Contracts, Reference Points, and Competition - Behavioral Effects of the Fundamental Transformation

In this paper we study the role of incomplete ex ante contracts for ex post trade. Previous experimental evidence indicates that a contract provides a reference point for entitlements when the terms are negotiated in a competitive market. We show that this finding no longer holds when the terms are determined in a non-competitive way. Our results imply that the presence of a "fundamental transformation" (i.e., the transition from a competitive market to a bilateral relationship) is important for a contract to become a reference point. To the best of our knowledge this behavioral aspect of the fundamental transformation has not been shown before.

Less Risk, More Effort : Demand Risk Allocation in Incomplete Contracts

This article investigates the allocation of demand risk within an incomplete contract framework. We consider an incomplete contractual relationship between a public authority and a private provider (i.e. a public-private partnership), in which the latter invests in non-verifiable cost-reducing efforts and the former invests in non-verifiable adaptation efforts to respond to changing consumer demand over time. We show that the party that bears the demand risk has fewer hold-up opportunities and that this leads the other contracting party to make more effort. Thus, in our model, bearing less risk can lead to more effort, which we describe as a new example of âeuro~counter-incentivesâeuro?. We further show that when the benefits of adaptation are important, it is socially preferable to design a contract in which the demand risk remains with the private provider, whereas when the benefits of cost-reducing efforts are important, it is socially preferable to place the demand risk on the public authority. We then apply these results to explain two well-known case studies.

Three essays in incomplete contracts

General Introduction These three chapters, while fairly independent from each other, study economic situations in incomplete contract settings. They are the product of both the academic freedom my advisors granted me, and in this sense reflect my personal interests, and of their interested feedback. The content of each chapter can be summarized as follows: Chapter 1: Inefficient durable-goods monopolies In this chapter we study the efficiency of an infinite-horizon durable-goods monopoly model with a fmite number of buyers. We find that, while all pure-strategy Markov Perfect Equilibria (MPE) are efficient, there also exist previously unstudied inefficient MPE where high valuation buyers randomize their purchase decision while trying to benefit from low prices which are offered once a critical mass has purchased. Real time delay, an unusual monopoly distortion, is the result of this attrition behavior. We conclude that neither technological constraints nor concern for reputation are necessary to explain inefficiency in monopolized durable-goods markets. Chapter 2: Downstream mergers and producer's capacity choice: why bake a larger pie when getting a smaller slice? In this chapter we study the effect of downstream horizontal mergers on the upstream producer's capacity choice. Contrary to conventional wisdom, we find anon-monotonic relationship: horizontal mergers induce a higher upstream capacity if the cost of capacity is low, and a lower upstream capacity if this cost is high. We explain this result by decomposing the total effect into two competing effects: a change in hold-up and a change in bargaining erosion. Chapter 3: Contract bargaining with multiple agents In this chapter we study a bargaining game between a principal and N agents when the utility of each agent depends on all agents' trades with the principal. We show, using the Potential, that equilibria payoffs coincide with the Shapley value of the underlying coalitional game with an appropriately defined characteristic function, which under common assumptions coincides with the principal's equilibrium profit in the offer game. Since the problem accounts for differences in information and agents' conjectures, the outcome can be either efficient (e.g. public contracting) or inefficient (e.g. passive beliefs).

Are Public Private Partnerships that Rigid ? And Why ? : Evidence from Toll Road Concession Contracts

Transport concession contracts are commonly said to be standardized and too rigid. They would not allow public authorities to adapt them to evolving context and circumstances. This paper aims at challenging this view and, more particularly, the view that contractual rigidity for transport concessions is exogenous. Using a transaction cost framework, we disentangle between three main determinants of contractual rigidity: traffic uncertainty; connivance between contracting parties; quality of the institutional environment. Using an original database of toll road concession contracts, we observe a great variety of provisions for toll adjustment. We find that these exogenous determinants significantly influence contractual choices.

Integrated care organizations in Switzerland.

INTRODUCTION: The Swiss health care system is characterized by its decentralized structure and high degree of local autonomy. Ambulatory care is provided by physicians working mainly independently in individual private practices. However, a growing part of primary care is provided by networks of physicians and health maintenance organizations (HMOs) acting on the principles of gatekeeping. TOWARDS INTEGRATED CARE IN SWITZERLAND: The share of insured choosing an alternative (managed care) type of basic health insurance and therefore restrict their choice of doctors in return for lower premiums increased continuously since 1990. To date, an average of one out of eight insured person in Switzerland, and one out of three in the regions in north-eastern Switzerland, opted for the provision of care by general practitioners in one of the 86 physician networks or HMOs. About 50% of all general practitioners and more than 400 other specialists have joined a physician networks. Seventy-three of the 86 networks (84%) have contracts with the healthcare insurance companies in which they agree to assume budgetary co-responsibility, i.e., to adhere to set cost targets for particular groups of patients. Within and outside the physician networks, at regional and/or cantonal levels, several initiatives targeting chronic diseases have been developed, such as clinical pathways for heart failure and breast cancer patients or chronic disease management programs for patients with diabetes. CONCLUSION AND IMPLICATIONS: Swiss physician networks and HMOs were all established solely by initiatives of physicians and health insurance companies on the sole basis of a healthcare legislation (Swiss Health Insurance Law, KVG) which allows for such initiatives and developments. The relevance of these developments towards more integration of healthcare as well as their implications for the future are discussed.

