On the valuation and incentive effects of executive cash bonus contracts

Executive compensation packages are often valued in an inconsistent manner: while employee stock options (ESOs) are typically valued ex-ante, cash bonuses are valued ex-post. This renders the existing valuation models of employee compensation packages theoretically unsatisfactory and, potentially, empirically distortive. In this paper, we propose an option-based framework for ex-ante valuation of cash bonus contracts. After obtaining closed-form expressions for ex-ante values of several frequently used types of bonus contracts, we utilize them to explore the e¤ects that the shape of a bonus contract has on the executive s attitude toward risk-taking. We, also, study pay-performance sensitivity of such contracts. We show that the terms of a bonus contract can dramatically impact both risk-taking behavior as well as pay-performance incentives. Several testable predictions are made, and venues of future research outlined.

Modelling state dependence and feedback effects between poverty, employment and parental home emancipation among European youth

Youth is one of the phases in the life-cycle when some of the most decisivelife transitions take place. Entering the labour market or leaving parentalhome are events with important consequences for the economic well-beingof young adults. In this paper, the interrelationship between employment,residential emancipation and poverty dynamics is studied for eight Europeancountries by means of an econometric model with feedback effects. Resultsshow that youth poverty genuine state dependence is positive and highly significant.Evidence proves there is a strong causal effect between poverty andleaving home in Scandinavian countries, however, time in economic hardshipdoes not last long. In Southern Europe, instead, youth tend to leave theirparental home much later in order to avoid falling into a poverty state that ismore persistent. Past poverty has negative consequences on the likelihood ofemployment.

Processes and consequences in business ethical dilemmas: The oil industry and climate changes

This paper proposes a framework to examine business ethical dilemmas andbusiness attitudes towards such dilemmas. Business ethical dilemmas canbe understood as reflecting a contradiction between a socially detrimentalprocess and a self-interested profitable consequence. This representationallows us to distinguish two forms of behavior differing by whetherpriority is put on consequences or on processes. We argue that theseforms imply very different business attitudes towards society:controversial or competitive for the former and aligned or cooperativefor the latter. These attitudes are then analyzed at the discursive level in order to address the question of good faith in businessargumentation, i.e. to which extent are these attitudes consistent withactual business behaviors. We argue that consequential attitudes mostlyinvolve communication and lobbying actions aiming at eluding the dilemma.Therefore, the question of good faith for consequential attitudes liesin the consistency between beliefs and discourse. On the other hand,procedural attitudes acknowledge the dilemma and claim a change of theprocess of behavior. They thus raise the question of the consistencybetween discourses and actual behavior. We apply this processes/consequencesframework to the case of the oil industry s climate change ethical dilemmawhich comes forth as a dilemma between emitting greenhouse gases and making more profits . And we examine the different attitudes of two oilcorporations-BP Amoco and ExxonMobil-towards the dilemma.

Design effect and interviewer effects: Evidence from the Spanish ESS3-2006 Data

In 2007 the first Quality Enhancement Meeting on sampling in the European SocialSurvey (ESS) took place. The discussion focused on design effects and inteviewereffects in face-to-face interviews. Following the recomendations of this meeting theSpanish ESS team studied the impact of interviewers as a new element in the designeffect in the response s variance using the information of the correspondent SampleDesign Data Files. Hierarchical multilevel and cross-classified multilevel analysis areconducted in order to estimate the amount of responses variation due to PSU and tointerviewers for different questions in the survey. Factor such as the age of theinterviewer, gender, workload, training and experience and respondent characteristicssuch as age, gender, renuance to participate and their possible interactions are alsoincluded in the analysis of some specific questions like trust in politicians and trustin legal system . Some recomendations related to future sampling designs and thecontents of the briefing sessions are derived from this initial research.

Fixed and random effects in Classical and Bayesian regression

This paper proposes a common and tractable framework for analyzingdifferent definitions of fixed and random effects in a contant-slopevariable-intercept model. It is shown that, regardless of whethereffects (i) are treated as parameters or as an error term, (ii) areestimated in different stages of a hierarchical model, or whether (iii)correlation between effects and regressors is allowed, when the sameinformation on effects is introduced into all estimation methods, theresulting slope estimator is also the same across methods. If differentmethods produce different results, it is ultimately because differentinformation is being used for each methods.

