Bargaining for power and information : an experimental and theoretical analysis of the interaction between institutions, externalities and adverse selection

Bargaining is the building block of many economic interactions, ranging from bilateral to multilateral encounters and from situations in which the actors are individuals to negotiations between firms or countries. In all these settings, economists have been intrigued for a long time by the fact that some projects, trades or agreements are not realized even though they are mutually beneficial. On the one hand, this has been explained by incomplete information. A firm may not be willing to offer a wage that is acceptable to a qualified worker, because it knows that there are also unqualified workers and cannot distinguish between the two types. This phenomenon is known as adverse selection. On the other hand, it has been argued that even with complete information, the presence of externalities may impede efficient outcomes. To see this, consider the example of climate change. If a subset of countries agrees to curb emissions, non-participant regions benefit from the signatories’ efforts without incurring costs. These free riding opportunities give rise to incentives to strategically improve ones bargaining power that work against the formation of a global agreement. This thesis is concerned with extending our understanding of both factors, adverse selection and externalities. The findings are based on empirical evidence from original laboratory experiments as well as game theoretic modeling. On a very general note, it is demonstrated that the institutions through which agents interact matter to a large extent. Insights are provided about which institutions we should expect to perform better than others, at least in terms of aggregate welfare. Chapters 1 and 2 focus on the problem of adverse selection. Effective operation of markets and other institutions often depends on good information transmission properties. In terms of the example introduced above, a firm is only willing to offer high wages if it receives enough positive signals about the worker’s quality during the application and wage bargaining process. In Chapter 1, it will be shown that repeated interaction coupled with time costs facilitates information transmission. By making the wage bargaining process costly for the worker, the firm is able to obtain more accurate information about the worker’s type. The cost could be pure time cost from delaying agreement or cost of effort arising from a multi-step interviewing process. In Chapter 2, I abstract from time cost and show that communication can play a similar role. The simple fact that a worker states to be of high quality may be informative. In Chapter 3, the focus is on a different source of inefficiency. Agents strive for bargaining power and thus may be motivated by incentives that are at odds with the socially efficient outcome. I have already mentioned the example of climate change. Other examples are coalitions within committees that are formed to secure voting power to block outcomes or groups that commit to different technological standards although a single standard would be optimal (e.g. the format war between HD and BlueRay). It will be shown that such inefficiencies are directly linked to the presence of externalities and a certain degree of irreversibility in actions. I now discuss the three articles in more detail. In Chapter 1, Olivier Bochet and I study a simple bilateral bargaining institution that eliminates trade failures arising from incomplete information. In this setting, a buyer makes offers to a seller in order to acquire a good. Whenever an offer is rejected by the seller, the buyer may submit a further offer. Bargaining is costly, because both parties suffer a (small) time cost after any rejection. The difficulties arise, because the good can be of low or high quality and the quality of the good is only known to the seller. Indeed, without the possibility to make repeated offers, it is too risky for the buyer to offer prices that allow for trade of high quality goods. When allowing for repeated offers, however, at equilibrium both types of goods trade with probability one. We provide an experimental test of these predictions. Buyers gather information about sellers using specific price offers and rates of trade are high, much as the model’s qualitative predictions. We also observe a persistent over-delay before trade occurs, and this mitigates efficiency substantially. Possible channels for over-delay are identified in the form of two behavioral assumptions missing from the standard model, loss aversion (buyers) and haggling (sellers), which reconcile the data with the theoretical predictions. Chapter 2 also studies adverse selection, but interaction between buyers and sellers now takes place within a market rather than isolated pairs. Remarkably, in a market it suffices to let agents communicate in a very simple manner to mitigate trade failures. The key insight is that better informed agents (sellers) are willing to truthfully reveal their private information, because by doing so they are able to reduce search frictions and attract more buyers. Behavior observed in the experimental sessions closely follows the theoretical predictions. As a consequence, costless and non-binding communication (cheap talk) significantly raises rates of trade and welfare. Previous experiments have documented that cheap talk alleviates inefficiencies due to asymmetric information. These findings are explained by pro-social preferences and lie aversion. I use appropriate control treatments to show that such consideration play only a minor role in our market. Instead, the experiment highlights the ability to organize markets as a new channel through which communication can facilitate trade in the presence of private information. In Chapter 3, I theoretically explore coalition formation via multilateral bargaining under complete information. The environment studied is extremely rich in the sense that the model allows for all kinds of externalities. This is achieved by using so-called partition functions, which pin down a coalitional worth for each possible coalition in each possible coalition structure. It is found that although binding agreements can be written, efficiency is not guaranteed, because the negotiation process is inherently non-cooperative. The prospects of cooperation are shown to crucially depend on i) the degree to which players can renegotiate and gradually build up agreements and ii) the absence of a certain type of externalities that can loosely be described as incentives to free ride. Moreover, the willingness to concede bargaining power is identified as a novel reason for gradualism. Another key contribution of the study is that it identifies a strong connection between the Core, one of the most important concepts in cooperative game theory, and the set of environments for which efficiency is attained even without renegotiation.