Un partenariat public-privé rigide ou flexible ? Théorie et application aux concessions routières à péage

In this article, we explore the contractual design of toll road concession contracts. We highlight the fact that contracting parties try to sign not only complete rigid contracts in order to avoid renegotiations but also flexible contracts in order to adapt contractual framework to contingencies and to create incentives for cooperative behavior. This gives rise to multiple toll adjustment provisions and to a tradeoff between rigid and flexible contracts. Such a tradeoff is formalized using an incomplete contract framework - including ex post maladaptation and renegotiation costs - and propositions are tested using an original database of 71 concession contracts. Our results suggest an important role for economic efficiency concerns, as well as politics, in designing such public-private contracts. Codes JEL : D23, H11, H54, L14, L9.

Controlling cytokinesis in the fission yeast Schizosaccharomyces pombe : the role of dma1; and ubc8

ABSTRACT The fission yeast Schizosaccharomyces pombe is a single celled eukaryote that has proved to be an excellent model system for the study of cell cycle control. S. pombe cells are rod shaped and grow mainly by elongation at their tips. They divide by formation of medially-placed cell wall, or septum, which cleaves the cell in two. Once the cell commits itself to mitosis the site of division is determined by formation of an acto-myosin based contractile ring at the cell cortex. The ring is assembled in stages throughout mitosis and contracts at the end of anaphase, coincident with spindle disassembly. The contraction, but not the assembly, of the ring requires the signal transduction network called the septation initiation network or SIN. The core components of the SIN are three protein kinases (cdc7p, sidl p and sid2p) and their regulatory subunits (spg1 p, cdcl4p and moblp, respectively). Signalling is dependent upon the nucleotide status of the GTPase spgl p, which is regulated by a two-component GAP protein, cdc16p-byr4p. Signalling is thought to emanate from the spindle pole body, where core SIN components are anchored to a scaffold comprised of sid4p and cdc11p. Activation of the SIN requires the protein kinase plolp, which also has additional roles in mitosis. SIN signalling is tightly regulated to assure the proper co-ordination of mitosis and cytokinesis. Ectopic activation of the SIN in interphase can uncouple septum formation from mitosis, while deregulated SIN signalling leads to formation of cells with multiple septa that do not cleave. Regulators of SIN activity are therefore of considerable interest. This study has concentrated upon two of these, dma1 and ubc8. I have demonstrated that dmal becomes essential when SIN signalling is activated. This leads me to propose a tripartite model for regulation of the SIN during the mitotic cell cycle. Increased expression of dma1 inhibits SIN signalling and prevents cell division. To identify potential targets and mediators of this, multicopy suppressors of dma1 toxicity were identified. One of these, ubc8, is the subject of this thesis. Genetic and molecular analyses are consistent with the view that ubc8p acts as an inhibitor of the SIN Localisation of ubc8p indicates that it is a nuclear protein. The ubc8 gene is not essential, but in its absence cells are unable to prevent septum formation if progression through mitosis is impaired. These data suggest that it may be an effector of the spindle assembly checkpoint. Together, these data shed new light upon the mechanisms by which cytokinesis is regulated in S. pombe. RESUME La levure Schizosaccharomyces pombe est un eucaryote unicellulaire qui est un bon système d'étude du cycle cellulaire. Les cellules de S. pombe sont en forme de bâtonnets et poussent par allongement aux deux bouts. Elles se divisent en formant une paroi au milieu de la cellule, qui s'appelle un septum et qui sépare la cellule en deux. Une fois que la cellule est engagée dans la mitose, le site de clivage est déterminé par la formation d'un anneau contractile d'acto-myosine au niveau du cortex cellulaire. Cet anneau est séquentiellement assemblé au cours de la mitose et se contacte à la fin de l'anaphase, au moment où le fuseau mitotique et désassemblé. La contraction, mais non pas l'assemblage, de l'anneau dépend d'un réseau de signalisation appelé septation initiation netvvork' ou SIN. Les composants centraux du SIN sont trois kinases (cdc7, sidi et sid2) ainsi que leurs sous-unités régulatrices (spgl, cdc14 et mob1, respectivement). La signalisation dépend du nucléotide rattaché à la GTPase spgl qui est régulée par une GAP comprenant deux sous-unités cdc16 et byr4. La signalisation est présumée provenir du pôle du fuseau où les composants centraux du SIN sont ancrés grâce à un échafaudage comprenant sid4 et cdcl 1. La signalisation est étroitement régulée pour assurer une bonne coordination entre mitose et cytokinèse. Une activation ectopique du SIN en interphase peut découpler la formation du septum de la mitose, engendrant des cellules à multiples septa qui ne sont pas clivés. C'est pourquoi les régulateurs du SIN sont d'un intérêt considérable. Cette étude se concentre autour de deux ces régulateurs, dma1 et ubc8. J'ai montré que dma1 devient essentiel quand la signalisation du SIN est activée. Ceci m'amène à proposer un modèle en trois parties pour la régulation du SIN durant la mitose. Une expression élevée de dma1 inhibe la signalisation du SIN et empêche la division cellulaire. Afin d'identifier des substrats ou médiateurs potentiels de la toxicité de dma1, des supresseurs en copies multiples ont été identifiés. Un de ces supresseurs, ubc8, constitue le deuxième sujet de cette thèse. Les études génétiques et moléculaires suggèrent un rôle inhibiteur du SIN par ubc8. Ubc8p est une protéine nucléaire, non essentielle, mais en son absence les cellules ne peuvent pas restreindre la fomation du septum, lorsque la progression de la mitose est perturbée. Les données suggèrent que ubc8 pourrait être un effecteur de point de contrôle de l'assemblage du fuseau mitotique. Prises dans leur ensemble, ces données apportent un nouvel éclairage sur les mécanismes de régulation de la cytokinèse dans S. pombe.