Efectos de la presencia social de las lenguas escolares en el desarrollo lingüístico del alumnado extranjero. Un estudio empírico en Cataluña = The Social Presence of School Languages and Their Effects on the Development of Immigrant Students’ Linguistic Proficiency. An Empirical Study in Catalonia

El estudio de las variables relacionadas con la adquisición de las lenguas escolares en contextos bilingües y multilingües ha resurgido a raíz de la incorporación de alumnado extranjero al sistema educativo español. En este sentido, y gracias a su peculiar situación sociolingüística, Cataluña se ha convertido en un observatorio perfecto para estudiar el proceso de adquisición de lenguas del alumnado extranjero. En este artículo presentamos una parte de los datos obtenidos en la evaluación del conocimiento de catalán y del castellano de 668 alumnos extranjeros de sexto de Primaria escolarizados en 57 centros de Cataluña. Con ello pretendemos estudiar los efectos de la presencia y del uso social de las lenguas escolares en el conocimiento lingüístico de este alumnado. La hipótesis principal es que el desarrollo de buenos niveles de conocimiento escrito de las lenguas escolares por parte de los alumnos extranjeros depende, en buena medida, de las oportunidades que haya en el entorno social para que ellos puedan utilizar estas lenguas en los intercambios comunicativos informales con sus compañeros o con otros adultos. Las conclusiones del trabajo señalan las relaciones existentes entre el desarrollo de habilidades lingüísticas conversacionales y el de habilidades lingüísticas cognitivo-académicas (Cummins, 1979b), en el sentido de que tanto el conocimiento escrito de catalán como el de castellano que tiene el alumnado extranjero están condicionados por el nivel de desarrollo conversacional previo en ambas lenguas. Además, apuntan a que la transferencia de habilidades lingüísticas cognitivo-académicas no se produce directamente entre el catalán y el castellano, sino que depende fundamentalmente de la presencia social que tengan estas lenguas y de sus usos informales. Así, en la medida en que un buen número de estudiantes extranjeros no desarrolla suficiente competencia lingüística conversacional ni en catalán ni en castellano, el proceso de adquisición de las lenguas escolares se alarga más allá de los seis años

Pro-inflammatory gene expression and neurotoxic effects of activated microglia are attenuated by absence of CCAAT/enhancer binding protein beta

Background. Microglia and astrocytes respond to homeostatic disturbances with profound changes of gene expression. This response, known as glial activation or neuroinflammation, can be detrimental to the surrounding tissue. The transcription factor CCAAT/enhancer binding protein ß (C/EBPß) is an important regulator of gene expression in inflammation but little is known about its involvement in glial activation. To explore the functional role of C/EBPß in glial activation we have analyzed pro-inflammatory gene expression and neurotoxicity in murine wild type and C/EBPß-null glial cultures. Methods. Due to fertility and mortality problems associated with the C/EBPß-null genotype we developed a protocol to prepare mixed glial cultures from cerebral cortex of a single mouse embryo with high yield. Wild-type and C/EBPß-null glial cultures were compared in terms of total cell density by Hoechst-33258 staining; microglial content by CD11b immunocytochemistry; astroglial content by GFAP western blot; gene expression by quantitative real-time PCR, western blot, immunocytochemistry and Griess reaction; and microglial neurotoxicity by estimating MAP2 content in neuronal/microglial cocultures. C/EBPß DNA binding activity was evaluated by electrophoretic mobility shift assay and quantitative chromatin immunoprecipitation. Results. C/EBPß mRNA and protein levels, as well as DNA binding, were increased in glial cultures by treatment with lipopolysaccharide (LPS) or LPS + interferon ¿ (IFN¿). Quantitative chromatin immunoprecipitation showed binding of C/EBPß to pro-inflammatory gene promoters in glial activation in a stimulus- and gene-dependent manner. In agreement with these results, LPS and LPS+IFN¿ induced different transcriptional patterns between pro-inflammatory cytokines and NO synthase-2 genes. Furthermore, the expressions of IL-1ß and NO synthase-2, and consequent NO production, were reduced in the absence of C/EBPß. In addition, neurotoxicity elicited by LPS+IFN¿-treated microglia co-cultured with neurons was completely abolished by the absence of C/EBPß in microglia.