Recurrent antitopographic inhibition mediates competitive stimulus selection in an attention network

Topographically organized neurons represent multiple stimuli within complex visual scenes and compete for subsequent processing in higher visual centers. The underlying neural mechanisms of this process have long been elusive. We investigate an experimentally constrained model of a midbrain structure: the optic tectum and the reciprocally connected nucleus isthmi. We show that a recurrent antitopographic inhibition mediates the competitive stimulus selection between distant sensory inputs in this visual pathway. This recurrent antitopographic inhibition is fundamentally different from surround inhibition in that it projects on all locations of its input layer, except to the locus from which it receives input. At a larger scale, the model shows how a focal top-down input from a forebrain region, the arcopallial gaze field, biases the competitive stimulus selection via the combined activation of a local excitation and the recurrent antitopographic inhibition. Our findings reveal circuit mechanisms of competitive stimulus selection and should motivate a search for anatomical implementations of these mechanisms in a range of vertebrate attentional systems.

Evidence, lack of evidence, controversy, and debate in the provision and performance of the surgery of acute type A aortic dissection

Acute type A aortic dissection is a lethal condition requiring emergency surgery. It has diverse presentations, and the diagnosis can be missed or delayed. Once diagnosed, decisions with regard to initial management, transfer, appropriateness of surgery, timing of operation, and intervention for malperfusion complications are necessary. The goals of surgery are to save life by prevention of pericardial tamponade or intra-pericardial aortic rupture, to resect the primary entry tear, to correct or prevent any malperfusion and aortic valve regurgitation, and if possible to prevent late dissection-related complications in the proximal and downstream aorta. No randomized trials of treatment or techniques have ever been performed, and novel therapies-particularly with regard to extent of surgery-are being devised and implemented, but their role needs to be defined. Overall, except in highly specialized centers, surgical outcomes might be static, and there is abundant room for improvement. By highlighting difficulties and controversies in diagnosis, patient selection, and surgical therapy, our over-arching goal should be to enfranchise more patients for treatment and improve surgical outcomes.

Robust expression of CCR3 as a single basophil selection marker in flow cytometry

Basophil activation tests (BAT) rely on different combinations of basophil selection and activation markers. Whereas activation markers, especially CD63, are widely validated, the most suitable and robust marker for basophil selection is still a matter of debate.

An overview of the objectives of and the approaches to propensity score analyses

The assessment of treatment effects from observational studies may be biased with patients not randomly allocated to the experimental or control group. One way to overcome this conceptual shortcoming in the design of such studies is the use of propensity scores to adjust for differences of the characteristics between patients treated with experimental and control interventions. The propensity score is defined as the probability that a patient received the experimental intervention conditional on pre-treatment characteristics at baseline. Here, we review how propensity scores are estimated and how they can help in adjusting the treatment effect for baseline imbalances. We further discuss how to evaluate adequate overlap of baseline characteristics between patient groups, provide guidelines for variable selection and model building in modelling the propensity score, and review different methods of propensity score adjustments. We conclude that propensity analyses may help in evaluating the comparability of patients in observational studies, and may account for more potential confounding factors than conventional covariate adjustment approaches. However, bias due to unmeasured confounding cannot be corrected for.

