHFND
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
LQJUVWHGVH[SHULPHQWVZLWKWKHLQWHQWLRQRILQYHVWLJDWLQJWKHPXWXDOUHODWLRQ
VKLSRIWKHHOHFWULFDOFKHPLFDODQGPDJQHWLFDFWLYLWLHVLQWKHJDOYDQLFFLUFXLW
6HHEHFNQRWLFHGWKDWQRWMXVWWKHDFWLRQDWWKHSRLQWRIFRQWDFWRIWKHPHWDOVZLWK
HDFKRWKHUEXWPXFKPRUHWKHLQHTXDOLW\RIWKHDFWLRQDWERWKSRLQWVRIFRQWDFWRI
WKHPHWDOVZLWKWKHPRLVWFRQGXFWRUGHWHUPLQHVWKHPDJQHWLFSRODUL]DWLRQRIWKH
ZKROHFORVHGFLUFXLW>.HWWH@DQGKHVXVSHFWHGWKDWDPDJQHWLFSRODUL]DWLRQFRXOG
EHSURGXFHGE\DQ\GLVSURSRUWLRQWDNLQJSODFHLQWKHVWDWHRIWKHSRLQWVRIFRQWDFW
RIWZRPHWDOVFRQQHFWHGWRHDFKRWKHULQDFLUFOH7KXVZDVLQLWLDWHGWKHVHULHV
RIH[SHULPHQWVKHSHUIRUPHGEHWZHHQWKHHQGRI-XO\DQGWKHEHJLQQLQJRI
)HEUXDU\+DYLQJFKRVHQELVPXWKDQGDQWLPRQ\IRUKLVUVWWULDOEHFDXVH
WKHLUEHKDYLRUZLWKFRSSHULQDYROWDLFSLOHZDVGHYLDQWDQGYDULDEOHKHQRWHGD
GHHFWLRQRIWKHPDJQHWLFQHHGOHZKHQKHKHOGVDPSOHVRIWKHWZRPHWDOVEHWZHHQ
KLVQJHUV7KURXJKIXUWKHUWULDOVKHUHDOL]HGWKDWQRWPRLVWXUHEXWKHDWZDVWKH
WUXHFDXVHRIWKHPDJQHWLVP6HHEHFNQH[WH[SHULPHQWHGZLWKDZLGHYDULHW\
RIZD\VRIDWWDFKLQJWKHPHWDOVWRHDFKRWKHUKHDWLQJWKHPDQGGLVSOD\LQJWKHLU
PDJQHWLVP)LJXUHUHSUHVHQWVKLVVFKHPDWLFGHSLFWLRQRIWKHEDVLFSKHQRPHQRQ
RIKHDWLQGXFHGPDJQHWLVP%UHSUHVHQWVDEDURIELVPXWK..DQDWWDFKHGFRSSHU
DUF61LQGLFDWHVWKHRULHQWDWLRQRIWKHVHWXSZLWKUHJDUGWRWKHHDUWKVSROHVVQ
WKHSRODULW\RIWKHPDJQHWLFQHHGOHDQG|VWOLQGLFDWHVWKDWZKHQKHDWLVDSSOLHG
DWEPDUNHGZDUPWKHQHHGOHHQFORVHGLQWKHFRSSHUDUFH[KLELWVDQHDVWHUO\
GHFOLQDWLRQ
6HHEHFNVXEVHTXHQWO\WULHGSDLUZLVHFRPELQDWLRQVRIWZHQW\HLJKWGLIIHUHQW
PHWDOVMRLQHGWRJHWKHUWRIRUPDULQJKHDWLQJRQHMXQFWLRQDQGQRWLQJWKHGLUHF
WLRQDQGURXJKVWUHQJWKRIWKHUHVXOWLQJPDJQHWLFSRODUL]DWLRQE\PHDQVRIWKH
GHHFWLRQRIDVXVSHQGHGPDJQHWLFQHHGH)URPWKHVHH[SHULPHQWVKHFRQFOXGHG
WKDWPHWDOVIRUPDSHFXOLDUPDJQHWLFVHULHVWKDWGRHVQRWFRUUHVSRQGWRDQ\RI
WKHNQRZQVHULHVGHULYHGIURPRWKHUSURSHUWLHVRIPHWDOV7KLVIDFWXQGHUOD\
KLVUHMHFWLRQRIWKHK\SRWKHVLVRIWKHLGHQWLW\RIHOHFWULFLW\DQGPDJQHWLVPDQGLQ
SDUWLFXODU$PSqUHVGHULYDWLRQRIPDJQHWLVPIURPWKHHOHFWULFLW\H[FLWHGDWWKH
FRQWDFWSRLQWRIWZRPHWDOV2QWKHEDVLVRIIXUWKHUH[SHULPHQWVKHDUJXHGWKDW
WKHPDJQHWLFSRODUL]DWLRQKHREVHUYHGFRXOGQRWGHULYHVROHO\IURPIUHHHOHFWULF
LW\VXFKDVFRXOGEHGHWHFWDEOHZLWKDQHOHFWURVFRSHDQGWKDWRQHZDVWKHUHIRUH
6HHEHFND E
6HHEHFND E
6HHEHFND E
6HHEHFNDVRPHZKDWFRQGHQVHGLQ6HHEHFND,ZDVQRWDEOH
WRFKHFNWKLVRUWKHQH[WUHIHUHQFHLQ6HHEHFNE
)LJXUHUHGUDZQIURP6HHEHFNDSO,,,JZKLFKZDVLWVHOIUHGUDZQIURP6HH
EHFNDSO,J3RJJHQGRUIIRPLWWHGWKHUVWRI6HHEHFNVRULJLQDOJXUHVSHUKDSV
EHFDXVHERWKLWDQG6HHEHFNVH[SODQDWLRQZHUHQRWHQWLUHO\FOHDU
6HHEHFND E
6HHEHFND E
6HHEHFND E6HHEHFNGLGQRWQDPH$PSqUHH[SOLFLWO\
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
D .
6% V Q 1
E .
RVWO
ZDUP
),*6HHEHFNVUHSUHVHQWDWLRQRIWKHWKHUPDOO\LQGXFHGPDJQHWLFSRODUL]DWLRQRID
FRSSHUELVPXWKFLUFXLWDVUHYHDOHGE\LWVDFWLRQRQDPDJQHWLFQHHGOH
QRWMXVWLHGLQFDOOLQJVXFKFLUFXLWVHOHFWURPDJQHWLFXQWLOWKHSUHVHQFHRIIUHHO\
FLUFXODWLQJ HOHFWULFLW\ FRXOG EH GHPRQVWUDWHG LQ WKHP 6LPLODUO\ KLV VSHFXOD
WLRQVFRQFHUQLQJWHUUHVWULDOPDJQHWLVPZHUHDOOLQWHUPVRIWKHGLUHFWH[FLWDWLRQRI
PDJQHWLVPE\YXOFDQLFDFWLRQRQVXEVWDQFHVLQWKHHDUWKZLWKQDU\DQRGWRZDUG
$PSqUHVWKHRU\RIWHUUHVWULDOHOHFWULFFXUUHQWV
6HHEHFNVDZLQWKHSKHQRPHQDWKHH[FLWDWLRQRIDPDJQHWLFSRODULW\RUPDJ
QHWLFSRODUL]DWLRQE\PHDQVRIDGLIIHUHQFHLQWHPSHUDWXUH5HFDOOKLVHDUOLHU
XQGHUVWDQGLQJRIUVWHGVHOHFWURPDJQHWLVPLQWHUPVRIDPDJQHWLFSRODUL]DWLRQ
SURGXFHGE\HOHFWULFLW\LQWKHFRQQHFWLQJZLUHRIDJDOYDQLFFLUFXLW(OHFWULFLW\DV
VXFKSOD\HGQRUROH1RWRQO\GLG6HHEHFNUHMHFWWKHODQJXDJHRIHOHFWURPDJQHWLVP
LQWKHRULJLQDOGUDIWRIKLVSDSHUKHGLGQRWHPSOR\WKHODQJXDJHRIWKHUPRPDJQHWLVP
WKDW<HOLQKDGLQWURGXFHGIRXUWHHQPRQWKVDIWHUWKHODVWRIWKHIRXUSUHVHQWDWLRQV
RQZKLFK6HHEHFNVPHPRLUZDVEDVHGWKDWRI)HEUXDU\$VDQRXQ
WKHUPRPDJQHWLVPRFFXUUHGRQO\RQFHLQDQDGGHGIRRWQRWHZKHUHKHXVHGLW
PDWWHURIIDFWO\ZLWKRXWDQ\GLVFXVVLRQRIWHUPLQRORJLFDOLVVXHV+HXVHGWKH
DGMHFWLYHWKHUPRPDJQHWLFIRXUWLPHVLQWKHSDJHPHPRLUDOOEXWRQFHLQ
IRRWQRWHVLQFRQQHFWLRQZLWKWKHDFWLRQRIPHWDOVSKHQRPHQDDQGH[SHULPHQWV
LQFOXGLQJ P\ WKHUPRPDJQHWLF H[SHULPHQWV 7KDW ZDV WKH H[WHQW WR ZKLFK
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
6HHEHFN DVVLPLODWHG KLV GLVFRYHU\ RI PDJQHWLF SRODUL]DWLRQ WR WKH ODQJXDJH RI
WKHUPRPDJQHWLVPLQWKLVKLVUVWDQGODVWSXEOLVKHGSDSHURQWKHVXEMHFW7R
PDQ\RIKLVFRQWHPSRUDULHVKRZHYHUHVSHFLDOO\DPRQJ*HUPDQVRIKLVJHQHUD
WLRQWKDWZDVZKDW6HHEHFNZDVFUHGLWHGZLWKKDYLQJGLVFRYHUHGXQWLOZHOOLQWR
WKH V 3RJJHQGRUII OLQNHG WKHUPRPDJQHWLVP DQG WKH DSSURSULDWHQHVV RI
VRGHVLJQDWLQJWKHSKHQRPHQDWRDUHMHFWLRQRI$PSqUHVHOHFWURG\QDPLFWKHRU\
RI PDJQHWLVP D WKHRU\ FRPPRQO\ FKDUDFWHUL]HG DV DVVHUWLQJ WKH LGHQWLW\ RI
HOHFWULFLW\DQGPDJQHWLVP7KHSKHQRPHQDUHPDLQHGVXEMHFWHGWRDGLYHUVLW\RI
LQWHUSUHWDWLRQVIRUDJRRGIWHHQ\HDUVDIWHU
+DYLQJIRUVRPH\HDUVEHHQLQWHUHVWHGLQWKHGLXUQDOYDULDWLRQVRIPDJQHWLF
QHHGOHVGXHWRWKHLQXHQFHRIWHPSHUDWXUHDQGKDYLQJFRQFOXGHGWKDWWKRVHYDULD
WLRQVDSSHDUHGWREHUHODWHGWRWKHSRVLWLRQRIWKHVXQZLWKUHJDUGWRWKHPDJQHWLF
PHULGLDQ6DPXHO+XQWHU&KULVWLHSURIHVVRURIPDWKHPDWLFVDWWKH
5R\DO0LOLWDU\$FDGHP\LQ:RROZLFKZDVSULPHGWRLQWHUSUHW6HHEHFNVQG
LQJV DV UHODWLQJ HVVHQWLDOO\ WR WKH SURGXFWLRQ RI PDJQHWLVP +DYLQJ WDNHQ WKH
YLHZ RI WKH VXEMHFW SUHYLRXVO\ WR P\ EHLQJ DZDUH RI 'U 6HHEHFNV GLVFRYHU\
WKDWPDJQHWLFDOSKQRPHQDZLOODULVHIURPDGLVWXUEDQFHLQWKHHTXLOLEULXPRI
WHPSHUDWXUH P\ NQRZOHGJH RI WKDW GLVFRYHU\ DQG RI VXEVHTXHQW H[SHULPHQWV
SDUWLFXODUO\WKRVHRI3URIHVVRU&XPPLQJFRQUPHGPHLQWKHRSLQLRQWKDWWHP
SHUDWXUHPXVWKDYHDFRQVLGHUDEOHHIIHFWLQSURGXFLQJVRPHRIWKHSKQRPHQDRI
VHFRQGZDVRPLWWHGWKHIRXUWKUHPDLQHGLQDIRRWQRWH7KHWKLUGLQVWDQFHWKHUPRPDJQH
WLVFKH(UVFKHLQXQJHQRFFXUUHGLQWKHERG\RIWKHRULJLQDOSDSHUDVSULQWHGEXWDIWHUDGDVK
VXJJHVWLQJLWVODWHUDGGLWLRQLWZDVRPLWWHGIURPDLQDUHFDVWVHQWHQFH
,QIRXUVXEVHTXHQWXQSXEOLVKHGSDSHUVKRZHYHUUHDGDWWKH%HUOLQ$FDGHP\EHWZHHQ
)HEUXDU\DQG1RYHPEHUKHDSSHDUVWRKDYHZKROO\DGRSWHGWKHODQJXDJHRI
WKHUPRPDJQHWLVPVHH3RJJHQGRUII[[[YLLLIRUWLWOHVDQGGDWHV
7KHHGLWRUVLQWURGXFWLRQWRWKHUHSULQWLQJRIDVKRUWH[WUDFWIURP6HHEHFNVORQJVXP
PDU\PHPRLURIEHJDQE\UHIHUULQJWR6HHEHFNVLPSRUWDQWGLVFRYHU\RIWKHUPRPDJ
QHWLVP6HHEHFNE)UDQ]:LOKHOP6FKZHLJJHU6HLGHOKDGMRLQHGKLV
DGRSWLYHIDWKHUDVHGLWRUZLWKYROXPHLQ6HHDOVR+XPEROGW>@
IURPWKHUVWDQGVHFRQGOHFWXUHVGHOLYHUHGFDDQG'HFHPEHU0XQFNH
3IDII$OWKRXJK3RJJHQGRUIIUHFRJQL]HGWKDWE\WKHGHVLJQD
WLRQWKHUPRHOHFWULFKDGEHFRPHQRUPDOKHKLPVHOIVWLOOSUHIHUUHGWRLGHQWLI\6HHEHFNV
GLVFRYHU\DVWKHUPRPDJQHWLVP3RJJHQGRUII[[[LLL[[[YL[[[YLL
,QDIRRWQRWHWRWKH*HUPDQWUDQVODWLRQRI%HFTXHUHO3RJJHQGRUIIQRWHGZLWK
VDWLVIDFWLRQ6HHEHFNVREMHFWLRQWR$PSqUHVWKHRU\RIWKHLGHQWLW\RIHOHFWULFLW\DQGPDJ
QHWLVP%HFTXHUHOFLWLQJ6HHEHFND+HEHJDQWKHQRWHZLWK
WKH FRPPHQW WKDW >Z@KDW %HFTXHUHO KHUH FDOOV FRQWDFW HOHFWULFLW\ LV DV LV ZHOO NQRZQ
ZKDWZHFXVWRPDULO\FDOOWKHUPRPDJQHWLVP,QKLVRELWXDU\QRWLFHRQKLVFROOHDJXH
3RJJHQGRUII DJDLQ QRWHG 6HHEHFNV EHOLHI LQ WKH HVVHQWLDO GLVVLPLODULW\ JlQ]OLFKH9HU
VFKLHGHQKHLWRIHOHFWULFLW\DQGPDJQHWLVP[[[YL7RMXGJHIURPWKHWLWOHVRIKLV
XQSXEOLVKHGPHPRLUVRILWZRXOGDSSHDUWKDW6HHEHFNUHPDLQHGSUHRFFXSLHG
ZLWKWKLVLVVXHXQWLOWKH\HDUEHIRUHKLVGHDWK[[[YLLL
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
WHUUHVWULDOPDJQHWLVP&KULVWLHVRYHUULGLQJFRQFHUQZLWKWHUUHVWULDODQGPHWDOOLF
PDJQHWLVPDQGLQSDUWLFXODULWVUHODWLRQVKLSWRWHPSHUDWXUHELDVHGKLPWRVHH
LQWKHSKHQRPHQDGLVFRYHUHGE\6HHEHFNDFOHDUH[SUHVVLRQRIWKHSURGXFWLRQRI
PDJQHWLVPE\KHDWMXVWDVUVWHGVLQWHUSUHWDWLRQRIKLVHSRFKPDNLQJGLVFRYHU\
KDGELDVHGKLPWRZDUGVHHLQJLQWKHSKHQRPHQDGLVFRYHUHGE\6HHEHFNWKHFOHDU
H[SUHVVLRQRIDQHOHFWULFDOHIIHFW
2QHLVVXHRIFRQWLQXLQJVLJQLFDQFHDVQRWHGE\UVWHGLQLQDFFRXQW
LQJIRU6HHEHFNVGLVLQFOLQDWLRQWRFRQVLGHUWKHHIIHFWDVGXHWRDWUXHHOHFWULFFXU
UHQWZDVWKDWZHKDYHQRWKLWKHUWREHHQDEOHWRGLVFRYHULQWKLVFLUFXLWHLWKHUDQ\
FKHPLFDOHIIHFWQRUKHDWRUOLJKW$V%HUQDUG)LQQSRLQWHGRXW>L@WZDVQRWXQWLO
WKHODWHVWKDWWKHUPRHOHFWULFVSDUNVWKHUPRHOHFWULFUHVLVWDQFHKHDWLQJDQG
WKHUPRHOHFWULFGHFRPSRVLWLRQRIZDWHUKDGEHHQGHPRQVWUDWHGXQDPELJXRXVO\
<HWIHZLIDQ\UHVHDUFKHUVXOWLPDWHO\ZLWKKHOGDGRSWLRQRIWKHWKHUPRHOHFWULFH[
SODQDWLRQXQWLOVXFKSKHQRPHQDKDGEHHQGHPRQVWUDWHG
7KHURXJKURDGWRWKHUPRHOHFWULFFRQVHQVXV
7KH ZRUN RI *HRUJ 6LPRQ 2KP IURP WR QLFHO\ LO
OXVWUDWHVKRZWKLQNLQJZDVEHJLQQLQJWRFKDQJHDVWKHFHQWUDOSKHQRPHQDZHUH
LQFUHDVLQJO\UHJDUGHGDVHVVHQWLDOO\HOHFWULFDODQGWKHPDJQHWLFQHHGOHDVDQXQ
SUREOHPDWLFLQGLFDWRUQRWRIDQ\PDJQHWLFSRODUL]DWLRQRIWKHJDOYDQLFFLUFXLWEXW
RIWKHSUHVHQFHRIDQHOHFWULFFXUUHQWLQWKHFRQQHFWLQJZLUH2KPVUVWSDSHUVHW
LWVHOIWKHWDVNRIGHWHUPLQLQJWKHODZDFFRUGLQJWRZKLFKPHWDOVFRQGXFWFRQWDFW
HOHFWULFLW\+HVRXJKWDIXQFWLRQDOUHODWLRQVKLSEHWZHHQWKHOHQJWKRIWKHFRQ
QHFWLQJZLUHRIDFRQYHQWLRQDOJDOYDQLFFLUFXLWDQGWKHORVVRIIRUFH.UDIWYHUOXVW
DV PHDVXUHG E\ WKH GHHFWLRQ RI D PDJQHWLF QHHGOH WKDW RFFXUUHG DV WKH ZLUH
OHQJWKHQHG2QHRIWKHPRVWSUHVVLQJSUREOHPVKHIDFHGZDVWKHRSHUDWLRQRIWKH
PXOWLSOLHUZKRVHSRZHUHYHQWXDOO\GLPLQLVKHGDVWKHQXPEHURIFRLOVLQFUHDVHG
7KHSUHOLPLQDU\UHODWLRQVKLSKHIRXQGSURPLVHVDGHHSHULQVLJKWLQWRWKHQDWXUH
RI WKHUPRPDJQHWLVP 7KH GLIIHUHQFHV EHWZHHQ ZKDW UVWHG KDG FDOOHG WKH
&KULVWLH2QKLVHDUOLHUZRUNVHH&KULVWLH+HVXS
SRUWHGKLVYLHZRIWKHWKHUPRPDJQHWLFQDWXUHRIWKHSKHQRPHQDZLWKTXRWDWLRQVIURP
&XPPLQJFDQG7UDLOO&KULVWLHWKHIRUPHUSDUWO\TXRWHG
DERYHDWQRWH,Q&KULVWLHSXEOLVKHGWZRSDSHUVRQPDJQHWLVPDULVLQJLQPHWDOV
GXHWRURWDWLRQDQGLQDQGKHSXEOLVKHGWZRRQWKHPDJQHWLFLQXHQFHRIVRODU
UD\VDOOLQWKH3KLOWUDQV
&KULVWLHZDVJXDUGHGLQKLVH[SUHVVLRQRIVXSSRUWIRUDQ\WKHRUHWLFDO
H[SODQDWLRQRIWKHSKHQRPHQDKHKDGVWXGLHGEXWKLVLPSOLHGVXSSRUWIRUWKHUPRPDJQHWLVP
LVFOHDU
UVWHG D
)LQQ
2KPDIURPWKHWLWOH
2KPD 2KPGLGQRW\HWHPSOR\UVWHGVWHUPLQRORJ\QRUVXSSO\
DUHDVRQIRUWKHH[SHFWHGFODULFDWLRQ
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
WKHUPRHOHFWULFDQGK\GURHOHFWULFFLUFXLWVKDGORQJSX]]OHGUHVHDUFKHUVHVSHFLDOO\
WKHIDFWWKDWWKHPDJQHWLFDFWLRQRIWKHUPRHOHFWULFFLUFXLWVZDVGLPLQLVKHGE\WKH
LQWHUSRVLWLRQRIHYHQDIHZFRLOVRIZLUH2KPKDGGLIFXOW\ZLWKWKHYDULDELOLW\
RIWKHIRUFHPHDVXUHGE\WKHPDJQHWLFQHHGOHXQGHUFKDQJLQJFLUFXPVWDQFHV,Q
D IRRWQRWH 3RJJHQGRUII UHFRPPHQGHG WKDW 2KP UHSHDW KLV H[SHULPHQWV XVLQJ
WKHVRFDOOHGWKHUPRHOHFWULFFLUFXLWVLQFHLWVDFWLRQLVPXFKVWHDGLHUWKDQWKDWRI
WKHVRFDOOHGK\GURHOHFWULFFLUFXLW8SWRWKLVSRLQWZKDW2KPOLNH6HHEHFN
ZDVORRNLQJDWZDVWKHPDJQHWLFDFWLRQRIWKHJDOYDQLFFLUFXLWQRWDVODWHUWKH
VWUHQJWKRIWKHHOHFWULFFXUUHQW
$FNQRZOHGJLQJ3RJJHQGRUIIVVXJJHVWLRQLQKLVQH[WPDMRUSDSHU2KPHP
SOR\HGZKDWKHDWUVWFDOOHGWKHWKHUPRPDJQHWLFFLUFXLWLQRUGHUWRDYRLGWKH
VXUJLQJ>:RJHQ@RIWKHIRUFHDVLWRFFXUVLQWKHK\GURHOHFWULFFLUFXLW7KHQFH
IRUWKKRZHYHUKHZRXOGDOZD\VVSHDNLQWHUPVRIWKHWKHUPRDQGK\GURHOHFWUL
FDOFLUFXLWVWKHUVWRIZKLFKZDVIRUKLPVLPSO\WKHVRXUFHRIDVWHDG\HOHFWULF
FXUUHQWQRWDGHYLFHZKRVHRSHUDWLRQZDVDPDWWHURIFRQFHUQ1HYHUWKHOHVV
DOWKRXJKLQWKHUVWSDUDJUDSKRIWKHSDSHUKHZURWHRIKLVGHVLUHWRQGDODZWKDW
ZRXOGXQLI\DOOWKHSKHQRPHQDUHODWLYHWRWKHHOHFWULFFXUUHQWKHLQWURGXFHG
WKHTXDQWLW\;PHDVXUHGE\KLVIRUPXODE\FDOOLQJLWWKHVWUHQJWKRIWKHPDJQHWLF
HIIHFWDORQJWKHFRQGXFWRUODWHUWKHPDJQHWLFIRUFHRQO\RQFHWKHIRUFHRI
WKHHOHFWULFFXUUHQW2QO\JUDGXDOO\E\XQUHPDUNHGRQVWHSVGLG2KPFRPH
WRUHIHUKLVWKHRU\WRDQHOHFWULFFXUUHQWRQO\LQURXJKVWHSWKHUHZLWKGLGKHUHFRQ
FHSWXDOL]HWKHUPRPDJQHWLVPDVWKHUPRHOHFWULFLW\,QFORVLQJWKLVSDSHUKHQRWHG
WKDW6HHEHFNVLPSRUWDQWGLVFRYHU\DSSHDUVWRVSLQWKHWKUHDGWKDWOHDGVRXWRIWKH
ODE\ULQWKLQWRZKLFKWKHHOHFWULFFXUUHQWEUDQFKHVRXW
7HQPRQWKVODWHU2KPDQQRXQFHGDWWKHEHJLQQLQJRIKLVQH[WSDSHUWKDWKLV
H[SHULPHQWVKDGOHGKLPWRDWKHRU\RIWKHHOHFWULFFXUUHQWEDVHGRQWKHIDFW
RIWKHHOHFWULFWHQVLRQEHWZHHQKHWHURJHQHRXVERGLHVZKHUHE\KHVLJQDOHGKLV
DFFHSWDQFHRIWKHFRQWDFWWKHRU\RIHOHFWULFLW\1RZWKH;LQKLVQHZIRUPXOD
UHSUHVHQWHG XQDPELJXRXVO\ WKH VWUHQJWK RI WKH HOHFWULF FXUUHQW WKDW PDLQWDLQV
LWVHOIXQDOWHUDEO\DORQJWKHHQWLUHOHQJWKRIWKHFRQGXFWRU1RZWKHDSSDUDWXV
KHXVHGZDVXQDPELJXRXVO\WKHWKHUPRHOHFWULFFLUFXLW7KHIDFWWKDWKHWUHDWHG
WKHHOHFWULFFXUUHQWDVUHVXOWLQJIURPWKHHOHFWURVFRSLFIRUFHDULVLQJIURPWKH
ELPHWDOOLFFRQWDFWIXUWKHUVROLGLHGKLVUHFRQFHSWXDOL]DWLRQRIWKHQDWXUHRIWKH
DFWLRQH[HUWHGE\WKHFRQQHFWLQJZLUHIURPDSKHQRPHQRORJLFDOO\PDJQHWLFWR
2KPE
2KPF
2KPD
2KPD
2KPD UHVS
2KPD
2KPE
2KPE FIE]ZWKHVWUHQJWKRIWKHHOHFWULFFXUUHQW
2KPE
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
2KPE
2KPE
2KPE 7KHZRUNRI(UPDQ5LWWHUDQG-lJHULVGLVFXVVHGLQ
&DQHYDDZLWKFLWDWLRQRIWKHRULJLQDOVRXUFHVLQQRWH
2KP
)HFKQHU
)HFKQHU)RU)HFKQHUVDSSUHFLDWLRQIRU2KPVWKHRU\DQGKLVXVHRILWWR
FOHDUXSFRQIXVLRQDERXWWKHRSHUDWLRQRIYDULRXVO\FRQQHFWHGWKHUPRDQGK\GURHOHFWULF
FLUFXLWVVHH[
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
SURGXFHGE\DWHPSHUDWXUHGLIIHUHQFHRUDVERWK2KPDQG)HFKQHUEHOLHYHGIRO
ORZLQJ9ROWDE\WKHFRQWDFWRIKHWHURJHQHRXVVXEVWDQFHV6WULNLQJKHUHLVWKHXVH
RIDTXDQWLWDWLYHWKHRU\WRJHWSDVWXQUHVROYHGH[SHULPHQWDOREMHFWLRQVDQGKHQFH
WRXQGHUFXWDQDOOHJHGTXDOLWDWLYHGLVWLQFWLRQ
$QRWKHULOOXVWUDWLRQRIWKHFKDQJLQJWHUPLQRORJLFDOVLWXDWLRQGXULQJWKHVLV
SURYLGHGE\WKHSXEOLFDWLRQLQRIDQROGSDSHURI7UDLOOVRQWKHUPRPDJQHWLVP
WKDWUHSUHVHQWHGKLVWKLQNLQJLQ3HUKDSVEHFDXVHKHKDGQRWVXFFHHGHG
LQ JHWWLQJKLV IXOO SDSHU SXEOLVKHG LQ (QJOLVK KH VHQW D FRS\WR WKH 6RFLpWp GH
3K\VLTXHHWG+LVWRLUH1DWXUHOOHGH*HQqYHLQZKLFKSXEOLVKHGLWWKHQH[W
\HDULQD)UHQFKSUpFLVRILWVUVWSDUWDQGWUDQVODWLRQRILWVVHFRQG$OWKRXJKWKH
WLWOHRIWKHSDSHUUHHFWLQJ7UDLOOVLQYDULDEOHXVDJHVSRNHRIWKHUPRPDJQHWLVP
WKHXQQDPHGHGLWRUGHVFULEHG7UDLOOVH[SHULPHQWVZLWKRXWFRPPHQWLQWHUPVRI
DWKHUPRHOHFWULFFLUFXLWDQGRIWKHPDJQHWLFQHHGOHVLQGLFDWLRQRIDQHOHFWULF
FXUUHQW7KHHGLWRUVXPPDUL]HG7UDLOOVUHVXOWVLQODQJXDJHIRUHLJQWRWKHDXWKRU
EXWLQDFFRUGZLWKDQLQFUHDVLQJO\WDNHQIRUJUDQWHGLQWHUSUHWDWLRQWKDWKDGWDFLWO\
EHFRPHUHJDUGHGDVDQH[SUHVVLRQRIWKHIDFWV
$OOWKHUHVXOWVWRZKLFKWKHVXFFHVVLYHH[DPLQDWLRQRIWKHVHGLIIHUHQWFLUFXPVWDQFHV
OHDGVLQGLFDWHWKDWWKHUHLVDQHOHFWULFFXUUHQWWKDWOHDYLQJWKHSRLQWRIMXQFWLRQ
WRZKLFKWKHKHDWLVDSSOLHGHQWHUVWKHFRSSHUWUDYHUVHVLWWKHQSDVVHVLQWRWKH
DQWLPRQ\LQRUGHUWRUHWXUQWRWKHSRLQWRIGHSDUWXUH7KHFRPSOHWHDQDO\VLVPDGH
E\$PSqUHLQRIWKHPRGHRIDFWLRQRIDQHOHFWULFFLUFXLWRQDPDJQHWL]HG
QHHGOHDFFRUGVIXOO\ZLWKDOOWKHUHVXOWVREWDLQHGE\'U7UDLOODQGSHUPLWVXVWR
FRQFOXGHWKDWWKHWKHUPRHOHFWULFDSSDUDWXVXVHGE\WKLVVDYDQWDFWVH[DFWO\OLNH
DFORVHGHOHFWULFFLUFXLWLQZKLFKWKHFXUUHQWIROORZVDGLUHFWLRQVLPLODUWRWKDW
ZKLFKZHKDYHMXVWLQGLFDWHG
,QRQO\RQHSDVVDJHGLGWKHHGLWRUDGGUHVVWKHTXHVWLRQRIZKHWKHUWKHVHSKH
QRPHQDUHYHDOWKHH[LVWHQFHRIKHOLFDOPDJQHWLFFXUUHQWVDV7UDLOOPDLQWDLQHG
RURIDWUXHHOHFWULFFXUUHQW+HSURQRXQFHGLQIDYRURIWKHODWWHURQWKHEDVLVRI
YDJXHO\JHQHULFODWHUUHVHDUFKHVDQGWKHVLPLODULW\EHWZHHQWKHFXUUHQWSURGXFHGE\
7UDLOOVWKHUPRPDJQHWLFDSSDUDWXVDQGWKDWRIWKHYROWDLFSLOH)URPVLPLODULW\
RIHIIHFWVRQHLQIHUUHGLGHQWLW\RIFDXVH
$IHZ(QJOLVKSXEOLFDWLRQVIURPWKHHDUO\VUHYHDODQDV\HWXQVHWWOHG
VLWXDWLRQ HYHQ DV WKH DXWKRUV LQ W\SLFDO IDVKLRQ GHFOLQHG H[SOLFLWO\ WR DGGUHVV
WKH LVVXHV RI LQWHUSUHWDWLRQ WKDW XQGHUOD\ WKH GLIIHUHQW WHUPLQRORJLHV :LOOLDP
6WXUJHRQVLQYHVWLJDWLRQRIWKHWKHUPRPDJQHWLVPRIKRPRJHQHRXV
ERGLHVFRUUHFWO\DVVLJQHGWR6HHEHFNWKHGLVFRYHU\RIPDJQHWLFSRZHUVLQYDUL
7UDLOO
7UDLOO
7UDLOO,QWKHVHFRQGWUDQVODWHGSDUWRIWKHPHPRLUDQ$SSOLFDWLRQRIWKH
WKHUPRPDJQHWLFH[SHULPHQWVWRWKHH[SODQDWLRQRIVRPHRIWKHSKHQRPHQDRIWHUUHVWULDOPDJ
QHWLVP7UDLOOFUHGLWHG6HHEHFNZLWKKDYLQJGLVFRYHUHGWKDWRQHFDQGHYHORSD
VWURQJPDJQHWLFDFWLRQE\KHDWLQJXQHTXDOO\FHUWDLQFRPELQDWLRQVRIPHWDOV
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
RXVPHWDOOLFFRPELQDWLRQVE\PHUHO\VXEPLWWLQJWKHLUSRLQWVRIXQLRQWRGLIIHUHQW
GHJUHHV RI WHPSHUDWXUH7KURXJKRXW KLV SDSHU KH UHSHDWHGO\ VSRNH LQ WHUPV
RIWKHUPRPDJQHWLVPDQGKHTXDOLHGYDULRXVSKHQRPHQDDFWLRQVSRZHUVDQG
DUUDQJHPHQWVDOODVWKHUPRPDJQHWLF<HWKHDOVRZURWHWKDWWKHGLVFRYHU\RI6HH
EHFNGHSHQGVXSRQWKHQRYHOPRGHE\ZKLFKKHFDOOVIRUWKWKHHOHFWULFSRZHUV
DQGLQWHUURJDWHVWKHPDJQHWLFSKQRPHQDWKH\GLVSOD\DQGKHVSRNHUHSHDWHGO\
RIWKHHOHFWULFFXUUHQWLWVGLUHFWLRQDQGLWVSURGXFWLRQE\KHDW6LPLODUO\LQKLV
ODWHUSDSHURQWKHWKHUPRPDJQHWLVPRIVLQJOHSLHFHVRIPHWDOKHFOHDUO\KDG
LQPLQGWKHJHQHUDWLRQRIHOHFWULFFXUUHQWVLQWKHPHWDOV+HUHLWZRXOGVHHP
HLWKHUWKDWWHUPLQRORJ\ODJJHGEHKLQGUHFRQFHSWXDOL]DWLRQRUWKDW6WXUJHRQZDV
XVLQJWKHUPRPDJQHWLVPLQDWKHRUHWLFDOO\QHXWUDOIDVKLRQDVWKHFRPPRQWHUP
WRGHVLJQDWHWKHSKHQRPHQDGLVFRYHUHGE\6HHEHFN
$VLPLODUDOWHUQDWLRQEHWZHHQWHUPLQRORJLHVLVIRXQGLQ&XPPLQJV5HSRUWRQ
WKHUPRHOHFWULFLW\GHOLYHUHGDWWKHVHFRQG%ULWLVK$VVRFLDWLRQPHHWLQJDW2[IRUG
LQWKHYHU\WLWOHRIZKLFKVXJJHVWVKRZWKHSKHQRPHQRQKDGFRPHWREH
UHJDUGHG,JQRULQJ6WXUJHRQVFRQVLVWHQWXVHRIWKHUPRPDJQHWLVP&XPPLQJ
FKDUDFWHUL]HG6WXUJHRQVZRUNRIDVDVWXG\RIWKHWKHUPRHOHFWULFLW\RI
KRPRJHQHRXV ERGLHV DQG WKH FRQQH[LRQ EHWZHHQ FU\VWDOOLQH DUUDQJHPHQWV DQG
WKHUPRHOHFWULFLW\<HWKHWKHQVWDWHGWKDWWKHREMHFWRI6WXUJHRQVWZRSDSHUV
ZDVWRWUDFHWKHGLUHFWLRQVRIWKHPDJQHWLFFXUUHQWVLQPDVVHVRIPHWDODJDLQ
XVLQJ D WHUP WKDW 6WXUJHRQ KDG QRWDQG KH QRWHG WKH DXWKRUV LJQRUDQFH RI
<HOLQVH[SHULPHQWVLOOXVWUDWLYHRIWKHUPRPDJQHWLFDFWLRQLQRQHVROLWDU\SLHFH
RIPHWDO(DUOLHULQKLVUHSRUW&XPPLQJKDGVSRNHQYDULRXVO\RIWKHPDJQHWLF
DFWLRQH[KLELWHGE\6HHEHFNVFLUFXLWRIWKHGHYHORSPHQWRIWKHUPRHOHFWULFLW\LQ
FLUFXLWVFRPSRVHGRIDVLQJOHPHWDODVUHYHDOHGE\GHYLDWLRQVRIWKHJDOYDQRPHWHU
QHHGOHDQGRI<HOLQVUHVHDUFKHVRQWKHWKHUPRHOHFWULFLW\RIDVLQJOHSLHFHRI
PHWDOSKHQRPHQDWKDWKDGSURPSWHG<HOLQWRFRLQWKHWHUPWKHUPRPDJQHWLVP
IURPZKLFKZHOHDUQWKDWDOOPHWDOOLFERGLHVDFTXLUHPDJQHWLFSURSHUWLHVZKHQ
XQHTXDOO\KHDWHG6LJQLFDQWO\UHYHDOLQJWKHUHODWLYHO\JUHDWHUFRQVHQVXVDPRQJ
WKH)UHQFK%HFTXHUHOVWUHDWPHQWRIWKHSURGXFWLRQRIWKHUPRHOHFWULFFXU
UHQWV DVVLJQHG WKH GLVFRYHU\ RI WKH SKHQRPHQD WR 6HHEHFN DV LW UHYLHZHG WKH
ZRUNRI<HOLQ6WXUJHRQDQG&XPPLQJVROHO\LQWHUPVRIWKHWKHUPDOJHQHUDWLRQ
RIHOHFWULFFXUUHQWVZLWKQRWDZRUGDERXWWKHUPRPDJQHWLVP
6WXUJHRQFI0\UVWH[SHULPHQWVIRUWKHGHWHFWLRQRIPDJQHWLVP>SURGXFHG@
E\KHDWLQVLQJOHSLHFHVRIPHWDOZHUHQRWYHU\VXFFHVVIXO6WXUJHRQOHFWXUHULQVFLHQFH
DQGSKLORVRSK\DWWKH(DVW,QGLD&RPSDQ\5R\DO0LOLWDU\&ROOHJHRI$GGLVFRPEHZDVZHOO
NQRZQIRUKLVFRQVWUXFWLRQRIHOHFWURPDJQHWLFDSSDUDWXV
6WXUJHRQTXRWH
6WXUJHRQ
&XPPLQJ
&XPPLQJ
&XPPLQJ
%HFTXHUHO%\DWOHDVW-DPHV)RUEHV
SURIHVVRU RI QDWXUDO SKLORVRSK\ DW (GLQEXUJK ZDV ZULWLQJ VLPSO\ RI 6HHEHFNV
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
6WXGHQWVRI*HUPDQSK\VLFDOVFLHQFHGXULQJWKHVHFRQGTXDUWHURIWKHQLQHWHHQWK
FHQWXU\KDYHIHZVRXUFHVDVULFKRUDVYDOXDEOHDV*HKOHUV3K\VLNDOLVFKHV:|UWHU
EXFKSXEOLVKHGLQWZHQW\WZRODUJHSDUWVEHWZHHQDQGDQGHGLWHGE\
YHVHQLRUSURIHVVRUV,WVWUHDWPHQWRIRXUWRSLFRYHUDVSDQRI\HDUVLVDJDXJHRI
WKHUHVSRQVHRIWKHROGHUJHQHUDWLRQRI*HUPDQVSHDNLQJVFLHQWLVWVWRDQXQVHWWOHG
VLWXDWLRQ0XQFNHSURIHVVRURIH[SHULPHQWDOSK\VLFVDW+HLGHOEHUJIURPXQWLO
KLVGHDWKLQZURWHRQHOHFWURPDJQHWLVPPDJQHWLVPWRXUPDOLQHDQGKHDW
ZKLOH3IDIIIURPWRSURIHVVRURIPHGLFLQHDW.LHOWKHQXQGHU'DQLVK
VRYHUHLJQW\ZURWHRQHOHFWULFLW\DQGWKHUPRHOHFWULFLW\E]ZWKHUPRPDJQHWLVP
0XQFNHV DUWLFOH RI RQ PDJQHWLVP GHYRWHG D VHFWLRQ WR WKHUPRPDJ
QHWLVPLQZKLFKKHQRWHGWKHLPSRUWDQFHRIWKHJDOYDQRPHWHUIRUGHWHFWLQJDQG
PHDVXULQJHOHFWURPDJQHWLFHIIHFWVE\ZKLFKPHDQV6HHEHFNGLVFRYHUHGDQHZ
VRXUFHRIPDJQHWLFH[FLWDWLRQZKLFKKDVEHHQGHVLJQDWHGIRUQRZE\WKHQDPH
RIWKHUPRPDJQHWLVPPDJQHWLVPSURGXFHGE\KHDW0XQFNHWKHUHE\LJQRUHG
WKHH[WHQVLYHOLWHUDWXUHHVSHFLDOO\LQ)UHQFKZKLFKE\WKHQKDGZLWKRXWFRPPHQW
DGRSWHGWKHODQJXDJHRIWKHUPRHOHFWULFLW\<HWLQZULWLQJODWHUWKDW>W@HPSHUDWXUH
GLIIHUHQFHDWERWKSRLQWVRIFRQWDFWRIWKHPHWDOOLFFLUFOHLVWKXVWKHQHZVRXUFH
RIGLVHQJDJHGPDJQHWLVPRUZKDWVXUHO\SUHFHGHVWKLVRIHOHFWULFLW\0XQFNH
QHVVHGWKHTXHVWLRQRIWKHXOWLPDWHQDWXUHRIWKHSKHQRPHQRQZKLOHIRUWKHPRVW
SDUW UHWDLQLQJ WKH ODQJXDJH RI WKHUPRPDJQHWLVP +H IROORZHG 6HHEHFN YHU\
FORVHO\LQFLWLQJWKHHVVHQWLDOGLIIHUHQFHEHWZHHQWKHPDJQHWLFDQGHOHFWULFVHULHV
RIPHWDOVDVDUJXLQJDJDLQVWWKHSKHQRPHQRQVEHLQJHVVHQWLDOO\HOHFWULFGHVSLWH
WKHIDFWWKDWKHDFFHSWHGWKHSURGXFWLRQRISRVLWLYHDQGQHJDWLYHHOHFWULFLW\WKURXJK
WKHDFWLRQRIKHDWDWWKHSRLQWRIFRQWDFWRIWZRPHWDOV+HFRQFOXGHG
7KHPDJQHWLFSRODUL]DWLRQRIWKHPHWDOOLFFLUFXLWVXQGHUFRQVLGHUDWLRQKHUHFDQWKXV
QRWEHGHULYHGVROHO\IURPWKHODUJHUTXDQWLW\RIHOHFWULFLW\WKDWVHSDUDWHVLWVHOIDW
WKHSRLQWRIFRQWDFWRIWZRPHWDOVEHFRPLQJIUHHDQGDEOHWREHFRPPXQLFDWHG
WRWKHHOHFWURPHWHUDQGRQHZLOOWRWKDWH[WHQWQRWEHMXVWLHGLQFDOOLQJWKHVH
FLUFXLWVHOHFWURPDJQHWLFXQWLOWKHPRGLFDWLRQKDVEHHQLQYHVWLJDWHGE\ZKLFKWKH
LQXHQFHRIFRPPRQHOHFWULFLW\RQWKHPDJQHWLFSRODUL]DWLRQLVLPSHGHGXQGHU
FHUWDLQFLUFXPVWDQFHVRUXQWLODSUHYLRXVO\XQUHFRJQL]HGXLGKDVEHHQGLVFRYHUHG
ZKLFKPHUHO\DFFRPSDQLHVWKHHOHFWULFLW\DQGZKLFKFRQVWLWXWHVWKHDFWXDOFDXVH
RIWKHHOHFWURPDJQHWLFSKHQRPHQD
1RWDFFHSWLQJ$PSqUHVUHGXFWLRQRIPDJQHWLVPWRHOHFWULFFXUUHQWV0XQFNHFRXOG
DOVR QRW DFFHSW WKH QRWLRQ RI D GLUHFW DFWLRQ EHWZHHQ WKH HOHFWULF DQG PDJQHWLF
XLGV
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
0XQFNHVPXUN\UHDVRQLQJLQWKHSDVVDJHMXVWTXRWHGZDVLQWLPDWHO\FRQQHFWHG
ZLWK KLV ORQJVWDQGLQJ GHIHQVH RI WUDQVYHUVDO PDJQHWLVP DV WKH H[SODQDWLRQ RI
UVWHGVVRFDOOHGHOHFWURPDJQHWLFDFWLRQ1RWHOHFWULFFXUUHQWVEXWDSHFXOLDU
GLVWULEXWLRQRIPDJQHWLFSRODULW\H[SODLQHGWKHDFWLRQRIWKHFRQQHFWLQJZLUHRID
FLUFXLWRQDPDJQHWLFQHHGOH)RU0XQFNHDVIRU3RJJHQGRUIIWKUHH\HDUVODWHU
ZULWLQJ6HHEHFNVRELWXDU\WKHLVVXHFDPHGRZQLQSDUWWRWKHGHQLDORI$PSqUHV
DVVHUWLRQRIWKHLGHQWLW\EHWZHHQHOHFWULFLW\DQGPDJQHWLVP,QUHGXFLQJPDJQHWLVP
WRHOHFWULFFXUUHQWV$PSqUHVHOHFWURG\QDPLFWKHRU\HQFRXUDJHGWKHLQWHUSUHWDWLRQ
RI6HHEHFNVSKHQRPHQDDVHVVHQWLDOO\WKHUPRHOHFWULF$OWKRXJKKHGLGQRWPDNH
WKHSRLQWKHUH,VXVSHFWWKDW0XQFNHDVVLJQHGFRQVLGHUDEOHLPSRUWDQFHWRWKHIDFW
WKDWWRKLPWKHSKHQRPHQDORRNHGPDJQHWLFLQYROYLQJDVWKH\GLGWKHGHHFWLRQ
RIDPDJQHWLFQHHGOH
0XQFNHKDGDSSOLHGWKHWHUPWKHUPRHOHFWULF\HDUVHDUOLHUWRSKHQRPHQDLQ
YROYLQJWKHVXSSRVHGWKHUPDOJHQHUDWLRQRIVWDWLFHOHFWULFLW\LQJODVVDQGKHQFH
PD\KDYHIHOWWKHQHHGIRUDVHSDUDWHWHUPIRU6HHEHFNVSKHQRPHQD+HVHHPV
WRKDYHEHHQPRUHFRPIRUWDEOHDSSO\LQJWKHWHUPHOHFWULFLW\WRWKHVWDWLFHOHFWULF
LW\ GHWHFWDEOH E\ DQ HOHFWURVFRSH WKDQ WR WKH HOHFWULF FXUUHQW DND JDOYDQLVP
SURGXFHGE\DYROWDLFSLOH+HOLNHZLVHFODVVLHGWKHSURGXFWLRQRIDQHOHFWULFDO
SRODULW\LQDFU\VWDORIWRXUPDOLQHE\KHDWDVDVSHFLHVRIWKHUPRHOHFWULFLW\DWHUP
KHHYHQWXDOO\LQWRDSSOLHGQRWRQO\WR<HOLQVSURGXFWLRQRIDQHOHFWULFDO
SRODULW\ LQ FU\VWDOOLQH PHWDOV EXW DOVR DSSDUHQWO\ WR RWKHU FDVHV RI HUVWZKLOH
WKHUPRPDJQHWLVPLQYROYLQJQRQFU\VWDOOLQHPHWDOVWKH\ZHUHDOOH[DPSOHVRIWKH
SURGXFWLRQ>+HUYRUUXIXQJFDOOLQJIRUWK@RIIUHHHOHFWULFW\
7ZR\HDUVODWHULQKLVYHU\ORQJDUWLFOHRQKHDW0XQFNHVSRNHRQO\LQSDVVLQJ
RIWKHH[FLWDWLRQRIHOHFWULFLW\E\KHDWRIWKHUPRHOHFWULFLW\SURSHUO\VRFDOOHG
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
UHIHUULQJWKHUHDGHUWR3IDIIVDUWLFOHRQWKHVXEMHFW,QDIRRWQRWHKRZHYHUKH
QRWHGWKDW>R@QHVSHDNVERWKRIWKHUPRHOHFWULFLW\DQGWKHUPRPDJQHWLVPEXWWKH
UVWGHVLJQDWLRQLVGRXEWOHVVWKHFRUUHFWRQHIRUWKHFXUUHQWJHQHUDWHGLVLQGLVSXWDEO\
DQHOHFWULFFXUUHQWZKLOHWKHLGHQWLW\RIHOHFWULFLW\DQGPDJQHWLVPLVLQDGPLVVLEOH
EHFDXVHRIWKHGLIIHUHQFHLQWKHLUH[SUHVVLRQHYHQLIERWKMXVWOLNHHOHFWULFLW\DQG
KHDWDUHDOZD\VIRXQGXQLWHGDQGPXWXDOO\GHWHUPLQHHDFKRWKHU2QHGHWHFWV
KHUHERWKKLVVRPHZKDWJUXGJLQJDFFHSWDQFHRIWKHIXQGDPHQWDOO\HOHFWULFQDWXUHRI
WKHSKHQRPHQDDQGKLVUHIXVDOWRDGPLWDQLGHQWLW\EHWZHHQHOHFWULFLW\DQGPDJQH
WLVP7KDWZDVDVIDUDV0XQFNHHYHUZHQWLQH[SOLFLWO\DFNQRZOHGJLQJWKHH[LVWHQFH
RIDQ\GLVDJUHHPHQWRYHULQWHUSUHWDWLRQVRIWKHFKDUDFWHURIWKHSKHQRPHQD
+HZDVQRWDORQH,QWKHFRQWHPSRUDU\OLWHUDWXUHWKHUHLVDOPRVWQRH[SOLFLW
GLVFXVVLRQRIWKHYHU\GLIIHUHQWFRQFHSWXDOL]DWLRQVRIWKHSKHQRPHQDWKDWXQGHUOD\
WKHYDULRXVSURSRVHGWHUPLQRORJLHV'LIIHUHQWSHRSOHXVHGGLIIHUHQWWHUPVDQGHYHQ
FKDQJHGWKHLUODQJXDJHZLWKRXWDGGUHVVLQJWKHYHU\GLIIHUHQWXQGHUVWDQGLQJVRI
WKHIXQGDPHQWDOQDWXUHRIWKHSKHQRPHQDLPSOLHGE\WKHFKDQJHV)RUH[DPSOH
LWZRXOGVHHPUHDVRQDEOHWRVXSSRVHWKDWEHKLQGWKHH[SODQDWRU\DSSHDORIERWK
WKHUPRPDJQHWLVPDQG$PSqUHVHOHFWURG\QDPLFUHGXFWLRQRIPDJQHWLVPWRHOHFWULF
FXUUHQWVOD\WKHDVVXPSWLRQWKDWOLNHFDQDFWRQO\RQOLNHHLWKHUDQLQGXFHGPDJQH
WLVPLQWKHFRQQHFWLQJZLUHDFWVRQWKHQHHGOHVSHUPDQHQWPDJQHWLVPRUDQHOHFWULF
FXUUHQWLQWKHFRQQHFWLQJZLUHDFWVRQWKHK\SRWKHWLFDOFXUUHQWORRSVUHVSRQVLEOH
IRUWKHQHHGOHVPDJQHWLVP<HW,KDYHQRWHQFRXQWHUHGDQ\H[SOLFLWVWDWHPHQWRI
VXFKFRQVLGHUDWLRQVHYHQDVWKHDFFHSWDQFHRI$PSqUHVHOHFWURG\QDPLFVDQGLWV
UHGXFWLRQRIPDJQHWLVPWRHOHFWULFLW\IDYRUHGWKHDFFHSWDQFHRIDQHOHFWULFFXUUHQW
LQWKHWKHUPRHOHFWULFFLUFXLW
$UDUHH[FHSWLRQLVSURYLGHGE\6HHEHFNVFROOHDJXHDWWKH%HUOLQ$FDGHP\
(UQVW*RWWIULHG)LVFKHU,QWKHYROXPHRIKLVZHOONQRZQDQGUHVSHFWHG
WH[WERRNSXEOLVKHGLQ)LVFKHUQRWHGWKHGLVDJUHHPHQWDPRQJ1DWXUIRUVFKHU
