Networks versus vertical integration

We construct a theory to compare vertically integrated firms to networks of manufacturers and suppliers. Vertically integrated firms make their own specialized inputs. In networks, manufacturers procure specialized inputs from suppliers that, in turn, sell to several manufacturers. The analysis shows that networks can yield greater social welfare when manufacturers experience large idiosyncratic demand shocks. Individual firms may also have the incentive to form networks, despite the lack of long-term contracts. The analysis is supported by existing evidence and provides predictions as to the shape of different industries.

Optimal Capital Requirements in Financial Networks with Fire Sales

I explore and analyze a problem of finding the socially optimal capital requirements for financial institutions considering two distinct channels of contagion: direct exposures among the institutions, as represented by a network and fire sales externalities, which reflect the negative price impact of massive liquidation of assets.These two channels amplify shocks from individual financial institutions to the financial system as a whole and thus increase the risk of joint defaults amongst the interconnected financial institutions; this is often referred to as systemic risk. In the model, there is a trade-off between reducing systemic risk and raising the capital requirements of the financial institutions. The policymaker considers this trade-off and determines the optimal capital requirements for individual financial institutions. I provide a method for finding and analyzing the optimal capital requirements that can be applied to arbitrary network structures and arbitrary distributions of investment returns.

In particular, I first consider a network model consisting only of direct exposures and show that the optimal capital requirements can be found by solving a stochastic linear programming problem. I then extend the analysis to financial networks with default costs and show the optimal capital requirements can be found by solving a stochastic mixed integer programming problem. The computational complexity of this problem poses a challenge, and I develop an iterative algorithm that can be efficiently executed. I show that the iterative algorithm leads to solutions that are nearly optimal by comparing it with lower bounds based on a dual approach. I also show that the iterative algorithm converges to the optimal solution.

Finally, I incorporate fire sales externalities into the model. In particular, I am able to extend the analysis of systemic risk and the optimal capital requirements with a single illiquid asset to a model with multiple illiquid assets. The model with multiple illiquid assets incorporates liquidation rules used by the banks. I provide an optimization formulation whose solution provides the equilibrium payments for a given liquidation rule.

I further show that the socially optimal capital problem using the ``socially optimal liquidation" and prioritized liquidation rules can be formulated as a convex and convex mixed integer problem, respectively. Finally, I illustrate the results of the methodology on numerical examples and

discuss some implications for capital regulation policy and stress testing.

Writing to learn and learning to write across the disciplines: Peer-to-peer writing in introductory-level MOOCs

© Comer, Clark, Canelas.This study aimed to evaluate how peer-to-peer interactions through writing impact student learning in introductory-level massive open online courses (MOOCs) across disciplines. This article presents the results of a qualitative coding analysis of peer-to-peer interactions in two introductory level MOOCs: English Composition I: Achieving Expertise and Introduction to Chemistry. Results indicate that peer-to-peer interactions in writing through the forums and through peer assessment enhance learner understanding, link to course learning objectives, and generally contribute positively to the learning environment. Moreover, because forum interactions and peer review occur in written form, our research contributes to open distance learning (ODL) scholarship by highlighting the importance of writing to learn as a significant pedagogical practice that should be encouraged more in MOOCs across disciplines.

Peer rejection and social information-processing factors in the development of aggressive behavior problems in children.

The relation between social rejection and growth in antisocial behavior was investigated. In Study 1,259 boys and girls (34% African American) were followed from Grades 1 to 3 (ages 6-8 years) to Grades 5 to 7 (ages 10-12 years). Early peer rejection predicted growth in aggression. In Study 2,585 boys and girls (16% African American) were followed from kindergarten to Grade 3 (ages 5-8 years), and findings were replicated. Furthermore, early aggression moderated the effect of rejection, such that rejection exacerbated antisocial development only among children initially disposed toward aggression. In Study 3, social information-processing patterns measured in Study 1 were found to mediate partially the effect of early rejection on later aggression. In Study 4, processing patterns measured in Study 2 replicated the mediation effect. Findings are integrated into a recursive model of antisocial development.

Peer-Informed Learning on Increasing Contraceptive Knowledge Among Women in Rural Haiti

Contraceptive prevalence in Haiti remains low despite extensive foreign aid targeted at improving family planning. [1] Earlier studies have found that peer-informed learning have been successful in promoting sexual and reproductive health. [2-5] This pilot project was implemented as a three-month, community-based, educational intervention to assess the impact of peer education in increasing contraceptive knowledge among women in Fondwa, Haiti. Research investigators conducted contraceptive information trainings to pre-identified female leaders of existing women’s groups in Fondwa, who were recruited as peer educators (n=4). Later, these female leaders shared the knowledge from the training with the test participants in the women’s group (n=23) through an information session. Structured surveys measuring knowledge of contraceptives were conducted with all participants before the intervention began, at the end of the intervention, and four weeks after the intervention. The surveys measured general contraceptive knowledge, knowledge about eight selected types of modern contraceptives and contraceptive preferences and attitudes. Only test participants showed significant improvement in their general contraceptive knowledge score (p<0.001), but both test participants and peer educators showed significant improvement in overall knowledge scores for identifying the types and uses of modern contraceptive methods. Assessment for knowledge retention remained significantly higher four weeks after the intervention than prior to the intervention. Therefore, a one-time, three-hour peer-based educational intervention using existing social structures is effective, and might be valuable in a population with minimal access to education and little to no knowledge about contraceptives.