Measles vaccination in HIV-infected children: systematic review and meta-analysis of safety and immunogenicity

Background. Measles control may be more challenging in regions with a high prevalence of HIV infection. HIV-infected children are likely to derive particular benefit from measles vaccines because of an increased risk of severe illness. However, HIV infection can impair vaccine effectiveness and may increase the risk of serious adverse events after receipt of live vaccines. We conducted a systematic review to assess the safety and immunogenicity of measles vaccine in HIV-infected children. Methods. The authors searched 8 databases through 12 February 2009 and reference lists. Study selection and data extraction were conducted in duplicate. Meta-analysis was conducted when appropriate. Results. Thirty-nine studies published from 1987 through 2008 were included. In 19 studies with information about measles vaccine safety, more than half reported no serious adverse events. Among HIV-infected children, 59% (95% confidence intervals [CI], 46–71%) were seropositive after receiving standard-titer measles vaccine at 6 months (1 study), comparable to the proportion of seropositive HIV-infected children vaccinated at 9 (8 studies) and 12 months (10 studies). Among HIV-exposed but uninfected and HIV-unexposed children, the proportion of seropositive children increased with increasing age at vaccination. Fewer HIV-infected children were protected after vaccination at 12 months than HIV-exposed but uninfected children (relative risk, 0.61; 95% CI, .50–.73). Conclusions. Measles vaccines appear to be safe in HIV-infected children, but the evidence is limited. When the burden of measles is high, measles vaccination at 6 months of age is likely to benefit children of HIV-infected women, regardless of the child's HIV infection status.

Guidelines for the use and interpretation of assays for monitoring autophagy

In 2008 we published the first set of guidelines for standardizing research in autophagy. Since then, research on this topic has continued to accelerate, and many new scientists have entered the field. Our knowledge base and relevant new technologies have also been expanding. Accordingly, it is important to update these guidelines for monitoring autophagy in different organisms. Various reviews have described the range of assays that have been used for this purpose. Nevertheless, there continues to be confusion regarding acceptable methods to measure autophagy, especially in multicellular eukaryotes. A key point that needs to be emphasized is that there is a difference between measurements that monitor the numbers or volume of autophagic elements (e.g., autophagosomes or autolysosomes) at any stage of the autophagic process vs. those that measure flux through the autophagy pathway (i.e., the complete process); thus, a block in macroautophagy that results in autophagosome accumulation needs to be differentiated from stimuli that result in increased autophagic activity, defined as increased autophagy induction coupled with increased delivery to, and degradation within, lysosomes (in most higher eukaryotes and some protists such as Dictyostelium) or the vacuole (in plants and fungi). In other words, it is especially important that investigators new to the field understand that the appearance of more autophagosomes does not necessarily equate with more autophagy. In fact, in many cases, autophagosomes accumulate because of a block in trafficking to lysosomes without a concomitant change in autophagosome biogenesis, whereas an increase in autolysosomes may reflect a reduction in degradative activity. Here, we present a set of guidelines for the selection and interpretation of methods for use by investigators who aim to examine macroautophagy and related processes, as well as for reviewers who need to provide realistic and reasonable critiques of papers that are focused on these processes. These guidelines are not meant to be a formulaic set of rules, because the appropriate assays depend in part on the question being asked and the system being used. In addition, we emphasize that no individual assay is guaranteed to be the most appropriate one in every situation, and we strongly recommend the use of multiple assays to monitor autophagy. In these guidelines, we consider these various methods of assessing autophagy and what information can, or cannot, be obtained from them. Finally, by discussing the merits and limits of particular autophagy assays, we hope to encourage technical innovation in the field.

Transcatheter aortic valve implantation: prevention and management of complications

Assessment of elderly patients with severe aortic stenosis and decisions in terms of management strategy (conservative with or without balloon aortic valvuloplasty, transcatheter aortic valve implantation (TAVI) or surgical aortic valve replacement) are complex and warrant a multidisciplinary approach involving collaboration between experienced cardiac surgeons, interventional cardiologists, cardiac imaging specialists, anaesthesiologists, geriatricians and a specialised nursing staff. Patient history, comorbid conditions, perioperative risk stratification as well as anatomical and procedural considerations require careful review on an individual, case-by-case basis and have a major impact on treatment allocation. The aims of this article are to provide insights into the fundamental role of appropriate patient screening and selection, and to review the nature, management and prevention of the most important procedural complications associated with the TAVI procedure.