RYHUWKHSURSHULQWHUSUHWDWLRQRIZKDWKHIROORZLQJ6HHEHFNFDOOHGH[FLWDWLRQRI
PDJQHWLVPE\KHDW$IWHUDWWULEXWLQJWKHGLVFRYHU\RIWKHSKHQRPHQDWR6HHEHFN
DQGQRWLQJ6HHEHFNVDQGRWKHUVFRQWLQXHGH[SHULPHQWDOH[SORUDWLRQRIWKHWRSLF
)LVFKHUREVHUYHGWKDWWKHH[SHULPHQWVRQWKHLQXHQFHRIKHDWRQPDJQHWLVPKDYH
QRW\HWEHHQUHSHDWHGRUFRQWLQXHGWRWKHVDPHH[WHQWDVWKRVHRQWKHLQXHQFH
RIHOHFWULFLW\3HUKDSVEHFDXVHPRVWLQYHVWLJDWRUV>1DWXUIRUVFKHU@EHFDXVHRIWKH
FRPSOHWHVLPLODULW\RIWKHUHVXOWLQ6HHEHFNVH[SHULPHQWVDSSHDUWRVHHRQO\D
PRGLFDWLRQRIUVWHGVH[SHULPHQWQDPHO\DQHZZD\WRH[FLWHHOHFWULFLW\E\
KHDW:KDWH[SUHVVHVLWVHOILPPHGLDWHO\LQ6HHEHFNVH[SHULPHQWVLVDQH[FLWDWLRQ
RIPDJQHWLVPE\FDQFHOLQJWKHHTXLOLEULXPRIWHPSHUDWXUHQRWE\HOHFWULFLW\LQD
FLUFXODUPHWDOOLFFRQQHFWLRQ7KHSKHQRPHQRORJLFDOO\LQFOLQHG)LVKHUGHFOLQHG
0XQFNHTXRWHRQ
0XQFNH
)LVFKHU
)LVFKHU1RUGLG)LVFKHUXVHWKHWHUPHOHFWURPDJQHWLVPLQWUHDWLQJWKH
H[FLWDWLRQRIPDJQHWLVPE\JDOYDQLFHOHFWULFLW\WKDWUVWHGKDGGLVFRYHUHG
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
WRDSSO\DQ\VSHFLFWHUPWRWKHVHSKHQRPHQDHYHQDVKHWDFLWO\UHFRJQL]HGWKHLU
FRPPRQVXEVXPSWLRQXQGHUWKHFDWHJRU\RIHOHFWURPDJQHWLVPZKLFKIRUVRPH
LQYROYHGWKHSURGXFWLRQRIHOHFWULFLW\IRURWKHUVWKHPDQLIHVWDWLRQRIPDJQHWLVP
$IHZRWKHUROGHU1DWXUIRUVFKHUUHFRJQL]HGWKLVVWDWHRIDIIDLUVGXULQJWKHPLG
WRODWHV7KLVORFDOL]DWLRQPD\UHHFWWKHIDFWWKDWWKHLQGLJHQRXVWHUPLQRORJ\
RIWKHUPRPDJQHWLVPZDVLQFUHDVLQJO\UHFRJQL]HGDVDWRGGVZLWKWKHODQJXDJHRI
WKHUPRHOHFWULFLW\ WKDW VFLHQWLVWV RXWVLGH WKH *HUPDQ VSKHUH ZHUH SUHIHUHQWLDOO\
HPSOR\LQJ,QWKUHH\HDUVEHIRUH0XQFNHVSDVVLQJDFNQRZOHGJHPHQWLQD
IRRWQRWHRIWKHH[LVWHQFHDQGVLJQLFDQFHRIDWHUPLQRORJLFDOGLIIHUHQFHEHWZHHQ
WKHUPRHOHFWULFLW\DQGWKHUPRPDJQHWLVP3IDIISXEOLVKHGLQ*HKOHUVHQF\FORSHGLD
DQDUWLFOHKHDGHG7KHUPRHOHFWULFLW\7KHUPRPDJQHWLVPLQZKLFKKHMXVWLHG
WKHLQWHUSUHWDWLRQRIWKHSKHQRPHQDDVWKHUPRHOHFWULFHYHQDVKHUHWDLQHGVRPH
RIWKHODQJXDJHRIWKHUPRPDJQHWLVP+HEHJDQKLVDUWLFOHE\FRPPHQWLQJRQLWV
GXDOKHDGLQJ
:LWKWKLVQDPHRQHGHVLJQDWHVLQWKHQDUURZHUVHQVHWKDWFODVVRIHOHFWULFDOSKH
QRPHQDH[FLWHGE\WKHVLPSOHDFWLRQRIKHDWRQWKHEHVWFRQGXFWRUVRIHOHFWULFLW\
HVSHFLDOO\RQPHWDOVDQGDORQJZLWKZKLFKDWWKHVDPHWLPHSKHQRPHQDRIPDJ
QHWLFSRODUL]DWLRQDSSHDULQDODZIXOZD\LQWKHVHERGLHV,QVRIDUDVRQHUHJDUGV
WKHSKHQRPHQDRFFXUULQJKHUHDVGHSHQGLQJRQDQH[FLWDWLRQRIHOHFWULFLW\RUD
GLVWXUEDQFHRIWKHHOHFWULFDOHTXLOLEULXPDQGWKHODWWHUVH[FLWDWLRQLVUHJDUGHGDV
WKHDFWXDOIXQGDPHQWDOSKHQRPHQRQWKLVFODVVRISKHQRPHQDULJKWO\GHVHUYHVWKH
QDPHWKHUPRHOHFWULFLW\ZKLFKH[SUHVVHVWKHFKDUDFWHULVWLFQDWXUHRIWKHLURULJLQ
7KHWHUPWKHUPRPDJQHWLVPH[SUHVVHVSUHFLVHO\WKLV>LVVXHRIWKHFRQFHSWLRQRI
WKH@QDWXUHRIWKHRULJLQ>RIWKHSKHQRPHQD@LQVRIDUDVRQHSULQFLSDOO\UHJDUGVWKH
PDJQHWLVPXQGHUZKLFKIRUPWKHDFWLYLW\KHUHH[FLWHGDQQRXQFHVLWVHOI
3IDII+HDVVLJQHGWR6HHEHFNWKHGLVFRYHU\RIWKHUPRHOHFWULFSKHQRPHQD
LQWKHQDUURZHUVHQVHDVXQGHUWKHIRUPRIWKHUPRPDJQHWLVP3IDIIVFRQFHSWLRQRI
)XQGDPHQWDOSKlQRPHQLVUHPLQLVFHQWRIWKHQRWLRQVRI=HQWUDOSKlQRPHQDQG)XQGDPHQ
WDOYHUVXFKIDYRUHGE\WKRVH,KDYHHOVHZKHUHFDOOHGFRQFUHWL]LQJVFLHQWLVWVVHH&DQHYD
E
3IDII
3IDII
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
FRQGXFWLQJZLUHEXWUDWKHUWKDWLQVXFKDURGFXUUHQWVPXVWEHVXSSRVHGWKDWPRYH
LQDNLQGRIFLUFXODUFRXUVHE\ZKLFKDORQHWKHGLIIHUHQFHEHWZHHQWKHEHKDYLRU
RIVXFKDURGDQGWKHEHKDYLRURIDUKHRSKRUHEHFRPHVLQWHOOLJLEOH,URQLFDOO\
DQG VLJQLFDQWO\ ZKHUHDV<HOLQ KDG FLWHG WKH PDJQHWLF DFWLRQ RI VXFK URGV LQ
WKHDEVHQFHRIDQ\WUXO\HOHFWULFHIIHFWVLQMXVWLFDWLRQRIKLVFRLQDJHWKHUPR
PDJQHWLVP3IDIIQRZDUJXHGIURPWKHVXSSRVHGEXWQRZJHQHUDOO\DFFHSWHG
H[LVWHQFHRIHOHFWULFFXUUHQWVLQWKHPWRWKHFRQFOXVLRQWKDWWKHVHSKHQRPHQDWRR
ZHUHHVVHQWLDOO\WKHUPRHOHFWULF7KXVGLGODQJXDJHIROORZDQLQFUHDVLQJO\WDNHQ
IRUJUDQWHGUHFRQFHSWXDOL]DWLRQ
$OWKRXJK,KDYHEHHQDEOHRQO\WRVNHWFKWKHGHWDLOVRIWKHFRPPXQLW\ZLGH
UHFHSWLRQRI6HHEHFNVDQGRWKHUVZRUNE\WKHVLWDSSHDUVWKDWIRUWKHPRVW
SDUWWKHODQJXDJHRIWKHUPRHOHFWULFLW\KDGGULYHQRXWWKDWRIWKHUPRPDJQHWLVP
)HZVHHPHYHUWRKDYHQRWLFHGWKDW6HHEHFNKLPVHOIKDGVSRNHQRIWKHPDJQHWLF
SRODUL]DWLRQRIPHWDOVE\KHDW,QWKHHQGZKDW6HHEHFNGLVFRYHUHGZDVGHFLGHG
IRUKLPE\RWKHUV:KHQLQWKHHQGWKHSKHQRPHQDZHUHGHFODUHGWREHWKHUPR
HOHFWULF6HHEHFNEHFDPHZLOO\QLOO\WKHGLVFRYHUHURIWKHUPRHOHFWULFLW\
*LYHQWKHSDXFLW\RIFRQWHPSRUDQHRXVFRPPHQWDU\RQWKHVHFKDQJHVDQGWKH
UHDVRQVIRUWKHPDQDO\VLVPXVWEHVSHFXODWLYH6HYHUDOIDFWRUVPD\KDYHSOD\HG
VLJQLFDQWUROHV2QWKHH[SHULPHQWDOVLGHDVPRUHSRZHUIXOWKHUPRHOHFWULFSLOHV
PRUHVXFFHVVIXOO\UHSURGXFHGWKHUDQJHRISKHQRPHQDDVVRFLDWHGZLWKWKHJDOYDQLF
DNDK\GURHOHFWULFSLOHVSDUNVUHVLVWDQFHKHDWLQJDQGFKHPLFDOGHFRPSRVL
WLRQVFLHQWLVWVFDPHPRUHHDVLO\WRDFFHSWWKDWWKHXQHTXDOKHDWLQJRIDELPHWDOOLF
MXQFWLRQSURGXFHVDQHOHFWULFFXUUHQWQRWLQWULQVLFDOO\GLVVLPLODUWRHOHFWURFKHPLFDOO\
DQGPDJQHWRHOHFWULFDOO\JHQHUDWHGFXUUHQWV7KHREVHUYHGPDJQHWLVPRIWKHWKHU
PRHOHFWULFFLUFXLWOLNHWKDWRIWKHK\GURHOHFWULFEHFDPHDQLQGLFDWRURIWKHSUHVHQFH
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
RIWKHFXUUHQW<HWLWLVFOHDUWKDWDOOVXFKH[SHULPHQWDOGHPRQVWUDWLRQVIURPWKH
VUHSUHVHQWHGPHUHO\DPRSSLQJXSRSHUDWLRQDFKLHYHGE\SHRSOHPRVWO\
PLQRUJXUHVZKRHQWHUWDLQHGQROLQJHULQJGRXEWVDVWRWKHSURSHUO\HOHFWULFDO
QDWXUHRIWKHUPRHOHFWULFLW\+RZHOHFWULFLW\DFWVXSRQPDJQHWLVPZDVDQRWKHU
PDWWHU$VLWZDVIRU2KPWKHWKHUPRHOHFWULFSLOHKDGEHFRPHDFRQYHQLHQWVRXUFH
RIDVWHDG\HOHFWULFFXUUHQWWKHSUHVHQFHRIZKLFKLQWKHFRQQHFWLQJZLUHZDVQR
ORQJHUSUREOHPDWLFZKHWKHURUQRWDGHTXDWHO\H[SODLQHG
2QWKHWKHRUHWLFDOVLGH2KPVPDWKHPDWLFDODQDO\VLVRIWKHGLVWLQFWLRQEH
WZHHQWKHTXDQWLW\RIHOHFWULFLW\DVVXPHGWREHRZLQJLQWKHHOHFWULFFXUUHQWDQG
WKHLQWHQVLW\RIWKHHOHFWURPRWLYHIRUFHDVVXPHGWREHGULYLQJWKHFXUUHQWKHOSHG
FOHDUXSDQ\UHPDLQLQJDQRPDOLHVWKDWKDGVXJJHVWHGDTXDOLWDWLYHGLIIHUHQFHEH
WZHHQWKHUPRHOHFWULFLW\DQGK\GURHOHFWULFLW\$WWKHVDPHWLPHLWUHLQIRUFHGWKH
HVVHQWLDOO\HOHFWULFQDWXUHRI6HHEHFNVSKHQRPHQD$WOHDVWZLWKLQWKH*HUPDQ
FXOWXUDOVSKHUH2KPVLGHDVEHJDQWRZLQHQWKXVLDVWLFDGKHUHQWVDVHDUO\DV
ZLWKPDMRUDGGLWLRQDOVXSSRUWGXULQJWKHHDUO\V
(YHQVK\RIVXFKIRUPDOVXSSRUWKRZHYHUYLHZVZHUHVXEWO\VKLIWLQJWRVXSSRUW
WKHWKHUPRHOHFWULFUHDGLQJRIWKHSKHQRPHQD1RWOHDVWZDVWKHHYHQWXDOO\ZHOOQLJK
XQLYHUVDODFFHSWDQFHRIWKHUHDOSUHVHQFHRIDQHOHFWULFFXUUHQWLQWKHFRQQHFWLQJ
ZLUH RI DOO VRUWV RI FLUFXLWV (YHQ<HOLQ DFFHSWHG WKH IXQGDPHQWDOO\ HOHFWULFDO
FKDUDFWHURIWKHSKHQRPHQDHYHQDVKHWULHGWRLGHQWLI\DVXEVHWZDUUDQWLQJWKH
VHSDUDWHGHVLJQDWLRQWKHUPRPDJQHWLF$VLWKDSSHQHG<HOLQVWKHUPRPDJQHWLF
)XQGDPHQWDOYHUVXFKWKHHOLFLWDWLRQRIPDJQHWLFDFWLRQLQDEDURIDVLQJOHSLHFH
RIPHWDOVWRSSHGEHLQJRISDUWLFXODULQWHUHVWDQGLWHIIHFWLYHO\IHOORXWRIVLJKWDVD
GLVWLQFWLYHSKHQRPHQRQLQQHHGRIDGLVWLQFWLYHH[SODQDWLRQLQWHUPVRIDGLVWLQFWLYH
WKHUPRPDJQHWLVP,QVRIDUDVLWZDVUHPHPEHUHG3IDIIVH[DPSOHVXJJHVWVKRZLW
FRXOGEHDVVLPLODWHGLQWRWKHGRPLQDQWWKHUPRHOHFWULFYLHZRIWKLQJV7KRVHZKR
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
IDYRUHGDWKHUPRPDJQHWLFLQWHUSUHWDWLRQZHUHODUJHO\DQROGHUJHQHUDWLRQRIPRVWO\
*HUPDQVSHDNLQJVFLHQWLVWVDWWDFKHGWRDPRUHSKHQRPHQRORJLFDORVWHQVLEO\OHVV
UHGXFWLRQLVWEUDQGRIVFLHQFH6XFKSHRSOHWHQGHGWRZDQWWRORRNDWWKHHQWLUH
FRPSOH[RISKHQRPHQDHPEUDFLQJFKHPLFDOWKHUPDOHOHFWULFDODQGPDJQHWLF
DFWLRQVDVDXQLWDOOSDUWVRIZKLFKKDGWREHXQGHUVWRRGLQUHODWLRQWRHDFKRWKHU
DVRSSRVHGIRUH[DPSOHWRVHHLQJWKHJDOYDQRPHWHUDVEDVLFDOO\DQLQVWUXPHQW
IRUGHWHFWLQJDQGPHDVXULQJVXSSRVHGHOHFWULFFXUUHQWV
2I FUXFLDO LPSRUWDQFH WR WKH ZD\ LQ ZKLFK 6HHEHFNV ZRUN ZDV UHFHLYHG
DPRQJWKH)UHQFKZDVWKHIDFWWKDWLWFDPHWRWKHPYLDUVWHGVWKHUPRHOHFWULF
LQWHUSUHWDWLRQWRZKLFK)RXULHUVQDPHZDVVRRQMRLQHG%ODLQYLOOHWKHHGLWRURI
WKH-RXUQDOGHSK\VLTXHVDZWRLWWKDWKLVLQXHQWLDOMRXUQDOVSUHDGUVWHGVODQ
JXDJH$QGDOWKRXJKUVWHGFRLQHGDGLVWLQFWLYHWHUPIRUWKHQHZWKHUPRHOHFWULF
SKHQRPHQDFRQFHSWXDOO\KHDOZD\VUHJDUGHGDQGSUHVHQWHGWKHPDVUHSUHVHQWLQJ
DVSHFLHVRIHOHFWURPDJQHWLFLQWHUDFWLRQ+HQFHLQVRIDUDVSHRSOHVDZHOHFWURPDJ
QHWLVPDVUHVXOWLQJIURPWKHDFWLRQRIDQHOHFWULFFXUUHQWLQWKHFRQQHFWLQJZLUHRI
WKHJDOYDQLFDSSDUDWXVVRWRRZRXOGWKH\KDYHEHHQLQFOLQHGWRVHHWKHDQDORJRXV
GHHFWLRQ RI D PDJQHWLF QHHGOH LQ 6HHEHFNV FDVH DV UHYHDOLQJ WKH SUHVHQFH RI
HOHFWULFLW\$QGDV5RVHQEHUJHUUHPDUNHGWKHWKHUPRHOHFWULFLQWHUSUHWDWLRQRIWKH
SKHQRPHQDUHFHLYHGVXSSRUWERWKIURP$PSqUHVHOHFWURG\QDPLFH[SODQDWLRQRI
PDJQHWLVPLQWHUPVRIFLUFXODUHOHFWULFFXUUHQWVDQGIURPWKHQHZSKHQRPHQRQRI
PDJQHWRHOHFWULFLQGXFWLRQGLVFRYHUHGE\)DUDGD\LQ
2KPVH[DPSOHLOOXVWUDWHVQLFHO\KRZXVDJHRIWHQHYROYHVVWHSE\VPDOOVWHS
ZLWKRXWWKHXVHUQHFHVVDULO\EHLQJDZDUHRIWKHHYROXWLRQ7RDFHUWDLQH[WHQW
WHUPLQRORJ\HQMR\HGDOLIHRILWVRZQVXUSULVLQJO\LQGHSHQGHQWRIDQ\RVWHQVLEO\
XQGHUO\LQJRQWRORJLFDOFRQFHSWXDOL]DWLRQ3HUKDSV6WXUJHRQVXVHRIWKHUPRPDJQH
WLVPIRUSKHQRPHQDKHUHJDUGHGDVIXQGDPHQWDOO\HOHFWULFDOLVQRWPXFKGLIIHUHQW
IURPRXUFRQWLQXHGXVHRIDWHUPOLNHFHQWULIXJDOIRUFH:HDUHQRWERWKHUHGE\
WKHIDFWWKDWZHGRQRWEHOLHYHLQDFHQWHUHHLQJIRUFHLQERWKFDVHVWKH\DUH
VLPSO\ZRUGVFRQYHQWLRQDOO\XVHGLQDFHUWDLQZD\
+,6725,2*5$3+,&$/&217(;7
0RVWSHRSOHZKRKDYHZULWWHQRQVFLHQWLFGLVFRYHU\KDYHFRPHIURPSKLORVR
SK\DQGPRVWVWXGLHVKDYHDSSURDFKHGWKHWRSLFIURPWKHVLGHRIWKHGLVFRYHUHULQ
RUGHUWRXQGHUVWDQGWKHG\QDPLFVRIVFLHQWLFFUHDWLYLW\0DQ\VWXGLHVKDYHHQJDJHG
WKHWRSLFLQWHUPVRIWKHGLVWLQFWLRQEHWZHHQFRQWH[WRIGLVFRYHU\DQGFRQWH[WRI
MXVWLFDWLRQ1RQHRIWKDWZRUNLVUHOHYDQWKHUH7KHUHUHPDLQVKRZHYHUDVPDOOHU
QXPEHURISURPLQHQWVWXGLHVRIVFLHQWLFGLVFRYHU\ZKRVHDSSURDFKWRXFKHVGLUHFWO\
XSRQP\SULQFLSDOFRQFHUQV+RZGRVFLHQWLVWVWUDQVIRUPWKHLUXQGHUVWDQGLQJRI
DGLVFRYHU\VRWKDWWKHFRQWULEXWLRQRIWKHRULJLQDOGLVFRYHUHUFRPHVWREHUHFDVW
LQWHUPVSHUKDSVIRUHLJQWRKLVRUKHURULJLQDOXQGHUVWDQGLQJ":KDWUROHGRHVWKH
2QZKDW,WHUPHGFRQFUHWL]LQJVFLHQFHVHH&DQHYDE
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
FRQFHSWRIGLVFRYHU\SOD\LQWKHSURFHVVRIFRQVHQVXVIRUPDWLRQE\WKHLQWHUDFWLQJ
FROOHFWLYLW\RIVFLHQWLVWV"2QHSRLQWWKDWZLOOHPHUJHIURPP\UHYLHZRIWKLVOLWHUD
WXUHLVWKDWWKHZD\LQZKLFKDXWKRUVKDYHDVNHGGLIIHUHQWTXHVWLRQVKDVHIIHFWLYHO\
GHHFWHGDWWHQWLRQDZD\IURPWKHLVVXHVFHQWUDOWRWKLVSDSHU
7KRPDV .XKQV VHPLQDO SDSHU RQ (QHUJ\ FRQVHUYDWLRQ DV DQ H[DPSOH RI
VLPXOWDQHRXV GLVFRYHU\ EURDFKHG VRPH RI WKH LVVXHV FRQVLGHUHG KHUH
WKRXJKKLVIRFXVRQWKHGLVFRYHU\VVLPXOWDQHRXVDVSHFWVDQGRQWKHWULJJHU
IDFWRUVKHLGHQWLHGGLUHFWHGKLVDWWHQWLRQDZD\IURPWKHTXHVWLRQRIZKDWZDV
EHLQJGLVFRYHUHGDQGIURPWKHUHODWHGLVVXHRIKRZFRQFHSWXDODQGOLQJXLVWLF
FRQVHQVXV HPHUJHG RYHU WLPH RXW RI D FRQJHULHV RI GLYHUVH LQSXWV$OWKRXJK
.XKQVEULOOLDQWDQDO\VLVRIVLPLODULWLHVDQGGLIIHUHQFHVDPRQJKLVVDPSOHJHQHU
DWHGDZHDOWKRILQVLJKWVFRQFHUQLQJWKHKLVWRULFDODQGFRQFHSWXDOEDFNJURXQGIURP
ZKLFKDFRQFHSWLRQRIWKHFRQVHUYDWLRQRIHQHUJ\HPHUJHGKHQHYHUVXEVHTXHQWO\
SXUVXHGWKHPDQ\OHDGVWKXVRSHQHGXSWKDWPLJKWKDYHOHGKLPWRIRUHJURXQGWKH
SUHVHQWSDSHUVFRQFHUQV+HGLGQRWWUDFNWKHHPHUJHQFHRIWHUPLQRORJLFDODQG
FRQFHSWXDOFRQVHQVXVDVDQDVSHFWRIVFLHQWLVWVFRQFHUQZLWKGLVFRYHU\
.XKQUHYLVLWHGWKHLVVXHRIGLVFRYHU\DIHZ\HDUVODWHULQDQLPSRUWDQWSDSHURQ
WKH+LVWRULFDOVWUXFWXUHRIVFLHQWLFGLVFRYHU\,WVREMHFWZDVWRLVRODWHDQG
LOOXPLQDWHRQHVPDOOSDUWRIZKDW,WDNHWREHDFRQWLQXLQJKLVWRULRJUDSKLFUHYROX
WLRQLQWKHVWXG\RIVFLHQFH+HH[SUHVVHGKLVWKHVLVE\FKDUDFWHUL]LQJWKHYLHZ
KHRSSRVHG5DWKHUWKDQEHLQJVHHQDVDFRPSOH[GHYHORSPHQWH[WHQGHGERWKLQ
VSDFHDQGWLPHGLVFRYHULQJVRPHWKLQJKDVXVXDOO\VHHPHGWREHDXQLWDU\HYHQW
RQHZKLFKOLNHVHHLQJVRPHWKLQJKDSSHQVWRDQLQGLYLGXDODWDVSHFLDEOHWLPHDQG
SODFH7KHXQWHQDELOLW\RIWKHWUDGLWLRQDOYLHZZDVVXJJHVWHGE\WKHIDFWWKDW
GHVSLWHWKHLPPHQVHHQHUJ\DQGLQJHQXLW\H[SHQGHGXSRQLWQHLWKHUSROHPLFQRU
SDLQVWDNLQJVFKRODUVKLSKDVRIWHQVXFFHHGHGLQSLQSRLQWLQJWKHWLPHDQGSODFHDW
ZKLFKDJLYHQGLVFRYHU\FRXOGSURSHUO\EHVDLGWRKDYHEHHQPDGH
.XKQGLVWLQJXLVKHGEHWZHHQWZRFODVVHVRIGLVFRYHULHVRQHDWURXEOHVRPH
FODVV H[HPSOLHG E\ R[\JHQ WKH HOHFWULF FXUUHQW [UD\V DQG WKH HOHFWURQ
FRQVLVWVRIREMHFWVZKLFKFRXOGQRWEHSUHGLFWHGE\DFFHSWHGWKHRU\LQDGYDQFH
.XKQQ Q2IKLVSLRQHHUV.XKQZURWH:KDWZHVHH
LQWKHLUZRUNVLVQRWUHDOO\WKHVLPXOWDQHRXVGLVFRYHU\RIHQHUJ\FRQVHUYDWLRQ5DWKHULW
LVWKHUDSLGDQGRIWHQGLVRUGHUO\HPHUJHQFHRIWKHH[SHULPHQWDODQGFRQFHSWXDOHOHPHQWV
IURPZKLFKWKDWWKHRU\ZDVVKRUWO\WREHFRPSRXQGHG,WLVWKHVHHOHPHQWVWKDWFRQFHUQXV
:HNQRZZK\WKH\ZHUHWKHUH(QHUJ\LVFRQVHUYHGQDWXUHEHKDYHVWKDWZD\%XWZHGR
QRWNQRZZK\WKHVHHOHPHQWVVXGGHQO\EHFDPHDFFHVVLEOHDQGUHFRJQL]DEOH7KDWLVWKH
IXQGDPHQWDOSUREOHPRIWKLVSDSHU
.XKQD +HUHIHUUHGWRKLVIRUWKFRPLQJERRNLQDIRRWQRWHIRUD
GLVFXVVLRQRIWKLVODUJHUUHYROXWLRQDGGLQJWKDW>W@KHFHQWUDOLGHDVLQWKLVSDSHUKDYHEHHQ
DEVWUDFWHGIURPWKDWVRXUFHSDUWLFXODUO\IURPLWVWKLUGFKDSWHU$QRPDO\DQGWKHHPHUJHQFH
RIVFLHQWLFGLVFRYHULHVDQ Q
.XKQD
.XKQD
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
WKHRWKHUFODVVH[HPSOLHGE\WKHQHXWULQRUDGLRZDYHVDQGWKHHOHPHQWVZKLFK
OOHG HPSW\ SODFHV LQ WKH SHULRGLF WDEOH LQFOXGHV FDVHV ZKHUH GLVFRYHU\ ZDV
JXLGHGE\H[LVWLQJWKHRU\.XKQVFKLHIFRQFHUQZDVWRH[HPSOLI\WKDWGLVWLQF
WLRQDQGWRVLJQDOLWVVLJQLFDQFHIRUWKHXQGHUVWDQGLQJRIERWKUHYROXWLRQDU\DQG
QRUPDOVFLHQWLFFKDQJH
&KDUDFWHULVWLFRIKLVWURXEOHVRPHFODVV.XKQQRWHGLVWKDWWKHUHLVQRVLQJOH
PRPHQWRUGD\ZKLFKWKHKLVWRULDQKRZHYHUFRPSOHWHKLVGDWDFDQLGHQWLI\DV
WKHSRLQWDWZKLFKWKHGLVFRYHU\ZDVPDGH2IWHQZKHQVHYHUDOLQGLYLGXDOVDUH
LQYROYHGLWLVHYHQLPSRVVLEOHXQHTXLYRFDOO\WRLGHQWLI\DQ\RQHRIWKHPDVWKH
GLVFRYHUHU)RUH[DPSOH>W@KRXJKXQGRXEWHGO\FRUUHFWWKHVHQWHQFH2[\JHQ
ZDV GLVFRYHUHG PLVOHDGV E\ VXJJHVWLQJ WKDW GLVFRYHULQJ VRPHWKLQJ LV D VLQJOH
VLPSOHDFWXQHTXLYRFDOO\DWWULEXWDEOHLIRQO\ZHNQHZHQRXJKWRDQLQGLYLGXDO
DQGDQLQVWDQWLQWLPH:KHQWKHGLVFRYHU\LVXQH[SHFWHGKRZHYHUWKHODWWHUDW
WULEXWLRQLVDOZD\VLPSRVVLEOHDQGWKHIRUPHURIWHQLVDVZHOO.XKQFRQFOXGHG
IURPWKHR[\JHQFDVHWKDWGLVFRYHULQJDQHZVRUWRISKHQRPHQRQLVQHFHVVDULO\
DFRPSOH[SURFHVVZKLFKLQYROYHVUHFRJQL]LQJERWKWKDWVRPHWKLQJLVDQGZKDWLW
LV2EVHUYDWLRQDQGFRQFHSWXDOL]DWLRQIDFWDQGWKHDVVLPLODWLRQRIIDFWWRWKHRU\
DUHLQVHSDUDEO\OLQNHGLQWKHGLVFRYHU\RIVFLHQWLFQRYHOW\,QHYLWDEO\WKDWSURFHVV
H[WHQGVRYHUWLPHDQGPD\RIWHQLQYROYHDQXPEHURISHRSOH2QO\IRUGLVFRYHULHV
LQP\VHFRQGFDWHJRU\WKRVHZKRVHQDWXUHLVNQRZQLQDGYDQFHFDQGLVFRYHULQJ
WKDWDQGGLVFRYHULQJZKDWRFFXUWRJHWKHUDQGLQDQLQVWDQW
7KLVLPSRUWDQWLQVLJKWOD\XQH[SORLWHGDV.XKQVKLIWHGKLVDQGWKHUHDGHUV
DWWHQWLRQWRLVVXHVWKDWUHODWHGKLVWUHDWPHQWRIGLVFRYHULHVWRKLVVRRQWREHXQ
YHLOHG DQDO\VLV RI VFLHQWLF UHYROXWLRQV .XKQ WKXV GHFRQVWUXFWHG WKH FRPPRQ
XQGHUVWDQGLQJRIVFLHQWLFGLVFRYHU\ZLWKRXWUHFRQFHSWXDOL]LQJLWVHSLVWHPRORJLFDO
VLJQLFDQFH+HH[WUDFWHGWKUHHFRPPRQFKDUDFWHULVWLFVIURPKLVDFFRXQWVRIWKH
XQDQWLFLSDWHGGLVFRYHULHVRIR[\JHQ8UDQXVDQG[UD\V$OOWKUHHEHJDQZLWK
WKHH[SHULPHQWDORUREVHUYDWLRQDOLVRODWLRQRIDQDQRPDO\WKDWLVZLWKQDWXUHV
IDLOXUHWRFRQIRUPHQWLUHO\WRH[SHFWDWLRQ7KHUHW\SLFDOO\IROORZVDPRUH
RUOHVVH[WHQGHGSHULRGGXULQJZKLFKWKHLQGLYLGXDODQGRIWHQPDQ\PHPEHUVRI
KLV JURXS VWUXJJOH WR PDNH WKH DQRPDO\ ODZOLNH:KLOH LW FRQWLQXHV VFLHQWLVWV
.XKQD +HODWHUDGGHG8UDQXVWRWKHUVWFODVV
.XKQD
.XKQD LWDOLFVVXSSOLHG
.XKQD FIE>'@LVFRYHULQJDQHZVRUWRISKHQRP
HQRQLVQHFHVVDULO\DFRPSOH[HYHQWRQHZKLFKLQYROYHVUHFRJQL]LQJERWKWKDWVRPHWKLQJ
LVDQGZKDWLWLV1RWHIRUH[DPSOHWKDWLIR[\JHQZHUHGHSKORJLVWLFDWHGDLUIRUXVZH
VKRXOGLQVLVWZLWKRXWKHVLWDWLRQWKDW3ULHVWOH\KDGGLVFRYHUHGLWWKRXJKZHZRXOGVWLOOQRW
NQRZTXLWHZKHQ%XWLIERWKREVHUYDWLRQDQGFRQFHSWXDOL]DWLRQIDFWDQGDVVLPLODWLRQWR
WKHRU\DUHLQVHSDUDEO\OLQNHGLQGLVFRYHU\WKHQGLVFRYHU\LVDSURFHVVDQGPXVWWDNHWLPH
2QO\ZKHQDOOWKHUHOHYDQWFRQFHSWXDOFDWHJRULHVDUHSUHSDUHGLQDGYDQFHLQZKLFKFDVH
WKHSKHQRPHQRQZRXOGQRWEHRIDQHZVRUWFDQGLVFRYHU\WKDWDQGGLVFRYHU\ZKDWRFFXU
HIIRUWOHVVO\WRJHWKHUDQGLQDQLQVWDQW
.XKQD
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
.XKQD
.XKQD ZKLFKUHSODFHVWKHODVWWKUHHZRUGVZLWKWKHGLVFRYHU\RI
WKDWSKHQRPHQRQ7KHUHSULQWLQJRIWKHHVVD\RPLWVWKHRULJLQDOVVXEKHDGLQJVLQWURGXFLQJ
WKHVHWKUHHSRLQWV$ZDUHQHVVRIDQRPDO\0DNLQJWKHDQRPDO\EHKDYHDQG$GMXVW
PHQWDGDSWDWLRQDQGDVVLPLODWLRQ
.XKQD $OWKRXJKKHUHIHUUHGLQDIRRWQRWHWRWKHHDUO\
SDJHVRIKLVSDSHUIRU>D@FORVHO\VLPLODUDQDO\VLVRIWKHHPHUJHQFHRIDQHZWKHRU\
DQ Q.XKQVSDSHUGLGQRWDGGUHVVWKHTXHVWLRQRI
WKHGLVFRYHU\RIHQHUJ\FRQVHUYDWLRQDQGLWLVQRWFOHDUWRPHZKHUHLQOD\WKHDOOHJHGVLPL
ODULW\HVSHFLDOO\VLQFHDQRPDOLHVSOD\HGQRUROHLQKLVVWRU\RIWKHHPHUJHQFHRIHQHUJ\
FRQVHUYDWLRQ
%DUQHV LH 6HFWLRQ 'LVFRYHU\ ZKLFK GHDOV RQO\ ZLWK .XKQ
D
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
HYHQWEXWDGUDZQRXWSURFHVVRIFRJQLWLYHUHRULHQWDWLRQ2WKHULQVWDQFHVRI
ZKDW%DUQHVWHUPHGFRQFHSWXDOFKDRVLQWKHR[\JHQVWRU\.XKQWROGDQGKLV
VHQVH WKDW WKH FRPPRQ XQGHUVWDQGLQJ RI GLVFRYHU\ ZDV LQH[WULFDEO\ DVVRFLDWHG
ZLWKLWVEHLQJDGLVFUHWHHYHQWSURPSWHGKLPWRUHFRPPHQGDEDQGRQLQJWKHFRQ
FHSWDOWRJHWKHU.XKQVUHFRPPHQGDWLRQRIWZRGHFDGHVDJRWKDWGLVFRYHU\EH
XQGHUVWRRGDVDSURFHVVUDWKHUWKDQHYHQWLVXQGXO\FDXWLRXVLWLVPRUHSURWDEOH
WRDEDQGRQVHULRXVXVHRIWKHWHUPDOWRJHWKHU7RVSHDNRIGLVFRYHU\LVWRDEHWD
IRUPRIFROOHFWLYHVHOIIRUJHWIXOQHVVKDUPOHVVHYHQIXQFWLRQDOLQVFLHQFHLWVHOI
EXWGLVDVWURXVLIWKHDLPLVWRVWXG\VFLHQFH
7KDW.XKQVSUHVHQWDWLRQRILVVXHVVXUURXQGLQJVFLHQWLFGLVFRYHU\ZDVWDLORUHG
WRWKLVIRUWKFRPLQJ6WUXFWXUHRIVFLHQWLFUHYROXWLRQVLVVXJJHVWHGLQWKHERRNV
WDEOHRIFRQWHQWVZKHUHWKHKHDGLQJVRIWKHVL[WKDQGVHYHQWKVHFWLRQVLQGLFDWHWKH
FRQFHSWXDOUROHWKHSURFHVVRIGLVFRYHU\SOD\VDVDQDQDORJWRWKHODUJHUSURFHVV
RIVFLHQWLFUHYROXWLRQ$QRPDO\DQGWKHHPHUJHQFHRIVFLHQWLFGLVFRYHULHVLV
IROORZHGE\&ULVLVDQGWKHHPHUJHQFHRIVFLHQWLFWKHRULHV+HUHSHDWHGWKH
PDMRUWKHPHVRIWKHHDUOLHUSDSHU
>'LVFRYHULHV@DUHQRWLVRODWHGHYHQWVEXWH[WHQGHGHSLVRGHVZLWKDUHJXODUO\UHFXU
UHQWVWUXFWXUH'LVFRYHU\FRPPHQFHVZLWKWKHDZDUHQHVVRIDQRPDO\LHZLWK
WKHUHFRJQLWLRQWKDWQDWXUHKDVVRPHKRZYLRODWHGWKHSDUDGLJPLQGXFHGH[SHFWD
WLRQVWKDWJRYHUQQRUPDOVFLHQFH,WWKHQFRQWLQXHVZLWKDPRUHRUOHVVH[WHQGHG
H[SORUDWLRQRIWKHDUHDRIDQRPDO\$QGLWFORVHVRQO\ZKHQWKHSDUDGLJPWKHRU\
KDVEHHQDGMXVWHGVRWKDWWKHDQRPDORXVKDVEHFRPHWKHH[SHFWHG$VVLPLODWLQJD
QHZVRUWRIIDFWGHPDQGVDPRUHWKDQDGGLWLYHDGMXVWPHQWRIWKHRU\DQGXQWLOWKDW
DGMXVWPHQWLVFRPSOHWHGXQWLOWKHVFLHQWLVWKDVOHDUQHGWRVHHQDWXUHLQDGLIIHUHQW
ZD\WKHQHZIDFWLVQRWTXLWHDVFLHQWLFIDFWDWDOO
$IWHUDODWHUUHFDSLWXODWLRQRIWKHVHSRLQWV.XKQDGGHG7KHUHLVHYHQHYLGHQFHWKDW
WKHVHVDPHFKDUDFWHULVWLFVDUHEXLOWLQWRWKHQDWXUHRIWKHSHUFHSWXDOSURFHVVLWVHOI
7KDWREVHUYDWLRQLQWURGXFHGKLVH[WHQGHGGLVFXVVLRQRIFDUGLGHQWLI\LQJH[SHUL
PHQWV7KHFRQFOXVLRQKHGUHZUHYHDOHGZKDWKHKHOGWREHRIPRVWLPSRUWDQFH
(LWKHUDVDPHWDSKRURUEHFDXVHLWUHHFWVWKHQDWXUHRIWKHPLQGWKDWSV\FKRORJLFDO
H[SHULPHQWSURYLGHVDZRQGHUIXOO\VLPSOHDQGFRJHQWVFKHPDIRUWKHSURFHVVRI
VFLHQWLFGLVFRYHU\,QVFLHQFHDVLQWKHSOD\LQJFDUGH[SHULPHQWQRYHOW\HPHUJHV
%DUQHV
%DUQHVFI7RPDNHRXWGLVFRYHU\DVDXQLWHYHQWKDVREYLRXVFRQYHQLHQFH
LQVFLHQFHLWVHOILWOHJLWLPDWHVWKHH[SHGLHQWFRPPXQDOGHFLVLRQVZKLFKKRQRXUVHOHFWHG
LQGLYLGXDOVFLHQWLVWVDVGLVFRYHUHUV%XWWKHVDPHVWUDWHJ\RIGHVFULSWLRQGRHVYLROHQFHWR
KLVWRU\LIWKHH[DPSOHDERYHLVDWDOOW\SLFDO
.XKQE[Y LLL([FHSWZKHUHRWKHUZLVHLQGLFDWHGWKHSDJLQDWLRQRIWKH
WZRHGLWLRQVLVWKHVDPH
.XKQE
.XKQE
.XKQE
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
RQO\ZLWKGLIFXOW\PDQLIHVWHGE\UHVLVWDQFHDJDLQVWDEDFNJURXQGSURYLGHGE\
H[SHFWDWLRQ7KDW DZDUHQHVV RI DQRPDO\ RSHQV D SHULRG LQ ZKLFK FRQFHSWXDO
FDWHJRULHVDUHDGMXVWHGXQWLOWKHLQLWLDOO\DQRPDORXVKDVEHFRPHWKHDQWLFLSDWHG
$WWKLVSRLQWWKHGLVFRYHU\KDVEHHQFRPSOHWHG
7KHFRQWH[WIRUWKHHPHUJHQFHRIDQRPDOLHVLVQRUPDOVFLHQFHDQGLWVSDUDGLJP
GHQHGH[SHFWDWLRQV
,Q RWKHU ZRUGV .XKQV LQWHUHVW LQ WKH SUREOHP RI VFLHQWLF GLVFRYHU\ ZDV
JRYHUQHGE\KLVODUJHULQWHUHVWLQSUHVHQWLQJDQHZSLFWXUHRIWKHQDWXUHRIVFLHQFH
DQGRIVFLHQWLFFKDQJH$QRPDOLHVLQWKHWUDGLWLRQDOXQGHUVWDQGLQJRIVFLHQWLF
GLVFRYHULHVSURYLGHG.XKQZLWKWKHRFFDVLRQWRRIIHUDQHZLQWHUSUHWDWLRQJURXQGHG
LQKLVQHZSDUDGLJPIRUXQGHUVWDQGLQJVFLHQFH+HUHIHUUHGWRKLVSDSHURI
IRUDIXOOHUDFFRXQWDQGELEOLRJUDSK\RIKRZFORVHO\IDFWXDODQGWKHRUHWLFDO
QRYHOW\DUHLQWHUWZLQHGLQWKHFDVHRIWKHGLVFRYHU\RIR[\JHQQRWIRULWVWUHDWPHQW
RIWKHSUREOHPRIVFLHQWLFGLVFRYHU\LQJHQHUDO)RUWKH.XKQRI6WUXFWXUHWKH
SUREOHPRIVFLHQWLFGLVFRYHU\ZDVRILQWHUHVWSULPDULO\DVDZD\WRJHWDWODUJHU
LVVXHVFRQFHUQLQJWKHQDWXUHRIVFLHQFH6WUXFWXUHGRHVQRWGLVFXVVFRQVHUYDWLRQ
RIHQHUJ\DQGPHQWLRQHG.XKQVHDUOLHUSDSHURQWKHVXEMHFWRQO\LQDIRRWQRWHLQ
WKHSUHIDFHUHJDUGLQJWKHHIIHFWVRIH[WHUQDOLQWHOOHFWXDODQGHFRQRPLFFRQGLWLRQV
XSRQVXEVWDQWLYHVFLHQWLFGHYHORSPHQWVDWRSLFH[FOXGHGIURP6WUXFWXUH3HU
KDSVWKHH[FOXVLRQRIHQHUJ\FRQVHUYDWLRQUHHFWHG.XKQVLQDELOLW\WRPDNHWKDW
HSLVRGHRIVLPXOWDQHRXVGLVFRYHU\WWKHSDWWHUQRIDQRPDO\LQGXFHGVFLHQWLF
UHYROXWLRQ
,QDQHQF\FORSHGLDDUWLFOHRIRQ7KHKLVWRU\RIVFLHQFH.XKQPDGH
SDVVLQJUHIHUHQFHWRVFLHQWLFGLVFRYHU\ZKLOHFRPPHQWLQJRQWKHVLJQLFDQFHRI
LQWHUSUHWLYHGLIFXOWLHVWKHSUDFWLFLQJKLVWRULDQZLOOW\SLFDOO\IDFHLQDWWHPSWLQJWR
XQGHUVWDQGSDVWVFLHQFH
5HFRJQL]LQJWKDWVFLHQWLVWVDUHRIWHQIDPRXVIRUUHVXOWVWKH\GLGQRWLQWHQGKH
VKRXOGDVNZKDWSUREOHPVKLVVXEMHFWZRUNHGDWDQGKRZWKHVHEHFDPHSUREOHPV
IRUKLP5HFRJQL]LQJWKDWDKLVWRULFGLVFRYHU\LVUDUHO\TXLWHWKHRQHDWWULEXWHGWR
.XKQE,QDQHVVD\WKDWFLWHGRQO\.XKQVSHFLFDOO\.XKQIURP
DPRQJWKHDXWKRUVGLVFXVVHGKHUHZKRKDYHDGGUHVVHGWKHLVVXHRIVFLHQWLFGLVFRYHU\)/
+ROPHVVXPPDUL]HG.XKQVDQDO\VLVRISUREOHPVDWWHQGLQJDQ\DWWHPSW
WRDQVZHUWKHTXHVWLRQ:KRGLVFRYHUHGR[\JHQ"+LVFRQFOXVLRQZDVWKDW>G@LVFRYHU\LV
WKHUHIRUHDPRUHFRPSOH[SURFHVVWKDQLWLVFRPPRQO\WDNHQWREHDQGWKHLGHQWLWLHVRI
GLVFRYHULHVDUHPRUHXLGWKDQWKHSDFNDJHVZHFRPPRQO\ZUDSDURXQGWKHLUKLVWRULFDO
DGYHQWVXSSRVH+ROPHVEULHIHVVD\LVHQWLUHO\LQWKHVSLULWRIWKLVSDSHU
&I .XKQ E 'LVFRYHU\ LV QRW WKH VRUW RI SURFHVV DERXW ZKLFK WKH TXHV
WLRQ>:KRUVWGLVFRYHUHGR[\JHQDQGZKHQ"@LVDSSURSULDWHO\DVNHG7KHIDFWWKDWLWLV
DVNHGLVDV\PSWRPRIVRPHWKLQJDVNHZLQWKHLPDJHRIVFLHQFHWKDWJLYHVGLVFRYHU\VR
IXQGDPHQWDODUROH
.XKQE[LL [
.XKQ TXRWHGLQ&DQHYD
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
LWVDXWKRULQODWHUWH[WERRNVSHGDJRJLFJRDOVLQHYLWDEO\WUDQVIRUPDQDUUDWLYH
WKHKLVWRULDQVKRXOGDVNZKDWKLVVXEMHFWWKRXJKWKHKDGGLVFRYHUHGDQGZKDWKH
WRRNWKHEDVLVRIWKDWGLVFRYHU\WREH$QGLQWKLVSURFHVVRIUHFRQVWUXFWLRQWKH
KLVWRULDQVKRXOGSD\SDUWLFXODUDWWHQWLRQWRKLVVXEMHFWVDSSDUHQWHUURUVQRWIRU
WKHLURZQVDNHEXWEHFDXVHWKH\UHYHDOIDUPRUHRIWKHPLQGDWZRUNWKDQGRWKH
SDVVDJHVLQZKLFKDVFLHQWLVWVHHPVWRUHFRUGDUHVXOWRUDQDUJXPHQWWKDWPRGHUQ
VFLHQFHVWLOOUHWDLQV
,WLVVLJQLFDQWWKDW.XKQJORVVHGWKHVLJQLFDQFHRIWKRVHGLIFXOWLHVVROHO\LQ
WHUPVRIZD\VWKHKLVWRULDQFDQHQWHULQWRWKHFRQFHSWXDOZRUOGRIWKHVFLHQWLVWQRW
DOVRDVDZD\RIUHFRQFHSWXDOL]LQJDJHQHUDOXQGHUVWDQGLQJRIVFLHQWLFGLVFRYHU\
DQGLWVKLVWRULRJUDSKLFDOVLJQLFDQFH
.XKQVRQO\RWKHUIRFXVHGGLVFXVVLRQRIVFLHQWLFGLVFRYHU\FDPHLQLQ
WKHODVWVHFWLRQRIKLVUHVSRQVHWRXQQDPHGFULWLFVRIKLVERRNRQ3ODQFN
7KDWGLVFXVVLRQUHYHDOVERWKKRZFORVH.XKQFDPHWRWKHSHUVSHFWLYHGHYHORSHG
KHUHDQGKRZIDUKHQHYHUWKHOHVVUHPDLQHGIURPGHYHORSLQJLWVLPSOLFDWLRQV.XKQ
REVHUYHG
>,@IZHFDQOHDUQWRUHIUDLQIURPDWWULEXWLQJWRSDVWVFLHQWLVWVDJUDVSRIYLHZV
WKDW KDG QRW HPHUJHG ZKHQ WKH\ ZURWHIURP HTXDWLQJ GLVFRYHULHV ZLWK WKHLU
FDQRQLFDO IRUPXODWLRQVYH[LQJ SUREOHPV PD\ YDQLVK LQ WKH SURFHVV 2Q WKLV
UHDGLQJWKHSUREOHPVWKDWYDQLVKDUHPRVWO\WH[WXDODQRPDOLHVIRXQGLQSDVVDJHV
WKDWGRQRWTXLWHPDNHVHQVHZKHQUHDGLQZD\VWKDWEHFDPHVWDQGDUGRQO\DIWHU
WKH\ZHUHZULWWHQ
7KLVSRLQWLVRIWHQKHDUGDVDPHUHSOHDIRUVFKRODUO\DFFXUDF\KLVWRULDQV
VKRXOGEHFDUHIXOQRWWRDWWULEXWHWRWKHLUVXEMHFWVEHOLHIVWKDWFRQLFWZLWKWKLQJV
WKH\VDLGRUZURWH%XW,KDYHLQPLQGVRPHWKLQJPRUHDQGVRPHWKLQJGLIIHUHQW
&UHDWLYH VFLHQWLVWV FDQ EH DQG W\SLFDOO\ DUH UHVSRQVLEOH IRUWKH HPHUJHQFH RI
EHOLHIVWKDWWKH\GLGQRWKROGWKHPVHOYHVDWOHDVWQRWGXULQJWKHSHULRGZKHQWKHLU
GLVFRYHULHVZHUHPDGH,IRQHLVWROHDUQKRZWKRVHGLVFRYHULHVFDPHDERXWKRZ
QHZNQRZOHGJHHPHUJHGWKHQRQHPXVWQGRXWKRZWKHGLVFRYHUHUVWKHPVHOYHV
WKRXJKWDERXWZKDWWKH\ZHUHGRLQJ2IWHQLWWXUQVRXWWKDWQRWMXVWWKHLUEHOLHIVEXW
WKHLUYHU\PRGHVRIWKRXJKWZHUHGLIIHUHQWIURPWKHRQHVWRZKLFKWKHLUGLVFRYHULHV
JDYHULVHDQGWKHODWHUGLIIHUHQFHLVFHQWUDOWR6WUXFWXUHRIVFLHQWLFUHYROXWLRQV
7KLVUHDOL]DWLRQLVQRWIDUIURPWKHSRLQW,UHDFKHGDIWHUQRWLFLQJDUHFXUUHQW
SDWWHUQHPHUJLQJIURPP\RZQZRUNRQHWKDWRSHQHGXSDQHZZD\WRFRQFHS
WXDOL]HVFLHQWLFGLVFRYHU\)RU.XKQKRZHYHUWKLVUHDOL]DWLRQVHUYHGDVEDFN
GURSIRUKLVLQVWDQFLQJWKHLPSRUWDQFHRIWKHFRQFHSWVWKDWOD\DWWKHKHDUWRIKLV
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
XQGHUVWDQGLQJRIVFLHQFH7KHZUHQFKLQJH[SHULHQFHRIHQWHULQJLQWRDQROGHU
PRGHRIWKRXJKWLVWKHVRXUFHRIP\UHIHUHQFHVWRJHVWDOWVZLWFKHVDQGUHYROXWLRQV
GLIFXOWLHVLQWUDQVODWLQJWKHGLVFRYHUHUVODQJXDJHLQWRRXURZQDUHZKDWOHGPH
WRZULWHDOVRRILQFRPPHQVXUDELOLW\DQGSDUDGLJPVZHUHWKHFRQFUHWHH[DPSOHV
QHHGHGVLQFH GHQLWLRQ LQ ZRUGV ZDV LPSRVVLEOHWR DFTXLUH WKH ODQJXDJH RI
WKHROGHUPRGH
.XKQH[SORLWHGKLVIXUWKHUREVHUYDWLRQWKDW>H@QWU\LQWRDGLVFRYHUHUVFXOWXUH
RIWHQSURYHVDFXWHO\XQFRPIRUWDEOHHVSHFLDOO\IRUVFLHQWLVWVLQRUGHUWRH[KLELW
