Hausman tests for inefficient estimators: application to demand for health care service (revised)

The Hausman (1978) test is based on the vector of differences of two estimators. It is usually assumed that one of the estimators is fully efficient, since this simplifies calculation of the test statistic. However, this assumption limits the applicability of the test, since widely used estimators such as the generalized method of moments (GMM) or quasi maximum likelihood (QML) are often not fully efficient. This paper shows that the test may easily be implemented, using well-known methods, when neither estimator is efficient. To illustrate, we present both simulation results as well as empirical results for utilization of health care services.

Hopf bifurcation of a delay differential equation with two delays

We consider a delay differential equation with two delays. The Hopf bifurcation of this equation is investigated together with the stability of the bifurcated periodic solution, its period and the bifurcation direction. Finally, three applications are given.

New delay-dependent stability criteria for uncertain neutral systems with mixed time-varying delays and nonlinear perturbations

The problem of stability analysis for a class of neutral systems with mixed time-varying neutral, discrete and distributed delays and nonlinear parameter perturbations is addressed. By introducing a novel Lyapunov-Krasovskii functional and combining the descriptor model transformation, the Leibniz-Newton formula, some free-weighting matrices, and a suitable change of variables, new sufficient conditions are established for the stability of the considered system, which are neutral-delay-dependent, discrete-delay-range dependent, and distributeddelay-dependent. The conditions are presented in terms of linear matrix inequalities (LMIs) and can be efficiently solved using convex programming techniques. Two numerical examples are given to illustrate the efficiency of the proposed method

Distortion control for delay-sensitive sources

We investigate the problem of finding minimum-distortion policies for streaming delay-sensitive but distortion-tolerant data. We consider cross-layer approaches which exploit the coupling between presentation and transport layers. We make the natural assumption that the distortion function is convex and decreasing. We focus on a single source-destination pair and analytically find the optimum transmission policy when the transmission is done over an error-free channel. This optimum policy turns out to be independent of the exact form of the convex and decreasing distortion function. Then, for a packet-erasure channel, we analytically find the optimum open-loop transmission policy, which is also independent of the form of the convex distortion function. We then find computationally efficient closed-loop heuristic policies and show, through numerical evaluation, that they outperform the open-loop policy and have near optimal performance.

Endogenous policy leads to inefficient risk sharing

We analyze risk sharing and fiscal spending in a two-region model withcomplete markets. Fiscal policy determines tax rates for each state ofnature. When fiscal policy is decentralized, it can be used to affect prices of securities. To manipulate prices to their beneffit, regionschoose pro-cyclical fiscal spending. This leads to incomplete risk sharing,despite the existence of complete markets and the absence of aggregaterisk. When a fiscal union centralizes fiscal policy, securities pricescan no longer be manipulated and complete risk sharing ensues. If regionsare homogeneous, median income residents of both regions prefer the fiscalunion. If they are heterogeneous, the median resident of the rich regionprefers the decentralized setting.

A zero-delay sequential scheme for lossy coding of individual sequences

We consider adaptive sequential lossy coding of bounded individual sequences when the performance is measured by the sequentially accumulated mean squared distortion. Theencoder and the decoder are connected via a noiseless channel of capacity $R$ and both are assumed to have zero delay. No probabilistic assumptions are made on how the sequence to be encoded is generated. For any bounded sequence of length $n$, the distortion redundancy is defined as the normalized cumulative distortion of the sequential scheme minus the normalized cumulative distortion of the best scalarquantizer of rate $R$ which is matched to this particular sequence. We demonstrate the existence of a zero-delay sequential scheme which uses common randomization in the encoder and the decoder such that the normalized maximum distortion redundancy converges to zero at a rate $n^{-1/5}\log n$ as the length of the encoded sequence $n$ increases without bound.

Stochastic delay equations with non-negativity constraints driven by fractional Brownian motion

In this note we prove an existence and uniqueness result for the solution of multidimensional stochastic delay differential equations with normal reflection. The equations are driven by a fractional Brownian motion with Hurst parameter H > 1/2. The stochastic integral with respect to the fractional Brownian motion is a pathwise Riemann¿Stieltjes integral.