Diagnosis and treatment of recurrent laryngeal cancer following initial nonsurgical therapy

Surgery is the preferred modality for curative treatment of recurrent laryngeal cancer after failure of nonsurgical treatments. Patients with initial early-stage cancer experiencing recurrence following radiotherapy often have more advanced-stage tumors by the time the recurrence is recognized. About one third of such recurrent cancers are suitable for conservation surgery. Endoscopic resection with the CO(2) laser or open partial laryngectomy (partial vertical, supracricoid, or supraglottic laryngectomies) have been used. The outcomes of conservation surgery appear better than those after total laryngectomy, because of selection bias. Transoral laser surgery is currently used more frequently than open partial laryngectomy for treatment of early-stage recurrence, with outcomes equivalent to open surgery but with less associated morbidity. Laser surgery has also been employed for selective cases of advanced recurrent disease, but patient selection and expertise are required for application of this modality to rT3 tumors. In general, conservation laryngeal surgery is a safe and effective treatment for localized recurrences after radiotherapy for early-stage glottic cancer. Recurrent advanced-stage cancers should generally be treated by total laryngectomy.

Species-Specific Relationships between Water Transparency and Male Coloration within and between Two Closely Related Lake Victoria Cichlid Species

Environmental variation in signalling conditions affects animal communication traits, with possible consequences for sexual selection and reproductive isolation. Using spectrophotometry, we studied how male coloration within and between populations of two closely related Lake Victoria cichlid species (Pundamilia pundamilia and P. nyererei) covaries with water transparency. Focusing on coloration patches implicated in sexual selection, we predicted that in clear waters, with broad-spectrum light, (1) colours should become more saturated and (2) shift in hue away from the dominant ambient wavelengths, compared to more turbid waters. We found support for these predictions for the red and yellow coloration of P. nyererei but not the blue coloration of P. pundamilia. This may be explained by the species difference in depth distribution, which generates a steeper gradient in visual conditions for P. nyererei compared to P. pundamilia. Alternatively, the importance of male coloration in intraspecific sexual selection may differ between the species. We also found that anal fin spots, that is, the orange spots on male haplochromine anal fins that presumably mimic eggs, covaried with water transparency in a similar way for both species. This is in contrast to the other body regions studied and suggests that, while indeed functioning as signals, these spots may not play a role in species differentiation.

The cytidine deaminases AID and APOBEC-1 exhibit distinct functional properties in a novel yeast selectable system

Activation-induced cytidine deaminase (AID) is indispensable for immunoglobulin maturation by somatic hypermutations and class switch recombination and is supposed to deaminate cytidines in DNA, while its homolog APOBEC-1 edits apolipoprotein (apo) B mRNA by cytidine deamination. We studied the editing activity of APOBEC-1 and AID in yeast using the selectable marker Gal4 linked to its specific inhibitor protein Gal80 via an apo B cassette (Gal4-C) or via the variable region of a mouse immunoglobulin heavy chain gene (Gal4-VH). Expression of APOBEC-1 induced C to U editing in up to 15% of the Gal4-C transcripts, while AID was inactive in this reaction even in the presence of the APOBEC-1 complementation factor. After expression of APOBEC-1 as well as AID approximately 10(-3) of yeast cells survived low stringency selection and expressed beta-galactosidase. Neither AID nor APOBEC-1 mutated the VH sequence of Gal4-VH, and consequently the yeast colonies did not escape high stringent selection. AID, however, induced frequent plasmid recombinations that were only rarely observed with APOBEC-1. In conclusion, AID cannot substitute APOBEC-1 to edit the apo B mRNA, and the expression of AID in yeast is not sufficient for the generation of point mutations in a highly transcribed Gal4-VH sequence. Cofactors for AID induced somatic hypermutations of immunoglobulin variable regions, that are present in B cells and a variety of non-B cells, appear to be missing in yeast. In contrast to APOBEC-1, AID alone does not exhibit an intrinsic specificity for its target sequences.