WKH>V@\VWHPDWLFGLVWRUWLRQVRIPHPRU\ZKLFKW\SLFDOO\PDUNVFLHQWLVWVUHWUR
VSHFWLYHDFFRXQWVRIHYHQWKHLURZQZRUNDQGZKLFKGLVJXLVHWKHIDFWWKDWWKHLU
GLVFRYHULHVZHUHWKHSURGXFWRIEHOLHIVDQGWKHRULHVLQFRPSDWLEOHZLWKWKRVHWR
ZKLFKWKHGLVFRYHULHVWKHPVHOYHVJDYHULVH2WKHUSDVVDJHVDUHPRUHVWURQJO\
UHPLQLVFHQWRIWKHYLHZVGHYHORSHGKHUH'LVFRYHULHVDUHH[WHQGHGSURFHVVHVVHO
GRPDWWULEXWDEOHWRDSDUWLFXODUPRPHQWLQWLPHDQGVRPHWLPHVQRWHYHQWRDVLQJOH
LQGLYLGXDO>,W@W\SLFDOO\WXUQVRXWWKDWWKHSHUVRQUHVSRQVLEOHIRUDGLVFRYHU\GLG
QRWEHOLHYHLQLWKLPVHOIDWOHDVWQRWLIEHOLHILQWKHGLVFRYHU\LVEHOLHILQLWVVXE
VHTXHQWFDQRQLFDOIRUPXODWLRQ(YHQZKHQWKHGLVFRYHUHUVRZQFRQWULEXWLRQZDV
VXEVWDQWLDOO\FRPSOHWHKHVWLOOWKRXJKWRIZKDWKHKDGGRQHLQDZD\VLJQLFDQWO\
GLIIHUHQWIURPWKHZD\LQZKLFKWKDWFRQWULEXWLRQFDPHODWHUWREHGHVFULEHG
<HWKHGLGQRWVXSSRUWWKHVHJHQHUDOLWLHVZLWKKLVWRULFDOH[DPSOHVOHWDORQHDQ\
H[WHQGHGWUHDWPHQWRIKLVWRULFDOH[DPSOHV
)URPWKHUH.XKQZHQWRQWRGLVFXVVWKHVLJQLFDQFHRISULRULW\FRQWURYHUVLHV
DQGWKHV\PEROLFLPSRUWDQFHVFLHQWLVWVDVVLJQWRWKHFRQFHSWRIWKHXQLWGLVFRY
HU\:KDW.XKQGLGQRWGRZDVWRSXUVXHWKHVHLVVXHVLQWKHGLUHFWLRQRIWKH
FROOHFWLYHUHFDVWLQJRIVFLHQWLFGLVFRYHULHVDVLQVWDQFHVRIWKHFROOHFWLYHFRQVWUXF
WLRQRIVFLHQWLFNQRZOHGJHQRUDVDZD\RISURYLGLQJDQKLVWRULFDOJURXQGLQJIRU
VFLHQWLFNQRZOHGJH.XKQVFKLHILQWHUHVWLQVFLHQWLFGLVFRYHU\ZDVWRLOOXVWUDWH
WKHSDUDGLJPGHSHQGHQWQDWXUHRIVFLHQWLFNQRZOHGJHDQGWKHVRFLRORJLFDOIXQ
FLRQWLRQRIVFLHQWLVWVDFFHSWDQFHRIWKHVLJQLFDQFHRIGLVFRYHU\
,Q5HYLVLWLQJ3ODQFN.XKQUDLVHGWKHTXHVWLRQ:K\VKRXOGVRPDQ\VFL
HQWLVWVDQGDOVRDQRFFDVLRQDOKLVWRULDQJKWVRKDUGRIWHQZLWKRXWTXLWHUHDOL]LQJ
WKH\DUHGRLQJVRWRUHFDVWSDVWGHYHORSPHQWVLQWKHODQJXDJHRIPRGHUQFRQFHSWV"
:K\VKRXOGDWWHPSWVWRUHFRQVWUXFWDFRQFHSWXDOSDVWLQLWVRZQWHUPVVRRIWHQEH
.XKQ LWDOLFVVXSSOLHG7KLVSDVVDJHLPPHGLDWHO\IROORZVWKH
RQHMXVWTXRWHG
.XKQ &IE]Z/DWHUDFFRXQWVRI
DGLVFRYHU\W\SLFDOO\UHGHVFULEHLWEXWDJDLQLQWKHFRQFHSWXDOYRFDEXODU\RIWKHSHULRGLQ
ZKLFKWKH\DUHSUHSDUHG7KHUHVXOWLVWKHOLQHDUL]HGRUFXPXODWLYHKLVWRULHVIDPLOLDUIURP
VFLHQFHWH[WERRNVDQGIURPWKHLQWURGXFWRU\FKDSWHUVRIVSHFLDOL]HGPRQRJUDSKV
.XKQ
.XKQ .XKQ KDG DOUHDG\ HPSKDVL]HG WKH JUHDW LPSRUWDQFH
VFLHQWLVWVDVVLJQWRXQLWGLVFRYHULHVDVFRQVWLWXWLYHRIWKHVFLHQWLFOLIHE]Z
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
UHJDUGHGDVVXEYHUVLYH".XKQVDQVZHUZDVWKDWSHRSOHXVXDOO\UHVLVWHQWHULQJ
DQDOLHQFXOWXUHEHFDXVHGRLQJVRHQWDLOVH[SRVLQJWKHIRXQGDWLRQVRIDSUHYL
RXVOLIHIRUPDVFRQWLQJHQWDQGWKUHDWHQLQJWKHLQWHJULW\RIWKHOLIHRQHKDGOLYHG
EHIRUH +H GLG QRW DSSO\ WKHVH LQVLJKWV WR WKH NLQGV RI SUREOHPV UHODWLQJ WR
WKHKLVWRULRJUDSK\RIVFLHQWLFGLVFRYHU\EURDFKHGE\KLVHDUOLHUZRUN,QGHHGLI
.XKQKDGEHHQHVSHFLDOO\FRQFHUQHGZLWKWKHKLVWRULFDOO\WUDQVIRUPDWLYHQDWXUHRI
GLVFRYHU\DFFRXQWVKHPLJKWKDYHH[SORLWHGKLVUHEXWWDORI9LFWRU/D0HUV
KLVWRULFDOO\LQDFFXUDWHUHSUHVHQWDWLRQRI&DUQRWVLGHDV$QXQGHUVWDQGLQJRIWKH
UHODWLRQVKLSEHWZHHQDSLRQHHUOLNH&DUQRWDQGKLVVXFFHVVRUVZRXOGFRQWULEXWHWR
DQXQGHUVWDQGLQJRIWKHZD\VFLHQWLFFRQFHSWVGHYHORS
3KLORVRSKHU5LFKDUG%ODFNZHOOV'LVFRYHU\LQWKHSK\VLFDOVFLHQFHV
HPSKDVL]HG WKDW >I@RU VRPHWKLQJ WR FRXQW DV D GLVFRYHU\ LW PXVW EHFRPH SDUW
RIWKHDFFHSWHGERG\RIUHOLDEOHVFLHQWLFNQRZOHGJHWKRXJKKHGLGQRWLQWKH
HYHQWWUDFNWKHYLFLVVLWXGHVRIDQ\SDUWLFXODUVFLHQWLFGLVFRYHU\DVYLHZVFKDQJHG
UHJDUGLQJZKDWZDVVFLHQWLFDOO\DFFHSWDEOH,QWKHSURFHVVRIEHFRPLQJDERQD
GHVFLHQWLFGLVFRYHU\WKHVWUXFWXUHGLVFRYHUHGLVJHQHUDOL]HGDVDXQLYHUVDO
VWDWHPHQWWUDQVFHQGLQJWKHSDUWLFXODUH[SHULHQFHVWKDWPD\LQLWLDOO\KDYHFRQVWL
WXWHGWKHGLVFRYHU\7KDWKDYLQJEHHQDFFRPSOLVKHGWKHDQDO\VWVWDVNLVWKHQ
WRGHWHUPLQHKRZIDFWVRUGLVFRYHUHGVWUXFWXUHVDFTXLUHLQWHUSUHWDWLRQDVWKH\DUH
LQWHJUDWHGLQWRWKHIUDPHZRUNRIDVFLHQWLFV\VWHP,QRWKHUZRUGVKRZGRHV
RXUUHSUHVHQWDWLRQRIZKDWZDVGLVFRYHUHGFKDQJHLQDFFRUGDQFHZLWKRXUFKDQJLQJ
XQGHUVWDQGLQJDQGH[SODQDWLRQRIWKHGLVFRYHUHGVWUXFWXUH"
.XKQ
.XKQ
.XKQDFRO)RUWKHLUH[FKDQJHVHHDOVR/D0HUDQGDQG.XKQ
E,URQLFDOO\.XKQVDUJXPHQWDJDLQVW/D0HUOHGKLPWRGRZQSOD\RWKHUVFLHQWLVWV
VXEVHTXHQWUHVWDWHPHQWVRIZKDW&DUQRWDOOHJHGO\VDLG3URIHVVRU/D0HUVFRQWHQWLRQ
WKDW&DUQRWVGHYHORSPHQWRIWKHJDVHQJLQHF\FOHGRHVQRWYLRODWHWKHUVWODZLVEDVHGXSRQ
WKHREVHUYDWLRQWKDW&DUQRWQRZKHUHXVHVWKHODZDWWULEXWHGWRKLPE\&ODXVLXVDQGRWKHUV
WKDWG4 &HUWDLQO\WKHLQWHJUDOIRUPXODWLRQGRHVQRWRFFXUIRUWKHZKROHPHPRLULV
ZULWWHQZLWKRXWWKHXVHRIDVLQJOHLQWHJUDOVLJQ%XW&DUQRWUHSHDWHGO\PDNHVHTXLYDOHQW
VWDWHPHQWVYHUEDOO\FRO$IWHUTXRWLQJWZRSDUDJUDSKVIURP&DUQRWVERRN
KHFRQFOXGHG3DVVDJHVOLNHWKLVRFFXUDJDLQDQGDJDLQLQWKHPHPRLU7KH\VHHPLQVXP
SUHFLVHO\HTXLYDOHQWWRWKHODWHUSDUDSKUDVHVRI&DUQRWVSULQFLSOHOLNHG4 ZKLFK
/D0HUUHMHFWVDVXQIRUWXQDWHGLVWRUWLRQVRIDQXQH[FHSWLRQDEOHRULJLQDO$WOHDVWWKH\DUH
HTXLYDOHQWLILWLVSHUPLVVLEOHWRWUDQVODWHFDORULTXHDVKHDWFROV
%ODFNZHOO
%ODFNZHOO+HGHQHGVWUXFWXUHUDWKHUPXUNLO\DVWKHDUWLFXODWHG
UHODWHGQHVVRIWKHHOHPHQWVRIKXPDQH[SHULHQFHSURGXFHGE\SURJUHVVLYHVSHFLFDWLRQRI
WKHPLQGQDWXUHFRQIURQWDWLRQ7KHFRPSRQHQWVDUHDOZD\VGXHWRERWKWKHGLFWDWHVRIQDWXUH
DQGWKHIXQFWLRQVRIWKHPLQG,WLVZKDWLVDVVHUWHGRIQDWXUHE\WKHPLQG$VXVXDO
KHJDYHQRDFWXDOH[DPSOHV
%ODFNZHOO
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
5DWKHUWKDQDQVZHUWKDWTXHVWLRQ%ODFNZHOOPDGHWKHFRQFHSWXDOSRLQWWKDW
WKH SURFHVV RI WUDQVIRUPDWLRQ ZKLFK LV SURGXFWLYH ERWK RI DQ H[SODQDWRU\
V\VWHPDQGRIWKHRUHWLFDOHQWLWLHVJRHVEH\RQGWKHLQLWLDOHODERUDWLRQRIWKH
GLVFRYHUHGVWUXFWXUH+LVSRLQWZDVWKDWDQHZVSHFLHVRIREMHFWIRUVFLHQWLF
NQRZOHGJH KDV EHHQ SURGXFHG 'LVFRYHUHG VWUXFWXUHV DV WKH UVW GLUHFW REMHFWV
RIVFLHQWLFNQRZOHGJHKDYHEHHQUHSODFHGE\WKHRUHWLFDOHQWLWLHVDVDVXEVWLWXWH
REMHFWRINQRZOHGJH
%ODFNZHOOQHYHUH[HPSOLHGKLVDEVWUDFWFDWHJRULHVZLWKHVKHGRXWKLVWRULFDO
H[DPSOHVDQGKHGLGQRWDWWHPSWWRWUDFNFKDQJHVLQPHDQLQJRYHUWLPH1RUGLGKH
VKLIWWKHORFXVIRUXQGHUVWDQGLQJGLVFRYHU\IURPWKHLQGLYLGXDOWRWKHFRPPXQLW\
+LVFRQFOXVLRQUHYHDOVWKHH[WHQWWRZKLFKKLVFKLHIFRQFHUQZDVZLWKPDNLQJD
FRQFHSWXDOGLVWLQFWLRQQRWZLWKH[SODLQLQJKLVWRULFDOFKDQJH
7KHQHWUHVXOWRIWKLVDQDO\VLVLVWKDWWKHUHDUHWZROHYHOVRIGLVFRYHU\LQSK\VLFDO
VFLHQFHWKRVHGHDOLQJZLWKWKHDUWLFXODWLRQRIVWUXFWXUHVDWWKHOHYHORIHODERUD
WLRQDQGWKRVHGHDOLQJZLWKWKHJUDVSLQJRIH[SODQDWLRQVDWWKHOHYHORIWKHRUHWLFDO
WUDQVIRUPDWLRQ7KHIRUPHUDUHFRQFHUQHGZLWKWKHGHWHUPLQDWLRQRIIDFWVWKHODWWHU
ZLWKWKHLQWHUSUHWDWLRQRIIDFWV7KHIRUPHUDUHDQXQGHUVWDQGLQJRILQGLYLGXDO
SK\VLFDOIDFWVDQGHPSLULFDOODZVWKHODWWHUDUHDQXQGHUVWDQGLQJRIH[SODQDWRU\
WKHRUHWLFDOHQWLWLHV7KHIRUPHUDUHLQVWDQFHVRIGLVFRYHULQJWKDWWKHODWWHUDUH
LQVWDQFHVRIGLVFRYHULQJZK\
7RMXGJHIURPWKHSDXFLW\RIFLWDWLRQVWRLW%ODFNZHOOVDQDO\VLVRIVFLHQWLFGLVFRY
HU\IRXQGIDYRUZLWKQHLWKHUSKLORVRSKHUVKLVWRULDQVQRUVRFLRORJLVWVRIVFLHQFH
,Q FRQWUDVW VRFLRORJLVW 6WHYH:RROJDUV SDSHU RQ WKH GLVFRYHU\ RI SXOVDUV
:ULWLQJDQLQWHOOHFWXDOKLVWRU\RIVFLHQWLFGHYHORSPHQW7KHXVHRIGLVFRYHU\
DFFRXQWVTXLFNO\EHFDPHRQHRIWKHUHJXODUO\FLWHGFRQWULEXWLRQVWRWKH
SUREOHPRIVFLHQWLFGLVFRYHU\+LVDWWHQWLRQZDVGUDZQWRSUREOHPVDWWHQGLQJWKH
UHFRQVWUXFWLRQRIWKHSURFHVVRIGLVFRYHU\IURPPXOWLSOHGLYHUJHQWDFFRXQWVRI
WKHSDUWLFLSDQWVXSWRWKHSRLQWZKHUHDQLQLWLDOO\FODULHGFRQVHQVXVZDVUHDFKHG
+HHPSKDVL]HGWKDWWKHGLVFRYHU\RISXOVDUVZDVQRWDQLQVWDQWDQHRXVUHYHODWLRQ
RUVXGGHQSHUFHSWLRQRIDVLQJOHLQGLYLGXDOEXWDFRPSOH[SURFHVVH[WHQGLQJRYHU
WLPHDQGLQYROYLQJPXOWLSOHSDUWLFLSDQWV+HGLGQRWFRQFHUQKLPVHOIZLWKWKHVXE
%ODFNZHOO
%ODFNZHOOFI,QHODERUDWLRQWKHGLFWDWHVRIQDWXUHSOD\WKHSUHGRPLQDWH
UROH,QWUDQVIRUPDWLRQWKHIXQFWLRQVRIWKHPLQGFRPHLQWRWKHIRUHJURXQG$VGLVFRYHUHG
VWUXFWXUHVDUHWUDQVIRUPHGLQWRWKHRUHWLFDOHQWLWLHVWKHPLQGLVFRQVLGHUDEO\PRUHDFWLYH
DQGFRQGHQWDVLWZHUHLQGHDOLQJZLWKWKHGLFWDWHVRIQDWXUH7KHFRPSOH[LW\RIQDWXUH
KDVEHFRPHPRUHPDQDJHDEOHLQWKHSURFHVVRIHODERUDWLRQ
%ODFNZHOO
:RROJDUFIDQGQ
:RROJDU+HQRWHGLQDIRRWQRWHWKDW>W@KHUHLVVRPHVLPLODULW\KHUHZLWK
.XKQVDUJXPHQWWKDWVFLHQWLFGLVFRYHULHVDUHQRWLVRODWHGHYHQWVEXWH[WHQGHGHSLVRGHV
QFLWLQJ.XKQDQGUHIHUULQJWR.XKQD%UDQQLJDQ
IROORZHG.XKQDQG:RROJDULQLQVLVWLQJWKDWGLVFRYHU\ZDVW\SLFDOO\DWHPSRUDOO\SURWUDFWHG
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
VHTXHQWWUDQVIRUPDWLRQRIVFLHQWLVWVXQGHUVWDQGLQJRIZKDWKDGEHHQGLVFRYHUHG
,QFULWLTXLQJ.XKQVWUHDWPHQWRIGLVFRYHU\%DUU\%DUQHVFLWHG:RROJDUVSDSHU
ZLWKIDYRUDVGHPRQVWUDWLQJWKH>H[WHQGHG@SURFHVVRIFRJQLWLYHUHRULHQWDWLRQ
WKDWLQ.XKQVDFFRXQWDVZHOODFFRPSDQLHVWKHGLVFRYHU\RIXQDQWLFLSDWHGHQWL
WLHV,QWKHHQGKRZHYHU%DUQHVUHIXVHGWRGLVVRFLDWHWKHFRQFHSWRIGLVFRYHU\
IURPWKHLPSOLFDWLRQWKDWLWVYDOLGDWLRQPXVWEHDFFRPSOLVKHGDVRQHHYHQWDQG
DVQRWHGHDUOLHUKHUHFRPPHQGHGWKDWDQDO\VWVRIVFLHQFHDEDQGRQXVHRIWKHWHUP
QRWWKDWWKH\UHFRQFHSWXDOL]HWKHLUWUHDWPHQWRILW
3KLORVRSKHU7KRPDV1LFNOHVHGLWHGWZRLPSRUWDQWYROXPHVRQ6FLHQWLFGLV
FRYHU\WKDWGHULYHGIURPDFRQIHUHQFHLQ2FWREHU7ZHQW\YHRIWKH
WZHQW\QLQHDXWKRUVFDPHIURPSKLORVRSK\WZRZHUHIURPSV\FKRORJ\RQHHDFK
IURPSK\VLFVDQGWKHKLVWRU\RIVFLHQFH0RVWDXWKRUVWUHDWHGGLVFRYHULHVDVWKH
SURGXFWVRILQGLYLGXDOGLVFRYHUHUV6RPHOLNH/DUU\/DXGDQZHUHSULPDULO\LQWHU
HVWHGLQWKHGLVFRYHU\RIFRQFHSWVDQGWKHRULHVQRWSKHQRPHQDRUIDFWV+HZLQJWR
WKHWUDGLWLRQDOGLVWLQFWLRQEHWZHHQWKHGLVFRYHU\RIDFRQFHSWDQGLWVDFFHSWDQFH
LQWUDGLWLRQDOIDVKLRQ/DXGDQZDVFRQFHUQHGZLWKWKHHXUHNDPRPHQWLHWKH
WLPHZKHQDQHZLGHDRUFRQFHSWLRQUVWGDZQVRQDQLQGLYLGXDO
1LFNOHVLQWURGXFWLRQWRRQHRIWKHYROXPHVLQYRNHGWKHWUDGLWLRQDOGLVWLQFWLRQ
EHWZHHQGLVFRYHU\ZLWKLWVIRFXVRQDQLQGLYLGXDOVFUHDWLRQRIDQHZLGHDRU
WKHRU\DQGMXVWLFDWLRQLWVVXEVHTXHQWDQGLPSOLFLWO\XQFKDQJHGUHFHSWLRQE\
RWKHUV1LFNOHVGLGQRW\HWGHYHORSKLVSRLQWWKDWLWIUHTXHQWO\WDNHVVFLHQFH
DJRRGGHDORIWLPHDQGHIIRUWDIWHUDGLVFRYHU\WRVD\ZKDWH[DFWO\KDVEHHQGLV
FRYHUHG)RUFRQFHSWXDOO\GHHSGLVFRYHULHVWKHGLVFRYHU\LWVHOIEHWWHUWKHHDUO\
SRUWLRQRILWVFDUHHULVPHUHO\WKHUVWDGXPEUDWLRQRIWKHHODERUDWHQHZFRQFHSWXDO
DSSDUDWXVQHFHVVDU\WRGHVFULEHZKDWKDVEHHQGLVFRYHUHG3ODQFNVGLVFRYHU\RI
WKHTXDQWXPRIDFWLRQDQGRIQRQFODVVLFDOVWDWLVWLFVLVDQRWKHUJRRGFDVHLQSRLQW
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
1LFNOHVODWHUGHYHORSPHQWRIWKLVDQGRWKHUSRLQWVUHJDUGLQJVFLHQWLFGLVFRYHU\
ZLOOEHGLVFXVVHGWRZDUGWKHHQGRIWKLVVHFWLRQ
$OWKRXJK.XKQVZRUNPLJKWKDYHSURYLGHGWKHVWDUWLQJSRLQWIRUDIXOO\KLVWR
ULFL]HGH[DPLQDWLRQRIWKHFRQFHSWLRQRIVFLHQWLFGLVFRYHU\DQGRIWKHFRQWH[WX
DOO\FRQWLQJHQWQDWXUHRIZKDWZDVDFFRXQWHGDGLVFRYHU\ZLWKWKHH[FHSWLRQRI
:RROJDUVVWXG\RISXOVDUVQRRQHVHHPVWRKDYHGHYHORSHGWKRVHOHDGVXQWLOWKH
SXEOLFDWLRQRIVRFLRORJLVW$XJXVWLQH%UDQQLJDQVZRUNEHJLQQLQJLQ$OWKRXJK
/XGZLN)OHFNVEULOOLDQWPRQRJUDSKRIZDVSXEOLVKHGLQ(QJOLVKLQ
%UDQQLJDQDSSHDUVQRWWRKDYHNQRZQLWQRUGLGKHPHQWLRQLWLQKLVLPSRUWDQW
ERRNRI7KHVRFLDOEDVLVRIVFLHQWLFGLVFRYHU\
7KH RFFDVLRQ IRU %UDQQLJDQV H[DPLQDWLRQ RI VFLHQWLF GLVFRYHU\ ZDV KLV
DQDO\VLVLQ7KHUHLFDWLRQRI0HQGHORIWKHVLWXDWLRQVXUURXQGLQJWKHFRQYHQ
WLRQDOO\VRFDOOHGUHGLVFRYHU\RI0HQGHOVZRUNLQ&HQWUDOWRKLVDQDO\VLV
ZDVWKHREVHUYDWLRQWKDW0HQGHOVFRQFHUQVZHUHQRWWKHVDPHDVWKRVHRIKLVWKUHH
UHGLVFRYHUHUVDOORIZKRPHQOLVWHG0HQGHOLQVXSSRUWRISRVLWLRQVWKH\ZLVKHGWR
GHIHQG$OWKRXJK%UDQQLJDQGLGQRWTXLWHSXWLWWKLVZD\ZKDW0HQGHOZDVVHHQ
WRKDYHGLVFRYHUHGGHSHQGHGRQWKHLQWHUHVWVRIWKRVHZKRDVVLJQHGKLPGLVFRYHUHU
VWDWXV:KDW%UDQQLJDQGLGVD\LVWKDWWKHUHOHYDQFHRI0HQGHOVDFKLHYHPHQW
FKDQJHGRYHUWLPHIURPWKHSRLQWDWZKLFKLWZDVLQLWLDOO\FRQGXFWHGLQWKHV
DQGVWRWKHSRLQWDWZKLFKLWUHDSSHDUHGLQ
,QDORQJIRRWQRWHWRWKHSDSHUVUVWSDUDJUDSK%UDQQLJDQWHDVHGRXWVRPH
RI LWV LPSOLFDWLRQV IRU DQ XQGHUVWDQGLQJ RI VFLHQWLF GLVFRYHU\ LQ JHQHUDO +H
EHJDQ E\ FLWLQJ .XKQ RQO\ WR VKLIW WKH EXUGHQ RI .XKQV DQDO\VLV WR WKH SRLQW
RISDUWLFXODULPSRUWDQFHWRKLP7KRPDV6.XKQVXJJHVWVQRWRQO\WKDWWKHUH
DUHWZRW\SHVRIGLVFRYHULHVLQVFLHQFHQRUPDODQGUHYROXWLRQDU\EXWWKDWD
SDUWLFXODUDFKLHYHPHQWPLJKWFRQVWLWXWHDQRUPDOGLVFRYHU\IRURQHJURXSZKLOH
EHLQJDUHYROXWLRQDU\GLVFRYHU\IRUDQRWKHU7KHLPSOLFDWLRQVRIWKLVLQVLJKWDUH
VLJQLFDQWIRUDVRFLRORJLFDOPRGHORIWKHSUREOHPRIVFLHQWLFGLVFRYHU\DWKHRU\
RIGLVFRYHU\VKRXOGFRQFHUQLWVHOIQRWZLWKGHWHUPLQLQJZKDWPDNHVGLVFRYHULHV
KDSSHQEXWZLWKZKDWPDNHVFHUWDLQKDSSHQLQJVGLVFRYHULHV3RVLQJWKHFHQWUDO
TXHVWLRQLQWKDWIRUPZDV%UDQQLJDQVPRVWLPSRUWDQWFRQWULEXWLRQWRWKHOLWHUDWXUH
RQVFLHQWLFGLVFRYHU\
OLWWOHVSDFHWRLVVXHVRXWVLGHWKHWUDGLWLRQDOVFRSHRISKLORVRSKHUVXQGHUVWDQGLQJRIZKDW
EHORQJVWRWKHWRSLFRIVFLHQWLFGLVFRYHU\1LFNOHV
%UDQQLJDQ$OWKRXJK+ROPHVGLGQRWFLWH%UDQQLJDQVZRUNKLVFRQFOXVLRQ
LVFRQVRQDQWZLWKERWK%UDQQLJDQVDQGPLQH%HFDXVHGLVFRYHULHVDUHVHHQLQVFLHQFHDV
VWDEOHRQFHWKH\KDYHEHHQPDGH%DWHVRQZDVSUREDEO\XQDZDUHWKDWLQWWLQJ0HQGHOV
GLVFRYHU\ZLWKDQHZODQJXDJHDQGDVVRFLDWLQJLWZLWKFRQFHSWVWKDWKDGHPHUJHGVLQFH
0HQGHOVWLPHKHZDVWXUQLQJLWLQWRDVRPHZKDWGLIIHUHQWGLVFRYHU\WKDQWKHRQH0HQGHO
KDGRULJLQDOO\PDGH+ROPHV
%UDQQLJDQ
%UDQQLJDQQLQWKHHOLGHGVHQWHQFHKHFLWHG.XKQE
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
5HIHUULQJWRDUHODWHGXQSXEOLVKHGSDSHURIKLV%UDQQLJDQVNHWFKHGIRXULP
SOLFDWLRQVKHGHULYHGIURPKLVYLHZRIWKHVRFLDOEDVLVRIVFLHQWLFGLVFRYHU\
2QO\WKHODVWLVUHOHYDQWKHUH
7KH IRXUWK DQG PRVW LPSRUWDQW LPSOLFDWLRQ RI WKLV DSSURDFK WR 0HQGHO LV WKH
PRGHORIGLVFRYHU\ZKLFKLWUHFRPPHQGV6SHFLFDOO\WKHFDVHRI0HQGHOGUDZV
XVWRZDUGDQDWWULEXWLRQDOPRGHORIGLVFRYHU\LQZKLFKWKHFHQWUDOTXHVWLRQLV
DSKHQRPHQRORJLFDORQHKRZZDVWKLVHYHQWFRQVWLWXWHGDVDGLVFRYHU\"0RVW
PRGHOVRIGLVFRYHU\LQWKHFXUUHQWOLWHUDWXUHSRLQWWRSV\FKRORJLFDOFDXVDOUHOD
WLRQVKLSV'LVFRYHULHVDUHSLFWXUHGDVWKHRXWFRPHRIJHVWDOWVKLIWVWKHSHUFHSWLRQ
RIDQRPDOLHVUHWURGXFWLRQVXQFRQVFLRXVV\QWKHVLVVWURQJLQIHUHQFHDQGVRRQ
$OOWKHVHPRGHOVHTXDWHWKHTXHVWLRQRIGLVFRYHU\ZLWKWKHTXHVWLRQRIKRZDQ
LGHDJHWVLQWRDQLQGLYLGXDOVKHDG,DVNWKHTXHVWLRQRIKRZWKHLGHDVJHWLQWR
WKHVRFLHW\>:@KDWQHHGVWREHH[SODLQHGDUHWKHFULWHULDRILQWHOOLJLELOLW\E\
ZKLFKQDWLYHVSHDNHUVDUHDEOHWRLQWHUSUHWHYHQWVDVGLVFRYHULHV7KHFRPPRQVHQVH
SHUFHSWLRQRIGLVFRYHULHVLQYROYHVWDFLWMXGJHPHQWVDQGRUDWWULEXWLRQVUHJDUGLQJ
WKH YDOLGLW\ RI WKH DFKLHYHPHQWV WKHLU VXEVWDQWLYHO\ VFLHQWLF GHULYDWLRQ DQG
HPEHGGHGQHVVLQFRXUVHVRIUHVHDUFKDFWLRQWKHLUSDWHQWXQSUHFHGHQWHGQHVVDQG
WKHLUSRVVLELOLW\VWUXFWXUHLQWKHWUDGLWLRQ
7KRVHIRXUFULWHULDFRQVWLWXWHG%UDQQLJDQVVSHFLFDWLRQRIWKHFRQGLWLRQVQHFHVVDU\
IRUWKHLGHQWLFDWLRQRIDQHYHQWDVDVFLHQWLFGLVFRYHU\
%UDQQLJDQSXUVXHGWKHVHWKUHDGVLQDSDSHUSXEOLVKHGWKHQH[W\HDUDV1DWX
UDOLVWLFDQGVRFLRORJLFDOPRGHOVRIWKHSUREOHPRIVFLHQWLFGLVFRYHU\,QUHMHFWLQJ
ZKDWKHWHUPHGWKHWUDGLWLRQDOPHQWDOLVWLFDSSURDFKWRXQGHUVWDQGLQJVFLHQWLF
GLVFRYHULHV%UDQQLJDQDVVHUWHGWKDWDQDGHTXDWHDFFRXQWPXVWGHVFULEHKRZDQ
DFKLHYHPHQWLVFRQVWLWXWHGRUUHFRJQL]HGDVDGLVFRYHU\LQVFLHQFHQRWKRZDQLGHD
RFFXUUHGWRDQLQGLYLGXDO%XLOGLQJXSRQKLVHDUOLHUVWXG\RI0HQGHO%UDQQLJDQ
QRWHGWKDW>K@LVVWDWXVDVGLVFRYHUHULVDIXQFWLRQRIWKHSURFHVVRIVRFLDOUHFRJQL
WLRQKLVDFKLHYHPHQWVXQGHUZHQWDVDUHVXOWRIWKHSXEOLFDWLRQE\'H9ULHVDQG
KLVSULRULW\GLVSXWHZLWK&RUUHQV+LVHPSKDVLVZDVRQWKHVRFLDOUHFRJQLWLRQ
DSHUVRQLVDFFRUGHGWKHSHUVRQVVWDWXVDVDGLVFRYHUHUDQGRQWKHVRFLDOO\FRQ
WLQJHQWQDWXUHRIWKHLGHQWLFDWLRQRIVRPHWKLQJDVDGLVFRYHU\EXWQRWHVSHFLDOO\
RQWKHWUDQVIRUPDWLRQLQWKHPHDQLQJRIWKHGLVFRYHU\
%UDQQLJDQQRWHGWKDWWKHDWWULEXWLRQRIGLVFRYHU\LVVWUXFWXUHGLQSDUWE\WKH
SHUFHSWLRQWKDWWKHDQQRXQFHPHQWLVFRKHUHQWZLWKH[LVWLQJNQRZOHGJHLQWKHHOG
%UDQQLJDQQ7KHSDSHUDOOXGHGWRZDVFOHDUO\WKHRQHSXEOLVKHGDV%UDQ
QLJDQ7KHUVWWKUHHLPSOLFDWLRQVLQYROYHGKLVFULWLTXHRIWKHQRWLRQVWKDW0HQGHOZDV
LQLWLDOO\LJQRUHGEHFDXVHKHZDVRXWRIVWHSZLWKKLVFRQWHPSRUDULHVWKDWWKHUHGLVFRYHU\
RIKLVZRUNLQZDVDQLQVWDQFHRIPXOWLSOHVLPXOWDQHRXVGLVFRYHU\DQGWKDW0HQGHOV
FDVHH[HPSOLHVWKHGLVWLQFWLRQEHWZHHQFRQWH[WRIGLVFRYHU\DQGFRQWH[WRIMXVWLFDWLRQ
%UDQQLJDQQ
%UDQQLJDQ
%UDQQLJDQVRFLDOUHFRJQLWLRQDQGVWDWXVDVGLVFRYHUHUVDJDLQRQ
DWWULEXWLRQRIWKHVWDWXVGLVFRYHU\LVDIXQFWLRQRIVRFLDOUHFRJQLWLRQRQ
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
RUWKDWLWUHVROYHVFHUWDLQRXWVWDQGLQJSUREOHPV,QRWKHUZRUGVZKDWLVGLV
FRYHUHGPXVWEHKHOGWREHVXEVWDQWLYHO\WUXHRUYDOLG+HGLGQRWGHYHORSWKH
LPSOLFDWLRQWKDWDVQRWLRQVRIWUXWKDQGYDOLGLW\FKDQJHVRPXVWWKHXQGHUVWDQGLQJ
RIZKDWZDVGLVFRYHUHG
%UDQQLJDQSXEOLVKHGDIXOOGUHVVHODERUDWLRQRIWKHVHYLHZVLQKLVERRN
7KHVRFLDOEDVLVRIVFLHQWLFGLVFRYHU\+HGLVWLQJXLVKHGWZRVRFLRORJLFDODVSHFWV
RI .XKQV ZRUN DQ DFFRXQW RI KRZ GLVFRYHULHV DUH PDGH E\ LQGLYLGXDOV DQG
DQDFFRXQWRIKRZFRPPXQLWLHVUHVLVWDQGRUDFFHSWVXFKGLVFRYHULHV7KHUVW
TXHVWLRQGHDOVZLWKDPRGHORIVFLHQWLFGLVFRYHU\WKHVHFRQGZLWKDPRGHORI
VRFLDOFKDQJH2QO\PXFKODWHULQWKHERRNGLGKHHODERUDWHZKDWKHPHDQWE\
WKDWGLVWLQFWLRQ3DVVLQJLQFULWLFDOUHYLHZ.XKQVWUHDWPHQWRIWKHTXHVWLRQ:KR
GLVFRYHUHGR[\JHQ"KHQRWHG
.XKQVVHHPLQJGLVLQWHUHVWLQWKHGDWHRIWKHGLVFRYHU\GRHVQRWGHULYHIURPD
SULQFLSOHGFRQFHSWLRQRIGLVFRYHU\DVDPDWWHURIVRFLDOUHFRJQLWLRQWKLVSRVLWLRQ
ZRXOGPDNHWKHGDWHDIXQFWLRQRIWKHJURXSVFRQIHUULQJVWDWXVDQGWKHDWWULEXWLRQDO
SURFHVVHVXQGHUO\LQJVXFKDQHYHQW2QWKHFRQWUDU\.XKQVSRVLWLRQDSSHDUVWR
GHULYHIURPKLVXQGHUVWDQGLQJRIGLVFRYHU\DVDFRPSOH[HYHQWWKDWGHYHORSV
RYHUDSHULRGRIWLPH+RZHYHU.XKQGRHVH[KLELWDV\PSDWK\IRUWKHVR
FLRORJLFDOYLHZLQDVHSDUDWHSDVVDJHZKHQKHVWDWHVWKDWWKHQDWXUHRIGLVFRYHU\
OLHVDWOHDVWLQSDUWLQWKHSURFHVVHVRIUHFRJQLWLRQDVVRFLDWHGZLWKDVFLHQWLF
QGLQJKHVD\VWKDWLIR[\JHQZHUHGHSKORJLVWLFDWHGDLUIRUXVZHZRXOGLQVLVW
ZLWKRXWKHVLWDWLRQWKDW3ULHVWOH\KDGGLVFRYHUHGLW$OWKRXJKWKHVSHFLFSRLQWRI
WKHH[DPSOHLVWRSURSRVHWKDWGLVFRYHU\LVDPDWWHURIYLHZSRLQWRUSHUVSHFWLYH
WKHPRUHJHQHUDOLPSOLFDWLRQLVWKHUROHRIWKHVRFLDOUHFRJQLWLRQLQWKHFRQVWLWXWLRQ
RIDSKHQRPHQRQVLGHQWLW\
%UDQQLJDQ FDOOHG DWWHQWLRQ WR WKH HPSKDVLV RI .XKQV DQDO\VLV RQ WKH UROH RI
DQRPDOLHVLQVFLHQWLFGLVFRYHU\DQGWKHLUUHODWLRQVKLSWRVFLHQWLFUHYROXWLRQV
%UDQQLJDQ
%UDQQLJDQ3KLORVRSKHU*DU\*XWWLQJDUJXHGLQDFRQWHPSRUDQHRXVHVVD\
WKDW WDNLQJ WKH SURFHVV RI GLVFRYHU\ DV WKH GHQLQJ FKDUDFWHULVWLFRIVFLHQFHDVDZKROH
ZRXOGFODULI\PDQ\ORQJVWDQGLQJSUREOHPVLQWKHSKLORVRSK\RIVFLHQFH,QWKHVSLULWRI
%UDQQLJDQVREVHUYDWLRQWKDWDFODLPRQO\EHFRPHVDGLVFRYHU\ZKHQLWLVIRXQGWREH
WUXH *XWWLQJ PDLQWDLQHG WKDW SURSHUO\ VSHDNLQJ WKH SUREOHP RI GLVFRYHU\
LQFOXGHVWKHSUREOHPRIMXVWLFDWLRQ7RGLVFRYHUVRPHWKLQJLVWRFRPHWRNQRZLWDQGZH
NQRZRQO\ZKDWZHKDYHMXVWLHG
%UDQQLJDQFDPHFORVHWRWKLVUHFRJQLWLRQLQWKHRQHSDJHVHFWLRQRQ7KHORFDOYDOLGLW\
RIGLVFRYHU\EXWWKHUHFRQVLGHUHGRQO\WKHFKDQJHGSHUFHSWLRQRIYLHZVQRZVHHQWREH
IDOVHDQGWKHGHOD\HGSHUFHSWLRQRIWKHYDOLGLW\RIRQFHLJQRUHGDFKLHYHPHQWV%UDQQLJDQ
%UDQQLJDQ
%UDQQLJDQ
%UDQQLJDQFLWLQJ.XKQLWDOLFVDGGHG.XKQVWH[WKDVDFRPPD
DIWHUXVDQGKDVVKRXOGLQVWHDGRIZRXOG
%UDQQLJDQZLWKUHIHUHQFHWR.XKQLHWKHEHJLQQLQJRI6HFWLRQ
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
,QRWKHUZRUGV.XKQVDWWHQWLRQWRGLVFRYHU\ZDVKHUHXQGHUVWRRGDVVXEVHUYLHQW
WRKLVODUJHUWKHVHVFRQFHUQLQJDQRPDOLHVVFLHQWLFUHYROXWLRQVDQGWKHSDUDGLJP
GHSHQGHQFHRIVFLHQWLFIDFWV
%UDQQLJDQH[WHQGHGKLVHDUOLHUFULWLFLVPRIPHQWDOLVWLFDQGSV\FKRORJLFDO
H[SODQDWLRQVRIGLVFRYHU\E\QRWLQJWKDWVXFKIDFWRUVDOWKRXJKVXSSO\LQJDQHF
HVVDU\FRPSRQHQWWRDQ\H[SODQDWLRQFRXOGQRWVXSSO\VXIFLHQWFRQGLWLRQVIRU
WKHLGHQWLFDWLRQRIGLVFRYHULHV6RPHWKLQJEHFRPHVDGLVFRYHU\RQO\ZKHQ
SHRSOHVRGHVLJQDWHLWDQG%UDQQLJDQVFRQFHUQZDVZLWKWKHIDFWRUVWKDWOLHEHKLQG
WKHGHVLJQDWLRQRIVRPHEXWQRWRWKHUHSLVRGHVDVGLVFRYHULHV+HFDOOHGWKLVWKH
DWWULEXWLRQDOPRGHORIGLVFRYHU\
5HYHDOLQJLPSOLFLWO\ZKDWKHWRRNWREHWKHLQDGHTXDF\RI.XKQVDQDO\VLV
%UDQQLJDQ VXPPDUL]HG KLV SRVLWLRQ UHJDUGLQJ WKH VXIFLHQW FRQGLWLRQV IRU WKH
GHVLJQDWLRQRIDQHYHQWDVDGLVFRYHU\LQUHPDUNVIROORZLQJKLVGLVFXVVLRQRID
QXPEHURIRQFHDFFHSWHGEXWVXEVHTXHQWO\UHMHFWHGGLVFRYHULHV3LOWGRZQPDQ
%DWK\ELXV KDHFNHOLL DQG 1UD\V 7KRXJK WKHVH HYHQWV SUREDEO\ LQYROYHG WKH
DQRPDOLHVDQGJHVWDOWVZLWFKHVZKLFKQDWXUDOLVWLFWKHRULVWVIRFXVRQFOHDUO\WKHVH
ZHUHRQO\VHFRQGDU\LQWKHGLVFRYHULHV7KHLUVWDWXVDVGLVFRYHULHVZDVDIXQFWLRQ
RIWKHSHUFHSWLRQE\WKHFRPPXQLW\DQGLQWKHFDVHRI%DWK\ELXVDQG1UD\VE\
WKHVFLHQWLVWVWKHPVHOYHVWKDWWKHHYHQWVRIWKHUHVHDUFKZHUHSRVVLEOHPRWLYDWHG
DFKLHYHPHQWVZKLFKZHUHVXEVWDQWLYHO\WUXHRUYDOLGDQGZKRVHDQQRXQFHPHQWV
ZHUH XQSUHFHGHQWHG , ZRXOG VXJJHVW WKDW WKHVH FRQVWLWXWH WKH FRPPRQ VHQVH
JURXQGVRUFULWHULDRILQWHOOLJLELOLW\RIGLVFRYHU\
5HSHDWLQJDQHDUOLHUFKDUDFWHUL]DWLRQ%UDQQLJDQQRWHGWKDWWKHDWWULEXWLRQRI
GLVFRYHU\LVVWUXFWXUHGLQSDUWE\WKHSHUFHSWLRQWKDWWKHDQQRXQFHPHQWLVFRKHU
HQWZLWKH[LVWLQJNQRZOHGJHLQWKHHOGZLWKRXWDJDLQQRWLQJH[SOLFLWO\WKDWWKH
FKDUDFWHUL]DWLRQRIWKHGLVFRYHU\PXVWFKDQJHDVH[LVWLQJNQRZOHGJHLQWKHHOG
FKDQJHV7REHVXUH%UDQQLJDQRFFDVLRQDOO\DSSURDFKHGWKHSRLQW,ZRXOGPDNH
,9$QRPDO\DQGWKHHPHUJHQFHRIVFLHQWLFGLVFRYHULHV
&I%UDQQLJDQ,WLVLQWHUHVWLQJLQWKLVUHVSHFWWKDW.XKQVZLWFKHVKLVGLVFXV
VLRQRIWKHGLVFRYHU\RI8UDQXVLQKLVDUWLFOHLQ6FLHQFHIRUDQRXWOLQHRIWKHKLVWRU\RI
UHVHDUFKRQ/H\GHQMDUVDQGHOHFWULFLW\LQ7KH6WUXFWXUHRI6FLHQWLF5HYROXWLRQVSUHVXPDEO\
WKHREVHUYDWLRQRI8UDQXVZDVQRWDQDFWXDODQRPDO\+HQFH.XKQVH[DPSOHVGLVJXLVHD
WHFKQLFDOXVHRIWKHZRUGGLVFRYHU\IRUWKH\RQO\H[KLELWGLVFRYHULHVZKLFKZHUHDOVR
FRQFHSWXDOUHYROXWLRQV
%UDQQLJDQ
%UDQQLJDQ
%UDQQLJDQ
%UDQQLJDQ7KHSDVVDJHTXRWHGFRQWLQXHVRUWKDWLWUHVROYHVFHUWDLQRXW
VWDQGLQJSUREOHPVDQLVVXHQRWUHOHYDQWKHUH,QWKHVDPHYHLQ%UDQQLJDQODWHUXVHG
WKHH[DPSOHVRI3LOWGRZQ%DWK\ELXV1UD\VDQG0HQGHOWRDUJXHWKDWDVWKHFULWHULDIRU
DVVHVVLQJDGLVFRYHU\FKDQJHVRWRRFDQWKHHYHQWVVWDWXVDVDGLVFRYHU\FKDQJHLQWKH
QDPHGFDVHVWKHHYHQWVDV%UDQQLJDQFDOOHGWKHPFHDVHWREHUHJDUGHGDVGLVFRYHULHV
FIIRUKLVDWWHQWLRQWRWKHFKDQJLQJVWDWXVRI0HQGHOVZRUNDQGIRUWKH
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
LQWKLVFRQQHFWLRQEXWZLWKRXWFDVWLQJKLVREVHUYDWLRQH[SOLFLWO\LQWHUPVRIWKH
VLJQLFDQFHRIFKDQJHGGLVFRYHU\DFFRXQWV%\YLHZLQJFHUWDLQGLVFRYHULHVLQ
DQKLVWRULFDOSHUVSHFWLYHZHVHHWKDWWKHLUPHDQLQJVKDYHFKDQJHG:KDWLVPRUH
WKH SURJUHVVLRQLVW FKDUDFWHU RI VFLHQFH UHFRPPHQGV WKDW DOO RXU FXUUHQW RUWKR
GR[LHVLQVFLHQFHZLOOEHVXSHUVHGHGRUWHPSHUHGE\EHWWHUWKHRULHVLQWKHIXWXUH
&RQVHTXHQWO\ZKLOHDWDQ\SRLQWLQWLPHFRQWHPSRUDU\WKHRULHVZLOOEHKHOGDV
REMHFWLYHDQGYDOLGWKLVYDOLGLW\KDVDSURYLVLRQDORUFRQYHQWLRQDOFKDUDFWHU,WLV
VRFLDOO\FRQVWUXFWHGDQGOLNHO\WREHVXSHUVHGHGE\ODWHUVRFLDOFRQVWUXFWLRQV
%HWKDWGLIIHUHQFHDVLWPD\%UDQQLJDQVERRNUHPDLQVWKHPRVWLQVLJKWIXODQG
VXEVWDQWLDOWUHDWPHQWRIWKHVRFLDOO\FRQVWUXFWHGQDWXUHRIZKDWDUHWDNHQWREH
GLVFRYHULHVLQVFLHQFH
+DYLQJODLQODUJHO\XQUHDGDQGFRPSOHWHO\XQH[SORLWHGIRURYHUWKLUW\\HDUV
WKHJURXQGEUHDNLQJZRUNRI3ROLVKEDFWHULRORJLVWDQGPHGLFDOUHVHDUFKHU/XGZLN
)OHFNZDVIRUFHIXOO\EURXJKWWRWKHDWWHQWLRQRIWKHVFKRODUO\FRPPXQLW\XSRQ
WKHSXEOLFDWLRQLQRIWKH(QJOLVKWUDQVODWLRQRIKLV*HQHVLVDQGGHYHORSPHQW
RI D VFLHQWLF IDFW .XKQV IDPRXV DFNQRZOHGJHPHQW RI DQ XQVSHFLHG GHEW WR
)OHFNV(QWVWHKXQJXQG(QWZLFNOXQJHLQHUZLVVHQVFKDIWOLFKHQ7DWVDFKHRI
LQWKHSUHIDFHWR7KHVWUXFWXUHRIVFLHQWLFUHYROXWLRQVKDGQRWSURPSWHG
RWKHUVWRUHLQWURGXFH)OHFNVZRUNLQWRRQJRLQJGHEDWHVRYHUWKHQDWXUHRIVFLHQFH
$OWKRXJK)OHFNGLGQRWRIWHQXVHWKHODQJXDJHRIGLVFRYHU\KLVDQDO\VLVRIWKH
SURFHVVE\ZKLFKWKHFROOHFWLYLW\RIVFLHQWLVWVWUDQVIRUPVDWHQWDWLYHDQGYDULRXVO\
XQGHUVWRRGVHWRIQGLQJVLQWRDFDQRQL]HGDQGXQDPELJXRXVVFLHQWLFIDFWVSHDNV
GLUHFWO\WRWKHFRQFHUQVRIWKLVSDSHUHYHQDVLWVVFRSHZHQWVLJQLFDQWO\EH\RQG
WKHVHFRQFHUQVLQSDUWLFXODUZLWKKLVDQDO\VLVRIWKHSURFHVVE\ZKLFKIDFWV
DFTXLUHWKHLULPSHUVRQDOREMHFWLYLW\
5RXJKO\ VSHDNLQJ WKH JHQHVLV (QWVWHKXQJ RI D VFLHQWLF IDFW SHUWDLQV
SULPDULO\ WR UHVHDUFKHUV LQLWLDO QGLQJV RU FODLPV ZKLOH LWV GHYHORSPHQW
(QWZLFNOXQJSHUWDLQVWRWKHFROOHFWLYHUHZRUNLQJDQGDFFHSWDQFHRIWKRVHQG
LQJVRUFODLPVDVWKH\DFTXLUHWKHFKDUDFWHURIIDFWLFLW\WKDWVWKHZD\WKHZRUOG
LV)OHFNVFHQWUDOFRQFHUQZLWKWKHSURFHVVRIFROOHFWLYHUHZRUNLQJFORVHO\FRU
UHVSRQGVWRP\FRQFHUQZLWKWKHWUDQVIRUPDWLRQRIVFLHQWLVWVXQGHUVWDQGLQJRI
ZKDWDGLVFRYHUHUGLVFRYHUHG
)OHFNVDQDO\VLVUHVWHGRQKLVFRQFHSWVRIWKRXJKWFROOHFWLYH'HQNNROOHNWLY
DQGWKRXJKWVW\OH'HQNVWLO7KHVHPXVWQRWEHLQWHUSUHWHGDVURXJKHTXLYDOHQWV
RI.XKQLDQVFLHQWLFFRPPXQLWLHVDQGSDUDGLJPVDVH[HPSODUV)OHFNVWKRXJKW
FROOHFWLYHFRQVLVWVRISHRSOHLQFRJQLWLYHLQWHUDFWLRQRYHUVRPHLVVXHUHJDUGOHVV
RIWKHLUQXPEHURUWKHH[WHQWRIWKHLUDJUHHPHQW$WKRXJKWFROOHFWLYHLVDOZD\V
SUHVHQWZKHQHYHUWZRRUPRUHSHRSOHH[FKDQJHWKRXJKWV)OHFNRQFHDSSOLHG
REMHFWLFDWLRQRIWKHVRFLDOO\GHWHUPLQHGVWDWXVRIGLVFRYHULHV
%UDQQLJDQ
)OHFN 5DQGSDVVLP
)OHFN 5([FHSWDVRWKHUZLVHLQGLFDWHGWUDQVODWLRQVIURP
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
WKHWHUP'HQNNROOHNWLYWRDQDVVHPEODJHRISHRSOHDWDPHHWLQJRIDPHGLFDOVRFLHW\
LQZKLFKWKHYLHZVRIWKHSDUWLFLSDQWVQRWDEO\GLYHUJHG)OHFNVWKRXJKWVW\OHDS
SURDFKHVWKHEURDGHUDQGORRVHUPHDQLQJVRISDUDGLJPWKDW.XKQHHWLQJO\VRXJKW
WRUHFKDUDFWHUL]HDVDGLVFLSOLQDU\PDWUL[HPEUDFLQJWKHHQWLUHFRQVWHOODWLRQRI
EHOLHIVYDOXHVWHFKQLTXHVDQGVRRQVKDUHGE\WKHPHPEHUVRIDJLYHQFRPPX
QLW\)RU)OHFNDWKRXJKWVW\OHFRQVLVWVRIDOOWKRVHZD\VLQZKLFKDSHUVRQLV
SUHSDUHGWRVHHDQGDFWLQFHUWDLQZD\VDQGQRWLQRWKHUVLQGHHGLVHIIHFWLYHO\
FRQVWUDLQHGWRGRVR3DUWLFLSDWLRQLQDSDUWLFXODUWKRXJKWFROOHFWLYHKHUHXQ
