Entrepreneur's Overconfidence, Private Benefits and the Market Performance of the Firm

Many firms around the world are managed and partially owned by entrepreneurs. These entrepreneurs hold under diversified portfolios and, therefore, bear idiosyncratic risk in addition to systematic risk. To compensate the additional risk borne, they extract private benefits. In this paper, we analyse how an entrepreneur's overconfidence affects the market performance of the firm, through the channel of private benefits. We show that two dimensions of overconfidence, namely overestimation of future cash-flows and underestimation of idiosyncratic risk (called miscalibration), have opposite effects on the private benefits extracted by the entrepreneur. As a consequence, firms managed and partially owned by overconfident entrepreneurs can deliver overperformance or underperformance, depending on the prevalence of overestimation or miscalibration of the beliefs of the entrepreneur.

Division of labour influences the rate of ageing in weaver ant workers.

The evolutionary theory of ageing predicts that the timing of senescence has been primarily shaped by the extrinsic mortality rate, which causes selection intensity to decline over time. One difficulty in testing the evolutionary theory of ageing is that extrinsic mortality risk is often confounded with body size and fecundity, which may also directly affect lifespan. Social insects with a pronounced division of labour between worker castes provide a unique opportunity to study the direct effect of extrinsic mortality on the evolution of ageing rates independently of body size, reproductive effort and genetic configuration. In the weaver ant, Oecophylla smaragdina, the major (large) workers perform the risky tasks outside the nest, while the minor (small) workers stay within the highly protected arboreal nest. Hence, this pronounced division of labour is associated with high differences in extrinsic mortality risks. The evolutionary theory of ageing predicts that the minor workers should have a longer intrinsic lifespan than the major workers. In line with this prediction, we found that in a protected environment the minor workers lived significantly longer than the major workers did. Hence, the ageing rate appears to have been moulded by variation in the extrinsic mortality rate independently of size, reproductive effort and genetic configuration.

Asymmetric cancer cell division regulated by AKT.

Human tumors often contain slowly proliferating cancer cells that resist treatment, but we do not know precisely how these cells arise. We show that rapidly proliferating cancer cells can divide asymmetrically to produce slowly proliferating "G0-like" progeny that are enriched following chemotherapy in breast cancer patients. Asymmetric cancer cell division results from asymmetric suppression of AKT/PKB kinase signaling in one daughter cell during telophase of mitosis. Moreover, inhibition of AKT signaling with small-molecule drugs can induce asymmetric cancer cell division and the production of slow proliferators. Cancer cells therefore appear to continuously flux between symmetric and asymmetric division depending on the precise state of their AKT signaling network. This model may have significant implications for understanding how tumors grow, evade treatment, and recur.

Three essays on short-term macroeconomics : business fluctuations, large devaluations and inflation dynamics

Résumé: At least since the Great Depression, explaining why there are business fluctuations has been one of the biggest challenges that the science of economics has had to face. The hope is that if we could better understand recessions, then we could also be more successful in overcoming them. This dissertation consists of three papers that are part of the general endeavor of economists to understand these fluctuations. The first paper discusses, for a particular model, whether a result related to fluctuations would still hold if time were modeled as continuous rather than discrete. The two other papers focus on price stickiness. The second paper discusses why, after a large devaluation, prices of non-tradables may change by only a small amount in comparison to the magnitude of the devaluation. The third paper examines price adjustment in a model in which information is imperfect and it is costly to change prices.