Institutional regimes for sustainable collective housing stocks

The influence of public policy, property rights and contracts on the sustainability of residential buildings remains largely unknown. This research will use the analytical framework of the housing institutional regime to study the sustainability over time of the housing stock. We aim to produce an inventory of the housing institutional regime in Switzerland, a comparison with the German and Catalan regimes, and policy suggestions to achieve a better sustainability of the housing stock.

Markers of atherosclerosis and of inflammation for prediction of coronary heart disease in older adults

BACKGROUND: Several markers of atherosclerosis and of inflammation have been shown to predict coronary heart disease (CHD) individually. However, the utility of markers of atherosclerosis and of inflammation on prediction of CHD over traditional risk factors has not been well established, especially in the elderly. METHODS: We studied 2202 men and women, aged 70-79, without baseline cardiovascular disease over 6-year follow-up to assess the risk of incident CHD associated with baseline noninvasive measures of atherosclerosis (ankle-arm index [AAI], aortic pulse wave velocity [aPWV]) and inflammatory markers (interleukin-6 [IL-6], C-reactive protein [CRP], tumor necrosis factor-a [TNF-a]). CHD events were studied as either nonfatal myocardial infarction or coronary death ("hard" events), and "hard" events plus hospitalization for angina, or the need for coronary-revascularization procedures (total CHD events). RESULTS: During the 6-year follow-up, 283 participants had CHD events (including 136 "hard" events). IL-6, TNF-a and AAI independently predicted CHD events above Framingham Risk Score (FRS) with hazard ratios [HR] for the highest as compared with the lowest quartile for IL-6 of 1.95 (95%CI: 1.38-2.75, p for trend<0.001), TNF-a of 1.45 (95%CI: 1.04-2.02, p for trend 0.03), of 1.66 (95%CI: 1.19-2.31) for AAI £0.9, as compared to AAI 1.01-1.30. CRP and aPWV were not independently associated with CHD events. Results were similar for "hard" CHD events. Addition of IL-6 and AAI to traditional cardiovascular risk factors yielded the greatest improvement in the prediction of CHD; C-index for "hard"/total CHD events increased from 0.62/0.62 for traditional risk factors to 0.64/0.64 for IL-6 addition, 0.65/0.63 for AAI, and 0.66/0.64 for IL-6 combined with AAI. Being in the highest quartile of IL-6 combined with an AAI £ 0.90 or >1.40 yielded an HR of 2.51 (1.50-4.19) and 4.55 (1.65-12.50) above FRS, respectively. With use of CHD risk categories, risk prediction at 5 years was more accurate in models that included IL-6, AAI or both, with 8.0, 8.3 and 12.1% correctly reclassified respectively. CONCLUSIONS: Among older adults, markers of atherosclerosis and of inflammation, particularly IL-6 and AAI, are independently associated with CHD. However, these markers only modestly improve cardiovascular risk prediction beyond traditional risk factors. Acknowledgments: This study was supported by Contracts NO1-AG-6-2101, NO1-AG-6- 2103, and NO1-AG-6-2106 of the National Institute on Aging. This research was supported in part by the Intramural Research Program of the NIH, National Institute on Aging.