GHUVWRRGWRUHIHUWRDQH[WHQVLYHFRPPXQLW\RILQWHUDFWLQJVFLHQWLVWVZLOOWHQGWR
FRQVWUDLQWKHH[SUHVVLRQRILGHDVWRWHUPVVDQFWLRQHGE\WKHFROOHFWLYH5HJDUGLQJ
)ULW]6FKDXGLQQVQGLQJWKDW6SLURFKDHWDSDOOLGDLVWKHFDXVDWLYHDJHQWRIV\SKLOLV
)OHFNZURWHWKDW>W@KHPHDQLQJDQGWUXWKYDOXHRI6FKDXGLQQVNQRZOHGJHFODLP
>(UNHQQWQLV@OLHVWKHUHIRUHLQWKHFRPPXQLW\RISHRSOHZKRVWDQGLQJLQFRJQLWLYH
>JHGDQNOLFK@LQWHUDFWLRQDQGVWHPPLQJIURPDFRPPRQFRJQLWLYHSDVWPDGHSRV
VLEOHDQGWKHQDFFHSWHGKLVIHDW
)RUSUHVHQWSXUSRVHV)OHFNVPRVWLPSRUWDQWLQVLJKWFRQFHUQHGWKHWUDQVIRU
PDWLRQDQGLQJRUFRQFHSWXQGHUJRHVDVLWFLUFXODWHVDPRQJWKHUHSUHVHQWDWLYHV
RIWKHWKRXJKWFROOHFWLYH
7KRXJKWVFLUFXODWHIURPLQGLYLGXDOWRLQGLYLGXDOHDFKWLPHVRPHZKDWWUDQVIRUPHG
IRURWKHULQGLYLGXDOVDWWDFKRWKHUDVVRFLDWLRQVWRWKHP6WULFWO\VSHDNLQJWKHUH
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
FHLYHUQHYHUXQGHUVWDQGVWKHWKRXJKWFRPSOHWHO\LQWKHZD\WKHVHQGHUZRXOGKDYH
LWXQGHUVWRRG$IWHUDVHULHVRIVXFKPLJUDWLRQVSUDFWLFDOO\QRWKLQJPRUHRIWKH
RULJLQDOFRQWHQWLVSUHVHQW:KRVHWKRXJKWLVLWWKDWFLUFXODWHVIXUWKHU"3UHFLVHO\D
FROOHFWLYHWKRXJKWRQHWKDWEHORQJVWRQRLQGLYLGXDO:KHWKHUIURPWKHLQGLYLGXDO
VWDQGSRLQWNQRZOHGJHFODLPV>(UNHQQWQLVVH@DUHWUXWKRUHUURUZKHWKHUWKH\DSSHDU
FRUUHFWRUPLVXQGHUVWRRGWKH\PLJUDWHZLWKLQWKHFRPPXQLW\>WKH\@DUHSROLVKHG
WUDQVIRUPHGVWUHQJWKHQHGRUZHDNHQHG>DQGWKH\@LQXHQFHRWKHUNQRZOHGJH
FODLPVFRQFHSWIRUPDWLRQVFRQFHSWLRQVDQGKDELWVRIWKRXJKW$IWHUDVHULHVRI
FLUFXLWVZLWKLQWKHFRPPXQLW\DNQRZOHGJHFODLP>HLQH(UNHQQWQLV@RIWHQUHWXUQV
VXEVWDQWLDOO\FKDQJHGWRWKHUVWDXWKRUDQGKHWRRDOUHDG\UHJDUGVLWHQWLUHO\
GLIIHUHQWO\GRHVQRWUHFRJQL]HLWDVKLVRZQRUDFRPPRQRFFXUUHQFHEHOLHYHV
KHVDZLWRULJLQDOO\LQWKHSUHVHQWIRUP
0RUHVSHFLFDOO\ZLWKUHJDUGWRWKHERRNVFHQWUDOH[DPSOH
>+@HUHWRR>ZLWKWKH:DVVHUPDQQUHDFWLRQ@DVZLWKWKHGLVFRYHU\RI6SLURFKDHWD
SDOOLGDLWLVLQDFWXDOLW\DQRUJDQL]HGFROOHFWLYHDQGQRWDQLQGLYLGXDOWKDWEURXJKW
LW>WKHZRUN@WRFRPSOHWLRQ(YHQWKHOLYHO\SROHPLFVDQGSHUVRQDOSURWHVWDWLRQV
WKDWSOD\HGWKHPVHOYHVRXWEHWZHHQSDUWLFLSDWLQJFRZRUNHUVLQLQWKH%HUOLQHU
.OLQLVFKH:RFKHQVFKULIWFDQQRWKHOSXVWRVHSDUDWHRXWRIWKHFRPPXQLW\WKHRQH
DQGRQO\GLVFRYHUHU6NLOOVHPSLULFDOIDFWV>DQG@LGHDVERWKIDOVHDQGFRUUHFW
ZHQWIURPKDQGWRKDQGIURPKHDGWRKHDGDQGFHUWDLQO\FKDQJHGWKHLUFRQWHQW
ERWKGXULQJWKHLUVRMRXUQLQHDFKLQGLYLGXDODVZHOODVGXULQJWKHLUSDVVDJHIURP
SHUVRQWRSHUVRQVLQFHFRPSOHWHXQGHUVWDQGLQJRIWUDQVPLWWHGNQRZOHGJHLVVR
GLIFXOW,QWKHHQGWKHUHDURVHDVWUXFWXUHRINQRZOHGJHWKDWLQDFWXDOLW\QRRQH
VXVSHFWHGRULQWHQGHGLQGHHGLQDFWXDOLW\DJDLQVWWKHVXVSLFLRQVDQGLQWHQWLRQV
RIWKHLQGLYLGXDO
,ZRXOGVWUHVVDJDLQWKDW)OHFNVFRQFHUQZDVSULPDULO\ZLWKKRZDNQRZOHGJH
FODLPD IDFW LQ WKH PDNLQJDFTXLUHV VWDEOH FRQVHQVXDO IRUP DQG DW WKH HQG
RIWKHSURFHVVDQDSSHDUDQFHRIREMHFWLYHIDFWLFLW\QRWKRZWKHFKDUDFWHUL]DWLRQ
RIWKDWIDFWWKDWGLVFRYHU\FKDQJHVWRDFFRPPRGDWHGLIIHULQJWKHRUHWLFDODQG
RQWRORJLFDOYLHZVZKLFKLVWKHLVVXHRISULQFLSDOFRQFHUQWRPHKHUH
)OHFNRFFDVLRQDOO\FDPHFORVHWRH[SUHVVLQJWKHSRLQW,ZDQWWRPDNH.QRZO
HGJHOLYHVLQWKHFROOHFWLYHDQGLVUHZRUNHGDJDLQDQGDJDLQ$QGDJDLQ>7@KH
LQFRQJUXLW\EHWZHHQDQLGHDDVZHUHWURVSHFWLYHO\REVHUYHLWDQGWKHUHSUHVHQWDWLRQ
JLYHQLWE\WKHDXWKRUKLPVHOILHE\WKHUHSUHVHQWDWLYHUHVHDUFKHULVH[SODLQHG
VLPSO\ E\ WKH IDFW WKDW WKH WKRXJKW FROOHFWLYH QRW DQ\ LQGLYLGXDO LV WKH DFWXDO
FUHDWRURIWKHQHZLGHD7KLVLVWKHUHSHDWHGO\HPSKDVL]HGFROOHFWLYHUHZRUNLQJ
RIDQLGHDIURPZKLFKLWIROORZVWKDWDIWHUWKHWUDQVIRUPDWLRQLQWKRXJKWVW\OHWKH
HDUOLHUSUREOHPLVQRORQJHUFRPSOHWHO\XQGHUVWDQGDEOH7KLVFKDUDFWHUL]DWLRQ
KDUGHQLQJVHH&DQHYD
)OHFN WUDQVODWLRQPRGLHGDIWHU)OHFN
)OHFN 5LWDOLFVVXSSOLHG
)OHFN 5
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
DSSOLHV EHDXWLIXOO\ WR WKH WUDQVIRUPDWLRQV WKDW WKH FKDUDFWHUL]DWLRQV RI UVWHGV
DQG6HHEHFNVGLVFRYHULHVXQGHUZHQWDVWKH\PLJUDWHGIURPWKHQDUURZHUDQG
VRPHZKDWLGLRV\QFUDWLFFRJQLWLYHFRQWH[WRIWKHLUDXWKRUVLQWRWKHODUJHUWKRXJKW
FROOHFWLYH
2QHRWKHUREVHUYDWLRQRI)OHFNVLVUHOHYDQWWRP\ZRUN$VDFODULI\LQJFRQ
VHQVXVLVUHDFKHGZLWKUHJDUGWRZKDWFRQVWLWXWHVDSDUWLFXODUIDFWRUGLVFRYHU\
VFLHQWLVWVRULJLQDOO\GLYHUVHDQGW\SLFDOO\TXDOLHGSURQRXQFHPHQWVJLYHZD\WR
WKHVLPSOHUDQGPRUHFDWHJRULFDOVWDWHPHQWVRIXQTXDOLHGIDFWWKDWFKDUDFWHUL]H
ZULWLQJVLQWHQGHGQRWIRUVSHFLDOLVWVEXWIRUDPRUHJHQHUDOHYHQSRSXODUDXGL
HQFH&KDUDFWHULVWLFRISRSXODUSUHVHQWDWLRQLVWKHHOLPLQDWLRQRISDUWLFXODUVDQG
HVSHFLDOO\RIFRQWHQGLQJRSLQLRQVZKHUHE\DQDUWLFLDOVLPSOLFDWLRQLVDWWDLQHG
7KHQFHWKHDUWLVWLFDOO\SOHDVLQJOLYHO\YLYLG>DQVFKDXOLFK@SHUIRUPDQFH&HUWDLQW\
VLPSOLFLW\YLYLGQHVVDULVHUVWLQSRSXODUNQRZOHGJHZKHQFHWKHH[SHUWGHULYHV
EHOLHILQWKHPDVWKHLGHDORINQRZOHGJH7KHUHLQOLHVWKHJHQHUDOHSLVWHPRORJLFDO
VLJQLFDQFHRISRSXODUVFLHQFH
6XFKLVDOVRWKHFKDUDFWHURIWKHNLQGVRIVWDWHPHQWVWKDWFRPHWREHPDGH
HVSHFLDOO\ LQ WKH QRQVSHFLDOLVW OLWHUDWXUH DERXW VFLHQWLVWV DQG WKHLU GLVFRYHULHV
6HHEHFNGLVFRYHUHGWKHUPRHOHFWULFLW\UVWHGGLVFRYHUHGHOHFWURPDJQHWLVP5LW
WHUGLVFRYHUHGXOWUDYLROHWOLJKW7KHVHDUHRVWHQVLEO\VLPSOHVWDWHPHQWVRIIDFWLQD
WZRIROGVHQVHWKHVWDWHPHQWVWKHPVHOYHVDUHLQWHQGHGWREHWDNHQDVXQSUREOHPDWLF
KLVWRULFDOWUXWKVMXVWDVWKDWZKLFKZDVGLVFRYHUHGLVLPSOLHGWREHDQXQSUREOHPDWLF
DVSHFWRIWKHSK\VLFDOZRUOGWKHUHIRUWKHGLVFRYHULQJ,QWKHVSLULWRI)OHFNVJHQHVLV
DQGGHYHORSPHQWRIDVFLHQWLFIDFWKRZHYHUZKDWZHKDYHKHUHDUHLQVWDQFHVRI
WKHJHQHVLVDQGGHYHORSPHQWRIKLVWRULFDOIDFWVDERXWVFLHQFH
2QHRIWKHUVWWRDSSUHFLDWHWKHLPSRUWDQFHRI)OHFNVLGHDVZDV*HUPDQ
ERUQELRORJLVW*XQWKHU6WHQWZKRVHDWWHQWLRQKDGEHHQFDOOHGWR)OHFNVDV\HW
XQWUDQVODWHGERRNE\KLVIULHQGWKHLPPXQRORJLVWDQGODWHU1REHO3UL]HZLQQHU
1LHOV-HUQHLQ5HYLHZLQJ+RUDFH-XGVRQV(LJKWKGD\RIFUHDWLRQ
6WHQWQRWHGWKHDSSOLFDELOLW\RI)OHFNVQRWLRQVRIWKRXJKWVW\OHDQGWKRXJKWFRO
OHFWLYHWRWKHKLVWRU\RIPROHFXODUELRORJ\)RU6WHQWPROHFXODUELRORJ\LVD
VW\OHRIWKRXJKW
6WHQWV V\PSDWKHWLF V\QRSVLV RI )OHFNV OHDGLQJ LGHDV ZDV ODUJHO\ DFFXUDWH
WKRXJK KH FRXFKHG KLV H[SRVLWLRQ PRUH FRQVLVWHQWO\ DQG H[SOLFLWO\ LQ WHUPV RI
GLVFRYHU\WKDQ KDG )OHFN WKHUHE\QLFHO\LOOXVWUDWLQJ)OHFNV REVHUYDWLRQWKDW
DQLGHDJHWVVXEWO\WUDQVIRUPHGDVLWSDVVHVIURPRQHH[SRVLWRUWRDQRWKHU)RU
H[DPSOHZKHUHDFFRUGLQJWR6WHQW>D@V)OHFNVHHVLWRIDOOKXPDQDFWLYLWLHV
VFLHQWLFGLVFRYHU\LVWKHPRVWVRFLDOO\FRQGLWLRQHG)OHFNKLPVHOIKDGZULWWHQ
WKDW>F@RJQLWLRQ>GDV(UNHQQHQ@UHSUHVHQWVWKHPRVWVWURQJO\VRFLDOO\FRQGLWLRQHG
)OHFN 5
6WHQWFRO
6WHQW
6WHQWFRO0ROHFXODUELRORJ\LVDVW\OHRIWKRXJKW
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
KXPDQDFWLYLW\6WHQWUHSHDWHGKLVUHFDVWLQJRI)OHFNLQWHUPVRIGLVFRYHU\LQ
KLVUHYLHZRIWKH(QJOLVKWUDQVODWLRQHPSOR\LQJVRPHRIWKHVDPHODQJXDJH
KHKDGXVHGWKH\HDUEHIRUH
$V)OHFNVHHVLWRIDOOKXPDQDFWLYLWLHVVFLHQWLFGLVFRYHU\LVWKDWZKLFKLVPRVW
VRFLDOO\FRQGLWLRQHG%HVLGHVUHYHDOLQJDVVRFLDOFRQVWUXFWVZKDWZHWKLQNRIDV
REMHFWLYHIDFWV)OHFNDOVRLOOXPLQDWHVWKHKLVWRU\RIVFLHQFH)RUKHVKRZVWKDWD
GLVFRYHU\FDQEHLQWHJUDWHGLQWRWKHERG\RINQRZOHGJHRIDWKRXJKWFROOHFWLYH
RQO\ZKHQLWLVLQWKHOLQHRILQWHUHVWLVH[SUHVVHGLQWKHVW\OHDQGLVFRQQHFWDEOH
WRWKHFRQFHSWVRIWKDWFROOHFWLYH+HQFHDGLVFRYHU\FDQPDNHLWVLPSDFWRQO\LQ
DVRFLDOFRQWH[WXQGHUZKLFKWKHVHFRQGLWLRQVDUHPHW
6WHQWWKHZRUNLQJVFLHQWLVWZDVWKHUHYLHZHUZKRPRVWGHHSO\DSSUHFLDWHGZKDW
)OHFNWKHZRUNLQJVFLHQWLVWKDGZULWWHQDERXWWKHZRUNLQJVRIVFLHQFH
'UDZLQJ XSRQ HIIHFWLYHO\ DOO UHOHYDQW HDUOLHU VWXGLHV RI VFLHQWLF GLVFRYHU\
DQGVHFRQGLQJWKHSULQFLSDOFRQFOXVLRQVRWKHUVKDGGUDZQVRFLRORJLFDOO\VHQVL
WLYHKLVWRULDQRIVFLHQFH6LPRQ6FKDIIHUSXEOLVKHGDQLPSRUWDQWDUWLFOHLQRQ
6FLHQWLFGLVFRYHU\DQGWKHHQGRIQDWXUDOSKLORVRSK\+HHPSKDVL]HGWKDWWKH
UHWURVSHFWLYHDVVLJQPHQWRIWKHODEHOGLVFRYHU\ZDVDWHFKQLTXHIRUPDUNLQJ
WHFKQLFDOSUDFWLFHVZKLFKDUHSUL]HGE\WKH>VFLHQWLF@FRPPXQLW\6FKDIIHU
DFFHSWHGRWKHUVWXGLHVFRQFOXVLRQWKDWVFLHQWLFGLVFRYHULHVFDQQRWEHXQGHUVWRRG
DVGLVFUHWHHYHQWVDVVLJQDEOHWRDVLQJOHSHUVRQDWDSRLQWLQWLPHZKDWKHWHUPHG
DQLQGLYLGXDOLVWLFPHQWDOLVWLFPRGHORIGLVFRYHU\+HZDVSULPDULO\LQWHUHVWHG
6WHQWFRO)OHFN WUDQVODWLRQPRGLHGDIWHU)OHFN
$FFRUGLQJWR6WHQW)OHFNVKRZHGWKDWDGLVFRYHU\FDQEHLQWHJUDWHGLQWRWKH
ERG\RINQRZOHGJHRIDWKRXJKWFROOHFWLYHRQO\ZKHQLWLVLQWKHOLQHRILQWHUHVWH[SUHVVHG
LQWKHVW\OHDQGFRQQHFWDEOHWRWKHFRQFHSWVRIWKDWFROOHFWLYH6WHQWFRO
LWDOLFVVXSSOLHG&RPSDUH)OHFNVZRUGVTXRWHGDERYH7KHIDFWPXVWEHH[SUHVVHGLQWKH
VW\OHRIWKHWKRXJKWFROOHFWLYH)OHFN 5LWDOLFVLQRULJL
QDOHPSKDVLVVXSSOLHG6HHQRWHIRUDUHDVRQZK\)OHFNPLJKWKDYHDYRLGHGWDONLQJ
DERXWGLVFRYHULHVLQWKHVDPHWHUPVKHXVHGIRUDQDO\]LQJWKHJHQHVLVDQGGHYHORSPHQWRI
VFLHQWLFIDFWV
6WHQWFRO7KHSDUDJUDSKZHQWRQWRHPSOR\WKHODQJXDJHRIGLVFRYHU\
WKUHHPRUHWLPHV
6FKDIIHU7KHUHOHYDQWZRUNVKHFLWHGLQFOXGH%DUQHV%UDQQLJDQ
DQG)OHFN)RUPDQ.XKQDDQG1LFNOHVDDQGF
)RUPDQDQDO\]HGWKHIDFWRUVFRQWULEXWLQJWRWKHP\WKRORJLFDOTXDOLW\RIWKHFDQRQLFDO
VWRU\DERXWWKHGLVFRYHU\RI[UD\GLIIUDFWLRQ)RUPDQVHHHVSHFLDOO\QDQG
+HQRWHGWKDWWKHVFLHQWLVWTXDVFLHQWLVWSODFHVQRYDOXHXSRQKLVWRULFDOIDFWKLVWRU\
LVZKROO\VXERUGLQDWHGWRWKHQHHGVRIWKHSUHVHQWDQGLQGHHGRQO\VXUYLYHVWRVXFKH[WHQW
DQGLQVXFKIRUPDVVHUYHVSUHVHQWQHHGVKHFLWHG.XKQDLQDIRRWQRWHWRWKLV
SDVVDJH6XFKDQDWWLWXGHLVFRQGXFLYHWRWKHWUDQVIRUPDWLRQRIVFLHQWLVWVXQGHUVWDQGLQJ
RIZKDWDQRWKHUVFLHQWLVWGLVFRYHUHG
6FKDIIHUIITXRWHRQ
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
LQKRZSDUWLFXODUVFLHQWLFFRPPXQLWLHVFRPHWRLGHQWLI\SDUWLFXODUREMHFWVDV
GLVFRYHULHVLQKRZDOHQJWK\HQWHUSULVHLVWHOHVFRSHGLQWRDQLQGLYLGXDOPRPHQW
ZLWKDQLQGLYLGXDODXWKRUDQGSDUWLFXODUO\LQWKHLGHRORJLFDOSXUSRVHVEHKLQG
VXFKLGHQWLFDWLRQV
6FKDIIHUH[WHQGHGKLVHVVHQWLDOO\IXQFWLRQDOLVWDQDO\VLVRIGLVFRYHULHVLQDODWHU
SDSHULQZKLFKKHGUHZXSRQWKHZRUNRI%UDQQLJDQDQG.XKQWRFRQFOXGHWKDW
GLVFRYHU\VWDUWVWRORRNOHVVLQGLYLGXDODQGVSHFLFDQGPRUHOLNHDOHQJWK\SURFHVV
RIKDUGZRUNDQGQHJRWLDWLRQZLWKLQDVHWRIFRPSOH[VRFLDOQHWZRUNV'LVFRYHULHV
EHFRPHHYHQWVMXGJHGVLJQLFDQWE\WKHVFLHQWLFFRPPXQLW\DQGGLVFRYHUHUVWKH
LQGLYLGXDOVWKRVHFRPPXQLWLHVZLVKWRUHFRJQL]H'LVFRYHULHVDUHPDGHXSLQWKH
FRXUVHRIPDNLQJWKHGLVFLSOLQDU\KLVWRULHVRIVSHFLFVFLHQWLFSUDFWLFHV&HO
HEUDWRU\GLVFRYHU\VWRULHVFRQWULEXWHWRWKHGHQLWLRQRIDGLVFLSOLQHVFDQRQWKH
VHWVRIH[HPSODU\WH[WVDQGDXWKRUVWKDWPD\EHVDLGWRJLYHWKHUXOHRIEHKDYLRUWR
WKHGLVFLSOLQH6FKDIIHULQYRNHG)OHFNLQDGGUHVVLQJWKHTXHVWLRQKRZWKHORFDO
VLWXDWHGFKDUDFWHURIVFLHQWLFZRUNLVORVWDVVSHFLFNQRZOHGJHFODLPVDFTXLUH
WKHFRQVHQVXDOVWDWXVRIVFLHQWLFIDFWV)URP)OHFNKHGUHZWKHFRQFOXVLRQVWKDW
WKHFROOHFWLYL]DWLRQRIQRYHOFODLPVDVVKDUHGIDFWVHIIHFWLYHO\HUDVHGWKHLQWHUHVWV
DQGVHQVHVRILQLWLDOUHVHDUFKHUVZRUNDQGWKDWWKXVWKHWUDGLWLRQDOPHPRU\RI
WKHWKRXJKWFROOHFWLYHVKRXOGEHYLHZHGE\WKHDQDO\VWDVDSURGXFWLYHSDUWRILWV
GLVFLSOLQDU\PHFKDQLVPQRWDVHPEDUUDVVLQJP\WK$QDO\]LQJWKHGLVFRYHU\
RIGLQRVDXUV6FKDIIHUDJDLQLQYRNHG)OHFNLQFRQFOXGLQJWKDWGLQRVDXUVZHUH
FRQVWUXFWHGLQWKH]RQHVEHWZHHQSRSXODUFXOWXUHDQGVSHFLDOLVWWHFKQLTXH
6FKDIIHUPRYHGFORVHUWRWKHFRQFHUQVRIWKLVSDSHUZKHQKHDUJXHGIURPKLV
DQDO\VLVRI)DUDGD\VDQG+HUVFKHOVFODLPVWREHFRQVLGHUHGWKHGLVFRYHUHURI
PDJQHWRRSWLFURWDWLRQWKDW>G@LVFRYHULHVKDYHQR[HGPHDQLQJ:HVHHWKDW
6FKDIIHU +H DUJXHG DW OHQJWK WKDW DFFHSWLQJ VRPHWKLQJ DV D GLVFRYHU\
HQWDLOVDFFHSWLQJWKHOHJLWLPDF\RIWKHWHFKQLTXHVDQGFRQFHSWVE\ZKLFKLWZDVSXWDWLYHO\
HVWDEOLVKHG7KXV>W@KHDFFHSWDQFHRIWKHWRUVLRQH[SHULPHQWVDVDGLVFRYHU\DXWKRUHGE\
&RXORPEZDVLQIDFWDQDFFHSWDQFHRI)UHQFKSK\VLFVLQLWV/DSODFLDQIRUP
6FKDIIHUVHHSIRUKLVH[SOLFLWFRQFHUQZLWKWKHIXQFWLRQVRIFDQRQ
L]HGGLVFRYHU\VWRULHV$ODQ*URVVDUJXPHQWWKDWGLVFRYHU\LVQRWDKLVWRULFDOHYHQWEXWD
UHWURVSHFWLYHVRFLDOMXGJPHQWGRHVQRWJREH\RQGZKDW%UDQQLJDQDQGRWKHUVKDGDOUHDG\
ZHOOHVWDEOLVKHG*URVV'DYLG0LOOHUVHODERUDWLRQRIZKDWKHWHUPHGWKHDW
WULEXWLRQDODSSURDFKWRGLVFRYHU\OLNHZLVHDGGHGOLWWOHRIJHQHUDOVLJQLFDQFHWRWKHZRUNRI
WKHDXWKRUVKHFLWHG.XKQ%UDQQLJDQ%DUQHV6FKDIIHUDQG*URVVWKRXJKWKHSDUWLFXODUV
RIKLVH[DPSOHWKHFRQWHVWHGDWWULEXWLRQWR:DWWDQG&DYHQGLVKRIWKHGLVFRYHU\RIWKH
FRPSRVLWLRQRIZDWHUQLFHO\H[HPSOLI\KLVFRQFOXVLRQWKDWWKHFRQWHVWDERXWWKHQDWXUH
RI GLVFRYHU\ LQ WKLV FDVH ZDV FORVHO\ OLQNHG WR GHEDWHV EHLQJ FRQGXFWHG VLPXOWDQHRXVO\
DERXWWKHSKLORVRSK\RIGLVFRYHU\DERXWWKHFKDUDFWHURIGLVFRYHUHUVDERXWWKHQDWXUHRI
LQYHQWLRQDQGDERXWWKHSDWHQWV\VWHP0LOOHU
6FKDIIHU
6FKDIIHU
6FKDIIHU
6FKDIIHU
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
WKHQDWXUHDQGPHDQLQJRIGLVFRYHU\YDULHVDQGWKDWUHWURVSHFWLRQDQGMXGJPHQW
DUHGHFLVLYH:KHQWUDGLWLRQDOVWRULHVDUHFRQVWUXFWHGWRPDNHVHQVHRIGLVFRYHULHV
RIWKHSDVWWKHSUDFWLFHVWKDWJHQHUDWHGNH\SKHQRPHQDDUHHIIDFHGDQGWKHSKH
QRPHQDWKHPVHOYHVRQO\VXUYLYHLQWKHPRVWLGHDOL]HGIRUP6FKDIIHUVLQWHUHVW
ZDVSULPDULO\LQWKHZD\WKHIRUPDWLRQRIFDQRQLFDOGLVFRYHU\VWRULHVFRQWULEXWHV
WRWKHFUHDWLRQRIZKDWDSSHDUVWREHGHFRQWH[WXDOL]HGREMHFWLYHNQRZOHGJHOHVV
LQWUDFNLQJWKHGHWDLOVRIKRZVFLHQWLVWVXQGHUVWDQGLQJRIZKDWZDVGLVFRYHUHGDV
HPERGLHGLQWKHLUSUHIHUUHGODQJXDJHHYROYHGRYHUWLPHLQUHVSRQVHWRGLIIHUHQW
LQWHUHVWVDQGGLIIHUHQWFRQFHSWXDODQGRQWRORJLFDOEHOLHIV
,QDVPDOOERRNHQWLWOHG6FLHQFH7KHYHU\LGHD6WHYH:RROJDUHQOLVWHG
DQDQDO\VLVRIGLVFRYHU\QRWMXVWVFLHQWLFGLVFRYHU\WRGHIHQGDQXQGHUVWDQG
LQJRIVFLHQFHWKDWZRXOGGLVVROYHLWVRQWRORJLFDOSUHWHQVLRQVYLDDVRFLRORJLFDO
XQGHUVWDQGLQJRIKRZLWVNQRZOHGJHFODLPVFRPHWREHFRQVWUXFWHG:RROJDUDOOLHG
KLPVHOIZLWKWKRVHZKRDLPWRXQGHUFXWWKHLGHDRIVFLHQFHDVDSULYLOHJHGZD\RI
SURGXFLQJUHOLDEOHNQRZOHGJHDQGZKRLQVWHDGGHIHQGWKHSRVLWLRQWKDWWKHUHLVQR
HVVHQWLDOGLIIHUHQFHEHWZHHQVFLHQFHDQGRWKHUIRUPVRINQRZOHGJHSURGXFWLRQRU
DVKHDOVRSXWLWRWKHUIRUPVRIFXOWXUDODQGVRFLDODFWLYLW\+LVDUJXPHQWZDV
WKDWWKHGLVFRXUVHRIVFLHQFHLVWREHXQGHUVWRRGDVDGLVFRXUVHZKLFKVWUXFWXUHVDQG
VXVWDLQVDSDUWLFXODUPRUDORUGHURIUHODWLRQVKLSVEHWZHHQDJHQWVRIUHSUHVHQWDWLRQ
WHFKQRORJLHVRIUHSUHVHQWDWLRQDQGWKHLUUHSUHVHQWHGREMHFWVZKHUHWKHTXRWHV
DURXQGREMHFWVUHYHDO:RROJDUVGHQLDORIDQ\GHIHQVLEOHRQWRORJLFDOFRPSRQHQW
WRVFLHQWLFNQRZOHGJHKLVUHMHFWLRQRIWKH>FRPPRQ@DVVXPSWLRQWKDWWKHREMHFWV
RIWKHQDWXUDOZRUOGDUHUHDOREMHFWLYHDQGHQMR\DQLQGHSHQGHQWSUHH[LVWHQFH
:RROJDUDOVRUHLWHUDWHGKLVUHMHFWLRQRI>W@KHSHUVLVWHQWQRWLRQRINQRZOHGJHDVDQ
LQGLYLGXDOLVWLFDQGPHQWDOLVWLFDFWLYLW\
(VVHQWLDOWR:RROJDUVFDVHZHUHUVWWKHGLVWLQFWLRQFRPPRQO\GUDZQEH
WZHHQQDWXUDOO\RFFXUULQJREMHFWVDQGWKHLUUHSUHVHQWDWLRQVDQGVHFRQGWKHWDFLW
EHOLHIWKDWRXUUHSUHVHQWDWLRQVVRPHKRZDFFXUDWHO\UHHFWWKHXQGHUO\LQJREMHFWLYH
QDWXUHRIWKRVHREMHFWV+HDWWDFNHGWKHLGHDWKDWVFLHQWLFNQRZOHGJHXQSUREOHP
DWLFDOO\UHIHUVWRDZRUOGRISUHH[LVWLQJREMHFWVE\DQDO\]LQJLQGHWDLOWKHSXWDWLYH
GLVFRYHU\RISXOVDUV:KHUHDVRQHFRPPRQO\WKLQNVRIUHSUHVHQWDWLRQVDVDULVLQJ
IURPDQGEHLQJFDXVHGE\SUHH[LVWLQJREMHFWVRIWKHQDWXUDOZRUOG:RROJDUWULHG
WRVKRZKRZVXFKREMHFWVDUHFRQVWLWXWHGFRQVWUXFWHGGHQHGDFFRPSOLVKHG
E\WKRVHUHSUHVHQWDWLRQV7KXVWKHQDWXUDOZRUOGLVQRWVLPSO\DQGGLUHFWO\WKH
VRXUFHRIVFLHQWLFNQRZOHGJHEXWUDWKHUZKDWZHGHHPWREHVFLHQWLFNQRZOHGJH
6FKDIIHU
:RROJDU
:RROJDU
:RROJDU
:RROJDUQDPHGRQO\WKUHHZRUNVXQGHUVXJJHVWLRQVIRUIXUWKHUUHDGLQJZLWK
UHJDUGWRVFLHQWLFGLVFRYHU\%UDQQLJDQ.XKQDQG)OHFNWKRXJKRQO\%UDQ
QLJDQDQG.XKQZHUHH[SOLFLWO\PHQWLRQHGLQFKDSWHUHQGQRWHV+HGLGQRWFLWH6FKDIIHU
:RROJDUTXRWHRQ
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
FUHDWHVIRUXVWKHREMHFWVZLWKZKLFKZHSRSXODWHDIDOVHO\FRQFHLYHGREMHFWLYH
ZRUOG>5@HSUHVHQWDWLRQDOSUDFWLFHDFWLYHO\FRQVWLWXWHVWKHZRUOG
:RROJDUVDQDO\VLVRIGLVFRYHU\EHDUVDKHDY\SKLORVRSKLFDOEXUGHQVLQFHWKH
FRPPRQXQGHUVWDQGLQJRIVFLHQWLFGLVFRYHU\XQGHUJLUGVZKDWKHWDNHVWREHD
FRQFHSWXDOVWUXFWXUHRIPLVSODFHGFRQFUHWHQHVV'LVFRYHU\LVFHQWUDOWRFRPPRQ
FRQFHSWLRQV RI VFLHQFH7KH PHWDSKRU RI VFLHQWLF GLVFRYHU\ WKH LGHD RI GLV
FRYHULQJLVSUHFLVHO\WKDWRIXQFRYHULQJDQGUHYHDOLQJVRPHWKLQJZKLFKKDGEHHQ
WKHUHDOODORQJ:RROJDUGLGQRWFRQVLGHUWKDWNQRZOHGJHWKDWVRPHWKLQJH[LVWV
REMHFWLYHO\LVQRWWKHVDPHWKLQJDVNQRZOHGJHRIZKDWLWLV7KXVWKHSKHQRPHQD
DVVRFLDWHGZLWKHOHFWURPDJQHWLVPDQGWKHUPRHOHFWULFLW\FRXOGEHUHQGHUHGZLWK
SKHQRPHQRORJLFDOREMHFWLYLW\GRWKLVDQGWKDWZLOOIROORZHYHQLIWKHVWDEOHFKDU
DFWHUL]DWLRQRIZKDWZDVGLVFRYHUHGE\UVWHGDQG6HHEHFNLQYROYHGDFRQVWUXFWHG
WKHRUHWLFDOFRPSRQHQWQRWJLYHQE\GLUHFWLQVSHFWLRQRIWKHSKHQRPHQD
)ROORZLQJ%UDQQLJDQVH[DPSOH:RROJDUVSDUDGLJPRIGLVFRYHU\ZDV&R
OXPEXVGLVFRYHU\RI$PHULFD$VDQDQDORJRIVFLHQWLFGLVFRYHU\WKHH[DPSOH
VPXJJOHVLQDKRVWRIREYLRXVO\VRFLDOO\FRQVWUXFWHGXQGHUVWDQGLQJVWKDWZRXOG
EHGLIFXOWWRH[WUDFWIURPWKHGLVFRYHU\RIWKHUPRHOHFWULFLW\RUUDGLRDFWLYLW\)HZ
ZRXOGDUJXHWKDW$PHULFDLVDQDWXUDOFDWHJRU\ZKLOHPDQ\ZRXOGDJUHHWKDW
WKHDVVLJQPHQWRILWVGLVFRYHU\WR&ROXPEXVLVSDWHQWO\DSROLWLFDOPDWWHULQ
WKHORRVHDQGSRSXODUVHQVHRIWKHZRUG7RGHQ\WKDW$PHULFDOLNHWKHUPRHOHF
WULFLW\ZDVWKHUHWREHGLVFRYHUHGREVFXUHVWKHGLIIHUHQFHEHWZHHQWKHWULYLDO
HQWHUSULVHRIUHGXFLQJWKHFRQFHSWRI$PHULFDWRDPDWWHURIVRFLDOFRQVWUXF
WLRQDQGWKHGDXQWLQJHQWHUSULVHRIUHGXFLQJWKHSKHQRPHQDRIWKHQDWXUDOZRUOG
WRPHUHVRFLDOFRQVWUXFWLRQV:RROJDUGUHZVHYHUDOE\QRZIDPLOLDUFRQFOXVLRQV
IURPWKLVH[DPSOH
)LUVWO\GLVFRYHU\LVDSURFHVVUDWKHUWKDQDSRLQWRFFXUUHQFHLQWLPH,WLVDSURFHVV
RISODQQLQJDQWLFLSDWLRQVROLFLWLQJVXSSRUWDQGREWDLQLQJLQVWLWXWLRQDODSSURYDORI
DFODLPRUGHQLWLRQWKDWDGLVFRYHU\KDVRFFXUUHG:KHQZHVD\WKDW&ROXPEXV
GLVFRYHUHG$PHULFDZHDUHVXPPDUL]LQJWKHRXWFRPHRIDQH[WHQGHGSHULRGRI
FODLPVDQGGHQLWLRQVDQGZHDUHRSWLQJIRUDSDUWLFXODURXWFRPHVDQFWLRQHGDW
DSDUWLFXODUWLPHE\DSDUWLFXODUVRFLDODJHQF\6HFRQGO\WKHGLVFRYHU\SURFHVV
H[WHQGVLQWLPHERWKEHIRUHDQGDIWHUWKHLQLWLDODQQRXQFHPHQWRUFODLP:HKDYH
DOUHDG\QRWHGWKDWWKHGLVFRYHU\ZDVURRWHGLQGHFDGHVRISUHSDUDWLRQDQGTXHVW
IRUVXSSRUW%XWWKHSURFHVVRIPRXOGLQJDQGVKDSLQJWKHQDWXUHRI&ROXPEXVV
DFKLHYHPHQWFRQWLQXHGORQJDIWHUWKH9DWLFDQVVHDORIDSSURYDO
:RROJDU
:RROJDUWKHVHFRQGVHQWHQFHEHJLQVDQHZSDUDJUDSK$QDWWHQGDQWVRFLRORJL
FDOSKHQRPHQRQSOD\HGDUHLQIRUFLQJUROH7KHLPSRUWDQFHRIFRQWURYHUV\DERXWGLVFRYHU\
ZLWKLQWKHFRPPXQLW\RISUDFWLWLRQHUVLVLWVREMHFWLYLW\UHLQIRUFLQJIXQFWLRQ7RDUJXHDERXW
ZKRGLVFRYHUHGSXOVDUVDQGZKHQWKLVGLVFRYHU\ZDVPDGHKDVWKHIXQFWLRQRIUHLQIRUFLQJ
WKHDQWHFHGHQWREMHFWLYHVWDWXVRIWKHGLVFRYHUHGREMHFWVSXOVDUVWKHPVHOYHV
:RROJDU
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
$IWHUQRWLQJRWKHUSRVVLEOHFODLPDQWVWRGLVFRYHUHUVWDWXV3KRHQLFLDQV1RUVH
PHQHWFKHFRQFOXGHG
7KHVWUHQJWKRIWKHVXFFHVVIXODFFRXQWWKDW&ROXPEXVGLVFRYHUHG$PHULFDLVLWV
HQWUHQFKPHQW7KHVWDELOLW\RIWKLVSDUWLFXODUIDFWXDOFODLPLVSUHFLVHO\DUHHF
WLRQRIWKHHQRUPRXVDPRXQWRIZRUNZKLFKLVQRZUHTXLUHGWRGHFRQVWUXFWLW
7KHGHJUHHRIUHVLVWDQFHLVDGLUHFWUHHFWLRQRIWKHZRUNLQYHVWHGGXULQJDORQJ
FRPSOH[VRFLDOSURFHVVRIGHQLWLRQ
,WLVLPSRUWDQWWRGLVWLQJXLVKEHWZHHQWKHIDFWRIWKHGLVFRYHU\WKDWLWZDVGXH
WR&ROXPEXVLQWKHFXUUHQWFRQVHQVXVDQGWKHIDFWRIWKHGLVFRYHUHGREMHFW
%XWDV%UDQQLJDQVGLVFXVVLRQRIWKLVDQGRWKHUGLVFRYHU\FODLPVVKRZVLQGHWDLO
WKHFKDUDFWHURIWKHGLVFRYHUHGREMHFWLVWKHXSVKRWRIWKHSURFHVVRIGHQLQJDQG
DUWLFXODWLQJ ZKDW WKH REMHFW LV 9HVSXFFLV REMHFW ZDV IXQGDPHQWDOO\ GLIIHUHQW
IURP&ROXPEXVVREMHFW2QO\LQYLUWXHRIRXUDFFHSWLQJWKHIDFWRIWKHGLVFRYHUHG
REMHFWFDQZHFRQWUDVWDQGFRPSDUHGLIIHUHQWFODLPVDERXWLW
7KLVVXSSRUWVRXUHDUOLHUVXJJHVWLRQWKDWWKHVWXG\RIKRZREMHFWVFRPHWR
EHFRQVWUXFWHGRXWWKHUHVKRXOGQRWEHQHJOHFWHGLQIDYRXURIDWWHQWLRQWRWKH
SURFHVVRIGHQLQJQRYHOW\DQGVLJQLFDQFH7KHIXQGDPHQWDODQGSULRUWDVNLV
WRXQGHUVWDQGWKHSURFHVVFXOPLQDWLQJLQWKHIDFWRIWKHGLVFRYHUHGREMHFWUDWKHU
WKDQWKHIDFWRIWKHGLVFRYHU\VLQFHWKHODWWHUWHQGVWRDVVXPHWKHSULRUH[LVWHQFH
DQGFKDUDFWHURIWKHREMHFW
7KHPRUHSURVDLFLPSOLFDWLRQVDUHFOHDUIDPLOLDUTXHVWLRQVDERXWZKRPDGH
DGLVFRYHU\RUZKHQLWZDVPDGHLOOHJLWLPDWHO\LPSO\WKHDQWHFHGHQWH[LVWHQFH
RIDFRQVWDQWREMHFWDZDLWLQJLWVUHYHODWLRQ$VZHKDYHVHHQWKHIDFWRIDQRE
MHFWLVWKHWHPSRUDU\VWDEOHXSVKRWRIDFRPSOH[VRFLDOSURFHVV0RUHRYHUWKLV
SURFHVVFRQWLQXHVORQJDIWHUDQLQLWLDOGLVFRYHU\FODLPWKHREMHFWKDVDQGZLOO
FRQWLQXHWRFKDQJH
7KHH[DPSOHRI&ROXPEXVDQGWKHGLVFRYHU\RI$PHULFDVXJJHVWVWKDWLQRXU
HIIRUWVWRXQGHUVWDQGWKHVRFLDOEDVLVRIGLVFRYHU\ZHFDQQRWSUHVXPHWKHFKDUDF
WHURIDGLVFRYHUHGREMHFWWKHIDFWRIDGLVFRYHUHGREMHFWDQGLWVFKDUDFWHULVWKH
DFKLHYHPHQWRIWKHGLVFRYHUHUVDQGRURWKHUVFODLPVDQGGHQLWLRQDOZRUN
7KHVHUHHFWLRQVOHGKLPWRKLVSULQFLSDOTXHVWLRQ+RZGRGLVFRYHUHUVPDNH
FODLPVIRUWKHUHDOLVWUHFHLYHGYLHZRIREMHFWVZKLFKRXUGLVFXVVLRQVXJJHVWV>@
WKH\KDYHDUWIXOO\FUHDWHG>"@7RDQVZHUWKLVTXHVWLRQKHWXUQHGWRKLVHDUOLHU
H[DPSOHWKHGLVFRYHU\RISXOVDUV
(VVHQWLDOWR:RROJDUVSXOVDUVWRU\LVWKHIDFWWKDWUHVHDUFKHUVHQWHUWDLQHGVH
TXHQWLDOO\LIQRWDOZD\VSUHFLVHO\DYDULHW\RIK\SRWKHVHVDERXWWKHVLJQLFDQFH
DQGWKHQWKHH[SODQDWLRQRIWKHXQXVXDOVLJQDOVDQGWKHQDERXWWKHQDWXUHRIWKH
REMHFWVWKDWPLJKWKDYHSURGXFHGWKHPEHIRUHDVWDEOHFRQVHQVXVHPHUJHGFRQFHUQ
LQJWKHGHQLWLRQRIWKHREMHFW7KHHSLVWHPRORJLFDOLPSOLFDWLRQKHGUHZXUJHG
:RROJDU
:RROJDU
:RROJDU>7@KHGHQLWLRQRIWKHREMHFWKDVHQMR\HGDFKHTXHUHGFDUHHUVLQFH
WKHGLVFRYHU\DQQRXQFHPHQW,WKDVEHHQDZKLWHGZDUIVWDUDURWDWLQJQHXWURQVWDUDQHXWURQ
VWDUZLWKDVDWHOOLWHWKHSODVPLFLQWHUDFWLRQEHWZHHQELQDU\QHXWURQVWDUVDQGVRRQ
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
WKHDEDQGRQPHQWRIRQWRORJLFDOFODLPVLQIDYRURIDVRFLRORJLFDOO\UHGXFWLRQLVW
SRVLWLRQ
7KHPDLQFRQFOXVLRQIURPRXUH[DPSOHVRIGLVFRYHU\LVWKDWWKHH[LVWHQFHDQG
FKDUDFWHURIDGLVFRYHUHGREMHFWLVDGLIIHUHQWDQLPDODFFRUGLQJWRWKHFRQVWLWX
HQF\RIGLIIHUHQWVRFLDOQHWZRUNV$QGE\VRFLDOQHWZRUNZHUHIHUWRWKHEHOLHIV
NQRZOHGJHH[SHFWDWLRQVWKHDUUD\RIDUJXPHQWVDQGUHVRXUFHVHTXLSPHQWDOOLHV
DQGVXSSRUWHUVLQVKRUWWRWKHZKROHORFDOFXOWXUHDVPXFKDVWRWKHLGHQWLWLHVRI
LQGLYLGXDOSDUWLFLSDQWV&UXFLDOO\WKLVYDULDWLRQXQGHUPLQHVWKHVWDQGDUGSUHVXPS
WLRQDERXWWKHH[LVWHQFHRIWKHREMHFWSULRUWRLWVGLVFRYHU\7KHDUJXPHQWLVQRWMXVW
WKDWVRFLDOQHWZRUNVPHGLDWHEHWZHHQWKHREMHFWDQGREVHUYDWLRQDOZRUNGRQHE\
SDUWLFLSDQWV5DWKHUWKHVRFLDOQHWZRUNFRQVWLWXWHVWKHREMHFWRUODFNRILW7KH
LPSOLFDWLRQIRURXUPDLQDUJXPHQWLVWKHLQYHUVLRQRIWKHSUHVXPHGUHODWLRQVKLS
EHWZHHQUHSUHVHQWDWLRQDQGREMHFWWKHUHSUHVHQWDWLRQJLYHVULVHWRWKHREMHFW
$VIDUDV:RROJDUVDQDO\VLVJRHVWKHIRUPDWLRQRIDVWDEOHFRQVHQVXVLVSXUHO\
DVRFLDOSKHQRPHQRQLQZKLFKUHDOHYLGHQWLDU\FRQVWUDLQWVGHULYLQJIURPWKHH[WHU
QDOZRUOGSOD\QRUROHQRWMXVWQRGHFLVLYHUROHEXWQRUROH)RU:RROJDUWRKDYH
FRQFHGHGRWKHUZLVHZRXOGKDYHRSHQHGWKHGRRUWRDFFHSWDQFHRIREMHFWVKDYLQJ
DQH[LVWHQFHDQGSURSHUWLHVLQGHSHQGHQWRIRXUNQRZOHGJHRIWKHP:LWQHVVKLV
DQVZHUWRWKHTXHVWLRQKHSRVHG>:@KDWVXVWDLQVDQGFRQWLQXDOO\UHDFFRPSOLVKHV
>VFLHQWLVWVEHOLHILQ@WKHSULRUH[LVWHQFHRIGLVFRYHUHGREMHFWV"%HOLHYLQJWKDW
GLVFRXUVHFRQVWLWXWHVLWVREMHFWVKLVDQVZHUZDVLQWHUPVRIJHQHUDOIHDWXUHVRI
WKHVWUXFWXUHRIVFLHQWLFGLVFRXUVH
:RROJDURIIHUHGDMXVWLFDWLRQIRUWKLVFRQFOXVLRQE\LQYRNLQJWKHSURFHVVRI
VSOLWWLQJDQGLQYHUVLRQWKDWKHDQG%UXQR/DWRXUKDGDGYDQFHGLQWKHLUERRN
/DERUDWRU\OLIH7KHFRQVWUXFWLRQRIVFLHQWLFIDFWV7KLVSURFHVVLQYROYHV
WKH IROORZLQJ VWHSV$IWHU JDWKHULQJ WKH LQLWLDO GDWD VXSSOHPHQWHG E\ JHQHUDO
NQRZOHGJHSDUWLFXODUEHOLHIVHWFVFLHQWLVWVLQIHUWKHH[LVWHQFHRIDSDUWLFXODU
REMHFWFUHDWHGDQGFRQVWLWXWHGRXWRIWKHGRFXPHQWVDYDLODEOHWRWKHUHVHDUFKHUV
6SOLWWLQJRFFXUVZKHQWKHLQIHUUHGREMHFWLVSHUFHLYHGDVDVHSDUDWHHQWLW\GLVWLQFW
IURPWKRVHGRFXPHQWV$QLQYHUVLRQWKHQRFFXUVLQWKHSHUFHLYHGUHODWLRQVKLS
:RROJDULWDOLFVVXSSOLHG
:RROJDU
:RROJDUDQGUHVS
:RROJDU7KHUHPDLQLQJTXRWDWLRQVLQWKLVSDUDJUDSKDUHIURPWKHVDPHSDJH
7KHLUUHIHUHQFHZDVWR/DWRXUDQG:RROJDUVHHSSRIWKDWRUWKHRULJLQDO
HGLWLRQRI/DWRXUDQG:RROJDUGLGQRWSUREOHPDWL]HWKHLVVXHRIGLVFRYHU\SHUVHQRU
HQJDJHWKHUHOHYDQWOLWHUDWXUH1RUGLGWKH\FLWH%UDQQLJDQRUWKHUHOHYDQWSDUWVRI.XKQ
,QWKHSRVWVFULSWWRWKHHGLWLRQWKH\PHUHO\PHQWLRQHG)OHFNLQDIRRWQRWH,QZKDW
DPRXQWHGWRDQDVLGHDWWKHHQGRIDORQJIRRWQRWH)OHFNPDGHDVLPLODUSRLQW2QHGUDZVWRR
VKDUSDOLQHEHWZHHQZKDWLVWKRXJKWDQGZKDWH[LVWVWRWKRXJKWPXVWEHDFFRUGHGDFHUWDLQ
REMHFWFUHDWLQJSRZHUDQGWRREMHFWVDQRULJLQRXWRIWKRXJKWULJKWO\XQGHUVWRRGRXWRIWKH
VW\OHIXOWKRXJKWRIDFROOHFWLYH)OHFNQ Q5Q
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
EHWZHHQGRFXPHQWVDQGREMHFW>,@WQRZVHHPVDVLIWKHREMHFWZKLFKZDVWKHUH
DOODORQJKDGJLYHQULVHWRWKHGRFXPHQWV,WLVDWWKLVSRLQWWKDWWKHGRFXPHQWVPRVW
REYLRXVO\DSSHDUWRWDNHRQWKHFKDUDFWHURIUHSUHVHQWDWLRQVRUWUDFHVWKH\DUH
QRORQJHUMXVWGRFXPHQWVWKH\EHFRPHGRFXPHQWVRIVRPHWKLQJ)LQDOO\VFLHQWLVWV
HIIHFWLYHO\HIIDFHIURPFRQVFLRXVQHVVWKHSURFHVVZKHUHE\WKH\JRWWRWKHSRLQWRI
EHOLHYLQJLQWKHRQWRORJLFDOUHDOLW\RIWKHREMHFWVLQTXHVWLRQ
7KHD[:RROJDUZDVRXWWRJULQGZDVSULPDULO\GLUHFWHGDJDLQVWWKHEHOLHIWKDW
VFLHQWLVWVFDQHYHUGLVFRYHUREMHFWLYHSURSHUWLHVRIDQWHFHGHQWO\H[LVWLQJREMHFWVLQ
WKHSK\VLFDOZRUOG$OWKRXJK,WKLQNKLVDQDO\VLVRIWKHVRFLRORJLFDOFRQVWUXFWLRQ
RIGLVFRYHU\LVHVVHQWLDOO\FRUUHFWLQGHHGLQWKDWUHJDUGKHGLGQRWJREH\RQG
WKHFODLPVRIKLVSUHGHFHVVRUV,QGXQFRQYLQFLQJKLVHQGHDYRUWRUHGXFHDOO
RIWKHHQWLWLHVSXWDWLYHO\GLVFRYHUHGE\VFLHQFHWRVFLHQWLFGLVFRXUVHEHUHIWRI
RQWRORJLFDOVLJQLFDQFHDPHUHJDPHRIZRUGV
7KUHHKLVWRULDQVRIVFLHQFHKDYHDGGUHVVHGWKHWRSLFRIVFLHQWLFGLVFRYHU\DVLW
UHODWHVWRWKHHOHFWURQ,VREHO)DOFRQHUVDUWLFOHRIFRQFHUQVWKHGHYHORSPHQW
RI--7KRPVRQVYLHZVDQGWKHUHODWLRQVKLSEHWZHHQKLVQRWLRQRIFRUSXVFOHDQG
/RUHQ]DQG/DUPRUVXQGHUVWDQGLQJRIHOHFWURQERWKEHLQJK\SRWKHWLFDOFRQ
