Growth, selection and appropriate contracts

We study a dynamic model where growth requires both long-term investment and the selection of talented managers. When ability is not ex-ante observable and contracts are incomplete, managerial selection imposes a cost, as managers facing the risk of being replaced tend to choose a sub-optimally low level of long-term investment. This generates a trade-off between selection and investment that has implications for the choice of contractual relationships. Our analysis shows that rigid long-term contracts sacrificing managerial selection may be optimal at early stages of economic development and when access to information is limited. As the economy grows, however, knowledge accumulation increases the return to talent and makes it optimal to adopt flexible contractual relationships, where managerial selection is implemented even at the cost of lower investment. Better institutions, in the form of a richer contracting environment and less severe informational frictions, speed up the transition to short-term relationships.

Construcció i explotació d'un magatzem de dades per a l'anàlisi estadístic dels resultats del Campionat de Fórmula 1

Disseny, construcció i explotació d'un magatzem de dades a partir de la información disponible en fitxer en format MsExcel. El producte final havia de permetre l'explotació de la información sobre els resultats del Campionat de Fórmula 1 mitjançant Oracle Discoverer.

Proposing a 'Consent Commons' in open education - balancing the desire for openness with the rights of people to refuse or withdraw from participation

A new 'Consent Commons' licensing framework is proposed, complementing Creative Commons, to clarify the permissions given for using and reusing clinical and non-clinical digital recordings of people (patients and non-patients) for educational purposes. Consent Commons is a sophisticated expression of ethically based 'digital professionalism', which recognises the rights of patients, carers, their families, teachers, clinicians, students and members of the public to have some say in how their digital recordings are used (including refusing or withdrawing their consent), and is necessary in order to ensure the long term sustainability of teaching materials, including Open Educational Resources (OER). Consent Commons can ameliorate uncertainty about the status of educational resources depicting people, and protect institutions from legal risk by developing robust and sophisticated policies and promoting best practice in managing their information.

Opening Education Beyond the Property Relation: From Commons to Communism

Open Education, and specifically the OER movement, seeks to provide universal access to knowledge, undermining the historical enclosure and the increasing privatisation of the public education system. In this paper we examine this aspiration by submitting the implicit theoretical assumptions of Open Education to the test of critical political economy. We acknowledge the Open Education movement's revolutionary potential but outline the inherent limitations of its current focus on the commons (property relations) rather than the social relations of capitalist production (wage work, the company) and because of this, argue that it will only achieve limited, rather than revolutionary, impact.

The Limits of Discrete Time Repeated Games:Some Notes and Comments

This paper studies the limits of discrete time repeated games with public monitoring. We solve and characterize the Abreu, Milgrom and Pearce (1991) problem. We found that for the "bad" ("good") news model the lower (higher) magnitude events suggest cooperation, i.e., zero punishment probability, while the highrt (lower) magnitude events suggest defection, i.e., punishment with probability one. Public correlation is used to connect these two sets of signals and to make the enforceability to bind. The dynamic and limit behavior of the punishment probabilities for variations in ... (the discount rate) and ... (the time interval) are characterized, as well as the limit payo¤s for all these scenarios (We also introduce uncertainty in the time domain). The obtained ... limits are to the best of my knowledge, new. The obtained ... limits coincide with Fudenberg and Levine (2007) and Fudenberg and Olszewski (2011), with the exception that we clearly state the precise informational conditions that cause the limit to converge from above, to converge from below or to degenerate. JEL: C73, D82, D86. KEYWORDS: Repeated Games, Frequent Monitoring, Random Pub- lic Monitoring, Moral Hazard, Stochastic Processes.

Shared knowledge

Agents use their knowledge on the history of the economy in orderto choose what is the optimal action to take at any given moment of time,but each individual observes history with some noise. This paper showsthat the amount of information available on the past evolution of theeconomy is an endogenous variable, and that this leads to overconcentrationof the investment, which can be interpreted as underinvestment in research.It presents a model in which agents have to invest at each period in one of$K$ sectors, each of them paying an exogenous return that follows a welldefined stochastic path. At any moment of time each agent receives an unbiasednoisy signal on the payoff of each sector. The signals differ across agents,but all of them have the same variance, which depends on the aggregate investmentin that particular sector (so that if almost everybody invests in it theperceptions of everybody will be very accurate, but if almost nobody doesthe perceptions of everybody will be very noisy). The degree of hetereogeneityacross agents is then an endogenous variable, evolving across time determining,and being determined by, the amount of information disclosed.As long as both the level of social interaction and the underlying precisionof the observations are relatively large agents behave in a very preciseway. This behavior is unmodified for a huge range of informational parameters,and it is characterized by an excessive concentration of the investment ina few sectors. Additionally the model shows that generalized improvements in thequality of the information that each agent gets may lead to a worse outcomefor all the agents due to the overconcentration of the investment that thisproduces.

Stochastic uncoupled dynamics and Nash equilibrium

In this paper we consider dynamic processes, in repeated games, that are subject to the natural informational restriction of uncoupledness. We study the almost sure convergence to Nash equilibria, and present a number of possibility and impossibility results. Basically, we show that if in addition to random moves some recall is introduced, then successful search procedures that are uncoupled can be devised. In particular, to get almost sure convergence to pure Nash equilibria when these exist, it su±ces to recall the last two periods of play.