Auction theory, sequential local service privatization, and the effects of geographical scale economies on effective competition

A sequential weakly efficient two-auction game with entry costs, interdependence between objects, two potential bidders and IPV assumption is presented here in order to give some theoretical predictions on the effects of geographical scale economies on local service privatization performance. It is shown that the first object seller takes profit of this interdependence. The interdependence externality rises effective competition for the first object, expressed as the probability of having more than one final bidder. Besides, if there is more than one final bidder in the first auction, seller extracts the entire bidder¿s expected future surplus differential between having won the first auction and having lost. Consequences for second object seller are less clear, reflecting the contradictory nature of the two main effects of object interdependence. On the one hand, first auction winner becomes ¿stronger¿, so that expected payments rise in a competitive environment. On the other hand, first auction loser becomes relatively ¿weaker¿, hence (probably) reducing effective competition for the second object. Additionally, some contributions to static auction theory with entry cost and asymmetric bidders are presented in the appendix

Static dipole polarizability of alkali-metal clusters: Electronic exchange and correlation effects

Nonlocal approximations for the electronic exchange and correlation effects are used to compute, within density-functional theory, the polarizability and surface-plasma frequencies of small jelliumlike alkali-metal clusters. The results are compared with those obtained using the local-density approximation and with available experimental data, showing the relevance of these effects in obtaining an accurate description of the surface response of metallic clusters.

Nonparabolicity and dielectric effects on addition energy spectra of spherical nanocrystals

An extension of the spin density functional theory simultaneously accounting for dielectric mismatch between neighboring materials and nonparabolicity corrections originating from interactions between conduction and valence bands is presented. This method is employed to calculate ground state and addition energy spectra of homogeneous and multishell spherical quantum dots. Our calculations reveal that corrections become especially relevant when they come into play simultaneously in strong regimes of spatial confinement.

Oxygen content and inhomogeneity effects on the electrical properties of YBa2Cu3Oy thin films

Oxygen content is a very important factor influencing the electrical properties of YBa2Cu3Oy. In this work the electrical properties of laser deposited YBa2Cu3Oy thin films on LaAlO3(100), in the whole range 6 y 7, are studied. An electrical network model, which randomly assigns oxygen contents and R(T) characteristics to the different elements in the circuit according to an arbitrary distribution, is used to analyze several features in the measured R(T) characteristics as a function of oxygen homogeneity. The model takes into account both short-range and long-range oxygen inhomogeneities. Good agreement between estimated oxygen contents from x-ray diffraction data in our samples and the average oxygen contents used to reproduce their R(T) characteristics is found. The model points out that oxygen homogeneity is very important in order to get the best and reproducible properties, and for conduction and superconductivity analysis through the shape or derivatives of R(T) characteristics.

Growth rate of fractal copper electrodeposits: Potential and concentration effects

Experiments are reported on fractal copper electrodeposits. An electrochemical cell was designed in order to obtain a potentiostatic control on the quasi-two-dimensional electrodeposition process. The aim was focused on the analysis of the growth rate of the electrodeposited phase, in particular its dependence on the electrode potential and electrolyte concentration.

External forcings, oceanographic processes and particle flux dynamics in Cap de Creus submarine canyon, NW Mediterranean Sea

Particle fluxes (including major components and grain size), and oceanographic parameters (near-bottom water temperature, current speed and suspended sediment concentration) were measured along the Cap de Creus submarine canyon in the Gulf of Lions (GoL; NW Mediterranean Sea) during two consecutive winter-spring periods (2009 2010 and 2010 2011). The comparison of data obtained with the measurements of meteorological and hydrological parameters (wind speed, turbulent heat flux, river discharge) have shown the important role of atmospheric forcings in transporting particulate matter through the submarine canyon and towards the deep sea. Indeed, atmospheric forcing during 2009 2010 and 2010 2011 winter months showed differences in both intensity and persistence that led to distinct oceanographic responses. Persistent dry northern winds caused strong heat losses (14.2 × 103 W m−2) in winter 2009 2010 that triggered a pronounced sea surface cooling compared to winter 2010 2011 (1.6 × 103 W m−2 lower). As a consequence, a large volume of dense shelf water formed in winter 2009 2010, which cascaded at high speed (up to ∼1 m s−1) down Cap de Creus Canyon as measured by a current-meter in the head of the canyon. The lower heat losses recorded in winter 2010 2011, together with an increased river discharge, resulted in lowered density waters over the shelf, thus preventing the formation and downslope transport of dense shelf water. High total mass fluxes (up to 84.9 g m−2 d−1) recorded in winter-spring 2009 2010 indicate that dense shelf water cascading resuspended and transported sediments at least down to the middle canyon. Sediment fluxes were lower (28.9 g m−2 d−1) under the quieter conditions of winter 2010 2011. The dominance of the lithogenic fraction in mass fluxes during the two winter-spring periods points to a resuspension origin for most of the particles transported down canyon. The variability in organic matter and opal contents relates to seasonally controlled inputs associated with the plankton spring bloom during March and April of both years.