VWUXFWVWKDWRQO\ZLWKWLPHFDPHWREHVHHQDVUHIHUULQJWRWKHVDPHHQWLW\$PRQJ
WKHUHDVRQVVKHJDYHIRUWKHJHQHUDOPLVUHSUHVHQWDWLRQRI7KRPVRQVZRUNE\ODWHU
SK\VLFLVWVZDVWKHLUDOOHJHGLQDELOLW\WRLPDJLQHDQRQFRUSXVFXODUDHWKHUEDVHG
SK\VLFVDQGWKHVWURQJO\HPSLULFLVWSKLORVRSK\RIPDQ\RI7KRPVRQVVWXGHQWV
ZKR DFFRUGLQJO\ DQG ZURQJO\ EHOLHYHG WKDW 7KRPVRQV FRUSXVFOH K\SRWKHVLV
RULJLQDWHGZLWKKLVFDWKRGHUD\H[SHULPHQWV+HUFRQFOXVLRQZKLOHUHDVRQDEOH
UHYHDOVWKHH[WHQWWRZKLFKVKHZDVQRWDWWXQHGWRWKHKLVWRULRJUDSKLFDOOLWHUDWXUH
WKDWIRUVHYHUDOGHFDGHVKDGSUREOHPDWL]HGWKHFRQFHSWRIVFLHQWLFGLVFRYHU\
,QWKHOLJKWRIWKLVUHLQWHUSUHWDWLRQRI7KRPVRQVZRUNLVWKHUHDQ\VHQVHUHPDLQ
LQJLQZKLFKKHFDQEHVDLGWRKDYHGLVFRYHUHGWKHHOHFWURQ"$UULYLQJDWWKH
&I:RROJDU2QHLPSRUWDQWIHDWXUHRIVSOLWWLQJDQGLQYHUVLRQLVWKHZD\LQ
ZKLFKWKHUHYHUVDORIWKHFRQQHFWLRQEHWZHHQREVHUYDWLRQDQGREMHFWDOVRHQWDLOVWKHUHPRYDO
IURPWKHVFKHPHRIDQ\FRQVWLWXWLYHDFWLYLW\RQWKHSDUWRIWKHREVHUYHU&RQVWUXLQJWKHSULRU
H[LVWHQFHRIWKHREMHFWHQWDLOVWKHSRUWUD\DORIWKHREVHUYHUDVSDVVLYHUDWKHUWKDQDFWLYH
)DOFRQHU
)DOFRQHU
)DOFRQHU 6KH FLWHG QRQH RI WKH KLVWRULRJUDSKLFDO OLWHUDWXUH GLVFXVVHG LQ
WKLV VHFWLRQ ,Q TXRWLQJ DOO EXW WKH UVW VHQWHQFH RI WKLV SDVVDJH$UDEDW]LV
FRPPHQWHG,QWHUPVRIWKHPHWKRGRORJLFDOLVVXHVGLVFXVVHGEHIRUH)DOFRQHUDWWHPSWVWR
UHGXFHWKHGLVFRYHU\SURFHVVWRWKHSUHFLVHPRPHQWZKHQH[SHULPHQWDOYHULFDWLRQWRRN
SODFHWKXVHTXDWLQJGLVFRYHU\ZLWKWKHDELOLW\WRLVRODWHPHDVXUHDQGPDQLSXODWH)URP
P\SHUVSHFWLYHWKLVDPRXQWVWRHTXDWLQJGLVFRYHU\ZLWKMXVWLFDWLRQ)DOFRQHUDQG'DYLV
ERRNRQ7KRPVRQDQGWKHGLVFRYHU\RIWKHHOHFWURQGLGQRWSUREOHPDWL]HWKHJHQHUDOLVVXH
RIVFLHQWLFGLVFRYHU\'DYLVDQG)DOFRQHU,QDIRRWQRWHWRDODWHUSDSHULQZKLFK
VKHEULH\DGGUHVVHGWKHZRUNRI%UDQQLJDQ6FKDIIHU*RRGD\DQG
$UDEDW]LV)DOFRQHUQQRWHGWKDWZKLOH,DYRLGWKHLVVXHLQWKLVSDSHU
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
WKHRUHWLFDOFRQFHSWRIWKHHOHFWURQZDVQRWPXFKRIDSUREOHPLQ1XPHURXV
VXFKLGHDVZHUHLQWKHDLU:KDW7KRPVRQDFKLHYHGZDVWRGHPRQVWUDWHWKHLU
YDOLGLW\H[SHULPHQWDOO\5HJDUGOHVVRIKLVRZQFRPPLWPHQWVDQGLQWHQWLRQVLW
ZDV7KRPVRQZKREHJDQWRPDNHWKHHOHFWURQUHDOLQ+DFNLQJVVHQVHRIWKH
ZRUG+HSLQSRLQWHGDQH[SHULPHQWDOSKHQRPHQRQLQZKLFKHOHFWURQVFRXOGEH
LGHQWLHGDQGPHWKRGVE\ZKLFKWKH\FRXOGEHLVRODWHGPHDVXUHGDQGPDQLSX
ODWHG7KLVZDVLPPHQVHO\VLJQLFDQWIRUWKHGHYHORSPHQWRIWKHHOHFWURQWKHRU\
ZKLFKKLWKHUWRKDGEHHQDQDEVWUDFWPDWKHPDWLFDOK\SRWKHVLVEXWQRZEHFDPH
DQHPSLULFDOUHDOLW\
*UDHPH*RRGD\VDFFRXQWRIWKHUHFHSWLRQRI7KRPVRQVFRUSXVFOHVUHYLVLWHG
WKHVWRU\RI7KRPVRQVFDQRQLFDOGLVFRYHU\RIWKHHOHFWURQLQHVSHFLDOO\LQKLV
(SLORJXH7KHLQYHQWLRQRIGLVFRYHU\VWRULHVIRUWKHHOHFWURQ1RWFRQQHFWLQJ
KLVVWXG\ZLWKWKHOLWHUDWXUHGLVFXVVHGKHUHRQVFLHQWLFGLVFRYHU\KHGLGQRWJHW
PXFKEH\RQGSRLQWLQJRXWWKDWOLWWOHUHVHDUFKKDVEHHQGRQHWRSURYHH[DFWO\>E\@
ZKLFKVWXGHQWVDQGWKURXJKZKLFKPHGLDWKHVWRU\WKDW--7KRPVRQDFKLHYHGD
KHURLFVRORGLVFRYHU\LQFDPHWREHFDQRQLFDOLQWH[WERRNVRIERWKVFLHQFH
DQGWKHKLVWRU\RIVFLHQFHDQGVXJJHVWLQJWKDW>W@KHFUHDWLRQVWRU\DSSHDUVWR
KDYHEHHQFORVHO\OLQNHGWRWKHFRPPRQSODFHVLPSOLFDWLRQVRISHGDJRJ\DVZHOO
DVLQWHUZDUFDPSDLJQVWRFUHDWHDXWRQRPRXVIXQGLQJIRUSXUHUHVHDUFK
*RLQJEH\RQG)DOFRQHUDQG*RRGD\7KHRGRUH$UDEDW]LVXVHGWKHH[DPSOH
RI7KRPVRQVDOOHJHGGLVFRYHU\RIWKHHOHFWURQDVDZD\RIFULWLTXLQJWKHJHQHUDO
FRQFHSWRIGLVFRYHU\LQVFLHQFH+LVUVWWDVNZDVWRUHMHFWDVXQZRUNDEOHDQ\
FULWHULRQIRUWKHGLVFRYHU\RIXQREVHUYDEOHHQWLWLHVWKDWGHSHQGVRQDUHVROXWLRQRI
WKHSUREOHPRIVFLHQWLFUHDOLVPOLNHZLVHDQ\FULWHULRQWKDWGHSHQGVRQDGHFLVLRQ
DVWRKRZPDQ\>RIWKHSUHVHQWO\DFFHSWHG@SURSHUWLHVPXVWRQHKDYHGLVFRYHUHGLQ
RUGHUWREHJUDQWHGWKHVWDWXVRIWKHGLVFRYHUHURIWKHHQWLW\LQTXHVWLRQ,QVWHDG
KHRSWHGIRUDQKLVWRULFLVWDSSURDFKDFFRUGLQJWRZKLFKDQ>XQREVHUYDEOH@HQWLW\
KDVEHHQGLVFRYHUHGRQO\ZKHQFRQVHQVXV>RIWKHUHOHYDQWKLVWRULFDODFWRUV@KDV
EHHQUHDFKHGZLWKUHVSHFWWRLWVUHDOLW\$UDEDW]LVVLWXDWHGKLVKLVWRULRJUDSKLFDO
UHHFWLRQVLQWKHUVWLQVWDQFHZLWKUHJDUGWRWKHZULWLQJVRI.XKQ%UDQQLJDQ
DQG6FKDIIHU
,DPQRWDGYRFDWLQJDEDQGRQLQJWKHDWWHPSWWRGHQHGLVFRYHU\
*RRGD\
*RRGD\
$UDEDW]LV
$UDEDW]LV&I:KHUHDVWKHLQWULFDFLHVRIWKHSKLORVRSKLFDOGHEDWHRQ
VFLHQWLFUHDOLVPVXJJHVWWKDWDQDJQRVWLFSHUVSHFWLYHLVEHVWVXLWHGIRUUHFRQVWUXFWLQJWKH
GLVFRYHU\RIXQREVHUYDEOHHQWLWLHVLWLVQRWWKHUHE\LPSOLHGWKDWWKHGLVFRYHU\RIWKHREVHUY
DEOHHQWLWLHVDQGSKHQRPHQDLVDOVRUHGXFLEOHWRWKHORFDOSUDFWLFHVRISDUWLFXODUVFLHQWLF
JURXSVDQGVKRXOGEHWUHDWHGLQDVLPLODUDJQRVWLFIDVKLRQ+HGLGQRWHODERUDWH
$UDEDW]LVQFLWLQJ.XKQ.XKQDIURPLWVUHSULQWLQJLQ.XKQ
%UDQQLJDQDQG6FKDIIHU$UDEDW]LVGLGQRWFULWLTXH:RROJDUVDQWLUHDOLVW
SRVLWLRQ
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
$SSOLHGWRWKHGLVFRYHU\RIWKHHOHFWURQ$UDEDW]LVGHWDLOHGDQDO\VLVRIWKH
ZKDWZKHQDQGE\ZKRPTXHVWLRQVOHGKLPWRFRQFOXGHWKDWWKHHOHFWURQZDV
QRWGLVFRYHUHGEXWZDVJUDGXDOO\FRQVWUXFWHGDQGOHJLWLPL]HGDVDQHOHPHQWRI
WKHRQWRORJ\RISK\VLFVDQGFKHPLVWU\YLDDSURFHVVVWUHWFKLQJIURP)DUDGD\WR
0LOOLNDQDQGFXOPLQDWLQJLQWKHRLOGURSH[SHULPHQWV+HFRQFOXGHGLQJHQHUDO
WKDWWKHUHLVVRPHWKLQJIXQGDPHQWDOO\ZURQJERWKKLVWRULRJUDSKLFDOO\DQGSKLOR
VRSKLFDOO\DERXWYLHZLQJWKHLQWURGXFWLRQDQGJUDGXDOFRQVROLGDWLRQRIWKHRUHWLFDO
HQWLWLHVWKURXJKWKHGLVWRUWLQJOHQVRIGLVFRYHU\$UDEDW]LVGLGQRWGLVFXVVKRZ
LQKLVWRULFDOIDFW7KRPVRQFDPHWREHGHVLJQDWHGGLVFRYHUHUQRUGLGKHDQDO\]H
WKHIXQFWLRQDOLW\RIWKHFRQFHSWRIGLVFRYHU\LQVFLHQFH7KRPVRQVFDVHGLIIHUV
IURPWKRVHRIUVWHGDQG6HHEHFNDWLVVXHZLWK7KRPVRQZHUHWKHDSSURSULDWH
QHVVDQGSURFHVVRILGHQWLI\LQJKLPDVWKHGLVFRYHUHURIWKHHOHFWURQZKHUHDVZLWK
UVWHGDQG6HHEHFNZKRIURPWKHVWDUWZHUHUHJDUGHGDVWKHOHJLWLPDWHGLVFRYHUHUV
DWLVVXHZDVZKDWWKH\KDGGLVFRYHUHG
$UDEDW]LV H[WHQGHG KLV DQDO\VLV RI VFLHQWLF GLVFRYHU\ LQ D SDSHU GHOLYHUHG
LQDWDV\PSRVLXPHQWLWOHG5HYLVLWLQJGLVFRYHU\DQGMXVWLFDWLRQ+H
DUJXHG WKDW WKH FRQWH[WV RI GLVFRYHU\ DQG MXVWLFDWLRQ DUH DOZD\V LQH[WULFDEO\
OLQNHGHVSHFLDOO\ZLWKUHJDUGWRXQREVHUYDEOHHQWLWLHVEHFDXVH>D@QLQGLYLGXDORU
DJURXSFDQDFTXLUHWKHVWDWXVRIWKHGLVFRYHUHURQO\DIWHUWKH\KDYHFRQYLQFHG
WKHUHVWRIWKHVFLHQWLFFRPPXQLW\RIWKHH[LVWHQFHRIWKHHQWLW\LQTXHVWLRQWKDW
LVRQO\DIWHUWKHFODLPIRULWVH[LVWHQFHKDVEHHQMXVWLHGWRWKDWFRPPXQLW\
1RWLQJWKDWZHGHFOLQHUHWURVSHFWLYHO\WRODEHODVGLVFRYHULHVH[LVWHQFHFODLPV
IRUHQWLWLHVZHUHJDUGDVFWLWLRXVOLNHSKORJLVWRQKHFRQFOXGHGWKDW>R@QO\EH
OLHIVWKDWKDYHUHPDLQHGLPPXQHWRUHYLVLRQFDQEHGHVLJQDWHGZLWKWKDWWHUP
,ZRXOGTXDOLI\WKLVMXGJHPHQWWRDOORZIRUFRQVLGHUDEOHUHYLVLRQDERXWZKDWZDV
GLVFRYHUHG$UDEDW]LVUHFRJQL]HGDVPXFKZKLOHDVVHVVLQJWKHDOOHJHGGLVFRYHU\
RIWKHHOHFWURQFLWLQJ%UDQQLJDQVERRNKHVXJJHVWHGWKDWWKHFRQVWUXFWLRQDQG
FRQWLQXRXVUHFRQVWUXFWLRQRIVFLHQWLFGLVFRYHULHVFDQEHIUXLWIXOO\VWXGLHGIURPD
VRFLRORJLFDOSHUVSHFWLYH$VP\H[DPSOHVVXJJHVWUHYLVLRQLQWKHPHDQLQJRI
FRQFHSWVPD\ZHOOKDYHHVFDSHGWKHDWWHQWLRQRIWKRVHUHVSRQVLEOHIRULW
$UDEDW]LV
$UDEDW]LV
6FKLFNRUHDQG6WHLQOH2IWKHVL[WHHQDXWKRUVUHSUHVHQWHGRQO\$UDEDW]LVFLWHG
%UDQQLJDQDQG.XKQDIURP.XKQ1RQHFLWHG%DUQHVRUDQ\WKLQJ
E\:RROJDUDQGRQO\)ULHGULFK6WHLQOHFLWHG)OHFNWKRXJKRQO\WRUHJLVWHUKLVKDYLQJ
EHHQUHPLQGHGRIWKHUHOHYDQFHRI)OHFNVZRUN2QO\$UDEDW]LVDQG7KRPDV6WXUPFLWHG
.XKQEE]ZZLWKUHJDUGWRGLVFRYHU\FLWDWLRQVRIWKDWZRUNE\'RQ+RZDUG
DQG7KRPDV1LFNOHVGHDOWZLWKRWKHULVVXHV,QDGGLWLRQWR$UDEDW]LVRQO\-XWWD6FKLFNRUH
FLWHG6FKDIIHUEXWQRWZLWKUHJDUGWRGLVFRYHU\$UDELW]LVFHQWUDOFRQFHUQVZHUHWKXV
QRWVKDUHGE\WKHRWKHUSDUWLFLSDQWV
$UDEDW]LV
$UDEDW]LV
$UDEDW]LV
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
$UDEDW]LVEULH\DGGUHVVHGWKHTXHVWLRQRIWKHIXQFWLRQDOLW\RIGLVFRYHU\VWRULHV
IRUVFLHQWLVWVLQJHQHUDO'LVFRYHULHVDUHVHHQDVWKHXQLWVRIVFLHQWLFSURJUHVVDQG
DUHDFFRUGLQJO\YDOXHG8VXDOO\WKH\DUHFRQVWUXFWHGLQWKHOLJKWRINQRZOHGJHWKDW
ZDVQRWDYDLODEOHWRWKHKLVWRULFDODFWRUVDWWKHWLPHZKHQWKHSUHVXPHGGLVFRYHU\
WRRNSODFHDQGDUHLQWLPDWHO\WLHGWRWKHUHZDUGVWUXFWXUHRIVFLHQFH7KH\WHQGWR
EHSRVWKRFUHFRQVWUXFWLRQVRIVSHFLFHSLVRGHVZKRVHDLPLVWRSURSDJDWHDQG
UHZDUGFHUWDLQSUDFWLFHVDQGEHOLHIVWKDWDUHGHHPHGVLJQLFDQWIRUFRQWHPSRUDU\
VFLHQWLFDFWLYLW\3HUKDSVEHFDXVHKLVH[DPSOH7KRPVRQVGLVFRYHU\RIWKH
HOHFWURQZDV LQ IDFW D UHWURVSHFWLYH MXGJHPHQW RI ZKDWZKHQDQGE\ZKRP
$UDEDW]LVDSSHDUVWRKDYHPLVVHGWKHVLJQLFDQFHRIHSLVRGHVWKDWUHSUHVHQWQRWD
UHWURVSHFWLYHDVVLJQPHQWRIGLVFRYHUHUVWDWXVEXWDQRQJRLQJWUDQVIRUPDWLRQLQWKH
ZKDWRIDGLVFRYHU\ZKRVHGLVFRYHUHULVQRWLQGRXEW
,QFRQFOXGLQJKLVSDSHU$UDEDW]LVUDQWKURXJKVRPHSKLORVRSKLFDOTXHVWLRQV
EHVHWWLQJDQXQGHUVWDQGLQJRIVFLHQWLFGLVFRYHU\>+@RZPDQ\EHOLHIVDERXWDQ
HQWLW\VKRXOGEHMXVWLHGIRUWKHHQWLW\LQTXHVWLRQWREHFRQVLGHUHGGLVFRYHUHG"
,IPRVWRUHYHQVRPHRIWKHEHOLHIVWKDWWKHSXWDWLYHGLVFRYHUHUKDGDERXWWKH
GLVFRYHUHGHQWLW\DUHZURQJ>KRZLV@RQHWRHVWDEOLVKWKHUHIHUHQWLDOVWDELOLW\
RIDWHUPGHVSLWHDFKDQJHRILWVPHDQLQJ>"@+RZVKRXOGRQHGHDOZLWKFDVHV
RIDOOHJHGVLPXOWDQHRXVGLVFRYHU\OLNHWKDWRIHQHUJ\FRQVHUYDWLRQZKHUHWKH
SXWDWLYHGLVFRYHUHUVZHUHFRQFHUQHGZLWKGLIIHUHQWSUREOHPVDQGFDPHXSZLWK
GLIIHUHQWWKHRUHWLFDOK\SRWKHVHV"+LVVROXWLRQFRPHVFORVHWRPLQH
2QHFRXOGVLPSO\WU\WRKLVWRULFL]HWKHQRWLRQRIVFLHQWLFGLVFRYHU\E\DGRSWLQJ
WKHSHUVSHFWLYHRIWKHUHOHYDQWKLVWRULFDODFWRUV2QHZRXOGUVWH[DPLQHWKHFRQWH[W
RIJHQHUDWLRQWKDWLVVKRZKRZWKHJLYHQHQWLW\ZDVLQWURGXFHGLQWRWKHVFLHQWLF
OLWHUDWXUH7KHQRQHZRXOGUHFRQVWUXFWWKHRULJLQDOFRQWH[WRIMXVWLFDWLRQFRQVLVW
LQJRIDOOWKHH[SHULPHQWDODQGWKHRUHWLFDODUJXPHQWVWKDWZHUHJLYHQLQIDYRXU
RIWKHH[LVWHQFHRIWKDWHQWLW\7KHQH[WVWHSZRXOGEHWRWUDFHWKHGHYHORSPHQWDO
SURFHVVWKDWIROORZHGWKHLQWURGXFWLRQRIWKDWHQWLW\DQGJUDGXDOO\WUDQVIRUPHG
WKHFRQFHSWDVVRFLDWHGZLWKLW7KHHYROXWLRQRIDQ\VXFKFRQFHSWUHVHPEOHVD
SURFHVV RI JUDGXDO FRQVWUXFWLRQ ZKLFK WDNHV SODFH LQ VHYHUDO VWDJHV$ UHDOLVW
$UDEDW]LVZLWKUHIHUHQFHWR6FKDIIHU,GLVFXVVHGWKHIXQFWLRQDOLW\RI
WKHFRQFHSWRIVFLHQWLFGLVFRYHU\LQ&DQHYD
$UDEDW]LV
$UDEDW]LVWKHSDVVDJHTXRWHGHQGVWKHSDSHU,QDIRRWQRWHWRWKHQH[W
WRWKHODVWVHQWHQFH$UDEDW]LVUHDIUPHGKLVHDUOLHUFRQWHQWLRQWKDWYLHZLQJVFLHQFHDVD
FRQVWUXFWLYHDFWLYLW\GRHVQRWQHFHVVDULO\FDUU\UHODWLYLVWRUDQWLUHDOLVWLPSOLFDWLRQV>&@RQ
VWUXFWLRQLVPSURSHUO\XQGHUVWRRGLVQHXWUDOZLWKUHVSHFWWRWKHUHDOLVPGHEDWH7KLV
DSSHDOWRWKHFRQVHQVXVRIWKHVFLHQWLFFRPPXQLW\VKRXOGQRWEHLQWHUSUHWHGDVDVRFLDO
FRQVWUXFWLYLVWSRVLWLRQ0\DSSURDFKLVFRQVWUXFWLYLVWLQWKHVHQVHWKDWWKHUHSUHVHQWDWLRQ
RIVD\WKHHOHFWURQZDVJUDGXDOO\FRQVWUXFWHG+RZHYHULWLVQRWDVRFLDOFRQVWUXFWLYLVW
RQHLQWKHXVXDOVHQVHZKLFKLPSOLHVWKDWFRQVHQVXVZLWKLQWKHVFLHQWLFFRPPXQLW\LVWKH
RXWFRPHRISURIHVVLRQDOLQWHUHVWVWKHGLVWULEXWLRQRISRZHUZLWKLQWKHVFLHQWLFFRPPXQLW\
HWFQ
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
PLJKWZDQWWRODEHOWKHUVWVWDJHRIWKDWSURFHVVWKHVWDJHRIGLVFRYHU\,QWKDW
FDVHGLVFRYHU\VKRXOGEHFRQVWUXHGDVDJUDGXDOSURFHVVRIFRQVHQVXVIRUPDWLRQ
ZLWKLQWKHVFLHQWLFFRPPXQLW\ZKRVHRXWFRPHLVWKHDFFHSWDQFHRIDQH[LVWHQFH
FODLPHJWKHHOHFWURQH[LVWV7KHFRQWH[WRIGLVFRYHU\LIZHZDQWWRUHWDLQ
WKLVH[SUHVVLRQFRQFHUQVDQH[WHQGHGSURFHVVZKLFKLQYROYHVERWKJHQHUDWLRQ
DQGMXVWLFDWLRQ
,ZRXOGFRXQWHUWKDWWDONDERXWHQWLWLHVGRHVQRWDSSO\ZHOOWRVLWXDWLRQVOLNH
WKRVHRIFRQFHUQKHUHZKHUHWKHLVVXHLVOHVVDQHQWLW\WKDQDQH[SODQDWLRQWKDW
H[DPSOHVOLNHPLQHGRQRWOHQGWKHPVHOYHVWREHLQJEURNHQGRZQLQWRVWDJHVDQG
PRVWLPSRUWDQWO\WKDWWKHVFLHQWLVWVLQYROYHGGRQRWUHJXODUO\DQGVHOIFRQVFLRXVO\
SUHVHQWWKHLUYLHZVDVMXVWLFDWLRQV
,OOXVWUDWLYHRIWKHOLPLWDWLRQVWKDWDWWDFKWRGLVFLSOLQDU\LGHQWLFDWLRQRIRQHVHOI
DQGRQHVSUREOHPVDQGRIRWKHUVDZDUHQHVVRIRQHVZRUNDUHDQLPSRUWDQWVHULHV
RISDSHUVSXEOLVKHGE\1LFNOHVEHWZHHQDQG$OWKRXJKKLVWKHPDWLFDOO\
RYHUODSSLQJSDSHUVULFKLQDGLYHUVLW\RIDUJXPHQWVUHVLVWHDV\VXPPDU\IRUSUHVHQW
SXUSRVHVRQHFDQFKDUDFWHUL]HWKHPDVWU\LQJWRFUDIWDQXQGHUVWDQGLQJRIVFLHQFH
RXWRIWZRGLVWLQFWLVVXHV2QHZDVDSKLORVRSKHUVLQWHQWLRQWRTXHVWLRQWKHORQJ
VWDQGLQJFRQVHQVXVDPRQJSKLORVRSKHUVRIVFLHQFHWKDWRQO\MXVWLFDWLRQQRWDOVR
GLVFRYHU\LVRISKLORVRSKLFDOVLJQLFDQFH7KHRWKHUZDVWKHLQWHQWLRQWRUHIUDPH
GLVFXVVLRQRIWKHVRFLDOUHFRQVWUXFWLRQRIVFLHQFHLQDZD\WKDWHYHQWXDOO\DQG
LPSOLFLWO\DVVLJQHGDFHQWUDOUROHWRDUHFDVWXQGHUVWDQGLQJRIVFLHQWLFGLVFRYHU\
1LFNHOVDGGUHVVHGWKHUVWVHWRILVVXHVSULPDULO\WRKLVIHOORZSKLORVRSKHUVRI
VFLHQFHWKHVHFRQGSULPDULO\WRWKRVHKHWHUPHGQHZZDYHVRFLRORJLVWVRIVFL
HQFHOLNH%UXQR/DWRXU6WHYH:RROJDU.DULQ.QRUU&HWLQD+DUU\&ROOLQVDQG
$QGUHZ3LFNHULQJ
1LFNOHVVRXJKWDUHHYDOXDWLRQRIWKHVWDQGDUGSKLORVRSKLFDODVVHVVPHQWRIWKH
GLVWLQFWLRQEHWZHHQGLVFRYHU\DQGMXVWLFDWLRQRQHJURXQGHGLQWKHSULYLOHJLQJ
RIWKHWHVWLQJRIDOUHDG\IRUPXODWHGSURSRVLWLRQVLQRUGHUWRFODLPIRUGLVFRYHU\
ERWKPHWKRGRORJLFDODQGHSLVWHPLFVLJQLFDQFH%\GLVFRYHU\KHPHDQWWKH
RULJLQDOJHQHUDWLRQRUFRQFHSWLRQRIDQLGHDRUWKHRU\DSDUWLFXODUKLVWRULFDOSUR
FHVVUDWKHUWKDQDQDOZDUUDQWHGDFKLHYHPHQWWKRXJKLQIDFWKHGLGQRWWKHUH
LGHQWLI\DQ\NLQGRIGLVFRYHU\SURFHVV/LNHPRVWSKLORVRSKHUV1LFNOHVKDELWX
DOO\VDZGLVFRYHU\LQWHUPVRILGHDVDQGWKHRULHVWKRXJKZKDWVFLHQWLVWVWHQGWR
EHIDPRXVIRUGLVFRYHULQJDUHIDFWVODZVDQGSKHQRPHQDOLNHHOHFWURPDJQHWLVP
DQGWKHUPRHOHFWULFLW\+LVVROXWLRQWRKLVHVVHQWLDOO\SKLORVRSKLFDOSUREOHPZDVWR
GHYHORSQRWLRQVRIZKDWKHYDULRXVO\WHUPHGJHQHUDWLYHMXVWLFDWLRQSRWHQWLDO
GLVFRYHU\DQGGLVFRYHUDELOLW\6KLIWLQJDWWHQWLRQDZD\IURPWKHDFWXDOKLVWRUL
1LFNOHVD
1LFNOHVDFI
1LFNOHVFI
1LFNOHVFI
1LFNOHVFIZKLFK
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
FDOSURFHVVRIGLVFRYHU\KHPDLQWDLQHGWKDWDVWURQJDUJXPHQWIRUWKHMXVWLFDWLRQ
RIDVFLHQWLFFODLPFDQFRPHIURPDSRVWKRFXQGHUVWDQGLQJRIKRZZKDWZDV
GLVFRYHUHGPLJKWKDYHEHHQGLVFRYHUHGJLYHQZKDWZHQRZNQRZ$V1LFNOHV
ODWHU UHSHDWHGO\ SRLQWHG RXW >V@LQFH GLVFRYHUDELOLW\ DUJXPHQWV DUH DUJXPHQWV
JHQHUDWLYHMXVWLFDWLRQLVDORJLFDOUDWKHUWKDQDKLVWRULFDOWKHRU\RIMXVWLFDWLRQ
DQGWKXVDYRLGVWKHSUREOHPVZLWKKLVWRULFDOWKHRULHVQDPHO\GHWHUPLQLQJWKH
DFWXDOGHWDLOVRIZKRNQHZDQGGLGZKDWZKHQ
7KHVHFRQGVHWRIFRQFHUQVOHG1LFNOHVWRGHYHORSKLVDQGRWKHUVUHFRJQLWLRQ
WKDWWKHSURGXFWLRQRIVFLHQWLFNQRZOHGJHFDQRQO\SURSHUO\EHXQGHUVWRRGDVD
SURFHVVRIWUDQVIRUPHGXQGHUVWDQGLQJH[WHQGHGLQWLPHDQGW\SLFDOO\DFURVVD
QXPEHURIUHVHDUFKHUV&ULWLFL]LQJZKDWKHFDOOHGDVLQJOHSDVVFRQFHSWLRQRI
VFLHQFHZKLFKDOORZVIRUQRHVVHQWLDOWUDQVIRUPDWLRQRYHUWLPHRIVXFFHVVLYH
UHQHPHQWVRISUHYLRXVZRUNKHRIIHUHGDQDOWHUQDWLYHYLHZ
7KH DOWHUQDWLYH YLHZ LV WKDW VFLHQWLF ZRUN LV PXOWLSDVV DQG WKDW WKH RYHUDOO
UHVHDUFKSURFHVVLVGLDOHFWLFDORUVHOIWUDQVIRUPLQJRIWHQLQXQLQWHQGHGZD\V
7KHUHDUHYDULRXVNLQGVRIIHHGEDFNORRSVLQZKLFKWKHSUHOLPLQDU\UHVXOWVRIRQH
ELWRIZRUNDUHUHSURFHVVHGDQGUHQHGRIWHQPRGLHGVXEVWDQWLDOO\:HPLJKW
WHUPLWVRFLDOFRQVWUXFWLRQE\UHFRQVWUXFWLRQ2QFHDURXJKDQGUHDG\SUREOHP
VROXWLRQLVSXEOLVKHGLWFDQLQWXUQEHFRPHDQREMHFWRIVWXG\E\RWKHUVVHDUFK
VSDFHVRISRVVLEOHVROXWLRQVFDQEHFRQVWUXFWHGDURXQGLWDQGVRRQ$VDUHVXOW
RIVXFFHVVIXOWLQNHULQJDQGUHWKLQNLQJPLVWDNHVDQGEOLQGDOOH\VDUHHOLPLQDWHG
SURFHGXUHV DUH VWUHDPOLQHG QRLVH LV UHGXFHG QHZ SURFHGXUHV DQG VWDQGDUGV
HPHUJHDQGWKHYHU\FRQFHSWLRQRIWKHSUREOHPPD\EHIXQGDPHQWDOO\DOWHUHGVR
WKDWZKDWZDVIRUPHUO\DQLOOVWUXFWXUHGSUREOHPEHFRPHVZHOOVWUXFWXUHG
1LFNOHVXQGHUVWDQGLQJRIVRFLDOFRQVWUXFWLRQE\UHFRQVWUXFWLRQZDVFORVHWR
WKHXQGHUVWDQGLQJRIWKHGLVFRYHU\SURFHVV,KDYHXUJHGLQWKLVSDSHU6FLHQWLVWV
FRQVWDQWO\ UHFRQVWUXH SUHYLRXV ZRUN ORFDWLQJ WKH HVVHQWLDO SUREOHPV GLVWLOOLQJ
RXWHVVHQWLDOFRQWULEXWLRQVWRWKRVHSUREOHPVDQGUHIRUPXODWLQJDOORIWKLVLQWKH
FOHDUHVWFRQWHPSRUDU\WHUPV6XFKFRQFHSWXDODQGWHFKQLFDOUHFRQVWUXFWLRQLV
RIWHQLQDGYHUWHQWDQGXQQRWLFHG<HWDVLGHIURPRFFDVLRQDORELWHUGLFWDKHGLG
QRWDQDO\]HGLVFRYHU\LQWKHVHWHUPV'HVSLWHKDYLQJREVHUYHGWKDWGLVFRYHU\
DGGVJHQHUDWDELOLW\DQGGHULYDELOLW\
1LFNOHVFIZKLFKUHSODFHGWKHRU\RIMXVWLFDWLRQZLWKFRQFHS
WLRQRIMXVWLFDWLRQQ
1LFNOHVDDQGUHVSFID
1LFNOHVDFIRQFRQVWUXFWLRQYHUVXV
UHFRQVWUXFWLRQ
)RUH[DPSOH2IWHQWKHPRVWLPSRUWDQWGLVFRYHULHVHPHUJHRQO\LQWKHUHHFWLRQDQG
DUJXPHQWLQYROYHGLQFRQVWUXFWLQJVFLHQWLFSDSHUVRULQUHFRQVWUXFWLQJWKHLUDUJXPHQWV
\HDUVODWHU1LFNOHVDFI
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
DWWULEXWLRQVDUHRIWHQUHWURVSHFWLYHUHFRQVWUXFWLRQVKHGLGQRWLGHQWLI\GLVFRYHU\
VWRULHVDVVLWHVIRUWKHVWXG\RIUHFRQVWUXFWLRQ
1LFNOHVGLVWLQFWLRQ EHWZHHQ FRQVWUXFWLRQ DQG UHFRQVWUXFWLRQ PD\ KDYH
ZRUNHGDJDLQVWVXFKDV\QWKHVLV>&@RQVWUXFWLRQFRQFHUQVWKHRULJLQDOPDQXIDF
WXUHRINQRZOHGJHFODLPVDQGWKHLULPPHGLDWHLQWHUSUHWDWLRQDQGDFFHSWDQFHRU
UHMHFWLRQE\WKHUHOHYDQWVFLHQWLFFRPPXQLW\5HFRQVWUXFWLRQFRQFHUQVZKDWKDS
SHQVWRWKHVHUHVXOWVODWHUKRZWKH\DUHVWUHDPOLQHGDUWLFXODWHGDVPRGHVRIZHOO
XQGHUVWRRGFRQFHSWXDOIUDPHZRUNVDQGLQVRPHFDVHVEODFNER[HG*ORVVLQJ
FRQVWUXFWLRQDVWKHSXEOLFDWLRQDQGDFFHSWDQFHRIDGLVFRYHU\UHPRYHVGLVFRY
HU\IURPWKHVXEVHTXHQWDQGPRUHH[WHQGHGSURFHVVRIUHFRQVWUXFWLRQ/LNHZLVH
KLVFRQWLQXLQJWRIUDPHKLVFRQFHUQVLQWHUPVRIWKHGLVFRYHU\MXVWLFDWLRQGLV
WLQFWLRQKRZHYHUPXFKPRGLHGE\KLVQRWLRQRIFRQFHSWXDOUHFRQVWUXFWLRQDQG
KLVFRQWLQXHGXVHRIWKHODQJXDJHRIVWDJHVHYHQDVKHFULWLFL]HGWKHVWDQGDUG
WZRRUWKUHHVWDJHPRGHORIWKHSKLORVRSKHUVPD\ERWKKDYHZRUNHGDJDLQVW
DPRUHWKRURXJKJRLQJUHFRQFHSWXDOL]DWLRQRIWKHSURFHVVE\ZKLFKDGLVFRYHU\
LV[HGDQGDVVLJQHGDVLQVRPHFDVHVFRH[WHQVLYHZLWKDVHDPOHVVSURFHVVRI
UHFRQVWUXFWLRQ
1RWZLWKVWDQGLQJWKHVHFRQVLGHUDWLRQV1LFNOHVGLGJUDGXDOO\EULQJLQWRLQWHUDF
WLYHSUR[LPLW\KLVXQGHUVWDQGLQJRIJHQHUDWLYHMXVWLFDWLRQDVDSKLORVRSKLFDODV
VHVVPHQWSURFHGXUHRIUHFRQVWUXFWLRQDVDVRFLDOSURFHVVDQGRIGLVFRYHU\DVDQ
H[WHQGHGKLVWRULFDOSURFHVVZKHUHE\KHWDFLWO\DEDQGRQHGKLVHDUOLHUXQGHUVWDQGLQJ
RIGLVFRYHU\DVWKHLQLWLDOJHQHUDWLRQRIDQLGHD%\KHZDVFULWLFL]LQJ.XKQ
IRUKDYLQJXQGHUHVWLPDWHGWKHH[WHQWWRZKLFKVFLHQWLFUHVHDUFKUHFRQVWUXFWVLWV
RZQSUHYLRXVUHVXOWV7KHSRLQWIRUGLVFRYHU\LVWKDWPXFKRUPRVWRIWKHLQQRYD
WLRQPD\RFFXUDIWHUWKHRULJLQDOUHVXOWLVSXEOLVKHGMXVWLHGDQGDFFHSWHG
<HWKLVPRVWLPSRUWDQWSRLQWIURPWKHSHUVSHFWLYHRIWKLVSDSHUFDPHDVDIRRWQRWH
DVLGHWRKLVFULWLTXHRI3LFNHULQJVREMHFWLRQWRSXWWLQJWKHSKHQRPHQDUVW
1LFNOHVFI:KHUHDVDQROGHUJHQHUDWLRQRIPHWKRGRORJLVWVFRQVLGHUHG
GLVFRYHU\LVVXHVSHUWLQHQWRQO\WRWKHHIFLHQWJHQHUDWLRQRIQHZWKHRULHVDWWKHLQLWLDOVWDJH
RIUHVHDUFKWRGD\GLVFRYHU\LVZLGHO\UHFRJQL]HGWREHUHOHYDQWWRDOOPDQQHURIMXVWLFD
WLRQSURFHVVHV,QWKHFRQWHPSRUDU\YLHZWKHWUHDWPHQWRIGLVFRYHU\GRHVQRWPHUHO\OO
DODFXQDLQROGHUPHWKRGRORJLHVRIVFLHQFH%\DSSUHFLDWLQJKRZHDUO\IDOWHULQJSUREOHP
IRUPXODWLRQVDQGVROXWLRQVDUHSURJUHVVLYHO\UHQHGE\ODWHUVWDJHVRIUHVHDUFKWKHHQWLUH
FRQFHSWLRQRIUHVHDUFKLQFOXGLQJWKHSURFHVVDQGORJLFDOVWUXFWXUHRIVFLHQWLFMXVWLFDWLRQLV
WUDQVIRUPHG7DNLQJVFLHQWLFUHFRQVWUXFWLRQVHULRXVO\PD\KHOSWREULGJHWKHJDSEHWZHHQ
ORJLFDODQGKLVWRULFDOWUHDWPHQWVRIGLVFRYHU\DQGLQQRYDWLYHUHVHDUFK
1LFNOHV
1LFNOHV(OVHZKHUHKHGLVWLQJXLVKHGRULJLQDOUHVHDUFKIURPLWVFRQFHSWX
DOO\UHQHGGHQRX>H@PHQW
1LFNOHVDQGUHVS
1LFNOHV
1LFNOHVFIIRUKLVHODERUDWLRQRI.XKQVSRLQWWKDWGLVFRYHULHVKDYH
DKLVWRULFDOVWUXFWXUHKDUGO\GLVWLQJXLVKDEOHIURPRWKHUIRUPVRIVRFLDOFRQVWUXFWLRQ
1LFNOHVQ7KHFHQWUDOSXUSRVHRI1LFNOHVSDSHUZDVWRFRPEDW
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
,QFLGHQWDOO\DSDUWLDOH[SODQDWLRQZK\VFLHQWLVWVSXWWKHSKHQRPHQDUVWLVWKDW
WKHLPSOLFLWUXOHVRIDWWULEXWLRQRIGLVFRYHULHVGHPDQGVLWZKLFKUXOHVKHOSWR
VWDELOL]HWKHFRPPXQLW\/DWRXUREVHUYHVWKDWDVFLHQWLVWZDQWVWRHQUROORWKHUVDV
DOOLHVEXWDOVRWRFRQWUROWKHPVRWKDWKLVZRUNLVQRWWUDQVIRUPHGRXWRIUHFRJQLWLRQ
ZLWKFRUUHVSRQGLQJORVVRIFUHGLW,VXJJHVWWKDWWKHUXOHVRIGLVFRYHU\DWWULEXWLRQ
DVVLJQFUHGLWWRWKHRULJLQDOZRUNHYHQZKHQWKHH[WHQWRIODWHUWUDQVIRUPDWLRQLV
UHFRJQL]HG7KLVSUDFWLFHE\LWVHOIPDNHVVFLHQWLVWVDFFRXQWVORRNPRUHZKLJJLVK
WKDQWKH\UHDOO\DUH
0\H[DPSOHVVXJJHVWWKDWVFLHQWLVWVHYHQFRQWHPSRUDULHVDUHW\SLFDOO\TXLWH
XQDZDUHRIWKHGLVWRUWHGQDWXUHRIWKHLUDWWULEXWLRQVRIGLVFRYHU\
7KHFXULRXVUHODWLRQVKLSRI1LFNOHVZRUNWRUHVWRIWKHOLWHUDWXUHGLVFXVVHGKHUH
KLJKOLJKWVWKHH[WHQWWRZKLFKGLIIHUHQFHVLQDSSURDFKDQGDXGLHQFHFDQHIIHFWLYHO\
FRPSDUWPHQWDOL]H VHHPLQJO\ OLNHVSLULWHG ZRUN 'HVSLWH D JHQHUDO UHOHYDQFH RI
PXFK RI 1LFNOHV ZRUN WR WKH LVVXHV FRQFHUQLQJ VFLHQWLF GLVFRYHU\ GLVFXVVHG
KHUHDQGWKHPRUHH[SOLFLWUHOHYDQFHRIRFFDVLRQDOSURQRXQFHPHQWVWKDWZRUNKDV
UHPDLQHGZLWKRXWVLJQLFDQWLQWHUVHFWLRQZLWKPRVWRIWKDWOLWHUDWXUH1RQHRIWKH
VHYHQDERYHGLVFXVVHGSDSHUVE\1LFNOHVSXEOLVKHGEHWZHHQDQGZDV
FLWHGLQ/DWRXUDQG:RROJDUV/DERUDWRU\OLIH:RROJDUV6FLHQFH7KHYHU\
LGHD6FKDIIHUV6FLHQWLFGLVFRYHU\DQGWKHHQGRIQDWXUDOSKLORVRSK\
DQG0DNLQJ8S'LVFRYHU\$UDEDW]LV5HWKLQNLQJWKHGLVFRYHU\
RIWKHHOHFWURQ)DOFRQHUVDQG*RRGD\VH[DPLQDWLRQVRIWKHVDPHWRSLF
ERWKRU0LOOHUV'LVWULEXWLQJGLVFRYHU\EHWZHHQ:DWWDQG&DYHQGLVK
$PD]LQJO\HYHQ1LFNOHVRZQHVVD\RQ'LVFRYHU\IRUWKH&RPSDQLRQ
WRWKHKLVWRU\RIPRGHUQVFLHQFHSUHVXPDEO\ZULWWHQZLWKDQDXGLHQFHRI
KLVWRULDQVRIVFLHQFHLQPLQGIDLOHGWRFLWHDQ\RIWKHVHVHYHQZRUNVRIKLV2QO\
$UDEDW]LVSDSHUVHQVLWLYHWRERWKKLVWRULRJUDSKLFDODQGSKLORVRSKLFDOLVVXHV
EURXJKW1LFNOHVUHOHYDQWZRUNLQWRFRQVLGHUDWLRQ,QGHHGLWZDVRQO\$UDEDW]LV
DUWLFOHWKDWPDGHPHDZDUHRIWKHQHHGWRFRQVLGHUWKDWEORFNRI1LFNOHVZRUN
H[FHVVLYHDQWLZKLJJLVPFI
6FKDIIHURQFHFLWHG1LFNOHVEDQGF6FKDIIHUQ
7KHRQO\ZRUNVRIKLVRZQKHFLWHGZHUH1LFNOHVDFDQGRGGO\E
7KHODVWQDPHGRQ/DNDWRVLDQKHXULVWLFVDQGHSLVWHPLFVXSSRUWZDVGLUHFWHGVROHO\WR
SKLORVRSKHUVRIVFLHQFHDQGWRXFKHGRQGLVFRYHU\LVVXHVRQO\ZLWKUHJDUGWRJHQHUDWLYH
VXSSRUWDQGGLVFRYHUDELOLW\,QKLVVWXG\RISULRULW\GLVSXWHV*URVV
VLPSO\OLVWHG1LFNOHVSDSHU%H\RQGGLYRUFHDORQJZLWKERRNVE\+DQVRQ3RSSHU
DQG6XSSHGHDOLQJZLWKWKHORJLFVRIGLVFRYHU\DQGMXVWLFDWLRQZLWKWKHUHPDUNWKDW>P@\
FRQFOXVLRQVKDYHQREHDULQJRQWKHVHSKLORVRSKLFDOLVVXHVQRUKDVWKHVWDWHRIVXFKLVVXHV
DQ\EHDULQJRQP\FRQFOXVLRQV
,QDGGLWLRQWRVHYHUDOFLWDWLRQVRI1LFNOHVEDQGRIDIHZZRUNVQRWUHOHYDQWKHUH
$UDEDW]LVFLWHG1LFNOHVPRVWVLJQLFDQWO\ZLWKUHJDUG
WR1LFNOHVHPSKDVLVRQ>W@KHIXQFWLRQDQGLPSRUWDQFHRIUHFRQVWUXFWLRQLQVFLHQFHDVLW
UHODWHVWRFKDQJLQJPRGHVRIMXVWLFDWLRQQ
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
2QWKHRWKHUVLGH1LFNOHVQHYHUFLWHGDQXPEHURIHVSHFLDOO\SURPLQHQWDQG
UHOHYDQWVRXUFHVLQFOXGLQJ:RROJDUVDQGDUWLFOHVRQVFLHQWLFGLVFRY
HU\RUKLVERRN%UDQQLJDQV1DWXUDOLVWLFDQGVRFLRORJLFDOPRGHOVRIWKH
SUREOHPRIVFLHQWLFGLVFRYHU\DQG%DUQV76.XKQDQGVRFLDOVFLHQFH
+HUHJXODUO\FLWHG%UDQQLJDQV6RFLDOEDVLVRIVFLHQWLFGLVFRYHU\
EXWPRVWO\IRULWVLOOXVWUDWLRQRIWKHVRFLDOUHFRQVWUXFWLRQRIVFLHQWLFZRUNKHUH
0HQGHOV+HWZLFHUHIHUUHGWRLWVVRSKLVWLFDWHGDFFRXQWRIVFLHQWLFGLVFRYHU\
DVVRFLDODWWULEXWLRQEXWZLWKRXWLQWHJUDWLQJ%UDQQLJDQVLQVLJKWVZLWKKLVRZQ
DFFRXQW
3HUKDSV PRVW VWULNLQJ LV 1LFNOHV FRQVLVWHQW VOLJKWLQJ RI WKH UHOHYDQFH RI
)OHFNVZRUNWRKLVHQWHUSULVHDIWHUDOO1LFNOHVQRWLRQRIVRFLDOUHFRQVWUXFWLRQLV
SUHFLVHO\WKHWKHPHRI)OHFNVERRNDQGLIGLVFRYHU\LVYLHZHGDVDSURFHVV
RIFROOHFWLYHUHZRUNLQJjOD)OHFNWKHQWKDWSURFHVVLVZKDWLPPHGLDWHO\MXVWLHV
WKHFODLPWKHGLVFRYHU\WRWKHVFLHQWLFFRPPXQLW\7KHUVWRI1LFNOHVWZR
PHQWLRQVRI)OHFNFDPHLQWKHFRQWH[WRIKLVUHFRJQLWLRQWKDWQHZZDYHVRFLROR
JLVWVRIVFLHQFHGHVHUYHFUHGLWIRUVKRZLQJKRZPXFKFRQVWUXFWLYHZRUNRFFXUV
HYHQLQWKHHVWDEOLVKPHQWRIH[SHULPHQWDOIDFWVQRWWRPHQWLRQWKHRULHVDQGWKH
UHODWLRQVRIIDFWWRWKHRU\7REHVXUHVRPHSRLQWVZHUHDQWLFLSDWHGE\)OHFNLQKLV
EULOOLDQW*HQHVLVDQGGHYHORSPHQWRIDVFLHQWLFIDFWDQGE\.XKQLQ6WUXF
WXUH7KDWVDOOKHWKHQKDGWRVD\DERXW)OHFNQRUGLGKHWHDVHRXWRI6WUXFWXUH
ZKDWLWKDGWRVD\RQWKHPDWWHU7ZRVHQWHQFHVZHUHGHYRWHGWR)OHFNLQ1LFNOHV
HVVD\RQ'LVFRYHU\/XGZLN)OHFNLQKLVORQJQHJOHFWHGZRUN*HQHVLV
DQG GHYHORSPHQW RI D VFLHQWLF IDFW %DVHO &KLFDJR KDG DOUHDG\
VKRZQZKDWDQHSLVWHPLFDOO\DQGVRFLDOO\FRPSOH[SURFHVVLWFDQEHWRFRQVWUXFW
DQGHVWDEOLVKDVFLHQWLFIDFW,WFDQEHGLIFXOWWRSLQSRLQWIDFWXDOGLVFRYHULHVDV
WRDXWKRUSODFHWLPHDQGREMHFWLYHUHODWLRQWRQDWXUH7KHFRQWLQXDWLRQRIWKLV
SDVVDJHLQZRUGVDOUHDG\SDUWO\TXRWHGVXJJHVWVZLWKLWVVLJQLFDQWO\LQWHUSRODWHG
WRRWKDW1LFNOHVLQIDFWIDLOHGWRUHFRJQL]HTXLWHKRZVLPLODUKLVDQG)OHFNV
XQGHUWDNLQJVZHUH
$OWKRXJK.XKQKLJKOLJKWHGWKLVSRLQWKHWRRPD\KDYHXQGHUHVWLPDWHGWKHH[WHQW
WRZKLFKVFLHQWLFUHVHDUFKUHFRQVWUXFWVLWVRZQSUHYLRXVUHVXOWVZLWKDUHVXOWLQJ
1LFNOHVD
1LFNOHVQFI,Q7KHVRFLDOEDVLVRIVFLHQWLFGLVFRYHULHV
&DPEULGJH$XJXVWLQH%UDQQLJDQFKDOOHQJHVWKHDSSURSULDWHQHVVRIWKHGLVFRYHU\
ODEHOLWVHOIDQGWUHDWVGLVFRYHU\DVDPDWWHURIVRFLDODWWULEXWLRQUDWKHUWKDQDVDVXFFHVVIXO
LQWHUSUHWDWLRQRIQDWXUH)XUWKHUGLVFRYHU\DWWULEXWLRQVDUHRIWHQUHWURVSHFWLYHUHFRQVWUXF
WLRQV
1LFNOHVD2IWHQZRUNLQJDJDLQVWDMXVWDSSUHFLDWLRQRIQRWMXVWWKHEULOOLDQFH
EXWWKHFRQWLQXHGUHOHYDQFHRI)OHFNVZRUNLVWKHLPSOLFDWLRQWKDWKHFDQEHLJQRUHGEHFDXVH
KHRQO\DQWLFLSDWHGZRUNWKDWRWKHUVKDYHVLQFHGXSOLFDWHG
1LFNOHV
1LFNOHV
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
QHHG IRU UDGLFDO EUHDNV LQ WKH GHYHORSPHQW RI VFLHQFH:RUN DW WKH IURQWLHU LV
FRQVWUXFWHGODUJHO\E\PRGHOOLQJLWRQSUHYLRXVSUREOHPVDQGVROXWLRQVDV.XKQ
SRLQWHGRXWEXWLQWKHSURFHVVWKRVHUHVRXUFHVDUHWKHPVHOYHVFRQFHSWXDOO\UHFRQ
VWUXFWHGDQGQRWPHUHO\IXUWKHUDUWLFXODWHG$VFLHQWLFUHYROXWLRQLVRIWHQDUHWUR
VSHFWLYHUHFRQVWUXFWLRQRIDFFXPXODWHGWUDQVIRUPDWLRQVZKLFKZHUHWKHPVHOYHV
IDLUO\QRUPDO7KHSRLQWIRUGLVFRYHU\LVWKDWPXFKRUPRVWRIWKHLQQRYDWLRQ
PD\RFFXUDIWHUWKHRULJLQDOUHVXOWLVSXEOLVKHGMXVWLHGDQGDFFHSWHG
,WLVLQGLFDWLYHRI1LFNOHVVOLJKWLQJRI)OHFNVZRUNWKDWKHQHYHUFLWHG)OHFNLQ