Stochastic delay differential equations driven by fractional Brownian motion with Hurst parameter H 1/2

We consider the Cauchy problem for a stochastic delay differential equation driven by a fractional Brownian motion with Hurst parameter H>¿. We prove an existence and uniqueness result for this problem, when the coefficients are sufficiently regular. Furthermore, if the diffusion coefficient is bounded away from zero and the coefficients are smooth functions with bounded derivatives of all orders, we prove that the law of the solution admits a smooth density with respect to Lebesgue measure on R.

Reconstruction of the join time-delay Doppler-scale reflectivity density in the wide-band regime. A frame theory based approach

The inverse scattering problem concerning the determination of the joint time-delayDoppler-scale reflectivity density characterizing continuous target environments is addressed by recourse to the generalized frame theory. A reconstruction formula,involving the echoes of a frame of outgoing signals and its corresponding reciprocalframe, is developed. A ‘‘realistic’’ situation with respect to the transmission ofa finite number of signals is further considered. In such a case, our reconstruction formula is shown to yield the orthogonal projection of the reflectivity density onto a subspace generated by the transmitted signals.

The Role of the Delay Time in the Modeling of Biological Range Expansions

The time interval between successive migrations of biological species causes a delay time in the reaction-diffusion equations describing their space-time dynamics. This lowers the predicted speed of the waves of advance, as compared to classical models. It has been shown that this delay-time effect improves the modeling of human range expansions. Here, we demonstrate that it can also be important for other species. We present two new examples where the predictions of the time-delayed and the classical (Fisher) approaches are compared to experimental data. No free or adjustable parameters are used. We show that the importance of the delay effect depends on the dimensionless product of the initial growth rate and the delay time. We argue that the delay effect should be taken into account in the modeling of range expansions for biological species

Marxism, social metabolism, and ecologically unequal exchange

Authors working on "industrial metabolism" or "social metabolism" look at the economy in terms of flows of energy and materials. Together with the ecological economists, they see the economy as a subsystem of a larger physical system. Marx and Engels followed with a few years’ delay many of the remarkable scientific and technical novelties of their time.

Dynamic matching and bargaining: the role of deadlines

We consider a dynamic model where traders in each period are matched randomly into pairs who then bargain about the division of a fixed surplus. When agreement is reached the traders leave the market. Traders who do not come to an agreement return next period in which they will be matched again, as long as their deadline has not expired yet. New traders enter exogenously in each period. We assume that traders within a pair know each other's deadline. We define and characterize the stationary equilibrium configurations. Traders with longer deadlines fare better than traders with short deadlines. It is shown that the heterogeneity of deadlines may cause delay. It is then shown that a centralized mechanism that controls the matching protocol, but does not interfere with the bargaining, eliminates all delay. Even though this efficient centralized mechanism is not as good for traders with long deadlines, it is shown that in a model where all traders can choose which mechanism to

A change would do you good . . . An experimental study on how to overcome coordination failure in organizations

Many organizations suffer poor performance because individuals within the organization fail to coordinate on efficient patterns of behavior. Using controlled laboratory experiments, we study how financial incentives can be used to find a way out of such performance traps. Our experiments are set in a corporate environment where subjects' payoffs depend on coordinating at high effort levels; the underlying game being played repeatedly by employees is a weak-link game. In an initial phase, the benefits of coordination are low relative to the cost of increased effort. Play in this initial phase typically converges to an inefficient outcome with employees failing to coordinate at high effort levels. The experimental design then explores the effects of varying the financial incentives to coordinate at a higher effort level. We find that an increase in the benefits of coordination leads to improved coordination, but, surprisingly, large increases have no more impact than small increases. Once subj

Consumption externalities, habit formation, and equilibrium efficiency

We analyze the welfare properties of the competitive equilibrium in a capital accumulation model where individual preferences are subjected to both habit formation and consumption spillovers. We also discuss how consumption externalities and habits interact to generate an inefficient dynamic equilibrium. Finally, we characterize optimal tax policies aimed to restore efficient decentralized paths.

Growth, habit formation, and catching-up\ with the Joneses

When habits are introduced multiplicatively in a capital accumulation model, the consumers' objective function might fail to be concave. In this paper we provide conditions aimed at guaranteeing the existence of interior solutions to the consumers' problem. We also characterize the equilibrium path of two growth models with multiplicative habits: the internal habit formation model, where individual habits coincide with own past consumption, and the external habit formation (or catching-up with the Joneses) model, where habits arise from the average past consumption in the economy. We show that the introduction of external habits makes the equilibrium path inefficient during the transition towards the balanced growth path. We characterize in this context the optimal tax policy.