Sustained virologic response and clinical outcomes in patients with chronic hepatitis C and advanced fibrosis

BACKGROUND: Clinical outcomes of chronic hepatitis C infection in patients with advanced fibrosis include liver failure, hepatocellular carcinoma, and death. OBJECTIVE: To investigate whether sustained virologic response to treatment for hepatitis C is associated with improved clinical outcomes. DESIGN: Retrospective cohort study. SETTING: 5 hepatology units of tertiary care centers in Europe and Canada caring for patients with chronic hepatitis C treated between 1990 and 2003. PATIENTS: Consecutively treated patients with chronic hepatitis C who had biopsy-proven advanced fibrosis or cirrhosis (Ishak score, 4 to 6). MEASUREMENTS: Sustained virologic response, defined as absence of detectable hepatitis C virus RNA at 24 weeks after the end of treatment, and clinical outcomes, defined as death (liver-related or non-liver-related), liver failure, and hepatocellular carcinoma. RESULTS: Of 479 patients, 29.6% had sustained virologic response and 70.3% did not. Median follow-up was 2.1 years (interquartile range, 0.8 to 4.9 years). Four patients with and 83 without sustained virologic response had at least 1 outcome event. Sustained virologic response was associated with a statistically significant reduction in the hazard of events (adjusted hazard ratio, 0.21 [95% CI, 0.07 to 0.58]; P = 0.003). The effect was largely attributable to a reduction in liver failure, which developed in no patients with and 42 patients without sustained virologic response (5-year occurrence, 0% vs. 13.3% [CI, 8.4% to 18.2%]; unadjusted hazard ratio, 0.03 [CI, 0.00 to 0.91]). LIMITATIONS: Because few events occurred in the sustained virologic response group, the study had limited ability to detect differences between groups in individual outcomes. In addition, the study was retrospective; selection and survival biases may therefore influence estimates of effect. CONCLUSION: Sustained virologic response to treatment is associated with improved clinical outcomes, mainly prevention of liver failure, in patients with chronic hepatitis C and advanced fibrosis.

Speciation reversal and biodiversity dynamics with hybridization in changing environments

A considerable fraction of the world's biodiversity is of recent evolutionary origin and has evolved as a by-product of, and is maintained by, divergent adaptation in heterogeneous environments. Conservationists have paid attention to genetic homogenization caused by human-induced translocations (e.g. biological invasions and stocking), and to the importance of environmental heterogeneity for the ecological coexistence of species. However, far less attention has been paid to the consequences of loss of environmental heterogeneity to the genetic coexistence of sympatric species. Our review of empirical observations and our theoretical considerations on the causes and consequences of interspecific hybridization suggest that a loss of environmental heterogeneity causes a loss of biodiversity through increased genetic admixture, effectively reversing speciation. Loss of heterogeneity relaxes divergent selection and removes ecological barriers to gene flow between divergently adapted species, promoting interspecific introgressive hybridization. Since heterogeneity of natural environments is rapidly deteriorating in most biomes, the evolutionary ecology of speciation reversal ought to be fully integrated into conservation biology.

Invasion and fixation of sex-reversal genes

We simulated a meta-population with random dispersal among demes but local mating within demes to investigate conditions under which a dominant female-determining gene W, with no individual selection advantage, can invade and become fixed in females, changing the population from male to female heterogamety. Starting with one mutant W in a single deme, the interaction of sex ratio selection and random genetic drift causes W to be fixed among females more often than a comparable neutral mutation with no influence on sex determination, even when YY males have slightly reduced viability. Meta-population structure and interdeme selection can also favour the fixation of W. The reverse transition from female to male heterogamety can also occur with higher probability than for a comparable neutral mutation. These results help to explain the involvement of sex-determining genes in the evolution of sex chromosomes and in sexual selection and speciation.

Species-level selection reduces selfishness through competitive exclusion

Adaptation does not necessarily lead to traits which are optimal for the population. This is because selection is often the strongest at the individual or gene level. The evolution of selfishness can lead to a 'tragedy of the commons', where traits such as aggression or social cheating reduce population size and may lead to extinction. This suggests that species-level selection will result whenever species differ in the incentive to be selfish. We explore this idea in a simple model that combines individual-level selection with ecology in two interacting species. Our model is not influenced by kin or trait-group selection. We find that individual selection in combination with competitive exclusion greatly increases the likelihood that selfish species go extinct. A simple example of this would be a vertebrate species that invests heavily into squabbles over breeding sites, which is then excluded by a species that invests more into direct reproduction. A multispecies simulation shows that these extinctions result in communities containing species that are much less selfish. Our results suggest that species-level selection and community dynamics play an important role in regulating the intensity of conflicts in natural populations.