WKHVHYHUDOSODFHVZKHUHKHQRWHGWKHVLJQLFDQFHWRWKHUHFRQVWUXFWLRQRIVFLHQ
WLFNQRZOHGJHRILWV[LQJLQ+DQGEFKHUWH[WERRNVDQGHYHQYDGHPHFXP
VFLHQFH
6WULNLQJWRRLVWKHH[WHQWWRZKLFK1LFNOHVIDLOHGWRHQJDJH.XKQVZRUNRQ
VFLHQWLF GLVFRYHU\ +H IUHTXHQWO\ FLWHG .XKQV %ODFNERG\ WKHRU\ EXW
SULQFLSDOO\ DV DQ H[DPSOH RI WKH VRFLDO UHFRQVWUXFWLRQ RI VFLHQWLF ZRUN KHUH
3ODQFNV +H QHYHU FLWHG .XKQV DEXQGDQWO\ UHOHYDQW HVVD\V RQ 6LPXOWDQH
RXV GLVFRYHU\ RU +LVWRULFDO VWUXFWXUH RI VFLHQWLF GLVFRYHU\
QRUH[FHSWIRUWZRPHUHO\SDVVLQJUHIHUHQFHVGLGKHFRQVLGHU6WUXFWXUH
ZLWKUHJDUGWRGLVFRYHU\1LFNOHVIDLOXUHWRHQJDJHWKHUHOHYDQWKLVWRULRJUDSKL
FDOOLWHUDWXUHLVWKHLSVLGHRIRWKHUVQHJOHFWRIKLVZULWLQJVDQGKLJKOLJKWVWKH
H[LVWHQFHDQGVLJQLFDQFHRISRRUO\LQWHUVHFWLQJFRPPXQLWLHVRISHRSOHHQJDJHG
LQZKDWDUHRVWHQVLEO\OLNHVSLULWHGHQWHUSULVHV
$66(660(17$1'&21&/86,216
7KHFOHDUFRQVHQVXVHPHUJLQJIURPWKHZRUNGLVFXVVHGLQWKHSUHYLRXVVHFWLRQ
LVWKDWVFLHQWLFGLVFRYHU\VHHQQRWLQWHUPVRIWKHFUHDWLYLW\RILQGLYLGXDOVEXWDV
1LFNOHV D TXRWH 0RVW VWULNLQJ LQ WKLV UHJDUG LV D
SDVVDJHRFFXUULQJDWWKHHQGRIDSDUDJUDSKIROORZLQJKLVMXVWTXRWHGUHIHUHQFHWR)OHFN
)XUWKHUVXSSRUW>IRUWKHFRQVWUXFWLYHUHFRQVWUXFWLYHYLHZRIVFLHQFH@PLJKWEHH[SHFWHG
IURPVWXGLHVRIWKHZULWLQJRIWHFKQLFDOVXUYH\DUWLFOHV+DQGEFKHUDQGHYHQWH[WERRNV
6XUSULVLQJO\OLWWOHDWWHQWLRQKDVEHHQJLYHQWRWKHVHWRSLFV
1LFNOHVD+HLJQRUHGWKHUHO
HYDQFHRIWKH+LVWRULRJUDSKLFSKLORVRSKLFDODGGHQGXPRI5HYLVLWLQJ3ODQFN.XKQ
WRWKHTXHVWLRQRIVFLHQWLFGLVFRYHU\FLWLQJWKDWZRUNRQFHLQDIRRWQRWHRQO\WR
GLVDJUHHZLWK.XKQVGHIHQVHRIKLV3ODQFNERRN1LFNOHVDQ
7KHRQHH[FHSWLRQ,NQRZRIWRWKHJHQHUDOL]DWLRQVRIWKLVDQGWKHSUHYLRXVVHQWHQFH
FRPHVLQRQHVHQWHQFHLQWKHODVWRIWKHSDSHUVFRQVLGHUHGKHUH.XKQ
DQGODWHUZULWHUVVKRZHGFRQYLQFLQJO\WKDWGLVFRYHULHVKDYHDKLVWRULFDOVWUXFWXUHKDUGO\
GLVWLQJXLVKDEOHIURPRWKHUIRUPVRIVRFLDOFRQVWUXFWLRQ1LFNOHV7KHRWKHUSDVV
LQJUHIHUHQFHWR6WUXFWXUHDQGGLVFRYHU\UHODWHVWRWKHSRLQWWKDWFUXFLDOH[SHULPHQWVOLNH
GLVFRYHULHVKDYHZURQJO\EHHQXQGHUVWRRGDVSXQFWLIRUPLQVWDQWDQHRXVO\DFKLHYHGUHVXOWV
-XVWDVKLVWRULDQVKDYHVKRZQWKDWGLVFRYHULHVFDQRQO\UDUHO\EHKLVWRULFDOO\SLQSRLQWHG
DVWRSODFHWLPHDQGDJHQW.XKQ6FKDIIHUVRWKHQIRUFUXFLDOH[SHULPHQWV
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
DFROOHFWLYHFRQVWUXFWLRQFXPUHWURVSHFWLYHFKDUDFWHUL]DWLRQPXVWEHXQGHUVWRRG
DVDQH[WHQGHGSURFHVVE\ZKLFKDGLYHUVLW\RILQGLYLGXDOVGHYHORSDQGFRPHFRO
OHFWLYHO\WRDFFHSWDVWUXHDVWDWHPHQWDERXWWKHSK\VLFDOZRUOG$V%UDQQLJDQ
VWUHVVHGRXUFRQFHSWLRQRIZKDWZDVGLVFRYHUHGLVQHFHVVDULO\JRYHUQHGE\ZKDWZH
QRZUHJDUGDVWUXHDQGRXUFKDUDFWHUL]DWLRQRIWKHGLVFRYHU\RIWKHIDFWGLVFRY
HUHGPXVWEHFRXFKHGLQXSWRGDWHODQJXDJH+HQFHDVRXUFRQFHSWLRQRISK\VLFDO
UHDOLW\FKDQJHVVRWRRPXVWRXUFKDUDFWHUL]DWLRQRIZKDWDGLVFRYHUHUGLVFRYHUHG
FKDQJHLQVRIDUDVWKHRULJLQDWRUVFRQFHSWLRQVGLIIHUIURPRXUV6LPLODUO\SHRSOH
KROGLQJGLIIHUHQWYLHZVDERXWWKHSK\VLFDOUHDOLW\XQGHUO\LQJDW\SLFDOO\QHZO\
GLVFRYHUHGSKHQRPHQRQZLOOQHFHVVDULO\GLIIHUHQWO\LGHQWLI\ZKDWZDVGLVFRYHUHG
7KRVHDUHWKHSULQFLSDOSRLQWVRIWKHKLVWRULFDOH[DPSOHVH[KLELWHGLQWKHUVWWZR
VHFWLRQVRIWKLVSDSHU
$QRWKHUFRQFOXVLRQIURPWKRVHKLVWRULFDOH[DPSOHVLVWKDWWKHFKDUDFWHUL]DWLRQRI
ZKDWDGLVFRYHUHUGLVFRYHUHGLVVRPHWLPHVWDNHQRXWRIWKHKDQGVRIWKHRVWHQVLEOH
GLVFRYHUHUDQGPDGHDPDWWHURIFROOHFWLYHUHZRUNLQJDVLQ)OHFNVJHQHVLVDQG
GHYHORSPHQWRIDVFLHQWLFIDFW(YHQLQWKHVKRUWUXQQHLWKHUUVWHGQRU6HHEHFN
FRQWUROOHGWKHJHQHUDOXQGHUVWDQGLQJRIZKDWWKH\KDGGLVFRYHUHGDWWKHOHYHORI
FRQFHSWXDOL]DWLRQXQGHUVWDQGLQJRUH[SODQDWLRQ(OHFWURPDJQHWLVPGLGQRWVXU
YLYHDVDGHVLJQDWLRQIRUDQHZIRUPRIDFWLRQRIQDWXUHVSULPLWLYHIRUFHQRUGLG
6HHEHFNHDUQODVWLQJUHQRZQIRUKLVGLVFRYHU\RIWKHWKHUPDOO\LQGXFHGPDJQHWLF
SRODUL]DWLRQRIPHWDOV$V.XKQREVHUYHGGLVFRYHULQJDQHZVRUWRISKHQRPHQRQ
LVQHFHVVDULO\DFRPSOH[HYHQWRQHZKLFKLQYROYHVUHFRJQL]LQJERWKWKDWVRPHWKLQJ
LVDQGZKDWLWLV$SKHQRPHQRQRISXWDWLYHVFLHQWLFVLJQLFDQFHLVUDUHO\DF
FHSWHGDVDPHUHSKHQRPHQRQZLWKRXWKDYLQJDQ\SDUWLFXODUPHDQLQJDVVLJQHGWR
LWZLWKRXWEHLQJXQGHUVWRRGLQWHUPVRIVRPHWKHRU\KRZHYHUVSHFXODWLYHO\$WD
EDVLFSKHQRPHQRORJLFDOOHYHOWKHUHZDVQHYHUDSSUHFLDEOHGLIFXOW\LQUHDFKLQJ
FRQVHQVXVDVWRZKDWUVWHGDQG6HHEHFNKDGGLVFRYHUHGHYHQLILQ6HHEHFNVFDVH
WKHUHVHHPHGIRUDWLPHWREHVRPHGLIIHUHQFHEHWZHHQWKHSURGXFWLRQRIPDJQHWLF
HIIHFWVLQFORVHGFLUFXLWVDQGLQPHWDOOLFEDUV&RQVHTXHQWO\,KDYHQRWGHYRWHGDS
SUHFLDEOHDWWHQWLRQKHUHWRKRZWKHSKHQRPHQDZHUHHPSLULFDOO\VWDELOL]HGWKRXJK
WKDWLVLQSULQFLSOHDQLPSRUWDQWPDWWHUDQGLQRWKHUFDVHVSUREOHPDWLF
$FXULRXVSKHQRPHQRQRIWHQDWWHQGVWKHSDVVDJHRIVFLHQWLFNQRZOHGJHLQ
WKHPDNLQJIURPWKHKDQGVRILWVRULJLQDWRUWKURXJKWKHDGKRFWKRXJKWFROOHFWLYH
WKH UHVXOWLQJ NQRZOHGJH FDQQRW EH DWWULEXWHG WR DQ\ VLQJOH LQGLYLGXDO <HW WKH
RULJLQDWRUVQDPHFDQUHPDLQDWWDFKHGWRWKDWELWRINQRZOHGJHDVLWVGLVFRYHUHU
HYHQDVWKHUHODWLRQVKLSEHWZHHQKLVRUKHUZRUNDQGZKDWZDVHYHQWXDOO\GHHPHG
1LFNOHV7KHIRUHJRLQJZDVWKHRQO\UHIHUHQFHWR6FKDIIWHULQ1LFNOHVSDSHUV
RWKHUWKDQLWVXQGLVFXVVHGLQFOXVLRQLQDOLVWRI)XUWKHUUHDGLQJ
0RVW ZRUN RQ VFLHQWLF GLVFRYHU\ KDV IRFXVHG RQ WKH GLVFRYHU\ RI FRQFHSWV DQG
WKHRULHV
.XKQETXRWHGPRUHIXOO\DERYHLQQRWH
6HH*RRGLQJIRUDQLQVLJKWIXOFRQVLGHUDWLRQRIKRZREVHUYDWLRQDOFRQVHQVXV
DULVHVLQWHUPVRIUHVHDUFKHUVVKDUHGUHSUHVHQWDWLRQRIWKHSKHQRPHQRQ
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
WRKDYHEHHQGLVFRYHUHGGLVDSSHDUVIURPYLHZ(YHQHSRQ\PRXVIDFWVWKXVDFTXLUH
WKHTXDOLW\RILPSHUVRQDOREMHFWLYLW\DVWKH\DSSHDUWREHFRPHIUHHRIDQ\SDUWLFX
ODUL]LQJRUPHUHO\SHUVRQDOFRQWH[W:KDWLVGLVFRYHUHGPXVWEHLSVRIDFWRWUXHRI
WKHZRUOGDVLWLVLQGHSHQGHQWO\RIRXULQWHUYHQWLRQ7KHSKUDVH;GLVFRYHUHG<
KHOSVHUDVHIURPFROOHFWLYHDZDUHQHVVWKHQHJRWLDWHGTXDOLW\RIWKHGLVFRYHUHGIDFW
RUSKHQRPHQRQ7KXVWKHIRUPDWLRQRIFRQVHQVXVDURXQGDGLVFRYHUHUVGLVFRYHU\
LVLWVHOIDQLQVWDQFHRIWKHFROOHFWLYHFRQVWUXFWLRQRIVFLHQWLFNQRZOHGJH
)OHFNFRQWHQGHGWKDWWKHDSSDUHQWJLYHQQHVVRIVFLHQWLFIDFWVLVUHLQIRUFHG
YLDWKHLUVLPSOLHGUHVWDWHPHQWLQQRQWHFKQLFDOZULWLQJV7KHVDPHG\QDPLFVDOVR
DSSOLHVWRWKHPHWDVFLHQWLFIDFWWKDW;GLVFRYHUHG<7KHUHLVDVROLGWUDGLWLRQRI
SUHVHQWLQJUVWHGDQG6HHEHFNDVWKHXQTXDOLHGGLVFRYHUHUVRIHOHFWURPDJQHWLVP
DQGWKHUPRHOHFWULFLW\LQKDQGERRNVDQGHQF\FORSHGLDVRIVFLHQFHDQGLQUHIHUHQFH
ZRUNVRIWKHKLVWRU\RIVFLHQFH
7KDWWKHJHQHUDODFFHSWDQFHRIDGLVFRYHU\FODLPVRPHWLPHVHQWDLOVDSSUHFLDEOH
UHVKDSLQJRIWKHJHQHUDOXQGHUVWDQGLQJRIZKDWZDVGLVFRYHUHGUDLVHVTXHVWLRQV
DERXWWKHUHODWLRQVKLSEHWZHHQWKHFDQRQLFDOO\WHUPHGFRQWH[WVRIGLVFRYHU\DQG
MXVWLFDWLRQ.XKQVLJQDOHGLQDJHQHUDOZD\LQWKH,QWURGXFWLRQWR6WUXFWXUH
WKDWKLVHQWHUSULVHZRXOGGLVSOHDVHWKRVHZKRZLVKHGWRPDLQWDLQDVWULFWVHSDUD
WLRQEHWZHHQWKRVHWZRSURFHVVHV$PRQJFRPPHQWDWRUVFLWHGKHUH$UDEDW]LV
HPSKDVL]HGWKDWWKHDWWULEXWLRQRIWKHWLWOHGLVFRYHUHUKHQFHWKHLGHQWLFDWLRQRI
VRPHWKLQJDVDGLVFRYHU\QHFHVVDULO\GHSHQGVXSRQWKHFROOHFWLYHVHQVHWKDWD
SDUWLFXODUFODLPLVMXVWLHG$GLVFRYHU\TXDGLVFRYHU\FDQQRWFRPHEHIRUHLWVMXV
WLFDWLRQEHFDXVHXQWLODFODLPKDVEHHQMXVWLHGWRVFLHQWLVWVJHQHUDOVDWLVIDFWLRQ
WKH\PXVWZLWKKROGWKHMXGJHPHQWWKDWDGLVFRYHU\KDVEHHQPDGH$OWKRXJK)OHFN
GLGQRWFRXFKKLVVWXG\LQWHUPVRIHLWKHUGLVFRYHU\RUMXVWLFDWLRQLWDEXQGDQWO\
GHPRQVWUDWHVWKHLQH[WULFDELOLW\RIWKHWZRRVWHQVLEO\VHSDUDWHHQWHUSULVHV
,QDGGLWLRQWRVXJJHVWLQJLQDSSURSULDWHO\WKHDIWHUWKHIDFWDFFHSWDQFHRUUHMHF
WLRQRIDQDOUHDG\GHQLWLYHO\IRUPXODWHGFODLPWKHFRPPRQQRWLRQRIMXVWLFD
WLRQDOVRLPSXWHVDGHJUHHRILQWHQWLRQDOLW\WRVFLHQWLVWVSXWDWLYHGHFLVLRQVWKDW
P\KLVWRULFDOH[DPSOHVGRQRWEHDURXW6WULNLQJLVWKHH[WHQWWRZKLFKVFLHQWLVWV
JDYHQRREYLRXVVLJQRIKDYLQJZHLJKHGDOWHUQDWLYHVZKHQWKH\WDFLWO\HPSOR\HG
WKLVRUWKDWWHUPWKLVRUWKDWFRQFHSW:RUGVDQGFRQFHSWVZHUHRIWHQGHSOR\HG
ZLWKDPDWWHURIIDFWQHVVWKDWEHOLHGWKHVWLOOFRQWHVWHGQDWXUHRIWKHNQRZOHGJHLQ
TXHVWLRQ$V)OHFNVRDEO\GHVFULEHGWKHVLWXDWLRQLGHDVJHWWUDQVIRUPHGDVWKH\
FLUFXODWHDPRQJWKHPHPEHUVRIWKHWKRXJKWFROOHFWLYHZLWKRXWWKHSDUWLFLSDQWV
QHFHVVDULO\EHLQJDZDUHRIWKHRQJRLQJSURFHVVRIWUDQVIRUPDWLRQ,QDFDVHOLNH
2KPV ZKLFK VDZ WKH ODQJXDJH RI WKHUPRHOHFWULFLW\ JUDGXDOO\ GLVSODFH WKDW RI
WKHUPRPDJQHWLVPVXFKJUDGXDOWUDQVIRUPDWLRQFDQWDNHSODFHIURPZRUNWRZRUN
IRUDVLQJOHDXWKRU
.XKQE
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
7KHH[DPSOHRIUVWHGDQGHOHFWURPDJQHWLVPIXUWKHULOOXVWUDWHVWKHVRPHWLPHV
ORRVHFRQQHFWLRQEHWZHHQWHUPLQRORJ\DQGFRQFHSWXDOL]DWLRQ7KHZRUGUVWHG
FRLQHGVXUYLYHGDIWHUDSHULRGRIVRPHWHUPLQRORJLFDOXQVHWWOHPHQWHYHQDVKLV
XQGHUVWDQGLQJRILWDVDSHFXOLDUVWDWHRUIRUPRIDFWLRQGLHGXQQRWLFHG6LPL
ODUO\<HOLQVUDWLRQDOHIRULQWURGXFLQJWKHWHUPWKHUPRPDJQHWLVPWRGLVWLQJXLVK
DFHUWDLQFODVVRISKHQRPHQDIURPWKHWKHUPHOHFWURPDJQHWLFSKHQRPHQDKHDV
VRFLDWHGZLWK6HHEHFNVGLVFRYHU\TXLFNO\GURSSHGIURPVLJKWLILQGHHGDQ\RQH
KDGHYHQQRWLFHGLWDVRWKHUVWRRNWRDSSO\LQJWKHWHUPWRWKHHQVHPEOHRIZKDW
UVWHGKDGGXEEHGWKHUPRHOHFWULFSKHQRPHQD,QVRPHFDVHVZKDWZHUHRQFH
WHUPLQRORJLFDODOWHUQDWLYHVUHSUHVHQWLQJFRQWHQWLRXVFRQFHSWXDOGLIIHUHQFHVFDQ
ZLWKWKHIRUPDWLRQRIDQHZFRQVHQVXVORVHWKHLUHUVWZKLOHDQWDJRQLVWLFVWDWXV
UHQGHULQJWKHRULJLQDOLVVXHVLQYLVLEOHRUPHDQLQJOHVV7KDWKDSSHQHGZLWKZKDW
$PSqUHSHUFHLYHGWREHDWVWDNHRYHUZKHWKHUWKHH[SODQDWLRQRIWKHQHZSKHQRPHQD
EHORQJHGWRUVWHGLDQHOHFWURG\QDPLFVRUWRKLVQHZVFLHQFHRIHOHFWURG\QDPLFV
-XVWDVVFLHQWLVWVGLIIHUHQWLQWHUHVWVRIWHQUHSUHVHQWLQJZKDWWKH\UHJDUGHGDV
WKHLURULJLQDOFRQWULEXWLRQVJRYHUQHGWKHLUGLIIHUHQWWDNHVRQDFRPPRQERG\RI
PDWHULDOVRWRRWKHGLIIHUHQWLQWHUHVWVRIWKHFRPPHQWDWRUVZKRVHZRUN,UHYLHZHG
LQWKHSUHYLRXVVHFWLRQVWURQJO\LQXHQFHGWKHQDWXUHDQGWKHH[SOLFLWQHVVRIWKHLU
WUHDWPHQWVRIZKDWZDVRVWHQVLEO\WKHVDPHWRSLFVFLHQWLFGLVFRYHU\$XWKRUVRIWHQ
PDGHLPSRUWDQWREVHUYDWLRQVLQSDVVLQJZLWKRXWHODERUDWLRQRULQVWDQWLDWLRQZLWK
KLVWRULFDOSDUWLFXODUVDVWKH\WXUQHGWKHLUDWWHQWLRQWRRWKHULVVXHVRIPRUHFHQWUDO
FRQFHUQWRWKHP6WULNLQJLVWKHUHODWLYHO\VPDOOUROHSOD\HGE\KLVWRULDQVRIVFLHQFH
LQWKHKLVWRULRJUDSKLFDOUHHYDOXDWLRQRIVFLHQWLFGLVFRYHU\
%ODFNZHOOV ZDV LQWHUHVWHG FKLH\ LQ DUJXLQJ IRU D GLVWLQFWLRQ EHWZHHQ WKH
HODERUDWLRQDQGWKHWUDQVIRUPDWLRQRIGLVFRYHUHGVWUXFWXUHV)RUWKHUHVWKLV
DEVHQFHIURPWKHVXEVHTXHQWFRQYHUVDWLRQVXJJHVWVKLVGLVWDQFHIURPWKHLVVXHVRI
PRUHJHQHUDOFRQFHUQ%UDQQLJDQZDVSULQFLSDOO\FRQFHUQHGWRPDNHWKHFDVHIRU
KLVDWWULEXWLRQDOPRGHORIVFLHQWLFGLVFRYHU\+HIRFXVHGPRUHRQWKHVWDWXVRI
DQHYHQWDVDGLVFRYHU\WKDQRQWKHSURFHVVRIWUDQVIRUPDWLRQLQVFLHQWLVWVFRQFHS
WLRQRIZKDWKDGEHHQGLVFRYHUHG6FKDIIHUVFKLHILQWHUHVWOD\LQLWLDOO\ZLWKWKH
LGHRORJLFDOXVHVRIGLVFRYHU\DFFRXQWVVXEVHTXHQWO\ZLWKKRZWKHIRUPDWLRQRI
FDQRQLFDOGLVFRYHU\VWRULHVFRQWULEXWHVWRWKHVWDELOL]DWLRQRIVFLHQWLFNQRZOHGJH
,QKLVPRVWH[WHQVLYHWUHDWPHQWRIWKHVXEMHFW:RROJDUVFKLHIFRQFHUQVHHPVWR
$PRQJWKHFRQFHSWXDODQGWHUPLQRORJLFDODOWHUQDWLYHVZHUH3UHFKWOVHOHFWULFDOPDJ
QHWLVP3UHFKWOVDQG0XQFNHVWUDQVYHUVDOPDJQHWLVP$PSqUHVHOHFWURG\QDPLFDFWLRQ
6HHEHFNVHOHFWULFDOO\LQGXFHGPDJQHWLFSRODUL]DWLRQ(UPDQVHOHFWURFKHPLFDOPDJQHWLVP
DQG3RJJHQGRUIIVYROWDLFPDJQHWLVP
7KH LPSOLHG QHJDWLYH PRGH LQFOXGHG DQ DWWDFN RQ PHQWDOLVW XQGHUVWDQGLQJV RI
VFLHQWLFGLVFRYHU\
,QFRQWUDVWLQJKLVVRFLRORJLFDOWUHDWPHQWRIVFLHQWLFGLVFRYHU\WR.XKQV%UDQQLJDQ
QRWHG.XKQVXQGHUVWDQGLQJRIGLVFRYHU\DVDFRPSOH[HYHQWWKDWGHYHORSVRYHUDSHULRG
RIWLPH%UDQQLJDQTXRWHGDERYHDWQRWH
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
KDYHEHHQLQH[SORLWLQJDFULWLFDOXQGHUVWDQGLQJRIWKHVRFLDOO\FRQVWUXFWHGQDWXUH
RIVFLHQWLFGLVFRYHULHVLQRUGHUWRDUJXHDJDLQVWDQ\UHDOLVWFODLPVWKDWPLJKWEH
PDGHIRUVFLHQWLFNQRZOHGJH)OHFNVZRUNHVSHFLDOO\LQWKHULFKQHVVRIKLVWRUL
FDOGHWDLOZLWKZKLFKLWPDGHLWVSRLQWDERXWWKHUROHRIWKHWKRXJKWFROOHFWLYH
LQ WUDQVIRUPLQJ WKH VXEVWDQFH RI SXWDWLYH VFLHQWLF IDFWV FRPHV FORVHVW WR WKH
SHUVSHFWLYH,YHDGYDQFHGKHUHWKRXJKKLVRYHUULGLQJFRQFHUQZDVZLWKKRZIDFWV
DFTXLUHDVWDEOHFRQVHQVXDOIRUPZLWKKRZWKH\DFTXLUHWKHLUSXWDWLYHIDFWLFLW\
QRWZLWKSUREOHPDWL]LQJGLVFRYHU\
$OWKRXJK.XKQVHDUO\ZRUNZDVULFKLQLQVLJKWVUHJDUGLQJWKHSUREOHPDWLF
VWDWXVRIGLVFRYHU\LQVFLHQFHKHQHYHUSURGXFHGDQLQGHSWKVWXG\RIDQ\SDUWLFXODU
HSLVRGHRIVFLHQWLFGLVFRYHU\%ODFNERG\WKHRU\DQGWKHTXDQWXPGLVFRQWLQXLW\
ZDVQRWFRQFHSWXDOL]HGDVVXFKQRUGLGLWSUREOHPDWL]HWKHLVVXHRUHYHQ
FRQWDLQDQLQGH[HQWU\IRUGLVFRYHU\DQG.XKQQHYHUUHWXUQHGDVKHLPSOLHGKH
ZRXOGWRWKHWRSLFRIHQHUJ\FRQVHUYDWLRQDVDQH[DPSOHRIDQ\NLQGRIGLVFRYHU\
+LVFKLHIFRQFHUQVOD\ZLWKWKHQDWXUHRIVFLHQFHDQGVFLHQWLFUHYROXWLRQVZLWK
H[HPSOLI\LQJWKHUHDFKRIFRQFHSWVOLNHJHVWDOWVZLWFKHVUHYROXWLRQVSDUDGLJPV
DQGLQFRPPHQVXUDELOLW\ZLWKXQGHUVWDQGLQJRULJLQDOWH[WV,FDPHWRWKHVHEURDGHU
KLVWRULRJUDSKLFDO FRQFHUQV YLD DQ KLVWRULDQV SULPDU\ LQWHUHVW LQ XQGHUVWDQGLQJ
SDUWLFXODUHSLVRGHVRIVFLHQWLFFKDQJH7KHULFKQHVVRIGHWDLOZLWKZKLFK,KDYH
WUDFNHGWKHYLFLVVLWXGHVRIVFLHQWLVWVXQGHUVWDQGLQJRIZKDWUVWHGDQG6HHEHFN
GLVFRYHUHGLVWKHFKLHIVWUHQJWKRIWKLVVWXG\IRUKLVWRULDQVRIVFLHQFH
1LFNOHVRIIHUHGKLVFRQFHSWLRQRIDPXOWLSDVVUHFRQVWUXFWLRQRIVFLHQFHDVD
ZD\WRUHVXUUHFWWKHLGHDRISRVLWLYHVFLHQFHDERG\RIUHOLDEO\HVWDEOLVKHG
UHVXOWVRYHUDJDLQVWWKHIDPLOLDUWKFHQWXU\IDOOLELOLVWLFYLHZSRLQWWKDWVLQFH
DOOVFLHQWLFFODLPVDUHFRQMHFWXUDORUK\SRWKHWLFDOZHPXVWWRWDOO\DEDQGRQWKH
ROGYLHZWKDWZKDWEHJLQVOLIHDVDFRQMHFWXUDOK\SRWKHVLVPD\XOWLPDWHO\DFKLHYH
DGLIIHUHQWORJLFRHSLVWHPRORJLFDOVWDWXV5HMHFWLQJWKHQRWLRQWKDWKLVWRULFLVP
HQWDLOVHSLVWHPLFUHODWLYLVPKHXUJHGWKDW>Z@KLOHWKHYDJDULHVRIKLVWRU\PD\
VHHP WR IDYRU UHODWLYLVP KLVWRU\ FDQ DOVR SURYLGH D ODERUDWRU\ IRU HVWDEOLVKLQJ
FRQVLOLHQFHDQGUREXVWQHVV2QHVXQGHUVWDQGLQJRIGLVFRYHU\SOD\VDFHQWUDO
UROHKHUHWKRXJK1LFNHOVGLGQRWVWUHVVWKHSRLQWRUUHODWHLWH[SOLFLWO\WRKLVQRWLRQ
RIVRFLDOUHFRQVWUXFWLRQ
,IWKHLUZRUNLVWRDGYDQFHVFLHQWLVWVPXVWVRPHKRZPDNHWKHWUDQVLWLRQIURPWKH
RUGHURINQRZLQJWRWKHRUGHURIEHLQJLQRUGHUWRXVHDQGUHHFWRQWKHLUSUHYLRXV
ZRUNLQZKDWWXUQVRXWWREHDVHOIWUDQVIRUPLQJPDQQHU$WVRPHSRLQWWKH\
1LFNOHV
1LFNOHVQ1RWHDJDLQWKHUHOHJDWLRQRIDQLPSRUWDQWSRLQWWRDIRRW
QRWH
1LFNOHVFIDQGHVS>$@QKLVWRULFLVPWKDWOLPLWVXVWRWDONRI
VRFLDODWWULEXWLRQVRIVXFFHVVDQGIDLOXUHDQGH[FOXGHVMXGJPHQWVRIREMHFWLYHVXFFHVVDQG
IDLOXUHRQRXUSDUWLVXOWLPDWHO\VHOIGHIHDWLQJ,DJUHHWKDWVRFLDODWWULEXWLRQLVLPSRUWDQWLQ
DFFRXQWVRIVFLHQWLFGHYHORSPHQWEXWGHQ\WKDWLWVFUHHQVXVRIIIURPWKHZRUOG,ILWGLGLW
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
PXVWPDNHWKHMXGJPHQWHQRXJKVXSSRUWDQGGHWDFKFODLPVRUWHFKQLTXHVIURP
DFRQWH[WRIGLVFRYHU\DQGVRFLDODWWULEXWLRQVRIVXFFHVVWDNLQJWKHPDVUHOLDEOH
HQRXJKWRXVHDVUHVRXUFHVLQIXUWKHUZRUN7KHVDPHKROGVIRUVFLHQFHVWXGLHV
SUDFWLWLRQHUVLQVRIDUDVWKH\ZLVKWRH[SODLQDQ\WKLQJ
$QHVVHQWLDODVSHFWRIWKLVWUDQVIRUPDWLRQLQYROYHVZKDW1LFNOHVWHUPHGWKH
GHFRQWH[WXDOL]DWLRQRUGHORFDOL]DWLRQRIVFLHQWLFFODLPVDVVFLHQWLVWVGHWHUPLQH
ZKLFKGHWDLOVZKLFKFRQWLQJHQFLHVRIRULJLQDWLRQWKHPDQ\IHDWXUHVRIWKHRULJLQDO
GLVFRYHU\SDWKVFDQEHLJQRUHGLQUHSUHVHQWLQJWKRVHFODLPVLQVWDQGDUGL]HG
IRUPWRDW\SLFDOO\ZLGHUDXGLHQFH7KLVRIFRXUVHZDVSUHFLVHO\ZKDW)OHFNV
JHQHVLVDQGGHYHORSPHQWRIDVFLHQWLFIDFWZDVDOODERXWWKRXJK1LFNOHVQHYHU
QRWHGWKDWFRQJUXHQFH1HYHUHVKLQJRXWKLVJHQHUDOSRLQWVZLWKKLVWRULFDOSDU
WLFXODUV1LFNOHVIDLOHGWRDFNQRZOHGJHWKDWVXFKDQDQDO\VLVUHORFDWHVWKHHSLVWHPLF
JURXQGLQJRIVFLHQFHIURPWKHSKLORVRSK\RIVFLHQFHWRLWVKLVWRU\
$UDEDW]LV H[SOLFLWO\ GLVWDQFHG KLPVHOI IURP ZKDW KH WRRN WR EH D FRPPRQ
LQWHQWLRQRIFRQVWUXFWLYLVWDQDO\VHVRIVFLHQFHZKLFKLQFOXGHQRWDEO\WKHKLV
WRULFL]LQJ RI VFLHQWLF GLVFRYHU\WR XQGHUFXW DQ\ UHDOLVW FODLPV WKDW PLJKW EH
PDGHIRUVFLHQWLFNQRZOHGJH+HKDVQRWDV\HWPRXQWHGDSRVLWLYHGHIHQVH
RIWKDWVWDQFH,QDQRWKHUZRUN,KDYHWULHGWRVNHWFKKRZDSURSHUO\XQGHUVWRRG
UHODWLYL]LQJRIVFLHQWLFNQRZOHGJHWRWKHFRQWH[WRILWVFUHDWLRQDQGFROOHFWLYHDF
FHSWDQFHFDQEHKDUQHVVHGLQGHIHQVHRILWVREMHFWLYHREMHFWVLGHGFKDUDFWHU
'LVFRYHU\VWRULHVFDQSURYLGHDZD\WRJURXQGVFLHQWLFNQRZOHGJHLQLWVKLVWRU\
3UHFLVHO\EHFDXVHWDONRIGLVFRYHU\LPSOLHVWKHWUXWKRIZKDWZDVGLVFRYHUHGWKH
ZD\LQZKLFKWKHVFLHQWLFFRPPXQLW\UHDFKHVFRQVHQVXVZLWKUHVSHFWWRWKHZKDW
ZKHQDQGE\ZKRPRIWKHGLVFRYHU\FRQVWLWXWHVRQHRIWKHURXWHVE\ZKLFKWKH
DEVWUDFWLRQVFLHQFHHVWDEOLVKHVWKHUHDOLW\RILWVNQRZOHGJHFODLPV,QWKLVFRQ
QHFWLRQLWLVHVVHQWLDOWRUHFDOOWKDWWKDWSURFHVVRIVWDELOL]DWLRQLQFOXGHVQRWRQO\
WKHHPSLULFDOVWDELOL]DWLRQRIWKHSKHQRPHQRQLQTXHVWLRQEXWDOVRWKHUHSHDWHG
WHVWLQJRIFRQFHSWVDQGWKHRULHVDJDLQVWWKHFRQVWUDLQWVRIWKHSK\VLFDOZRUOG)OHFN
ZRXOGHTXDOO\VFUHHQXVRIIIURPVRFLDODWWULEXWLRQVRIKLVWRULFDODJHQWVDVZHOODVDQ\RWKHU
IDFWVDQGZHVKRXOGKDYHDUHJUHVVRIVRFLDODWWULEXWLRQVRIDWWULEXWLRQV$WVRPHSRLQWZH
PXVWJREH\RQGWKH\VD\LWZRUNVWRLWZRUNV
1LFNOHVDTXRWHRQ
&I 1LFNOHV DQG HVS >7@R EH IXOO\ VXFFHVVIXO WKH VRFLDO SURFHVV
RIMXVWLFDWLRQPXVWUHQGHULWVHOIWUDQVSDUHQWDQGKHQFHLQYLVLEOHLQRUGHUWRUHQGHUWKH
UHVXOWLQJFODLPVXQSUREOHPDWLFDVREYLRXVIDFWVUHDGRII1DWXUHLQRQHVRUWRIFDVHDQG
DV SXUHO\ ORJLFDO SURRIV LQ DQRWKHU 3DUDGR[LFDOO\ RQH VHFRQGRUGHU IXQFWLRQ RI VRFLDO
UHFRQVWUXFWLRQLVWRUHQGHULWVHOILQYLVLEOH5HFRQVWUXFWLRQVXFFHHGVLQPDNLQJWKHUHFRQ
VWUXFWHGH[SHULPHQWDODQGWKHRUHWLFDOFODLPVXQSUREOHPDWLFRQO\LQVRIDUDVLWVXFFHHGVLQ
UHQGHULQJLWVHOILQYLVLEOH
6HHQRWHDERYH
&DQHYDE$VQRWHGWKHUHWKHWHUPREMHFWVLGHGLVGXHWR3DXO+R\
QLQJHQ+XHQH
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
([FXUVXV.XKQRQ)OHFN
$FFRUGLQJWR.XKQVUHWURVSHFWLYHDFFRXQWKHUVWUHDGWKHRULJLQDO*HUPDQ
HGLWLRQRI)OHFNVERRNZKLOHD-XQLRU)HOORZRIWKH6RFLHW\RI)HOORZVRI+DUYDUG
8QLYHUVLW\LQRUHDUO\.XKQVUHIHUHQFHWR)OHFNLQWKHSUHIDFHWR
6WUXFWXUHEURXJKW)OHFNVZRUNWRWKHDWWHQWLRQRIKLVWRULDQVDQGVRFLRORJLVWVRI
VFLHQFHWKRXJKLWWRRNWKHSXEOLFDWLRQRILWV(QJOLVKWUDQVODWLRQLQWRPDNH
WKHZRUNLWVHOIPRUHZLGHO\NQRZQ$QHZSDSHUEDFN*HUPDQHGLWLRQDSSHDUHG
LQ.XKQLGHQWLHG)OHFNVERRNDVDQHVVD\WKDWDQWLFLSDWHVPDQ\RIP\
RZQLGHDVRQHZKLFKPDGHPHUHDOL]HWKDWWKRVHLGHDVPLJKWUHTXLUHWREHVHW
LQWKHVRFLRORJ\RIWKHVFLHQWLFFRPPXQLW\RQHWRZKLFK,DPLQGHEWHGLQ
PRUHZD\VWKDQ,FDQQRZUHFRQVWUXFWRUHYDOXDWH+HHODERUDWHGDOLWWOHLQKLV
SUHIDFHWRWKH(QJOLVKWUDQVODWLRQ
,KDYHPRUHWKDQRQFHEHHQDVNHGZKDW,WRRNIURP)OHFNDQGFDQRQO\UHVSRQG
WKDW,DPDOPRVWWRWDOO\XQFHUWDLQ6XUHO\,ZDVUHDVVXUHGE\WKHH[LVWHQFHRIKLV
7KHZRUNRIWKHUHVHDUFKHUPHDQVLQWKHFRPSOH[FRQIXVLRQLQWKHFKDRVWKDWKH
FRQIURQWVWRGLVWLQJXLVKWKDWZKLFKREH\VKLVZLOOIURPWKDWZKLFKKDSSHQVE\LWVHOIDQGRS
SRVHVKLVZLOO7KLVLVWKHUPJURXQGWKDWKHRULQDFWXDOLW\WKHWKRXJKWFROOHFWLYHVHHNV
DQGFRQWLQXHVWRVHHN7KHVHDUHWKHSDVVLYHFRXSOLQJVDVZHFDOOHGWKHP)OHFN
WUDQVODWLRQPRGLHGDIWHU)OHFN7KHH[DPSOH)OHFNLQYRNHG
ZKHQ KH LQWURGXFHG WKH WHUP SDVVLYH .RSSHOXQJHQ ZDV WKH OLPLWHG FXUDWLYH HIIHFW RI
PHUFXU\RQYHQHUHDOGLVHDVHDOLPLWDWLRQJURXQGHGLQWKHZD\WKHZRUOGLV)OHFN
5,QKHUUHYLHZRI)OHFN+HQULND.XNOLFN
QRWHGWKDW%ULWLVKDQG&RQWLQHQWDOVRFLRORJLVWVRIVFLHQFHZKLOHDSSURSULDWHO\UHMHFWLQJWKH
QRWLRQWKDWVFLHQWLFNQRZOHGJHLVFXOWXUHIUHHPLJKWSURWKRZHYHUZHUHWKH\WRDGRSW
)OHFNV GLVWLQFWLRQ EHWZHHQ DFWLYH DQG SDVVLYH HOHPHQWV RI NQRZOHGJH IRU LW RIIHUV RQH
VROXWLRQWRWKHSUREOHPVSRVHGE\WKHLUXQFRPSURPLVLQJUHODWLYLVP,WVKRXOGEHDGGHGLQ
WKHVSLULWRI)OHFNVDQDO\VLVWKDWHYHQFRQFHSWVFOHDUO\GHULYLQJIURPDFROOHFWLYHVDFWLYH
FRXSOLQJVWKDWLVZLWKUHJDUGWRPDWWHUVWKH\PLJKWZHOOKDYHGHFLGHGRWKHUZLVHWHQG
WRDFTXLUHDQDXUDRIJLYHQQHVVRIREMHFWVLGHGQHVV
.XKQEYLLLL[ YLYLLYLL
.XKQEL[ YLL
.XKQYLLLL[3ULQFHWRQ8QLYHUVLW\VFRS\RI)OHFNLVDERXQGSKRWRFRS\
RI.XKQVDQQRWDWHGFRS\.XKQWDXJKWDW3ULQFHWRQIURPWR,WVPDQ\YHUWLFDO
VWURNHVLQWKHPDUJLQVIURPRQHWRIRXUSDUDOOHOOLQHVDQGRFFDVLRQDODQQRWDWLRQVRQ
SSDQGVXJJHVWWKDW.XKQUHDGLWZLWKDSSUHFLDEOHDWWHQWLRQWKRXJK
KHZDVQRWEHLQJPRGHVWZKHQKHFRQIHVVHGWRKDYLQJVRPHWKLQJOHVVWKDQDFRPIRUWDEOH
FRPPDQGRI*HUPDQ
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
ERRNDQRQWULYLDOFRQWULEXWLRQEHFDXVHLQDQGIRUVRPH\HDUVWKHUHDIWHU,
NQHZRIQRRQHHOVHZKRVDZLQWKHKLVWRU\RIVFLHQFHZKDW,ZDVP\VHOIQGLQJ
WKHUH9HU\SUREDEO\DOVRDFTXDLQWDQFHZLWK)OHFNVWH[WKHOSHGPHWRUHDOL]HWKDW
WKHSUREOHPVZKLFKFRQFHUQHGPHKDGDIXQGDPHQWDOO\VRFLRORJLFDOGLPHQVLRQ
%XW,DPQRWVXUHWKDW,WRRNDQ\WKLQJPXFKPRUHFRQFUHWHIURP)OHFNVZRUN
WKRXJK,REYLRXVO\PD\DQGXQGRXEWHGO\VKRXOGKDYH$WWKHWLPH,IRXQG)OHFNV
*HUPDQH[WUDRUGLQDULO\GLIFXOWSDUWO\EHFDXVHPLQHZDVUXVW\DQGSDUWO\EHFDXVH
,SRVVHVVHGQHLWKHUWKHEDFNJURXQGQRUWKHYRFDEXODU\WRDVVLPLODWHGLVFXVVLRQV
RIPHGLFLQHDQGELRFKHPLVWU\7KHOLQHVLQWKHPDUJLQRIP\FRS\RIWKHERRN
VXJJHVWWKDW,UHVSRQGHGSULPDULO\WRZKDWKDGDOUHDG\EHHQYHU\PXFKRQP\
PLQGFKDQJHVLQWKHJHVWDOWVLQZKLFKQDWXUHSUHVHQWHGLWVHOIDQGWKHUHVXOWLQJ
GLIFXOWLHVLQUHQGHULQJIDFWLQGHSHQGHQWRISRLQWRIYLHZ
7KHYDJXHQHVVDQGJHQHUDOLW\RI.XKQVDFNQRZOHGJHGGHEWWR)OHFNOHDYH
XQWRXFKHGWKHREYLRXVFORVHSDUDOOHOVEHWZHHQWKHIRUPHUVSDUDGLJPVDQGFRP
PXQLWLHVRISDUDGLJPGHQHGSUDFWLWLRQHUVRIQRUPDOVFLHQFHDQGWKHODWWHUVWKRXJKW
VW\OHVDQGWKRXJKWFROOHFWLYHV1RUFDQWKH.XKQSUHSDUHGUHDGHURI)OHFNIDLOWR
QRWLFHWKHODWWHUVXVHRIWHUPVOLNHSDUDGLJP*HVWDOWDQGHYHQRQFHLQFRPPHQ
VXUDEOHLQZD\VIXOO\LQKDUPRQ\ZLWK.XKQVXVDJHV6LPLODULWLHVRIFRXUVH
GRQRWSURYHGHSHQGHQFHDQG,VKDOOQRWSXUVXHWKHQHFHVVDULO\VSHFXODWLYHTXHV
WLRQRIZKDW.XKQPLJKWKDYHRZHGWRKLVHDUO\UHDGLQJRI)OHFN,QVWHDG,ZLVK
WRVFUXWLQL]H.XKQVVWDWHGUHDVRQVIRUNHHSLQJ)OHFNDWDGLVWDQFHDQGKLVEULHI
FULWLTXHRIDIHZRI)OHFNVLGHDV+LVUHDVRQVDUHFXULRXVDQGKLVFULWLTXHKDUGO\
FRJHQW,WLVSUHFLVHO\DV.XKQZRXOGVD\ZKHUHDVWDWHGDUJXPHQWGRHVQRWVWDQG
VFUXWLQ\WKDWRQHLVSURPSWHGWRSUREHIRUXQVWDWHGUHDVRQV
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
(VSHFLDOO\ VWULNLQJ DUH WKH WHUPV ZLWK ZKLFK .XKQ H[SUHVVHG KLV GLVOLNH RI
)OHFNVQRWLRQRIDWKRXJKWFROOHFWLYH,QKLVIRUHZRUGWRWKH(QJOLVKWUDQVODWLRQ
FRPSRVHGLQKHVSRNHRIWKHWRPHXQNQRZQDQG\HWYDJXHO\UHSXOVLYHSHU
VSHFWLYHRIDVRFLRORJ\RIWKHFROOHFWLYHPLQG$OORZLQJWKDWWKHERRNUHPDLQV
DEULOOLDQWDQGODUJHO\XQH[SORLWHGUHVRXUFH.XKQDYHUUHGWKDWWKHSRVLWLRQLW
HODERUDWHVLVQRWIUHHRIIXQGDPHQWDOSUREOHPVDQGIRUPHWKHVHFOXVWHUDVWKH\GLG
RQUVWUHDGLQJDURXQGWKHQRWLRQRIDWKRXJKWFROOHFWLYH:KDWWURXEOHVPHLVQRW
WKDWDWKRXJKWFROOHFWLYHLVDK\SRVWDWL]HGFWLRQWKRXJK,WKLQNLWLV)OHFNVRZQ
UHVSRQVHWRWKDWREMHFWLRQFKDSVHFQVHHPVDGHTXDWH5DWKHU,QGWKH
QRWLRQLQWULQVLFDOO\PLVOHDGLQJDQGDVRXUFHRIUHFXUUHQWWHQVLRQVLQ)OHFNVWH[W
3XWEULH\DWKRXJKWFROOHFWLYHVHHPVWRIXQFWLRQDVDQLQGLYLGXDOPLQGZULWODUJH
EHFDXVHPDQ\SHRSOHSRVVHVVLWRUDUHSRVVHVVHGE\LW,QWKHVDPHYHLQLQ
KLVLQWHUYLHZKHUHSRUWHGWKDW,QHYHUIHOWDWDOOFRPIRUWDEOHDQG,VWLOOGRQW
ZLWKWKRXJKWFROOHFWLYH,WZDVFOHDULWZDVDJURXSVLQFHLWZDVFROOHFWLYHEXW
WKHPRGHOZDVWKHPLQGDQGWKHLQGLYLGXDO,MXVWZDVERWKHUHGE\LW,FRXOGQRW
PDNHXVHRILW,FRXOGQRWSXWP\VHOILQWRLWDQGIRXQGLWVRPHZKDWUHSXJQDQW
7KDWKHOSHGNHHSPHDWVRPHZKDWDWDUPVOHQJWK
0XFKKHUHLVFXULRXV)RUVWDUWHUVUHSXOVLYHDQGUHSXJQDQWDUHXQXVXDOO\
VWURQJWHUPVRIVFKRODUO\GLVOLNHDQGEHWUD\UDWKHUDSV\FKRORJLFDOUHVSRQVHWKDQ
D GLVSDVVLRQDWH DVVHVVPHQW RI VWUHQJWKV DQG ZHDNQHVVHV :KDW PDNHV .XKQV
UHVSRQVHDOOWKHPRUHFXULRXVLVWKDWLWLQYRNHVDQLQWHUSUHWDWLRQRIWKRXJKWFRO
OHFWLYHTXLWHIRUHLJQWR)OHFNVFOHDUDQGFRQVLVWHQWXVDJH)OHFNGLGQRWWUHDWWKH
WKRXJKWFROOHFWLYHDVDK\SRVWDWL]HGFWLRQRUDVDQLQGLYLGXDOPLQGZULWODUJH
QRUGRHVWKHJHQHUDOWHQRURIKLVXVDJHVXSSRUW.XKQVUHDGLQJ1HLWKHULV)OHFNV
WKRXJKWFROOHFWLYHVRPHWKLQJWKDWPDQ\SHRSOHSRVVHVVQRUZDV)OHFNVPRGHO
WKHPLQGDQGWKHLQGLYLGXDO)OHFNVWKRXJKWFROOHFWLYHLVDJURXSRILQWHUDFW
LQJSHRSOHZKRIDUIURPSRVVHVVLQJVRPHNLQGRIFROOHFWLYHPLQGGRQRWKDYHWR
DJUHHWKH\RQO\QHHGWREHLQFRJQLWLYHLQWHUDFWLRQ&RPLQJIURPDSHUVRQZKR
DOORZHGWKHQRWLRQRI*HVWDOWVZLWFKSURSHURQO\WRLQGLYLGXDOVWRVWDQGIRUWKH
FRPPXQLW\VFKDQJHRIYLVLRQGXULQJDVFLHQWLFUHYROXWLRQDQGZKRVHFRQFHSW
RISDUDGLJPGLGQRWHVFDSHVHULRXVK\SRVWDWL]DWLRQ.XKQVLQDSSURSULDWHFULWLFLVP
LVHVSHFLDOO\LURQLF1RUGRHV.XKQVFULWLTXHIDUHDQ\EHWWHULIIRUWKRXJKWFRO
OHFWLYHRQHUHDGVWKRXJKWVW\OH)OHFNVWKRXJKWVW\OHIXQFWLRQVTXLWHOLNH.XKQV
SDUDGLJPGHWHUPLQHGQRUPDOVFLHQFH
,QIDFWWKHUHZHUHQRVXEVHTXHQWUHIHUHQFHV
.XKQL[LWDOLFVVXSSOLHG
.XKQ[WKHODVWVHQWHQFHEHJLQVDQHZSDUDJUDSK7KHSDVVDJHVFLWHGKHUHDQG
DWQRWHVDQGIRUPDFRQWLQXRXVEORFNRIWH[W
.XKQ VOLJKWO\HGLWHGLWDOLFVVXSSOLHG7KHSDVVDJHTXRWHG
HQGVEXWLWZDVYHU\LPSRUWDQWWKDW,UHDGWKDWERRNEHFDXVHLWPDGHPHIHHODOOULJKW,P
QRWWKHRQO\RQHZKRVVHHLQJWKLQJVWKLVZD\
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
,WLVKDUGWRLQWHUSUHWWKHIRUFHEHKLQG.XKQVUHIHUHQFHWRFKDSVHF
QHVSHFLDOO\VLQFHKHVHHPVWREHVD\LQJUVWWKDWWKHWKRXJKWFROOHFWLYHLVD
K\SRVWDWL]HGFWLRQDQGWKHQWKDWLWLVQRW7KHIRRWQRWHLQTXHVWLRQLVORQJRQH
DQGDKDOISDJHVRIVPDOOW\SHLQWKHRULJLQDODQGGLIIXVH7RZDUGLWVHQG)OHFN
DUJXHGWKDWWKHFRQFHSWRIWKRXJKWFROOHFWLYHVKRXOGQRWEHGLVPLVVHGRQSKLOR
VRSKLFDOJURXQGVEHFDXVHWKHH[DFWVFLHQFHVOLNHSK\VLFVHPSOR\DYHUDJHQXPEHUV
DQGSUREDELOLVWLFYDOXHVWKDWFRUUHVSRQGWRQRUHDOSKHQRPHQRQEXWUDWKHUWRD
K\SRVWDWL]HGFWLRQ,QDQ\HYHQWWKHFRQFHSWVOHJLWLPDF\FRPHVIURPLWV
HSLVWHPRORJLFDOXWLOLW\2GGJLYHQ.XKQVPLVUHSUHVHQWDWLRQRI)OHFNLVWKDW
LQWKLVQRWH)OHFNTXRWHGZLWKDSSDUHQWDSSURYDORQHDXWKRUVUHVWULFWLRQRIWKH
SV\FKLFGDV6HHOLVFKHWRLQGLYLGXDOVDQGUHMHFWLRQRIDQ\NLQGRIVXSUDLQGLYLGXDO
VRXODVPHWDSK\VLFDO
.XKQVIXUWKHUHODERUDWLRQRIKLVREMHFWLRQVWR)OHFNVWKRXJKWFROOHFWLYHLVQR