Strategic behavior and price discovery

The paper analyzes the effects of strategic behavior by an insider in a price discovery process, akin to an information tatonnement, in the presence of a competitive informed sector. Such processes are used in the preopening period of continuous trading systems in several exchanges. It is found that the insider manipulates the market using a contrarian strategy in order to neutralize the effect of the trades of competitive informed agents. Furthermore, consistently with the empirical evidence available, we find that information revelation accelerates close to the opening, that the market price does not converge to the fundamental value no matter how many rounds the tatonnement has, and that the expected trading volume displays a U-shaped pattern. We also find that a market with a larger competitive sector (smaller insider) has an improved informational efficiency and an increased trading volume. The insider provides a public good (a lower informativeness of the price) for the competitive informed sector.

Overconfidence and market efficiency with heterogeneous agents

We study financial markets in which both rational and overconfident agents coexist and make endogenous information acquisition decisions. We demonstrate the following irrelevance result: when a positive fraction of rational agents (endogeneously) decides to become informed in equilibrium, prices are set as if all investors were rational, and as a consequence the overconfidence bias does not aect informational efficiency, price volatility, rational traders expected profits or their welfare. Intuitively, as overconfidence goes up, so does price infornativeness, which makes rational agents cut their information acquisition activities, effectively undoing the standard effect of more aggressive trading by the overconfident.

On information and competition in private value auctions

How much information does an auctioneer want bidders to have in a private value environment?We address this question using a novel approach to ordering information structures based on the property that in private value settings more information leads to a more disperse distribution of buyers updated expected valuations. We define the class of precision criteria following this approach and different notions of dispersion, and relate them to existing criteria of informativeness. Using supermodular precision, we obtain three results: (1) a more precise information structure yields a more efficient allocation; (2) the auctioneer provides less than the efficient level of information since more information increases bidder informational rents; (3) there is a strategic complementarity between information and competition, so that both the socially efficient and the auctioneer s optimal choice of precision increase with the number of bidders, and both converge as the number of bidders goes to infinity.

Income maintenance programs and multidimensional screening

This paper examines properties of optimal poverty assistance programs under different informational environments using an income maintenanceframework. To that end, we make both the income generating ability andthe disutility of labor of individuals unobservable, and compare theresulting benefit schedules with those of programs found in the UnitedStates since Welfare Reform (1996). We find that optimal programs closelyresemble a Negative Income Tax with a Benefit Reduction rate that dependson the distribution of population characteristics. A policy of workfare(unpaid public sector work) is inefficient when disutility of labor isunobservable, but minimum work requirements (for paid work) may be usedin that same environment. The distortions to work incentives and thepresence of minimum work requirements depend on the observability andrelative importance of the population's characteristics.

Failure to collude in the presence of asymmetric information

In this paper, we design the optimal contract when two agents can collude under asymmetric information. They have correlated types, produce complementary inputs and are protected by limited liability. Therefore, a joint manipulation of reports allows them to internalize informational and productive externalities. We show that by taking advantage of the transaction costs created by asymmetric information, even though they collude, the principal can achieve the outcome without collusion regardless of the sign and the degree of correlation. In particular, the principal can implement a non-monotonic quantity schedule in a collusion-proof way while this is impossible if collusion occurs under complete information.

Reputation and honesty in a market for information

Previous works on asymmetric information in asset markets tendto focus on the potential gains in the asset market itself. We focus on the market for information and conduct an experimental study to explore, in a game of finite but uncertain duration, whether reputation can be an effective constraint on deliberate misinformation. At the beginning of each period, an uninformed potential asset buyer can purchase information, at a fixed price and from a fully-informed source, about the value of the asset in that period. The informational insiders cannot purchase the asset and are given short-term incentives to provide false information when the asset value is low. Our model predicts that, in accordance with the Folk Theorem, Pareto-superior outcomes featuring truthful revelation should be sustainable. However, this depends critically on beliefs about rationality and behavior. We find that, overall, sellers are truthful 89% of the time. More significantly, the observed frequency of truthfulness is 81% when the asset value is low. Our result is consistent with both mixed-strategy and trigger strategy interpretations and provides evidence that most subjects correctly anticipate rational behavior. We discuss applications to financial markets, media regulation, and the stability of cartels.

Relationship and transaction lending in a crisis

We study how relationship lending and transaction lending varyover the business cycle. We develop a model in which relationshipbanks gather information on their borrowers, which allows them toprovide loans for profitable firms during a crisis. Due to the servicesthey provide, operating costs of relationship-banks are higher thanthose of transaction-banks. In our model, where relationship-bankscompete with transaction-banks, a key result is that relationship-banks charge a higher intermediation spread in normal times, butoffer continuation-lending at more favorable terms than transactionbanks to profitable firms in a crisis. Using detailed credit registerinformation for Italian banks before and after the Lehman Brothers'default, we are able to study how relationship and transaction-banksresponded to the crisis and we test existing theories of relationshipbanking. Our empirical analysis confirms the basic prediction of themodel that relationship banks charged a higher spread before the crisis, offered more favorable continuation-lending terms in response tothe crisis, and suffered fewer defaults, thus confirming the informational advantage of relationship banking.

Nota al artículo "El sistema de las Creative commons"

Después de leer el artículo "El sistema de las Creative Commons" de Marco Marandola1, me gustaría presentar de manera más completa el proyecto de las licencias de Creative commons. Actualmente las palabras copyleft, copyright, open access, creative commons, procomún, se utilizan mucho pero a veces se mezclan conceptos y se informa de manera errónea. Agradezco a los editores la posibilidad de escribir esta nota que personalmente considero de rectificación.