OHVVSUREOHPDWLF+HZURWH7RH[SODLQLWVDSSDUHQWOHJLVODWLYHDXWKRULW\)OHFN
WKHUHIRUHUHSHDWHGO\UHVRUWVWRWHUPVERUURZHGIURPGLVFRXUVHDERXWLQGLYLGXDOV
6RPHWLPHVKHZULWHVRIWKHWHQDFLW\RIFORVHGV\VWHPVRIRSLQLRQFKDSVHF
LWDOLFVPLQH.XKQVDVVHUWLRQQRWZLWKVWDQGLQJ)OHFNGLGQRWUHSHDWHGO\VSHDN
RIWKRXJKWFROOHFWLYHVLQWHUPVSURSHUWRLQGLYLGXDOV(YHQ.XKQVVLQJOHH[DPSOH
LVGHFLHQWQRWRQO\LVWHQDFLW\ZHDNHYLGHQFHIRU)OHFNVDSSO\LQJGLVFRXUVH
DERXWLQGLYLGXDOVWRDWKRXJKWFROOHFWLYHEXWWKHZRUGLVDSRRUWUDQVODWLRQRI
WKHRULJLQDOZKLFKKDVRQWKHFRQWUDU\DGHFLGHGO\QRQKXPDQFRQQRWDWLRQ7KH
ZRUGVWUDQVODWHGWKHWHQDFLW\RIVHOIFRQWDLQHGV\VWHPVRIRSLQLRQLQWKHSXE
OLVKHGYHUVLRQ.XKQZDVFOHDUO\FLWLQJIURPDVXEVHTXHQWO\HGLWHGWH[WUHSUHVHQW
WKHRULJLQDOVGLH%HKDUUXQJVWHQGHQ]GHU0HLQXQJVV\VWHPHGLHDOVJHVFKORVVHQH
*DQ]KHLWHQDXIWUHWHQ%HKDUUXQJE\LWVHOIPLJKWZHOOEHWUDQVODWHGSHUVH
YHUDQFH EXW FRPSRXQGV OLNH %HKDUUXQJVSULQ]LS %HKDUUXQJVPRPHQW DQG
%HKDUUXQJVYHUP|JHQZKLFK UHIHU WR WKH SULQFLSOH PRPHQW DQG SRZHU RI
LQHUWLDVXJJHVWWKDW%HKDUUXQJVWHQGHQ]EHUHQGHUHGDVLQHUWLDOWHQGHQF\RU
MXVWSODLQLQHUWLD)XUWKHUPRUHVLQFH.XKQRULJLQDOO\UHDG)OHFNLQ*HUPDQKLV
DUJXPHQWEDVHGRQWKHFRQQRWDWLRQVRIWHQDFLW\FDQQRWDFFRXQWIRUKLVLQLWLDO
UHVSRQVH &RQWLQXLQJ WKH SDVVDJH MXVW FLWHG .XKQ VRXJKW WR EXWWUHVV KLV LQWHU
SUHWDWLRQE\LQVLVWLQJWKDW>H@OVHZKHUHKHDFFRXQWVIRUWKLVWHQDFLW\LQWHUPVIRU
H[DPSOHRIWUXVWLQWKHLQLWLDWHGWKHLUGHSHQGHQFHRQSXEOLFRSLQLRQLQWHOOHFWXDO
VROLGDULW\FKDSVHF1RWKLQJLQWKHRULJLQDOWH[WZDUUDQWV.XKQVFODLP
)OHFNQ Q5Q
:HQQHU>GHU'HQNNROOHNWLYEHJULII@GHU(UNHQQWQLVQW]WZLHLFKKRIIHLVWHUOHJLWL
PLHUW)OHFNQ Q5Q
)OHFNQ Q5Q
.XKQ[
:LWKUHJDUGWR)OHFN.XKQFRQVLVWHQWO\LJQRUHGRQHRIWKHKLVWRULDQVLQYLRODEOHSULQ
FLSOHV:KHQSRVVLEOHDOZD\VFKHFNWKHRULJLQDOVRXUFH
)OHFN)OHFN
.XKQ[
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
WKDW )OHFN ZDV WKHUH FRQFHUQHG ZLWK DFFRXQW>LQJ@ IRU WKLV WHQDFLW\ WKH LVVXH
IRU)OHFNLQWKHVHFWLRQFLWHGZDVKRZLQWUDFROOHFWLYHFRPPXQLFDWLRQDPRQJWKH
LQGLYLGXDOVPDNLQJXSWKHWKRXJKWFROOHFWLYHFRQWULEXWHVWRWKHVROLGLFDWLRQRILWV
FRQFHSWXDOVWUXFWXUHV
.XKQVFDVHLQWKHUHPDLQGHURIWKHSDUDJUDSKFROODSVHVLQWKHIDFHRIVHULRXV
PLVWUDQVODWLRQV+HZHQWRQ5HVSRQGLQJWRWKRVHIRUFHVWKHPHPEHUVRIDVXF
FHVVIXOWKRXJKWFROOHFWLYHFRPHWRSDUWLFLSDWHLQZKDW)OHFNVRPHWLPHVGHVFULEHVDV
DNLQGRIKDUPRQ\RILOOXVLRQVFKDSVHF$ODVIRU.XKQ)OHFNVZRUGV
ZHUHHLQH$UW+DUPRQLHGHU7lXVFKXQJDQG7lXVFKXQJPHDQVGHFHSWLRQQRW
LOOXVLRQ:KDW)OHFNKDGLQPLQGZDVFORVHWR.XKQVXQGHUVWDQGLQJWKDWUHSUH
VHQWDWLYHVRIDSDUDGLJPVRPHWLPHVVKDUHDYLHZRIWKHZRUOGWKDWZHLQKLQGVLJKW
PLJKWUHJDUGDVDNLQGRIVHOIGHFHSWLRQ(YHQLIZKHQKHUVWUHDG)OHFN.XKQ
PLVWUDQVODWHG7lXVFKXQJLWVKRXOGKDYHEHHQFOHDUIURPWKHFRQWH[WWKDWRQFH
DJDLQ)OHFNZDVPDNLQJDSRLQWYHU\FORVHWRZKDW.XKQDOVREHOLHYHGWKDWWKH
YDULRXVLGHDVFKDUDFWHULVWLFRIDJLYHQWKRXJKWVW\OHPXWXDOO\UHLQIRUFHHDFKRWKHU
VXFKWKDWWKDQNVWRDNLQGRIKDUPRQ\RIGHFHSWLRQWKH\DSSHDUWRWDNHRQD
[HGDQGSHUPDQHQWIRUP:KDWEHWWHUH[DPSOHRIWKLVSURFHVVFRXOGRQHLPDJLQH
WKDQWKHVROLGLW\FRQWHPSRUDU\FKHPLVWVDFFRUGHGWKHSKORJLVWRQWKHRU\"
.XKQFRQWLQXHG'RXEWOHVVWKDWODVWSKUDVHLVLQWHQGHGPHWDSKRULFDOO\EXW
LWLVDGDPDJLQJPHWDSKRUIRULWUHLQIRUFHVWKHLPSUHVVLRQWKDWLQWKHDEVHQFHRI
VRFLDOSUHVVXUHVLOOXVLRQPLJKWKDYHEHHQDYRLGHG,I>6LHJHOV@QGLQJVKDGKDG
WKHDSSURSULDWHLQXHQFHDQGUHFHLYHGDSURSHUPHDVXUHRISXEOLFLW\WKHFRQFHSWRI
V\SKLOLVZRXOGEHGLIIHUHQWWRGD\FKDSVHFLWDOLFVPLQH%XW)OHFNV*HU
PDQKDGQRZRUGDWDOOFRUUHVSRQGLQJWRSURSHUDQGLWVHQWVSUHFKHQGHXVXDOO\
PHDQLQJFRUUHVSRQGLQJGRHVQRWFDUU\DVVWURQJDVHQVHRIDSSURSULDWHDV
GRHVWKH(QJOLVKZRUG:lUHVHLQHU(UNHQQWQLVHQWVSUHFKHQGHVXJJHVWLYH:LUNXQJ
XQGGHQNNROOHWLYH9HUEUHLWXQJ]X7HLOZRUGHQVREHVlHQZLUKHXWHHLQHQDQGHUHQ
6\SKLOLVEHJULII5HQGHUHGDV,IKLVNQRZOHGJHFODLPKDGEHHQDFFRUGHGVXLW
DEOHVXJJHVWLYHLQXHQFHDQGGLVVHPLQDWLRQZLWKLQWKHWKRXJKWFROOHFWLYHWKHQZH
ZRXOGWRGD\SRVVHVVDQRWKHUFRQFHSWRIV\SKLOLV)OHFNVVWDWHPHQWZRXOGVHHP
WREHZKROO\XQREMHFWLRQDEOHIURPD.XKQLDQSHUVSHFWLYH)RUWKHUHVW,VLPSO\
&I)OHFN P5
.XKQ[
)OHFN 5
.XKQ[KLVHOOLSVLV&I)OHFNZKHUHWKHRPLWWHGZRUGVDSSHDUDV
WKURXJKWRXWWKHWKRXJKWFROOHFWLYH
)OHFN (UNHQQWQLVWUDQVODWHGDVQGLQJVE\%UDGOH\DQG7UHQQ
DQGZLWKVRPHWUHSLGDWLRQDVNQRZOHGJHFODLPE\PHLVDGLIFXOWZRUGWRWUDQVODWHVLQFH
WKHEDVLFPHDQLQJRIWKHZRUGLVNQRZOHGJHZKLFKGRHVQRWPDNHJRRG(QJOLVKVHQVH
JLYHQWKHSHFXOLDUZD\)OHFNXVHGWKH*HUPDQZRUGDVLQHLQH(UNHQQWQLV
,IWKHQRWLRQRIDVLJQLFDQWVRFLDOFRPSRQHQWWRVFLHQWLFNQRZOHGJHLVWRKDYHDQ\
SODXVLELOLW\LWPXVWEHSRVVLEOHWRLPDJLQHWKDWZKDWLQKLVWRULFDOIDFWFDPHWREHDFFHSWHG
PLJKW KDYH WXUQHG RXW RWKHUZLVH KDG FLUFXPVWDQFHV EHHQ RWKHUZLVH$Q REVHUYDWLRQ RI
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
GRQRWXQGHUVWDQGWKHLQIHUHQFHWKDW.XKQGUHZIURP)OHFNVRVWHQVLEOHDVVHUWLRQ
WKDWLQDEVHQFHRIVRFLDOSUHVVXUHLOOXVLRQ>RUHYHQGHFHSWLRQ@PLJKWKDYHEHHQ
DYRLGHG1RWRQO\GLG)OHFNQHYHUVD\DQ\WKLQJRIWKHNLQGEXWWKHYHU\LGHDRI
DQLQGLYLGXDOVFLHQWLVWLQVXODWHGIURPVRFLDOSUHVVXUHVWKDWLVLQHIIHFWUHPRYHG
IURPDQ\VRFLDOFRQWH[WZDVDVXQWKLQNDEOHWR)OHFNDVLWZDVWR.XKQ
$IWHUEULH\DFNQRZOHGJLQJDSRLQWRIDJUHHPHQWZLWK)OHFN.XKQFRQWLQXHG
ZLWKKLVFULWLFLVPV(OVHZKHUH)OHFNZULWHVWKDWWKHFRPPXQLFDWLRQRIWKRXJKWV
ZLWKLQDFROOHFWLYHLUUHVSHFWLYHRIFRQWHQWRUORJLFDOMXVWLFDWLRQVKRXOGOHDGIRU
VRFLRORJLFDOUHDVRQVWRWKHFRUURERUDWLRQRIWKHWKRXJKWVWUXFWXUH>'HQNJHELOGH@
FKDSVHF7KHVHDQGPDQ\RWKHUSKUDVHVLQWKHERRNLQGLFDWHWKDWWKHHIIHFWV
RISDUWLFLSDWLRQLQDWKRXJKWFROOHFWLYHDUHVRPHKRZFDWHJRULFDORUDSULRUL:KDW
WKHWKRXJKWFROOHFWLYHVXSSOLHVLWVPHPEHUVLVVRPHKRZOLNHWKH.DQWLDQFDWHJRULHV
SUHUHTXLVLWHWRDQ\WKRXJKWDWDOO7KHDXWKRULW\RIDWKRXJKWFROOHFWLYHLVWKXVPRUH
QHDUO\ORJLFDOWKDQVRFLDO\HWLWH[LVWVIRUWKHLQGLYLGXDORQO\E\YLUWXHRIKLVLQGXF
WLRQLQWRDJURXS7KDWSRVLWLRQLVRIFRXUVHH[WUDRUGLQDULO\SUREOHPDWLF,DP
DWDORVVWRLPDJLQHKRZ.XKQUHDG)OHFNDVLPSO\LQJDQ\.DQWLDQFDWHJRULFDORU
DSULRULDVSHFWWRWKHWKRXJKWVWUXFWXUHFKDUDFWHULVWLFRIDSDUWLFXODUWKRXJKWFRO
OHFWLYHRUKRZKHLQIHUUHGWKDWWKHWKRXJKWFROOHFWLYHVDXWKRULW\LVPRUHQHDUO\
ORJLFDOWKDQVRFLDO)OHFNVHQWLUHDSSURDFKLVUHOHQWOHVVO\VRFLRORJLFDO2QFHDJDLQ
LWVHHPVWRPHWKDWRQWKLVSRLQW)OHFNVSRVLWLRQZDVHVVHQWLDOO\LQGLVWLQJXLVKDEOH
IURP.XKQVERWKWKRXJKWVW\OHVDQGSDUDGLJPVIRUFHIXOO\GLUHFWDQGVHYHUHO\OLPLW
SHRSOHVSHUFHSWLRQDQGFRQFHSWXDOL]DWLRQ
.XKQVQDOMDEDW)OHFNFDPHLQWKHFRQWLQXDWLRQRIWKHODVWTXRWHGSDVVDJH
7KDWSRVLWLRQLVRIFRXUVHH[WUDRUGLQDULO\SUREOHPDWLFDQG)OHFNVRFFDVLRQDO
DWWHPSWVWRGHYHORSLWE\GLVWLQJXLVKLQJEHWZHHQWKHSDVVLYHDQGDFWLYHHOHPHQWV
RI NQRZOHGJH DUH WR PH XQHQOLJKWHQLQJ 3DVVLYH DQG DFWLYH DUH DJDLQ WHUPV
ERUURZHG IURP LQGLYLGXDO SV\FKRORJ\ IRU DSSOLFDWLRQ WR D FROOHFWLYH )DU PRUH
XVHIXO LQ WKHVH DQG RWKHU SDVVDJHV ZRXOG EH WKH HSLVWHPLF GLVWLQFWLRQ EHWZHHQ
NQRZOHGJHDQGEHOLHI2QHFRXOGDUJXHWKDWSDVVLYHDQGDFWLYHGRQRWDSSO\
6WHQWVLVSHUWLQHQW5HHFWLQJRQ-XGVRQVVWRU\RQHUHDOL]HVWKDWWKHSORWFRXOGYHU\ZHOO
HDVLO\KDYHWDNHQGLIIHUHQWWXUQVDWYDULRXVFUXFLDOMXQFWXUHVLQZKLFKFDVHZHPLJKWVWLOO
KDYHDYDLODEOHWRGD\DQDGHTXDWHDFFRXQWRIWKHPROHFXODUEDVLVRIKHUHGLW\EXWZHZRXOG
EH WKLQNLQJ DERXW LW GLIIHUHQWO\ XVLQJ D GLIIHUHQW VHPLRWLF LPDJHU\ VSHDNLQJ D GLIIHUHQW
ODQJXDJH6WHQWFRO
.XKQ[[LWKHODVWVHQWHQFHDEEUHYLDWHGKHUHEHJLQVDQHZSDUDJUDSK&I)OHFN
5 7KHSDVVDJHVFLWHGKHUHDQGDWWKHQH[WQRWHIRUPD
FRQWLQXRXVEORFNRIWH[W
.XKQ[LKHJORVVHGKLVSRLQWZLWKDQLPPHGLDWHO\IROORZLQJSDUHQWKHWLFUHPDUN
)RU H[DPSOH LI NQRZOHGJH ZHUH VXEVWLWXWHG IRU RSLQLRQ LQ WKH SUHYLRXVO\ TXRWHG
SKUDVHWKHWHQDFLW\RIVHOIFRQWDLQHGV\VWHPVRIRSLQLRQWKHQWHQDFLW\DQGSHUKDSV
DOVR VHOIFRQWDLQHG DQG V\VWHP ZRXOG EHFRPH UHGXQGDQW :DV WKDW VXSSRVHG WR EH
KHOSIXO"
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
RQO\WRLQGLYLGXDOSV\FKRORJ\EXWWRGRVRZRXOGEHWRPLVVWKHLPSRUWDQWSRLQW
WKDW)OHFNGLGQRWDSSO\WKRVHFKDUDFWHUL]DWLRQVWRWKHWKRXJKWFROOHFWLYHOHWDORQH
WR DVSHFWV RI LQGLYLGXDO SV\FKRORJ\ ,QVWHDG KH VSRNH RI DFWLYH DQG SDVVLYH
FRXSOLQJVLQRUGHUWRFKDUDFWHUL]HGLIIHUHQWDVSHFWVRIWKHNQRZOHGJHEHORQJLQJ
WRWKHWKRXJKWVW\OH.XKQVPLVUHDGLQJRI)OHFNRQWKLVSRLQWLVHVSHFLDOO\LURQLF
VLQFH.XKQVIDLOXUHWRQGDSODFHLQKLVVFKHPHIRUFRQVWUDLQWVIURPWKHSK\VL
FDOZRUOGZKLFKLVZKDW)OHFNVSDVVLYHFRXSOLQJVHVVHQWLDOO\DUHUHPDLQHGDQ
XQUHPHGLHGZHDNQHVVIRUVRPHRQHXQZLOOLQJWRDFFHSWWKHFKDUDFWHUL]DWLRQRIKLV
SRVLWLRQDVLUUHPHGLDEO\UHODWLYLVWLF0RUHRYHUWRGLVWLQJXLVKEHWZHHQNQRZOHGJH
DQGEHOLHIQRPRUHDFFRUGVZLWKWKHWHQRURI)OHFNVXQGHUVWDQGLQJRIWKHQDWXUH
RIVFLHQWLFNQRZOHGJHWKDQLWGRHVZLWK.XKQV
.XKQVFULWLFLVPVRI)OHFNDUHUHOHQWOHVVO\PLVJXLGHG7KDWLVRGGIURPDSHUVRQ
ZKRLQWKHZHOOQLJKXQLYHUVDOHVWLPDWLRQRIWKRVHZKRREVHUYHGKLPLQRSHUDWLRQ
ZDVDQXQVXUSDVVHGPDVWHUZKHQLWFDPHWRXQGHUVWDQGLQJWH[WVDQGWHDVLQJRXW
WKHLUPHDQLQJVDQGLPSOLFDWLRQV2QHFDQXQGHUVWDQGWKHPLVXQGHUVWDQGLQJVWKDW
GHULYHGIURPKLVUHOLDQFHRQDSRRUWUDQVODWLRQEXWWKRVHFDVHVFDQKDUGO\FRQWULEXWH
WRDQH[SODQDWLRQRIKLVLQLWLDOUHVSRQVHWR)OHFNRURIWKHPDQ\RWKHULQVWDQFHV
RI PLVUHSUHVHQWDWLRQ (VSHFLDOO\ VWULNLQJ LV WKH H[WHQW WR ZKLFK .XKQ ORZHUHG
KLVODQFHDJDLQVWDQRSSRQHQWZKRZDVLQIDFWDGYDQFLQJDSRVLWLRQYHU\FORVHLQ
PDQ\HVVHQWLDOVWRKLVRZQ.XKQVLJQDOO\IDLOHGWRSURYLGHDQ\WKLQJUHPRWHO\
OLNHFRJHQWUHDVRQVWKDWPLJKWUDWLRQDOO\H[SODLQZK\KHZDQWHGWRNHHS)OHFNDW
DUPVOHQJWK7KDWKHRQO\XQZLOOLQJO\XQGHUWRRNWRH[SODLQDVPXFKDVKHGLGLV
VXJJHVWHGE\KLVFRPPHQWUHJDUGLQJWKHHGLWRUVUHVSRQVLEOHIRU)OHFNVWUDQVOD
WLRQLQWR(QJOLVK,KDYHQRWNQRZQKRZWRGHFOLQHWKHLULQYLWDWLRQWRSURYLGHD
SUHIDWRU\QRWHUHHFWLQJRQP\RZQHQFRXQWHUZLWK)OHFN:KHUHSXEOLFDOO\
VWDWHGUHDVRQVIDLOWRH[SODLQVKRXOGRQHLQVWHDGORRNIRUSULYDWHO\NHSWUHDVRQVRU
IRULUUDWLRQDORUSXUHO\SV\FKRORJLFDOPRWLYHV",WLVKDUGWRUHVLVWWKHVSHFXODWLRQ
WKDWUHFRJQL]LQJKRZFORVHLQVSLULW)OHFNVLQVLJKWVDQGFRQFHSWVZHUHWRKLVRZQ
.XKQGLVWDQFHGKLPVHOIIURPKLV3ROLVKSUHGHFHVVRUWKHEHWWHUWRVHFXUHZKDWKH
ZLVKHGWREHUHJDUGHGDVKLVLQWHOOHFWXDOSURSHUW\
.XKQYLL
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
.(11(7+/&$1(9$
'LVFRYHU\DVDVLWHIRUWKHFROOHFWLYHFRQVWUXFWLRQRIVFLHQWLFNQRZOHGJH
$%675$&7
+DQV&KULVWLDQUVWHGDQG7KRPDV-RKDQQ6HHEHFNDUHUHFRJQL]HGDVWKHGLVFRYHUHUVRI
HOHFWURPDJQHWLVPDQGWKHUPRHOHFWULFLW\<HWZKDWHDFKPDQEHOLHYHGKHKDGGLVFRYHUHG
GLIIHUHG PDUNHGO\ IURP ZKDW PDQ\ FRQWHPSRUDULHV VDZ LQ WKRVH GLVFRYHULHV DQG IURP
VXEVHTXHQWFDQRQL]HGUHSUHVHQWDWLRQVRIWKHP7KHFHQWUDOKLVWRULFDOFRQFHUQRIWKLVSDSHU
LVWRWUDFNWKHGHWDLOVRIKRZVFLHQWLVWVXQGHUVWDQGLQJRIZKDWZDVGLVFRYHUHGLQWKHVHWZR
FDVHVDVHPERGLHGLQWKHLUSUHIHUUHGODQJXDJHHYROYHGRYHUWLPHLQUHVSRQVHWRGLIIHUHQW
LQWHUHVWVFRQFHSWXDOSUHIHUHQFHVDQGRQWRORJLFDOEHOLHIV7KHYHU\FRQFHSWRIGLVFRYHU\LQ
DFFRUGDQFHZLWKZKLFKVFLHQWLVWVEHVWRZUHFRJQLWLRQRQO\RQVRPHRQHZKRKDVGLVFRYHUHG
VRPHWKLQJKHOGWREHWUXHRIWKHZRUOGSOD\VDQLPSRUWDQWUROHLQWKHSURFHVVRIFRQVHQVXV
IRUPDWLRQE\WKHLQWHUDFWLQJFROOHFWLYLW\RIVFLHQWLVWV,QLWVKLVWRULRJUDSKLFDODVVHVVPHQWRI
VXFKHSLVRGHVWKLVVWXG\EXLOGVXSRQ7KRPDV.XKQVUHFRJQLWLRQWKDWGLVFRYHULQJDQHZ
VRUWRISKHQRPHQDLVQHFHVVDULO\DFRPSOH[SURFHVVZKLFKLQFOXGHVUHFRJQL]LQJERWKWKDW
VRPHWKLQJLVDQGZKDWLWLVXSRQDXJXVWLQH%UDQQLJDQVDQDO\VLVRIWKHVRFLDOFRQVWUXFWLRQ
RIGLVFRYHU\DFFRXQWVZKHUHE\WKHDWWULEXWLRQRIGLVFRYHU\LVVWUXFWXUHGE\WKHSHUFHSWLRQ
WKDWWKHDFKLHYHPHQWLVFRKHUHQWZLWKH[LVWLQJNQRZOHGJHLQWKHHOGDQGXSRQ/XGZLN
)OHFNVDQDO\VLVRIWKHFUHDWLYHUROHRIDQLQWHUDFWLQJWKRXJKWFROOHFWLYHLQWKHJHQHVLV
DQGGHYHORSPHQWRIDVFLHQWLFIDFW
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
%LEOLRJUDSK\
(QWULHVIRUHDFKDXWKRUDUHOLVWHGFKURQRORJLFDOO\URXJKO\E\GDWHRISXEOLFD
WLRQ DV QHDU DV FRXOG EH GHWHUPLQHG RU LQIHUUHG$Q HQWU\ VXFK DV >@
LQGLFDWHVWKHGDWHRIFRPSRVLWLRQRIDZRUNQRWSXEOLVKHGXQWLOWKHODWHUGDWH7KH
EROGIDFHYROXPHQXPEHUGRHVQRWGLVWLQJXLVKEHWZHHQWKHGHVLJQDWLRQV%DQGDQG
-DKUJDQJYDULRXVO\DSSOLHGWR*HUPDQSHULRGLFDOV$PRQWKLQSDUHQWKHVHVDWWKH
HQGRIWKHHQWU\LQGLFDWHVWKHQRPLQDOGDWHRIWKHLVVXHLQZKLFKLWZDVSXEOLVKHG
6XFKLQIRUPDWLRQPD\EHODFNLQJZKHUH,ZDVXQDEOHWRFRQVXOWWKHMRXUQDOGLUHFWO\
)RU)UHQFKMRXUQDOVLQSDUWLFXODUWKHDFWXDOGDWHRISXEOLFDWLRQZDVVRPHWLPHV
VHYHUDO PRQWKV ODWHU 6LQFH WKH QXPEHULQJ RU QRW RI SODWHV VRPHWLPHV YDULHV
ZLWKLQDVLQJOHYROXPHEHWZHHQURPDQDQGDUDELFQXPHUDOV,KDYHEHHQFDUHIXO
WRGLVWLQJXLVKEHWZHHQIRUH[DPSOHSODQGSO,,:KHQWKHSODWHVDUHXQ
QXPEHUHGWKHQXPEHU$Q]DKORIWKHPLVJLYHQDVIRUH[DPSOHSO:KHQ
DMRXUQDOZDVNQRZQWRFRQWHPSRUDULHVE\LWVHGLWRUHJ*LOEHUWV$QQDOHQKLV
QDPHLVJLYHQLQVTXDUHEUDFNHWVEHIRUHWKHWLWOHRIWKHMRXUQDO3DJLQDWLRQRIDIHZ
VHSDUDWHO\SXEOLVKHGZRUNVKDVEHHQJLYHQZKHUHGHHPHGXVHIXO*LOEHUWV$QQDOHQ
GHU 3K\VLN 3RJJHQGRUIIV $QQDOHQ GHU 3K\VLN XQG &KHPLH DQG 6FKZHLJJHUV
-RXUQDO IU &KHPLH XQG 3K\VLN FDPH RXW PRQWKO\ LQ WKUHH YROXPHV D \HDU RI
IRXULVVXHVHDFKKHQFHWKHQXPEHURIWKH+HIWRU6WFNIRUHLWKHUWKHYROXPHRU
WKH \HDURIWHQ XVHIXO IRU FURVVUHIHUHQFLQJ IURP FRQWHPSRUDU\ VRXUFHVFDQ
EH LQIHUUHG IURP WKH PRQWK JLYHQ LQ SDUHQWKHVHV7KH $QQDOHV GH FKLPLH HW GH
SK\VLTXHOLNHZLVHFDPHRXWPRQWKO\ZLWKIRXUFDKLHUVLQHDFKRIWKH\HDUVWKUHH
YROXPHV7KH%LEOLRWKqTXHXQLYHUVHOOHGH*HQqYHZDVSXEOLVKHGLQVL[YROXPHV
D\HDUHDFKFRQWDLQLQJWZRPRQWKO\QXPEHUV7KH3KLORVRSKLFDOPDJD]LQHZDV
SXEOLVKHGPRQWKO\LQWZRYROXPHVD\HDUZLWKRFFDVLRQDOVXSSOHPHQWDU\QXPEHUV
7KHIROORZLQJDEEUHYLDWLRQVDUHXVHG
%LEOLRWKqTXHXQLYHUVHOOH%LEOLRWKqTXHXQLYHUVHOOHGHVVFLHQFHEHOOHVOHWWUHVHW
DUWV6FLHQFHVHW$UWV&053&ROOHFWLRQGHPpPRLUHVUHODWLIVjODSK\VLTXHSXEOLpV
SDUOD6RFLpWpIUDQoDLVHGHSK\VLTXH9RO0pPRLUHVVXUOpOHFWURG\QDPLTXH
3DULV*DXWKLHU9LOODUVSWV'6%'LFWLRQDU\RIVFLHQWLFELRJUDSK\
HG&KDUOHV&*LOOLVSLHYROV1HZ<RUN&KDUOHV6FULEQHUV6RQV
(0(QF\FORSGLDPHWURSROLWDQDRU8QLYHUVDOGLFWLRQDU\RINQRZOHGJHRQDQ
RULJLQDOSODQYROV/RQGRQ%)HOORZHV>HWF@$FFRUGLQJWRWKH1DWLRQDOXQLRQ
FDWDORJLVVXHGLQSDUWVIURPWR-RXUQDOGHSK\VLTXH
-RXUQDOGHSK\VLTXHGH&KLPLHG+LVWRLUH1DWXUHOOHHWGHV$UWV3KLOPDJ7KH
/RQGRQ(GLQEXUJKDQG'XEOLQ3KLORVRSKLFDO0DJD]LQHDQG-RXUQDORI6FLHQFH
3KLO WUDQV 3KLORVRSKLFDO 7UDQVDFWLRQV RI WKH 5R\DO 6RFLHW\ RI /RQGRQ 39
3URFqVYHUEDX[GHVVpDQFHVGHO$FDGpPLHWHQXHVGHSXLVODIRQGDWLRQGHO,QVWLWXW
MXVTXDX PRLV GDRW YROV +HQGD\H %DVVH3\UpQpHV,PSULPHULH GH
O2EVHUYDWRLUHG$EERGLD
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
$PSqUH$QGUp0DULH>@0pPRLUHVXUOH[SUHVVLRQPDWKpPDWLTXHGHV
DWWUDFWLRQVHWGHVUpSXOVLRQVGHVFRXUDQWVpOHFWULTXHV3XEOLVKHGIRUWKHUVWWLPH
LQ&053SW5HDGDWWKH$FDGpPLHGHV6FLHQFHV'HFHPEHU
D /HWWUH GH 0$PSqUH j 0$UDJR $QQDOHV GH FKLPLH HW GH
SK\VLTXH)HEUXDU\5HSULQWHGLQ$PSqUHF$UHSO\WR
%HU]HOLXVD
E([SRVpVRPPDLUHGHVGLYHUV0pPRLUHVOXVSDU0U$PSqUHj
O$FDGpPLH5R\DOHGHV6FLHQFHVGH3DULVVXUODFWLRQPXWXHOOHGHGHX[FRXUDQV
pOHFWULTXHVHWVXUFHOOHTXLH[LVWHHQWUHXQFRXUDQWpOHFWULTXHHWOHJOREHWHUUHVWUHRX
XQDLPDQW%LEOLRWKqTXHXQLYHUVHOOH$SULO,GHQWLFDOWR'HODPEUH
F[[[YLLF[OYLLL 3XEOLVKHG DQRQ\PRXVO\ IRU$PSqUHV SUREDEOH DXWKRU
VKLSVHHOHWWHURI0DUFKWR*DVSDUGGH/D5LYHLQ$PSqUH
F1RWLFHVXUOHVH[SpULHQFHVpOHFWURPDJQpWLTXHVGH00$PSqUH
HW$UDJRSDU0U$PSqUHOXHjODVpDQFHSXEOLTXHGHO$FDGpPLH5R\DOHGHVVFL
HQFHVGH3DULVOHDYULO%LEOLRWKqTXHXQLYHUVHOOH0D\5HSULQWHG
ZLWKVRPHFKDQJHVLQ$PSqUHF
G5pSRQVHGH0$PSqUHjODOHWWUHGH09DQ%HFN>VLF@6XUXQH
QRXYHOOH([SpULHQFHpOHFWURPDJQpWLTXH-RXUQDOGHSK\VLTXHSO
'HFHPEHU5HSULQWHGLQ&053SW/HWWHUEHJXQ-DQXDU\
QLVKHG0DUFK
D1RWLFHVXUOHVQRXYHOOHV([SpULHQFHVpOHFWURPDJQpWLTXHVIDLWHV
SDUGLIIpUHQV3K\VLFLHQVGHSXLVOHPRLVGHPDUVOXHGDQVODVpDQFHSXEOLTXH
GHO$FDGpPLHUR\DOHGHV6FLHQFHVOHDYULO-RXUQDOGHSK\VLTXH
)HEUXDU\5HSULQWHGZLWKVRPHFKDQJHVLQ$PSqUH>@DV
([SRVpVRPPDLUHGHVQRXYHOOHV([SpULHQFHV3XEOLVKHGDQRQ\PRXVO\DXWKRU
VKLSLQIHUUHGIURPXVHRIUVWSHUVRQ
E1RWLFHVXUGHQRXYHOOHVUHFKHUFKHVGH0U$PSqUHUHODWLYHVDX[
SKpQRPqQHVpOHFWURPDJQpWLTXHV%LEOLRWKqTXHXQLYHUVHOOH$SULO
3XEOLVKHGDQRQ\PRXVO\DXWKRUVKLSDVVXPHG
F5HFXHLOGHPpPRLUHVQRWLFHVH[WUDLWVGHOHWWUHVRXGRXYUDJHVSp
ULRGLTXHVVXUOHVVFLHQFHVUHODWLIVjO$FWLRQPXWXHOOHGHGHX[FRXUDQVpOHFWULTXHV
VXUFHOOHTXLH[LVWHHQWUHXQFRXUDQWpOHFWULTXHHWXQDLPDQWRXOHJOREHWHUUHVWUH
HWFHOOHGHGHX[DLPDQVOXQVXUODXWUH3DULV&URFKDUGSSO3XEOLVKHG
EHWZHHQPLG$SULODQGHDUO\-XQH$QH[SDQGHGYHUVLRQXQGHUWKLVWLWOHS
SODSSHDUHGE\ODWH-XO\WKHUHPD\KDYHEHHQIXUWKHUDGGLWLRQVEHIRUHWKHDS
SHDUDQFHRI$PSqUH>@
G ([SpULHQFHV UHODWLYHV j GH QRXYHD[ SKpQRPqQHV pOHFWURG\
QDPLTXHV$QQDOHVGHFKLPLHHWGHSK\VLTXHSO0D\5HSULQWHG
ZLWKVRPHFKDQJHVLQ$PSqUH>@SODQGLQH3UREDEO\
SXEOLVKHGLQPLGODWH-XO\
H ([SpULHQFHV UHODWLYHV j GH QRXYHD[ SKpQRPqQHV pOHFWURG\
QDPLTXHV REVHUYpV DX PRLV GH 'pFHPEUH %LEOLRWKqTXH XQLYHUVHOOH
SO-XO\
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
I([WUDLWGXQHOHWWUHGH0U$PSqUHDX3URI'H/D5LYHVXUGHV
H[SpULHQFHV pOHFWURPDJQpWLTXHV %LEOLRWKqTXH XQLYHUVHOOH SO
-XO\5HSULQWHGLQ$PSqUH>@SO'DWHG-XQH
>@5HFXHLOGREVHUYDWLRQVpOHFWURG\QDPLTXHVFRQWHQDQWGLYHUV
PpPRLUHVQRWLFHVH[WUDLWVGHOHWWUHVRXGRXYUDJHVSpULRGLTXHVVXUOHVVFLHQFHV
UHODWLIVjODFWLRQPXWXHOOHGHGHX[FRXUDQVpOHFWULTXHVjFHOOHTXLH[LVWHHQWUHXQ
FRXUDQWpOHFWULTXHHWXQDLPDQWRXOHJOREHWHUUHVWUHHWjFHOOHGHGHX[DLPDQV
OXQVXUODXWUH3DULV&URFKDUGSSO3XEOLVKHGDURXQG0DUFK7KH
UVWSDJHVDQGSODWHVDUHLGHQWLFDOWR$PSqUHF$PSqUHFRQWLQXHGWR
DGGSDSHUVWRWKHFROOHFWLRQXQWLOWKHQDOYHUVLRQRISSOZKLFKDSSHDUHG
DURXQG-XO\
([WUDLW GXQH /HWWUH GH 0$PSqUH j 0 )DUDGD\ $QQDOHV GH
FKLPLHHWGHSK\VLTXHSO>,,@$SULO'DWHG$SULO
&RUUHVSRQGDQFHGXJUDQG$PSqUH(G/RXLVGH/DXQD\
YROV3DULV*DXWKLHU9LOODUV
$QRQ\PRXV,QVWLWXW5R\DOGH)UDQFH0RQLWHXUXQLYHUVHO1R
1RYHPEHU2QWKHPHHWLQJRIWKH$FDGpPLHGHV6FLHQFHVRI1RYHPEHU
1RWLFH GHV VpDQFHV GH O$FDGpPLH 5R\ GHV VFLHQFHV GH 3DULV
SHQGDQWOHVPRLVG2FW1RYHW'pF%LEOLRWKqTXHXQLYHUVHOOH1R
-XO\
([WUDLW GHV 6pDQFHV GH O$FDGpPLH GHV 6FLHQFHV $QQDOHV GH
FKLPLHHWGHSK\VLTXH0DUFK
$UDEDW]LV7KHRGRUH5HWKLQNLQJWKHGLVFRYHU\RIWKHHOHFWURQ6WXGLHV
LQWKHKLVWRU\DQGSKLORVRSK\RIPRGHUQSK\VLFV
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
2QWKHLQH[WULFDELOLW\RIWKHFRQWH[WRIGLVFRYHU\DQGWKHFRQWH[W
RIMXVWLFDWLRQ,Q6FKLFNRUHDQG6WHLQOH
$UDJR'RPLQLTXH)UDQoRLV-HDQ([SpULHQFHVUHODWLYHVjODLPDQWDWLRQGX
IHUHWGHODFLHUSDUODFWLRQGXFRXUDQWYROWDwTXH$QQDOHVGHFKLPLHHWGHSK\VLTXH
6HSWHPEHU3XEOLVKHGDQRQ\PRXVO\$UDJRZDVFRHGLWRURIWKHMRXUQDO
DQGWKHSLHFHZDVUHSULQWHGXQGHUKLVQDPHLQ&053SW
%DUORZ3HWHU$QDFFRXQWRIVRPHHOHFWURPDJQHWLFFRPELQDWLRQVIRUH[
KLELWLQJWKHUPRHOHFWULFSKQRPHQDLQYHQWHGE\0U-DPHV0DUVKRI:RROZLFK
ZLWKH[SHULPHQWVRQWKHVDPH3KLORVRSKLFDOPDJD]LQHDQGMRXUQDO1R
1RYHPEHUSO9
(OHFWURPDJQHWLVP,Q(0 0L[HGVFLHQFHVSO
3UREDEO\ZULWWHQFDVHHQRWHDERYH
%DUQHV%DUU\76.XKQDQGVRFLDOVFLHQFH/RQGRQ0DFPLOODQ1HZ<RUN
&ROXPELD8QLYHUVLW\3UHVV
%HFTXHUHO$QWRLQH&pVDUD'XGpYHORSSHPHQWGHOpOHFWULFLWpSDUOHFRQWDFW
GHGHX[SRUWLRQVGXQPrPHPpWDOGDQVXQpWDWVXIVDPPHQWLQpJDOGHWHPSpUD
WXUHGHVSLOHVYROWDwTXHVFRQVWUXLWHVDYHFGHVOVGXQPrPHPpWDOHWPrPHDYHF
XQVHXOOHWGHTXHOTXHV(IIHWVpOHFWULTXHVTXLQDLVVHQWGDQVOHVFRPELQDLVRQV
FKLPLTXHV$QQDOHVGHFKLPLHHWGHSK\VLTXH-XQH5HDGDWWKH
$FDGpPLHGHV6FLHQFHV-XQH
E1RXYHDX[5pVXOWDWVpOHFWURFKLPLTXHV$QQDOHVGHFKLPLHHWGH
SK\VLTXH-XO\&RPPXQLFDWHGWRWKH$FDGpPLHGHV6FLHQFHV
-XO\
F(QWZLFNHOXQJGHU(OHNWULFLWlWGXUFKGHQ&RQWDFW]ZHLHU7KHLOH
HLQ XQG GHVVHOEHQ 0HWDOOHV EHL KLQUHLFKHQG XQJOHLFKHU 7HPSHUDWXU 9ROWDLVFKH
6lXOHQFRQVWXLUWGXUFK'UlKWHYRQHLQXQGGHPVHOEHQ0HWDOOHXQGVRJDUGXUFK
HLQHQHLQ]LJHQ'UDKWXQGYRQHLQLJHQHOHNWULVFKHQEHLFKHPLVFKHQ9HUELQGXQJHQ
HQWVWHKHQGHQ:LUNXQJHQ>6FKZHLJJHUV@-RXUQDOIU&KHPLHXQG3K\VLN
-DKUEXFKGHU&KHPLHXQG3K\VLN'HFHPEHU7UDQVODWLRQRI%HFTXHUHO
D
1HXHHOHNWURFKHPLVFKH5HVXOWDWH>6FKZHLJJHUV@-RXUQDOIU
&KHPLHXQG3K\VLN -DKUEXFKGHU&KHPLHXQG3K\VLN$SULO
7UDQVODWLRQRI%HFTXHUHOE
5HFKHUFKHVVXUOHV(IIHWVpOHFWULTXHVGHFRQWDFWSURGXLWVGDQVOHV
FKDQJHPHQVGHWHPSpUDWXUHHWDSSOLFDWLRQTXRQSHXWHQIDLUHjODGpWHUPLQDWLRQ
GHVKDXWHVWHPSpUDWXUHV$QQDOHVGHFKLPLHHWGHSK\VLTXH$SULO
5HDGDWWKH$FDGpPLHGHV6FLHQFHV0DUFK
8QWHUVXFKXQJ EHU GLH GXUFK 7HPSHUDWXUGLIIHUHQ]HQ HU]HXJWH
&RQWDFWHOHNWULFLWlWXQGGHUHQ$QZHQGXQJ]XU%HVWLPPXQJKRKHU7HPSHUDWXUHQ
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
>3RJJHQGRUIIV@$QQDOHQGHU3K\VLNXQG&KHPLH $QQDOHQGHU3K\VLN
)HEUXDU\([WUDFWWUDQVODWHGIURP%HFTXHUHO
'XSRXYRLUWKHUPRpOHFWULTXHGHVPpWDX[$QQDOHVGHFKLPLHHW
GHSK\VLTXHSO>,,@$XJXVW
0pPRLUHVXUOHSRXYRLUWKHUPRpOHFWULTXHGHVPpWDX[0pPRLUHV
GHO$FDGpPLH5R\DOHGHV6FLHQFHVGHO,QVWLWXWGH)UDQFH5HDG
$XJXVW
7UDLWpH[SpULPHQWDOHGHOpOHFWULFLWpHWGXPDJQpWLVPHHWGH
OHXUVUDSSRUWVDYHFOHVSKpQRPqQHVQDWXUHOVYROV3DULV)LUPLQ'LGRWIUqUHV
7UDLWpGHSK\VLTXHFRQVLGpUpHGDQVVHVUDSSRUWVDYHFODFKLPLH
HWOHVVFLHQFHVQDWXUHOOHVYROV3DULV)LUPLQ'LGRWIUqUHV
%HHN$OEHUWXVYDQD([SpULHQFHVpOHFWURPDJQpWLTXHVIDLWHVGDQVOHFDEL
QHWGHOD6RFLpWpGHSK\VLTXHG8WUHFKWSDU0U$9DQ%HFN>VLF@%LEOLRWKqTXH
XQLYHUVHOOH0D\
E&RQVLGpUDWLRQVHWH[SpULHQFHVVXUOHVSKpQRPqQHVpOHFWURPDJQp
WLTXHV%LEOLRWKqTXHXQLYHUVHOOHSO-XO\'DWHG-XQH
F6XUOHVSURFpGpVpOHFWULTXHVSDUOHVTXHOVODFLHUUHoRLWODYHUWX
PDJQpWLTXH%LEOLRWKqTXHXQLYHUVHOOH1RYHPEHU'DWHG2FWREHU
1HXHWKHUPRHOHFWULVFKPDJQHWLVFKH:LUNXQJHQ>*LOEHUWV@$Q
QDOHQGHU3K\VLNSO9$SULO,QOHWWHUVWR*LOEHUWGDWHGDQG
$SULO
%HHN$OEHUWXVYDQ=X\OHQYDQ1\HYHOW3LHWHU+HQGULNYDQDQG0ROO*HUDUG
$FFRXQW RI VRPH HOHFWURPDJQHWLF H[SHULPHQWV PDGH LQ WKH 8QLYHUVLW\
RI8WUHFKW(GLQEXUJKSKLORVRSKLFDOMRXUQDO1R-XO\SO,9
'DWHG$SULO
%HU]HOLXV-|QV-DNRED/HWWUHj0%HUWKROOHWVXUO(WDWPDJQpWLTXHGHV
FRUSVTXLWUDQVPHWWHQWXQFRXUDQWGpOHFWULFLWp$QQDOHVGHFKLPLHHWGHSK\VLTXH
)HEUXDU\5HSULQWHGLQ$PSqUHF5HDGE\$UDJRDWWKH
$FDGpPLHGHV6FLHQFHVRQ-DQXDU\$PSqUHD
E9RPPDJQHWLVFKHQ=XVWDQGHLQGHQ.|USHUQZHOFKHGLHHOHN
WULVFKH 6lXOH HQWODGHQ ,P$XV]XJH DXV GHQ$FWHQ GHU .|QLJO$NDGHPLH GHU
:LVVHQVFKDIWHQLQ6WRFNKROPEHUVH]WYRQ&DUO3DOPVWHGW>6FKZHLJJHUV@-RXUQDO
IU&KHPLHXQG3K\VLN -DKUEXFKGHU&KHPLHXQG3K\VLN-DQX
DU\
%LRW-HDQ%DSWLVWHD6XUOH0DJQpWLVPHGHODSLOHGH9ROWD%XOOHWLQGHV
VFLHQFHVSDUODVRFLpWpSKLORPDWLTXHGH3DULVSOLYUDLVRQGDRWSXEOLpH
HQQRYHPEUH3XEOLVKHGDQRQ\PRXVO\DXWKRUVKLSDVVXPHG7KLVDQGWKHQH[W
LWHPUHSRUWRQKLVDQG6DYDUWVSDSHURI2FWREHU
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
E1RWHVXUOHPDJQpWLVPHGHODSLOHGH9ROWD$QQDOHVGHFKLPLH
HW GH SK\VLTXH 2FWREHU 3XEOLVKHG DQRQ\PRXVO\ DXWKRUVKLS DV
VXPHG
>@3UpFLVpOpPHQWDLUHGHSK\VLTXHH[SpULPHQWDOHQGHGYROV
3DULV'HWHUYLOOH7KHUVWDQGVHFRQGYROXPHVZHUHUHFHLYHGE\WKH$FDGHP\RQ
1RYHPEHUDQG-XQH39>@
6XUO$LPDQWDWLRQLPSULPpHDX[PpWDX[SDUOpOHFWULFLWpHQPRX
YHPHQW -RXUQDO GHV VDYDQV $SULO 5HDG DW D SXEOLF VHVVLRQ RI WKH
$FDGpPLHGHV6FLHQFHV$SULO
%LRW-HDQ%DSWLVWHDQG$PSqUH$QGUp0DULH([SpULHQFHVpOHFWURPDJQp
WLTXHV-RXUQDOGHSK\VLTXH$XJXVW6HSDUDWHSDUDJUDSKVRQZRUN
SUHVHQWHG RQ 2FWREHU LQ VHFWLRQ 1RXYHOOHV VFLHQWLTXHV 3K\VLTXH
3XEOLVKHGDQRQ\PRXVO\IRUDXWKRUVKLSVHH%ODLQYLOOHVOHWWHURI1RYHPEHU
WRUVWHGUVWHGE
%ODFNZHOO5LFKDUG-'LVFRYHU\LQWKHSK\VLFDOVFLHQFHV1RWUH'DPH
/RQGRQ8QLYHUVLW\RI1RWUH'DPH3UHVV
%|FNPDQQ&DUO:LOKHOP.XU]HU%HULFKWYRQVHLQHQ9HUVXFKHQEHUGLH
:LUNXQJHQ GHV JHVFKORVVHQHQ 9ROWDLVFKHOHFWULVFKHQ .UHLVHV DXI GLH 0DJQHW
QDGHOXQGEHUGLH(UUHJXQJGHV0DJQHWLVPXVLP6WDKOGXUFKGLHJHZ|KQOLFKH
(OHFWULFLWlW>*LOEHUWV@$QQDOHQGHU3K\VLN $QQDOHQGHU3K\VLNXQGGHU
SK\VLNDOLVFKHQ&KHPLH0D\'DWHG0DUFK
%RWWR *LXVHSSH 'RPHQLFR 1RWLFH VXU ODFWLRQ FKLPLTXH GHV FRXUDQV
WKHUPRpOHFWULTXHV %LEOLRWKqTXH XQLYHUVHOOH 6HSWHPEHU 'DWHG
-DQXDU\
%UDQQLJDQ$XJXVWLQH7KHUHLFDWLRQRI0HQGHO6RFLDOVWXGLHVRIVFL
HQFH
1DWXUDOLVWLFDQGVRFLRORJLFDOPRGHOVRIWKHSUREOHPRIVFLHQWLF
GLVFRYHU\%ULWLVKMRXUQDORIVRFLRORJ\
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
7KHVRFLDOEDVLVRIVFLHQWLFGLVFRYHU\&DPEULGJH>HWF@&DPEULGJH
8QLYHUVLW\3UHVV
%UHJHU+HUEHUW9RQGHU(UKDOWXQJGHU.UDIW]XU(UKDOWXQJGHU(QHUJLH,Q
-DKUHVWDJGHV9RUWUDJHVhEHUGLH(UKDOWXQJGHU.UDIWYRQ+HUPDQQ+HOP
KROW]3UHSULQW%HUOLQ0D[3ODQFN,QVWLWXWIU:LVVHQVFKDIWVJHVFKLFKWH
)URPDV\PSRVLXPRQ-XQH
%XFK-RKDQQ-DFRE&DVLPLU8HEHU(OHNWURPDJQHWLVPXV>6FKZHLJJHUV@
-RXUQDOIU&KHPLHXQG3K\VLN -DKUEXFKGHU&KHPLHXQG3K\VLN
-DQXDU\'DWHG1RYHPEHU
%XFKZDOG-HG=DQG:DUZLFN$QGUHZHGV+LVWRULHVRIWKHHOHFWURQ7KH
ELUWKRIPLFURSK\VLFV&DPEULGJH0DVV /RQGRQ0,73UHVV
&DQHYD.HQQHWK/D2KP*HRUJ6LPRQ,Q'6%
E&RQFHSWXDODQGJHQHUDWLRQDOFKDQJHLQ*HUPDQSK\VLFV7KH
FDVH RI HOHFWULFLW\ 3K' GLVV 3ULQFHWRQ 8QLYHUVLW\ 'HFHPEHU
)URPJDOYDQLVPWRHOHFWURG\QDPLFV7KHWUDQVIRUPDWLRQRI*HU
PDQSK\VLFVDQGLWVVRFLDOFRQWH[W+636
$PSqUHWKHHWKHULDQVDQGWKH2HUVWHGFRQQH[LRQ%ULWLVKMRXUQDO
IRUWKHKLVWRU\RIVFLHQFH
D&ROGLQJUVWHGDQGWKHPHDQLQJVRIIRUFH+6363W
>SXEOLVKHG0D\@
E 2EMHFWLYLW\ UHODWLYLVP DQG WKH LQGLYLGXDO$ UROH IRU D SRVW
.XKQLDQ KLVWRU\ RI VFLHQFH 6WXGLHV LQ KLVWRU\ DQG SKLORVRSK\ RI VFLHQFH
3RVVLEOH.XKQVLQWKHKLVWRU\RIVFLHQFH$QRPDOLHVRILQFRPPHQ
VXUDEOHSDUDGLJPV6WXGLHVLQKLVWRU\DQGSKLORVRSK\RIVFLHQFH
7KH IRUP DQG IXQFWLRQ RI VFLHQWLF GLVFRYHULHV 'LEQHU /LEUDU\
/HFWXUH1RYHPEHU:DVKLQJWRQ'&6PLWKVRQLDQ,QVWLWXWLRQ/LEUDULHV
YLLLS
)RUWKFRPLQJUVWHGVSUHVHQWDWLRQRIRWKHUVDQGKLVRZQZRUN
,Q5REHUW%UDLQDQG2OH.QXGVHQHGV+DQV&KULVWLDQUVWHGDQGWKHURPDQWLF
TXHVWIRUXQLW\RINQRZOHGJH,GHDVLQVWUXPHQWVGLVFLSOLQHV'RUGUHFKW %RVWRQ
.OXZHU$FDGHPLF3XEOLVKHUV
&DQWRU*HRIIUH\12SWLFVDIWHU1HZWRQ7KHRULHVRIOLJKWLQ%ULWDLQDQG,UH
ODQG0DQFKHVWHU8. 'RYHU1+0DQFKHVWHU8QLYHUVLW\3UHVV
&KULVWLH6DPXHO+XQWHU2QWKHGLXUQDOGHYLDWLRQVRIWKHKRUL]RQWDOQHHGOH
ZKHQXQGHUWKHLQXHQFHRIPDJQHWV3KLOWUDQV>@3WSO;;,9
;;95HDG-XQH
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
2QWKHHIIHFWVRIWHPSHUDWXUHRQWKHLQWHQVLW\RIPDJQHWLFIRUFHV
DQGRQWKHGLXUQDOYDULDWLRQRIWKHWHUUHVWULDOPDJQHWLFLQWHQVLW\3KLOWUDQV>@
3WSO,5HDG-XQH
7KHRU\RIWKHGLXUQDOYDULDWLRQRIWKHPDJQHWLFQHHGOHLOOXVWUDWHG
E\H[SHULPHQWV3KLOWUDQV>@3WIROGLQJWDEOH'DWHG0D\
UHDGDQG-XQH
&XPPLQJ-DPHV2QWKHFRQQH[LRQEHWZHHQJDOYDQLVPDQGPDJQHWLVP
7UDQVDFWLRQVRIWKH&DPEULGJH3KLORVRSKLFDO6RFLHW\3WSO;,
5HDG$SULO
D 2Q WKH GHYHORSPHQW RI HOHFWURPDJQHWLVP E\ KHDW $QQDOV RI
SKLORVRSK\ 161R-XQH/HWWHUWRWKHHGLWRU7KRPDV
7KRPVRQRI$SULO7UDQVODWHGLQ&XPPLQJE
E$OLVWRIVXEVWDQFHVDUUDQJHGDFFRUGLQJWRWKHLUWKHUPRHOHFWULF
UHODWLRQVZLWKDGHVFULSWLRQRILQVWUXPHQWVIRUH[KLELWLQJURWDWLRQE\WKHUPRHOHF
WULFLW\$QQDOVRISKLORVRSK\ 161R6HSWHPEHU'DWHG
-XO\7UDQVODWHGLQ&XPPLQJE
F2QVRPHDQRPDORXVDSSHDUDQFHVRFFXUULQJLQWKHWKHUPRHOHFWULF
VHULHV$QQDOVRISKLORVRSK\ 161R1RYHPEHU'DWHG
2FWREHU7UDQVODWHGLQ&XPPLQJE
G2QWKHUPRPDJQHWLFURWDWLRQ$QQDOVRISKLORVRSK\ 16
1R'HFHPEHU'DWHG1RYHPEHU7UDQVODWHGLQ&XPPLQJ
E
D'HVFULSWLRQRIDQHZWKHUPRHOHFWULFLQVWUXPHQW$QQDOVRISKL
ORVRSK\ 161R-DQXDU\'DWHG'HFHPEHU7UDQVODWHG
LQ&XPPLQJE
E 8HEHU GLH (QWZLFNHOXQJ GHV (OHNWURPDJQHWLVPXV GXUFK
+LW]H>6FKZHLJJHUV@-RXUQDOIU&KHPLHXQG3K\VLN -DKUEXFKGHU&KHPLH
XQG3K\VLNSO,,-DQXDU\$WUDQVODWLRQE\/XGZLJ)ULHGULFK.lPW]
RIVL[OHWWHUVGDWHGIURP$SULOWR'HFHPEHUSXEOLVKHGLQWKH$QQDOV
RISKLORVRSK\$QPHUNXQJGHV+HUDXVJHEHUVLH6FKZHLJJHURQ
F2QWKHGHYHORSPHQWRIHOHFWURPDJQHWLVPE\KHDW7UDQVDFWLRQV
RIWKH&DPEULGJH3KLORVRSKLFDO6RFLHW\>@3W>@SO
'DWHRISXEOLFDWLRQLQIHUUHG5HDG$SULO
5HSRUWRQWKHUPRHOHFWULFLW\5HSRUWRIWKHUVWDQGVHFRQGPHHW
LQJVRIWKH%ULWLVK$VVRFLDWLRQIRUWKH$GYDQFHPHQWRI6FLHQFHDW<RUNLQ
DQGDW2[IRUGLQ5HDG-XQH
'DYLV(GZDUG$UWKXUDQG)DOFRQHU,VREHO--7KRPVRQDQGWKHGLVFRYHU\
RIWKHHOHFWURQ/RQGRQ %ULVWRO3D7D\ORU )UDQFLV
'DY\+XPSKUH\D2QWKHPDJQHWLFSKHQRPHQDSURGXFHGE\HOHFWULFLW\
3KLOWUDQV>@SW,$VDOHWWHUWR:+:ROODVWRQGDWHG1RYHPEHU
UHDG1RYHPEHU
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
'|EHUHLQHU-RKDQQ:ROIJDQJ$XVHLQHP6FKUHLEHQYRP3URI'|EHUHLQHU
DQ*LOEHUW3K\WRFKHPLH(VFKZHJLWPHUNZUGLJH9HUlQGHUGXQJYRQ+RO]GXUFK
GHQ%OLW]:LHGHUKROXQJ6HHEHFNVFKHU9HUVXFKHEHUPDJQHWLVFKH(OHFWURPRWRUHQ
GXUFK(UKLW]XQJ>*LOEHUWV@$QQDOHQGHU3K\VLNSO,-DQXDU\
'DWHG-DQXDU\
(UPDQ3DXO8PULVVH]XGHQSK\VLVFKHQ9HUKlOWQLVVHQGHVYRQ+HUUQ3UR
IHVVRUgUVWHGHQWGHFNWHQHOHNWURFKHPLVFKHQ0DJQHWLVPXV%HUOLQ*&1DXFN
&DPHRXWLQ)HEUXDU\
)DOFRQHU ,VREHO &RUSXVFOHV HOHFWURQV DQG FDWKRGH UD\V -- 7KRPVRQ
DQGWKHGLVFRYHU\RIWKHHOHFWURQ%ULWLVKMRXUQDOIRUWKHKLVWRU\RIVFLHQFH
&RUSXVFOHVWRHOHFWURQV,Q%XFKZDOGDQG:DUZLFN
)HFKQHU*XVWDY7KHRGRU/HKUEXFKGHV*DOYDQLVPXVXQGGHU(OHNWURFKH
PLH -HDQ%DSWLVWH%LRW/HKUEXFKGHU([SHULPHQWDO3K\VLNRGHU(UIDKUXQJV
1DWXUOHKUH =ZHLWH$XDJHGHU GHXWVFKHQ%HDUEHLWXQJ'ULWWHU%DQG /HLS]LJ
/HRSROG9R
)LQQ%HUQDUG6'HYHORSPHQWVLQWKHUPRHOHFWULFLW\3K'
GLVV8QLYHUVLW\RI:LVFRQVLQ0DGLVRQ
7KHUPRHOHFWULFLW\$GYDQFHVLQHOHFWURQLFVDQGHOHFWURQSK\VLFV
$UHYLVLRQRI)LQQ
)OHFN/XGZLN(QWVWHKXQJXQG(QWZLFNOXQJHLQHUZLVVHQVFKDIWOLFKHQ7DW
VDFKH (LQIKUXQJ LQ GLH /HKUH YRP 'HQNVWLO XQG 'HQNNROOHNWLY %DVHO %HQQR
6FKZDEH &R
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
*HQHVLVDQGGHYHORSPHQWRIDVFLHQWLFIDFW(G7KDGGHXV-7UHQQ
DQG5REHUW.0HUWRQ7UDQV)UHG%UDGOH\DQG7KDGGHXV-7UHQQ)RUHZRUGE\
7KRPDV6.XKQ&KLFDJR /RQGRQ8QLYHUVLW\RI&KLFDJR3UHVV7UDQVODWLRQRI
)OHFN
(QWVWHKXQJ XQG (QWZLFNOXQJ HLQHU ZLVVHQVFKDIWOLFKHQ 7DWVDFKH
(LQIKUXQJLQGLH/HKUHYRP'HQNVWLOXQG'HQNNROOHNWLY(G/RWKDU6FKlIHUDQG
7KRPDV6FKQHOOH)UDQNIXUWDP0DLQ6XKUNDPS
)ORXUHQV0DULH-HDQ3LHUUH$QDO\VHGHVWUDYDX[GHO$FDGpPLHGHVVFL
HQFHVGH3DULV0RLVGHVHSWHPEUH$QQDOHVJpQpUDOHVGHVVFLHQFHVSK\VLTXHV
2FWREHU
)RUEHV-DPHV'DYLG2QWKHUHIUDFWLRQDQGSRODUL]DWLRQRIKHDW3KLOPDJ
6HU1R)HEUXDU\1R0DUFK1R$XJXVW
1R0D\5HDGEHIRUHWKH5R\DO6RFLHW\RI(GLQEXUJK
DQG-DQXDU\
2QWKHUHIUDFWLRQDQGSRODUL]DWLRQRIKHDW7UDQVDFWLRQVRIWKH
5R\DO6RFLHW\RI(GLQEXUJK3W
'LVVHUWDWLRQ VL[WK ([KLELWLQJ D JHQHUDO YLHZ RI WKH SURJUHVV RI
PDWKHPDWLFDODQGSK\VLFDOVFLHQFHSULQFLSDOO\IURPWR%RVWRQ/LWWOH
%URZQ &R6HSDUDWHO\SULQWHGIURP7KH(QF\FORSGLD%ULWDQQLFDRU'LFWLRQ
DU\RIDUWVVFLHQFHVDQGJHQHUDOOLWHUDWXUHWKHGQYROV(GLQEXUJK$GDPDQG
&KDUOHV%ODFN3W>@
$UHYLHZRIWKHSURJUHVVRIPDWKHPDWLFDODQGSK\VLFDOVFLHQFHLQ
PRUHUHFHQWWLPHVDQGSDUWLFXODUO\EHWZHHQWKH\HDUVDQG%HLQJRQH
RIWKHGLVVHUWDWLRQVSUH[HGWRWKHHLJKWKHGLWLRQRIWKH(QF\FORSGLD%ULWDQQLFD
(GLQEXUJK$GDPDQG&KDUOHV%ODFN>YLLL@S
)RUPDQ 3DXO 7KH GLVFRYHU\ RI WKH GLIIUDFWLRQ RI [UD\V E\ FU\VWDOV$
FULWLTXHRIWKHP\WKV$UFKLYHIRUKLVWRU\RIH[DFWVFLHQFHV1R
)RXULHU-HDQ%DSWLVWH-RVHSK$QDO\VHGHV7UDYDX[GHO$FDGpPLHUR\DOH
GHV6FLHQFHVSHQGDQWODQQpH3DUWLHPDWKpPDWLTXH0pPRLUHVGHO$FDGpPLH
5R\DOHGHV6FLHQFHVGHO,QVWLWXWGH)UDQFH$QQpHVHW+LVWRLUHGH
O$FDGpPLH5HDG$SULO
)UDQNHO(XJHQH6HHEHFN7KRPDV-RKDQQ,Q'6%
*HKOHU-RKDQQ6DPXHO7UDXJRWW*HKOHUV3K\VLNDOLVFKHV:|UWHUEXFK
QHXEHDUEHLWHWYRQ%UDQGHV*PHOLQ+RUQHU0XQFNH3IDIIYROVLQSWV
/HLS]LJ(%6FKXFNHUW
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
*RRGD\*UDHPH7KHTXHVWLRQDEOHPDWWHURIHOHFWULFLW\7KHUHFHSWLRQRI--
7KRPVRQVFRUSXVFOHDPRQJHOHFWULFDOWKHRULVWVDQGWHFKQRORJLVWV,Q%XFKZDOG
DQG:DUZLFN
*RRGLQJ'DYLG&+RZGRVFLHQWLVWVUHDFKDJUHHPHQWDERXWQRYHOREVHU
YDWLRQV"6WXGLHVLQKLVWRU\DQGSKLORVRSK\RIVFLHQFH
*URVV$ODQ*'RGLVSXWHVRYHUSULRULW\WHOOXVDQ\WKLQJDERXWVFLHQFH"
6FLHQFHLQFRQWH[W
*XWWLQJ*DU\6FLHQFHDVGLVFRYHU\5HYXHLQWHUQDWLRQDOHGHSKLORVRSKLH
+DFKHWWH-HDQ1LFRODV3LHUUH6XUOHVH[SpULHQFHVpOHFWURPDJQpWLTXHVGH
00HUVWHG>VLF@HW$PSqUH-RXUQDOGHSK\VLTXH6HSWHPEHU
3UREDEO\ZULWWHQDIWHU$PSqUHVOHWWHUWRKLPRI1RYHPEHU$PSqUH
WKLVLVVXHUHFHLYHGDWWKH$FDGpPLHGHV6FLHQFHVRQ1RYHPEHU
39
+DQVWHHQ&KULVWRSKHU0DWKHPDWLVN7KHRULHRYHUGHDI3URIgUVWHGRS
GDJHGH HOHNWURPDJQHWLVNH 3KQRPHQHU 0DJD]LQ IRU 1DWXUYLGHQVNDEHUQH >
$DUJDQJ@SO>$DUJDQJ@SO-XQHDQG6HSWHPEHU"
7KHVHFRQGSDUWKDV6UV\QIRU3KQRPHQHU7KHUVWSDUWZDVZULWWHQDWWKH
HQGRI
+HUPDQQ$UPLQHG*HVFKLFKWHGHU3K\VLNYROV /H[LNRQGHU
6FKXOSK\VLN &RORJQH$XOLV9HUODJ'HXEQHU &R
+HUVFKHO-RKQ)UHGHULFN:LOOLDP>@/LJKW,Q(0 0L[HGVFLHQFHV
SO'DWHG'HFHPEHU+HUVFKHO VD\V
LWZDVSXEOLVKHGLQ&DQWRUVD\V+HUVFKHOVHQWRXWFRSLHVGXULQJ
WKHVSULQJRIFI+HUVFKHO7KHDUWLFOHDSSHDUVWR
KDYHEHHQSULQWHGDQGGLVWULEXWHGEHIRUHWKHYROXPHZDVSXEOLVKHG
2Q OLJKW 3DUW , 5HH[LRQ5HIUDFWLRQ'LVSHUVLRQ&R
ORXU$EVRUSWLRQ*RRGZRUGV>1R@$SULO>1R@
0D\5HSULQWHGLQ+HUVFKHO
)DPLOLDU OHFWXUHV RQ VFLHQWLF VXEMHFWV /RQGRQ 1HZ<RUN
$OH[DQGHU6WUDKDQ
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
$FDOHQGDURIWKHFRUUHVSRQGHQFHRI6LU-RKQ+HUVFKHO(G0LFKDHO
-&URZH'DYLG5'\FNDQG-DPHV-.HYLQ&DPEULGJH 1HZ<RUN&DPEULGJH
8QLYHUVLW\3UHVV
+ROPHV)UHGHULF/3UHPDWXULW\DQGWKHG\QDPLFVRIVFLHQWLFFKDQJH,Q
(UQHVW%+RRNHG3UHPDWXULW\LQVFLHQWLFGLVFRYHU\2QUHVLVWDQFHDQGQHJOHFW
%HUNHOH\/RV$QJHOHV /RQGRQ8QLYHUVLW\RI&DOLIRUQLD3UHVV
+ROWRQ*HUDOG,QWURGXFWLRQWRFRQFHSWVDQGWKHRULHVLQSK\VLFDOVFLHQFH
QGHGQ5HYE\6WHSKHQ*%UXVK5HDGLQJ0DVV>HWF@$GGLVRQ:HVOH\
+RUQHU-RKDQQ.DVSDU$EZHLFKXQJGHU0DJQHWQDGHO,Q*HKOHU
>$EWK@
+XPEROGW$OH[DQGHUYRQ>@hEHUGDV8QLYHUVXP'LH.RVPRV
YRUWUlJHLQGHU%HUOLQHU6LQJDNDGHPLH(G-UJHQ+DPHODQG.ODXV+DUUR
7LHPDQQ )UDQNIXUW DP 0DLQ ,QVHO9HUODJ 6L[WHHQ ZHHNO\ OHFWXUHV GHOLYHUHG
EHWZHHQ'HFHPEHUDQG0DUFK
-XQJQLFNHO&KULVWDDQG0F&RUPPDFK5XVVHOO,QWHOOHFWXDOPDVWHU\RIQD
WXUH7KHRUHWLFDOSK\VLFVIURP2KPWR(LQVWHLQ9RO7KHWRUFKRIPDWKHPDWLFV
&KLFDJR /RQGRQ8QLYHUVLW\RI&KLFDJR3UHVV
.HIHUVWHLQ&KULVWLDQ-DKUEHULFKWEHUGLH9HUKDQGOXQJHQGHUQDWXUIRUVFKHQ
GHQ*HVHOOVFKDIW]X+DOOHYRP-XO>6FKZHLJJHUV@-RXUQDOIUGLH
&KHPLHXQG3K\VLN -DKUEXFKGHU&KHPLHXQG3K\VLN-DQXDU\
'HOLYHUHG-XO\
.XKQ7KRPDV6D&DUQRWVYHUVLRQRI&DUQRWVF\FOH$PHULFDQMRXUQDO
RISK\VLFV3DSHUUHFHLYHG0DUFK
E/D0HUVYHUVLRQRI&DUQRWVF\FOH$PHULFDQMRXUQDORISK\V
LFV$OHWWHUWRWKHHGLWRU
(QHUJ\FRQVHUYDWLRQDVDQH[DPSOHRIVLPXOWDQHRXVGLVFRYHU\
,Q0DUVKDOO&ODJHWWHG&ULWLFDOSUREOHPVLQWKHKLVWRU\RIVFLHQFH3URFHHGLQJV
RIWKHLQVWLWXWHIRUWKHKLVWRU\RIVFLHQFHDWWKH8QLYHUVLW\RI:LVFRQVLQ6HSWHPEHU
0DGLVRQ8QLYHUVLW\RI:LVFRQVLQ3UHVV5HSULQWHGLQ.XKQ
D+LVWRULFDOVWUXFWXUHRIVFLHQWLFGLVFRYHU\6FLHQFH1R
-XQH5HSULQWHGLQ.XKQDV7KHKLVWRULFDOVWUXFWXUH
RIVFLHQWLFGLVFRYHU\
E7KHVWUXFWXUHRIVFLHQWLFUHYROXWLRQV,QWHUQDWLRQDOHQF\FORSHGLD
RIXQLHGVFLHQFH1R&KLFDJR /RQGRQ8QLYHUVLW\RI&KLFDJR3UHVV
7KHKLVWRU\RIVFLHQFH,Q'DYLG/6LOOVHG,QWHUQDWLRQDOHQF\
FORSHGLDRIWKHVRFLDOVFLHQFHVYROV1HZ<RUN&URZHOO&ROOLHU 0DFPLOODQ
5HSULQWHGLQ.XKQ
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
.XNOLFN+HQULND5HYLHZRI)OHFN$PHULFDQMRXUQDORIVRFLRORJ\
/D0HU9LFWRU.6RPHFXUUHQWPLVLQWHUSUHWDWLRQVRI1/6DGL&DUQRWV
PHPRLUDQGF\FOH$PHULFDQMRXUQDORISK\VLFV
6RPH FXUUHQW PLVLQWHUSUHWDWLRQV RI 1/ 6DGL &DUQRWV PHPRLU
DQGF\FOH,,$PHULFDQMRXUQDORISK\VLFV
/D5LYH&KDUOHV*DVSDUGGH0pPRLUHVXUTXHOTXHVQRXYHOOHVH[SpULHQFHV
pOHFWURPDJQpWLTXHV HW HQ SDUWLFXOLHU VXU FHOOHV GH 0U )DUDGD\ %LEOLRWKqTXH
XQLYHUVHOOHSO,,,'HFHPEHU
/DWRXU%UXQRDQG:RROJDU6WHYH/DERUDWRU\OLIH7KHVRFLDOFRQVWUXFWLRQ
RIVFLHQWLFIDFWV6DJHOLEUDU\RIVRFLDOUHVHDUFK%HYHUO\+LOOV /RQGRQ
6DJH3XEOLFDWLRQV
/DERUDWRU\OLIH7KHFRQVWUXFWLRQRIVFLHQWLFIDFWV,QWURE\-R
QDV6DON:LWKDQHZSRVWVFULSWDQGLQGH[3ULQFHWRQ3ULQFHWRQ8QLYHUVLW\3UHVV
3RVWVFULSWWRVHFRQGHGLWLRQRQ
/DXGDQ/DUU\:K\ZDVWKHORJLFRIGLVFRYHU\DEDQGRQHG",Q1LFNOHV
D
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
/LQGVD\5REHUW%UXFHDQG0DUJHQDX+HQU\)RXQGDWLRQVRISK\VLFV1HZ
<RUN-RKQ:LOH\ 6RQV/RQGRQ&KDSPDQ +DOO5HSULQWHG1HZ<RUN'RYHU
3XEOLFDWLRQV
0D\HU-RKDQQ7RELDV.RSHQKDJHQ*|WWLQJLVFKHJHOHKUWH$Q]HLJHQ1R
2FWREHU
0LOOHU'DYLG3KLOLS'LVWULEXWLQJGLVFRYHU\EHWZHHQ:DWWDQG&DYHQGLVK
$UHDVVHVVPHQWRIWKHQLQHWHHQWKFHQWXU\ZDWHUFRQWURYHUV\$QQDOVRIVFLHQFH
0ROO*HUDUGD/HWWUHGH0*0ROODXUpGDFWHXU6XUGHV([SpULHQFHV
pOHFWURPDJQpWLTXHV-RXUQDOGHSK\VLTXH$SULO'DWHG0DUFK
E/HWWUHGH00ROODXUpGDFWHXU6XUOHVQRXYHOOHV([SpULHQFHV
pOHFWURPDJQpWLTXHV-RXUQDOGHSK\VLTXH$SULO
0XLU+D]HOHG/DURXVHGLFWLRQDU\RIVFLHQWLVWV(GLQEXUJK 1HZ<RUN
/DURXVH
0OOHU-RKDQQ+HLQULFK-DFRE3ULQFLSOHVRISK\VLFVDQGPHWHRURORJ\)LUVW
$PHULFDQHGQ3KLODGHOSKLD/HD %ODQFKDUG2ULJLQDOO\SXEOLVKHG/RQGRQ+
%DLOOLHUH>HWF@QRWVHHQ2QWKHWLWOHSDJHDV-0XOOHU
/HKUEXFKGHU3K\VLNXQG0HWHRURORJLHWKHGQYROV%UDXQ
VFKZHLJ)ULHGULFK9LHZHJ 6RKQ
0XQFNH*HRUJ:LOKHOPD9HUVXFKHEHUGHQ(OHFWUR0DJQHWLVPXV]XU
%HJUQGXQJHLQHUJHQJHQGHQ(UNOlUXQJGHUVHOEHQ$QQDOHQGHU3K\VLN
$QQDOHQ GHU 3K\VLN XQG GHU SK\VLNDOLVFKHQ &KHPLH )HEUXDU\
5HDGDWWKH*HVHOOVFKDIWIU1DWXUZLVVHQVFKDIWXQG+HLONXQGHLQ+HLGHOEHUJ
-DQXDU\
E8HEHU(OHFWUR0DJQHWLVPXV=ZHLWH)RUWVHW]XQJ$QQDOHQGHU
3K\VLN $QQDOHQGHU3K\VLNXQGGHUSK\VLNDOLVFKHQ&KHPLH
$XJXVW5HDGDWWKH*HVHOOVFKDIWIU1DWXUZLVVHQVFKDIWXQG+HLONXQGHLQ+HL
GHOEHUJ-XQH
(OHNWURPDJQHWLVPXV,Q*HKOHU
7KHUPRHOHNWULVFKH%HREDFKWXQJHQ$QQDOHQGHU3K\VLNXQG&KH
PLH1RYHPEHU&RPPXQLFDWHGDWWKHPHHWLQJRIWKH*HVHOOVFKDIW
'HXWVFKHU1DWXUIRUVFKHUXQGbU]WHLQ+DPEXUJ6HSWHPEHU
0DJQHWLVPXV,Q*HKOHU$EWK
7RXUPDOLQ,Q*HKOHU$EWK
:lUPH,Q*HKOHU$EWK
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
1LFNOHV7KRPDVHGD6FLHQWLFGLVFRYHU\ORJLFDQGUDWLRQDOLW\%RV
WRQVWXGLHVLQWKHSKLORVRSK\RIVFLHQFH'RUGUHFKW%RVWRQ /RQGRQ'
5HLGHO
E,QWURGXFWRU\HVVD\6FLHQWLFGLVFRYHU\DQGWKHIXWXUHRISKL
ORVRSK\RIVFLHQFH,Q1LFNOHVD
F6FLHQWLFGLVFRYHU\&DVHVWXGLHV%RVWRQVWXGLHVLQWKHSKLORVR
SK\RIVFLHQFH'RUGUHFKW%RVWRQ /RQGRQ'5HLGHO
%H\RQGGLYRUFH&XUUHQWVWDWXVRIWKHGLVFRYHU\GHEDWH3KLORVR
SK\RIVFLHQFH
D 7KH UHFRQVWUXFWLRQ RI VFLHQWLF NQRZOHGJH 3KLORVRSK\ DQG
VRFLDODFWLRQ
E/DNDWRVLDQKHXULVWLFVDQGHSLVWHPLFVXSSRUW%ULWLVKMRXUQDOIRU
WKHSKLORVRSK\RIVFLHQFH
5HFRQVWUXFWLQJVFLHQFH'LVFRYHU\DQGH[SHULPHQW,Q'LGHULN
%DWHQVDQG-HDQ3DXOYDQ%HQGHJHPHGV7KHRU\DQGH[SHULPHQW5HFHQWLQVLJKWV
DQGQHZSHUVSHFWLYHV6\QWKHVH/LEUDU\'RUGUHFKW>HWF@'5HLGHO
-XVWLFDWLRQDQGH[SHULPHQW,Q'DYLG*RRGLQJ7UHYRU3LQFK
DQG6LPRQ6FKDIIHUHGV7KHXVHVRIH[SHULPHQW6WXGLHVRIH[SHULPHQWLQWKH
QDWXUDOVFLHQFHV&DPEULGJH>HWF@&DPEULGJH8QLYHUVLW\3UHVV
'LVFRYHU\,Q5REHUW&2OE\*HRIIUH\1&DQWRU-55&KULVWLH
DQG0LFKDHO-6+RGJHHGV&RPSDQLRQWRWKHKLVWRU\RIPRGHUQVFLHQFH/RQGRQ
1HZ<RUN5RXWOHGJH
*RRGVFLHQFHDVEDGKLVWRU\)URPRUGHURINQRZLQJWRRUGHURI
EHLQJ,Q(UQDQ0F0XOOLQHGQ7KHVRFLDOGLPHQVLRQVRIVFLHQFH1RWUH'DPH
1RWUH'DPH8QLYHUVLW\3UHVV
$PXOWLSDVVFRQFHSWLRQRIVFLHQWLFLQTXLU\'DQLVK\HDUERRN
RISKLORVRSK\
1LHOVHQ.HOG$QRWKHUNLQGRIOLJKW7KHZRUNRI7-6HHEHFNDQG
KLVFROODERUDWLRQZLWK*RHWKH3DUWV,DQG,,+6363W
3W
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
D%HVWLPPXQJGHV*HVHW]HVQDFKZHOFKHP0HWDOOHGLH&RQWDN
WHOHNWULFLWlWOHLWHQQHEVWHLQHP(QWZXUIH]XHLQHU7KHRULHGHV9ROWDLVFKHQ$SSDUDWHV
XQGGHV6FKZHLJJHUVFKHQ0XOWLSOLFDWRUV>6FKZHLJJHUV@-RXUQDOIU&KHPLHXQG
3K\VLN -DKUEXFKGHU&KHPLHXQG3K\VLN)HEUXDU\SO,,,
5HSULQWHGLQ2KP
E9HUVXFKHLQHU7KHRULHGHUGXUFKJDOYDQLVFKH.UlIWHKHUYRUJH
EUDFKWHQHOHNWURVNRSLVFKHQ(UVFKHLQXQJHQ>3RJJHQGRUIIV@$QQDOHQGHU3K\VLN
XQG&KHPLH $QQDOHQGHU3K\VLN$SULOE]Z
0D\5HSULQWHGLQ2KP
(LQLJHHOHNWULVFKH9HUVXFKH>6FKZHLJJHUV@-RXUQDOIU&KHPLH
XQG3K\VLN -DKUEXFKGHU&KHPLHXQG3K\VLN-DQXDU\5HSULQWHG
LQ2KP
*HVDPPHOWH$EKDQGOXQJHQ(G(XJHQ/RPPHO/HLS]LJ-RKDQQ
$PEURVLXV%DUWK
UVWHG+DQV&KULVWLDQ2P2YHUHQVVWHPHOVHQPHOOHPGHHOHNWULVNH)L
JXUHURJGHRUJDQLVNH)RUPHU'HWVNDQGLQDYLVNH/LWWHUDWXUVHOVNDEV6NULIWHU>
$DUJDQJ@5HSULQWHGLQUVWHGD
$QVLFKWGHUFKHPLVFKHQ1DWXUJHVHW]HGXUFKGLHQHXHUHQ(QWGHFNXQ
JHQJHZRQQHQ%HUOLQ,QGHU5HDOVFKXOEXFKKDQGOXQJ5HSULQWHGLQUVWHGD
5HFKHUFKHVVXUOLGHQWLWpGHVIRUFHVFKLPLTXHVHWpOHFWULTXHV7UDQV
E\0DUFHOGH6HUUHV3DULV-*'HQWX
D /UVWQLQJHU DI GHQ Q\HUH &KHPLH $IWU\NW WLO %UXJ IRU KDQV
7LOKUHUH &RSHQKDJHQ 7U\NW SDD$QGUHDV 6HLGHOLQV )RUODJ KRV &KULVWRSKHU
*UEH
E>0LGGHOWLODWIUHPEULQJHPDJQHWLVNH9LUNQLQJHUIRUPHGHOVWGH
HOHFWULVNH.UIWHULGHUHVJDOYDQLVNH)RUP@'DQVN/LWWHUDWXU7LGHQGHIRU$DUHW
1RFDPLG-XO\XQGHUWKHKHDGLQJ,QGVHQGW5HSULQWHGLQ
7HXEHUZLWKIDFVLPLOHRQDQG)RUGDWLQJVHHDOVR7RUVWHQ
6FKOLFKWNUXOOVQRWHLQ7HXEHUZKHUHKHWHQWDWLYHO\GDWHGLWVFRP
SRVLWLRQWR-XO\DQGFLWHGHYLGHQFHWKDWLWKDGEHHQSXEOLVKHGE\-XO\
F([SHULPHQWDFLUFDHIIHFWXPFRQLFWXVHOHFWULFLLQDFXPPDJQHWL
FDP+DIQL7\SLV6FKXOW]LDQLV5HSULQWHGLQUVWHGD'DWHG
-XO\
G1HXHUHHOHFWURPDJQHWLVFKH9HUVXFKH>6FKZHLJJHUV@-RXUQDOIU
&KHPLHXQG3K\VLNSO,,,-XO\5HSULQWHGLQUVWHGD
H1RXYHOOHVH[SpULHQFHVpOHFWURPDJQpWLTXHV&RPPXQLTXpHGDQV
XQHOHWWUHUHoXHj3DULVOHVHSWHPEUH-RXUQDOGHSK\VLTXH
SO$XJXVW
I([SHULPHQWVRQWKHHIIHFWRIDFXUUHQWRIHOHFWULFLW\RQWKHPDJQHWLF
QHHGOH>7KRPVRQV@$QQDOVRISKLORVRSK\RUPDJD]LQHRIFKHPLVWU\PLQHUDORJ\
PHFKDQLFVQDWXUDOKLVWRU\DQGWKHDUWV1R2FWREHU7UDQVODWLRQ
RIUVWHGF
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
H(OHFWURPDJQHWLVP1HZH[SHULPHQWVE\06HHEHFNRQHOHFWUR
PDJQHWLFDFWLRQ4XDUWHUO\MRXUQDORIVFLHQFHOLWHUDWXUHDQGWKHDUWV1R
-XO\3XEOLVKHGDQRQ\PRXVO\DWUDQVODWLRQRIWKHUVWWZRSDUDJUDSKVRI
UVWHGD
8HEHUHLQLJHWKHUPRHOHNWULVFKH9HUVXFKHZHOFKHYRQ)RXULHUXQG
2HUVWHGDQJHVWHOOWZRUGHQVLQG(LQHYRQ2HUVWHGLQGHU3DULVHU$FDGHPLHGHU:LV
VHQVFKDIWHQYRUJHOHVHQH1RWL]-RXUQDOIU&KHPLHXQG3K\VLN -DKUEXFK
GHU&KHPLHXQG3K\VLNSO,0D\7UDQVODWLRQE\/XGZLJ)ULHGULFK
.lPW]RIUVWHGF$UWLFOHDSSHDUHGXQGHUWKHKHDGLQJ7KHUPRPDJQHWLVPXV
,QFOXGHVDQ$QKDQJE\6FKZHLJJHURQ
7KHUPRHOHFWULFLW\ 7KH (GLQEXUJK HQF\FORSGLD (G 'DYLG
%UHZVWHUYROV(GLQEXUJK:LOOLDP%ODFNZRRGSO';;,,';;,,,
5HSULQWHGLQUVWHGD6HQWWR%UHZVWHURQ-XO\UVWHG
E3XEOLVKHGDQRQ\PRXVO\
%UHYHIUDRJWLO+DQV&KULVWLDQUVWHG(G0DWKLOGHUVWHGYROV
&RSHQKDJHQ7K/LQGV)RUODJ
D1DWXUYLGHQVNDEHOLJH6NULIWHU 6FLHQWLFSDSHUV(G.LUVWLQH
0H\HUYROV&RSHQKDJHQ+VW
E&RUUHVSRQGDQFHGH+&gUVWHGDYHFGLYHUVVDYDQWV(G0DULXV
&KULVWLDQ+DUGLQJYROV&RSHQKDJHQ+$VFKHKRXJ
F /D GpFRXYHUWH GH OHOHFWURPDJQpWLVPH IDLWH HQ SDU -&
UVWHG&RSHQKDJHQ++7KLHOV%RJWU\NNHUL
2VWZDOG:LOKHOP(OHNWURFKHPLHLKUH*HVFKLFKWHXQG/HKUH/HLS]LJ9HLW
&RPS
3RJJHQGRUII-RKDQQ&KULVWLDQ3K\VLVFKFKHPLVFKH8QWHUVXFKXQJHQ]XU
QlKHUQ.HQQWQLGHV0DJQHWLVPXVGHUYROWDLVFKHQ6lXOH,VLVYRQ2NHQ1R
$XJXVWFROV
*HGlFKWQLUHGHDXI7KRPDV-RKDQQ6HHEHFN$EKDQGOXQJHQGHU
.|QLJOLFKHQ$NDGHPLHGHU:LVVHQVFKDIWHQ]X%HUOLQ$XVGHP-DKUH[L[
[[[YLLL'HOLYHUHG-XO\
3RUWHU5R\HG7KHELRJUDSKLFDOGLFWLRQDU\RIVFLHQWLVWVQGHGQ1HZ<RUN
2[IRUG8QLYHUVLW\3UHVV
3RXLOOHW&ODXGH6HUYDLV0DWKLDVeOpPHQVGHSK\VLTXHH[SpULPHQWDOHHWGH
PpWpRURORJLHQGHGQYROVLQ3DULV%pFKHWMHXQH
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
3UHFKWO-RKDQQ-RVHSK8HEHUGLHZDKUH%HVFKDIIHQKHLWGHVPDJQHWLVFKHQ
=XVWDQGHVGHV6FKOLHXQJV'UDKWHVLQGHU9ROWDLVFKHQ6lXOH>*LOEHUWV@$QQDOHQ
GHU3K\VLN $QQDOHQGHU3K\VLNXQGGHUSK\VLNDOLVFKHQ&KHPLH
SO90DUFK
8HEHUGHQ7UDQVYHUVDOPDJQHWLVPXVLQVHLQHU%H]LHKXQJ]XGHQ
HOHFWULVFKPDJQHWLVFKHQ(UVFKHLQXQJHQ>6FKZHLJJHUV@-RXUQDOIU&KHPLHXQG
3K\VLN -DKUEXFKGHU&KHPLHXQG3K\VLNSO,'HFHPEHU
3ULGHDX[-RKQ([SHULPHQWDOFRQWULEXWLRQVWRZDUGVWKHWKHRU\RIWKHUPR
HOHFWULFLW\3KLOPDJ6HU1R6HSWHPEHU1R2FWREHU
5RRW%HUQVWHLQ5REHUW6FRWW'LVFRYHULQJ&DPEULGJH0DVV /RQGRQ
+DUYDUG8QLYHUVLW\3UHVV
5RVHQEHUJHU)HUGLQDQG'LH*HVFKLFKWHGHU3K\VLNLQ*UXQG]JHQPLW
V\QFKURQLVWLVFKHQ 7DEHOOHQ GHU 0DWKHPDWLN GHU &KHPLH XQG EHVFKUHLEHQGHQ
:LVVHQVFKDIWHQVRZLHGHUDOOJHPHLQHQ*HVFKLFKWH'ULWWHU7KHLO%UDXQVFKZHLJ
)ULHGULFK9LHZHJ 6RKQ5HSULQWHG+LOGHVKHLP*HRUJ2OPV
6FKDIIHU6LPRQ6FLHQWLFGLVFRYHU\DQGWKHHQGRIQDWXUDOSKLORVRSK\
6RFLDOVWXGLHVRIVFLHQFH
0DNLQJXSGLVFRYHU\,Q0DUJDUHW$%RGHQHG'LPHQVLRQVRI
FUHDWLYLW\&DPEULGJH0DVV0,73UHVV
6FKLFNRUH -XWWD DQG 6WHLQOH )ULHGULFK HGV 5HYLVLWLQJ GLVFRYHU\ DQG
MXVWLFDWLRQ:RUNVKRSDWWKH0D[3ODQFN,QVWLWXWH)HEUXDU\0DUFK
0D[3ODQFN,QVWLWXWIU:LVVHQVFKDIWVJHVFKLFKWH3UHSULQW>%HUOLQ@0D[
3ODQFN,QVWLWXWIU:LVVHQVFKDIWVJHVFKLFKWH
6FKQHOOH 7KRPDV 5HYLHZ RI )OHFN 7KHRU\ DQG VRFLHW\
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
6FKZHLJJHU-RKDQQ6DORPR&KULVWRSKDQG0HLQHNH-RKDQQ/XGZLJ*HRUJ
9RUZRUW>6FKZHLJJHUV@-RXUQDOIU&KHPLHXQG3K\VLN -DKUEXFKGHU
&KHPLHXQG3K\VLNLLL-DQXDU\'DWHG-DQXDU\
6HHEHFN7KRPDV-RKDQQ8HEHUGHQ0DJQHWLVPXVGHUJDOYDQLVFKHQ.HWWH
$EKDQGOXQJHQGHU.|QLJOLFKHQ$NDGHPLHGHU:LVVHQVFKDIWHQ]X%HUOLQ$XVGHQ
-DKUHQ XQG $EKDQGOXQJHQ GHU SK\VLNDOLVFKHQ .ODVVH SO
,,,,%DVHGRQOHFWXUHVJLYHQ'HFHPEHUDQG)HEUXDU\SOXVODWHU
DGGLWLRQV
D0DJQHWLVFKH3RODULVDWLRQGHU0HWDOOHXQG(U]HGXUFK7HPSHUD
WXU'LIIHUHQ]$EKDQGOXQJHQGHU.|QLJOLFKHQ$NDGHPLHGHU:LVVHQVFKDIWHQ]X
%HUOLQ$XVGHQ-DKUHQXQG$EKDQGOXQJHQGHUSK\VLNDOLVKHQ.ODVVH
SO,,,IROGHGWDEOHV(GLWHGH[WUDFWVRIOHFWXUHVUHDGRQ$XJXVW
DQG2FWREHUDQG)HEUXDU\
E8HEHUGLH0DJQHWLVFKH3RODULVDWLRQGHU0HWDOOHXQG(U]HGXUFK
7HPSHUDWXU'LIIHUHQ]%HUOLQ*HGUXFNWLQGHU'UXFNHUHLGHU.|QLJO$NDGHPLH
GHU:LVVHQVFKDIWHQ>L@>@SSOIROGHGWDEOHV
D8HEHUGLHPDJQHWLVFKH3RODULVDWLRQGHU0HWDOOHXQG(U]HGXUFK
7HPSHUDWXU'LIIHUHQ]$XVJH]RJHQDXVGHQVRHEHQHUVFKLHQHQHQ'HQNVFKULIWHQ
IUXQG>3RJJHQGRUIIV@$QQDOHQGHU3K\VLNXQG&KHPLH $Q
QDOHQGHU3K\VLNSO,,,DQG9-DQXDU\)HEUXDU\
0DUFK6OLJKWO\PRGLHGIURP6HHEHFND
E6HHEHFNV0HWKRGH3ODWLQDWLHJHODXILKUHFKHPLVFKH5HLQKHLW
GXUFK7KHUPRPDJQHWLVPXV]XSUIHQ>6FKZHLJJHUV@-RXUQDOIU&KHPLHXQG
3K\VLN -DKUEXFKGHU&KHPLHXQG3K\VLN-DQXDU\([WUDFWHG
IURP6HHEHFND
6LHJHO'DQLHO07KHHQHUJ\FRQFHSW$KLVWRULFDORYHUYLHZ0DWHULDOV
DQGVRFLHW\1R
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
6WHLQOH )ULHGULFK 'HU (LQVWHLJ LQ HLQ QHXHV )HOG )RUVFKXQJVSUD[LV LP
IUKHQ(OHNWURPDJQHWLVPXVEHL$PSqUHXQG)DUDGD\+DELOLWDWLRQVVFKULIW7HFK
QLVFKH8QLYHUVLWlW%HUOLQ
6WHQW*XQWKHU6$WKRXJKWFROOHFWLYH5HYLHZRI+RUDFH)UHHODQG-XGVRQ
7KHHLJKWKGD\RIFUHDWLRQ0DNHUVRIWKHUHYROXWLRQLQELRORJ\1HZ<RUN6LPRQ
6FKXVWHU4XDUWHUO\UHYLHZRIELRORJ\
5HYLHZ RI )OHFN 4XDUWHUO\ UHYLHZ RI ELRORJ\
6WUHLW+6HHEHFNVZLVVHQVFKDIWOLFKH)RUVFKXQJHQXQG(QWGHFNXQJHQDXI
GHP*HELHWHGHU(OHNWULFLWlWXQGGHV0DJQHWLVPXV,Q;;;-DKUHVEHULFKWEHU
GDVVWlGWLVFKH3URJ\PQDVLXPPLW5HDODEWHLOXQJHQ]X6FKODZHIUGDV6FKXOMDKU
HUVWDWWHWYRQGHP'LUHNWRU*XVWDY6WUDWKPDQQ6FKODZH+0ROGHQKDXHU
6RKQ>LLL@[[LLSO
7D\ORU/OR\G:LOOLDP3K\VLFVWKHSLRQHHUVFLHQFH%RVWRQ>HWF@+RXJKWRQ
0LILQ&R5HSULQWHG1HZ<RUN'RYHU
7KRPVRQ7KRPDV(OHFWURPDJQHWLFH[SHULPHQW$QQDOVRISKLORVRSK\
161R2FWREHU3XEOLVKHGDQRQ\PRXVO\DXWKRUVKLSLQIHUUHG
IURP7KRPVRQVEHLQJWKHHGLWRU,QVHFWLRQKHDGHG6FLHQWLFLQWHOOLJHQFHDQG
QRWLFHVRIVXEMHFWVFRQQHFWHGZLWKVFLHQFH
D 1HZ HOHFWURPDJQHWLF H[SHULPHQWV 6HEHFN >VLF@ 4XDUWHUO\
MRXUQDORIVFLHQFHOLWHUDWXUHDQGWKHDUWV1R-DQXDU\
3XEOLVKHGDQRQ\PRXVO\HVVHQWLDOO\WKHVDPHDV7KRPVRQ,QVHFWLRQ
KHDGHG0LVFHOODQHRXV,QWHOOLJHQFHZLWKDQDGGLWLRQDOQRWHVLJQHG('
E1HZHOHFWURPDJQHWLFH[SHULPHQWV3KLORVRSKLFDOPDJD]LQHDQG
MRXUQDO1R)HEUXDU\3XEOLVKHGDQRQ\PRXVO\DVOLJKWO\PRGLHGYHU
VLRQRI7KRPVRQ,QVHFWLRQKHDGHG,QWHOOLJHQFHDQGPLVFHOODQHRXVDUWLFOHV
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
&$1(9$
7UDLOO7KRPDV6WHZDUW2QVRPHWKHUPRPDJQHWLFH[SHULPHQWV$QQDOV
RISKLORVRSK\ 161R'HFHPEHU'DWHG1RYHPEHU
2Q WKHUPRPDJQHWLVP (GLQEXUJK SKLORVRSKLFDO MRXUQDO
SO;2FWREHU7KHVXEVWDQFHRIDSDSHUFRPSOHWHGLQ'HFHPEHU
DQGUHDGDWWKH5R\DO6RFLHW\RI(GLQEXUJKDQG)HEUXDU\
([SpULHQFHVHWREVHUYDWLRQVVXUOHWKHUPRPDJQpWLVPH0pPRLUHV
GHOD6RFLpWpGH3K\VLTXHHWG+LVWRLUH1DWXUHOOHGH*HQqYH3W7KH
SDSHURIDQG)HEUXDU\FRPPXQLFDWHGWRWKH6RFLHW\LQ
7\QGDOO-RKQ5HSRUWRQWKHSURJUHVVRIWKHSK\VLFDOVFLHQFHV3KLOPDJ
6HU1R)HEUXDU\SO,,,
+HDWFRQVLGHUHGDVDPRGHRIPRWLRQ%HLQJDFRXUVHRIWZHOYH
OHFWXUHVGHOLYHUHGDWWKH5R\DO,QVWLWXWLRQRI*UHDW%ULWDLQLQWKHVHDVRQRI
/RQGRQ/RQJPDQ*UHHQ/RQJPDQ5REHUWV *UHHQ
/HFWXUHVRQOLJKW'HOLYHUHGLQWKH8QLWHG6WDWHVLQ:LWK
DQDSSHQGL[1HZ<RUN'$SSOHWRQ &R
6FLHQFHDQGPDQ)RUWQLJKWO\UHYLHZ 161R
1RYHPEHU5HSULQWHGZLWKDGGLWLRQVLQ7\QGDOO
ZKLFKDGGV3UHVLGHQWLDO$GGUHVVGHOLYHUHGEHIRUHWKH%LUPLQJKDPDQG0LGODQG
,QVWLWXWH2FWREHUVW
)UDJPHQWVRIVFLHQFH$VHULHVRIGHWDFKHGHVVD\VDGGUHVVHVDQG
UHYLHZVWKHGQYROV/RQGRQ/RQJPDQV*UHHQ &R
:DWNLQV )UDQFLV 2Q WKHUPRHOHFWULFLW\ 3KLO PDJ 6HU 1R
6HSWHPEHU
2QWKHGHFRPSRVLWLRQRIZDWHUE\WKHUPRHOHFWULFLW\3KLOPDJ
6HU1R-XQH'DWHG0DUFK
2QWKHHYROXWLRQRIKHDWE\WKHUPRHOHFWULFLW\3KLOPDJ6HU
1R)HEUXDU\'DWHG'HFHPEHU
:KHDWVWRQH&KDUOHV2QWKHWKHUPRHOHFWULFVSDUN F3KLOPDJ6HU
1R0D\'DWHG$SULO
:KHZHOO:LOOLDP+LVWRU\RIWKHLQGXFWLYHVFLHQFHVIURPWKHHDUOLHVWWRWKH
SUHVHQWWLPHYROV/RQGRQ-RKQ:3DUNHU&DPEULGJH- --'HLJKWRQ
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions
',6&29(5<$1'6&,(17,),&.12:/('*(
:KLWWDNHU(GPXQG$KLVWRU\RIWKHWKHRULHVRIDHWKHUDQGHOHFWULFLW\9RO
7KHFODVVLFDOWKHRULHV/RQGRQ7KRPDV1HOVRQ 6RQV5HSULQWHG1HZ<RUN
+DUSHU %URWKHUV+DUSHU7RUFKERRNV7KH6FLHQFH/LEUDU\7%
:LOOLDPV / 3HDUFH 7KH RULJLQV RI HOG WKHRU\ 1HZ <RUN 5DQGRP
+RXVH
:LOOLDPV7UHYRU,HG$ELRJUDSKLFDOGLFWLRQDU\RIVFLHQWLVWVUGHGQ1HZ
<RUN-RKQ:LOH\ 6RQV/RQGRQ$ &%ODFN
:RROJDU6WHYH:ULWLQJDQLQWHOOHFWXDOKLVWRU\RIVFLHQWLFGHYHORSPHQW
7KHXVHRIGLVFRYHU\DFFRXQWV6RFLDOVWXGLHVRIVFLHQFH1R6HSWHPEHU
'LVFRYHU\/RJLFDQGVHTXHQFHLQDVFLHQWLFWH[W,Q.DULQ'
.QRUU5RJHU*.URKQDQG5LFKDUG:KLWOH\HGV7KHVRFLDOSURFHVVRIVFLHQWLF
LQYHVWLJDWLRQ6RFLRORJ\RIWKHVFLHQFHV$\HDUERRN'RUGUHFKW%RVWRQ
/RQGRQ'5HLGHO
6FLHQFH7KHYHU\LGHD&KLFKHVWHU(OOLV+RUZRRG/RQGRQ 1HZ
<RUN7DYLVWRFN
<HOLQ-XOLXV&RQUDGYRQD1HXHHOHFWURPDJQHWLVFKH9HUVXFKH'LHPDJ
QHWRPRWRULVFKH:LUNXQJGHUVVLJHQ6lXUHQ%DVHQXQG6DO]HPLWWHOVWHLQIDFKHU
PHWDOOLVFKHU /HLWHU XQG HLQH HLQIDFKH /DGXQJVVlXOH PLW WUHQQEDUHQ HLQSROLJHQ
(OHPHQWHQ0XQLFK*HGUXFNWPLW,JQDW]-RVHSK/HQWQHUVFKHQ6FKULIWHQS
'DWHG0DUFK
E'HU7KHUPRPDJQHWLVPXVLQHLQHU5HLKHQHXHUHOHNWURPDJQHWLVFKHU
9HUVXFKH0XQLFKQRSXEOLVKHUSSO'DWHG$SULOEDVHGRQWZR
OHFWXUHVJLYHQDWWKH.|QLJOLFKH$NDGHPLHGHU:LVVHQVFKDIWHQLQ0XQLFKDQG
$SULO
F 1HXH 9HUVXFKH EHU GLH PDJQHWRPRWRULVFKH (LJHQVFKDIW GHU
ELVKHUVRJHQDQQWHQXQPDJQHWLVFKHQ0HWDOOH>*LOEHUWV@$QQDOHQGHU3K\VLN
SO9$SULO
G'HU7KHUPR0DJQHWLVPXVGHU0HWDOOHHLQHQHXH(QWGHFNXQJ
>*LOEHUWV@$QQDOHQGHU3K\VLNSO9$SULO5HDGDWWKH.|QLJOLFKH
$NDGHPLHGHU:LVVHQVFKDIWHQLQ0XQLFK$SULO
H$XVHLQHP%ULHIHYRQ<HOLQV>*LOEHUWV@$QQDOHQGHU3K\VLN
$SULO'DWHG0D\
I 'HU 7KHUPRPDJQHWLVPXV HWF /H 7KHUPRPDJQpWLVPH H[SRVp
GDQV XQH VpULH GH QRXYHOOHV H[SpULHQFHV pOHFWURPDJQpWLTXHV 0QLFK DYULO
SLQR%LEOLRWKqTXHXQLYHUVHOOH'HFHPEHU0RVWO\D
SUpFLVRI<HOLQESRVVLEO\E\HLWKHU&KDUOHV*DVSDUGGH/D5LYHRUKLVVRQ
$UWKXU$XJXVWH
2QWKHUPRPDJQHWLVP4XDUWHUO\MRXUQDORIVFLHQFHOLWHUDWXUH
DQGDUW1R$SULO$QHGLWHGWUDQVODWLRQRI<HOLQI
This content downloaded by the authorized user from 192.168.52.68 on Tue, 20 Nov 2012 03:45:23 AM
All use subject to JSTOR Terms and Conditions