Essays on behavioral aspects of the design and disclosure of compensation contracts

This thesis consists of four essays on the design and disclosure of compensation contracts. Essays 1, 2 and 3 focus on behavioral aspects of mandatory compensation disclosure rules and of contract negotiations in agency relationships. The three experimental studies develop psychology- based theory and present results that deviate from standard economic predictions. Furthermore, the results of Essay 1 and 2 also have implications for firms’ discretion in how to communicate their top management’s incentives to the capital market. Essay 4 analyzes the role of fairness perceptions for the evaluation of executive compensation. For this purpose, two surveys targeting representative eligible voters as well as investment professionals were conducted. Essay 1 investigates the role of the detailed ‘Compensation Discussion and Analysis’, which is part of the Security and Exchange Commission’s 2006 regulation, on investors’ evaluations of executive performance. Compensation disclosure complying with this regulation clarifies the relationship between realized reported compensation and the underlying performance measures and their target achievement levels. The experimental findings suggest that the salient presentation of executives’ incentives inherent in the ‘Compensation Discussion and Analysis’ makes investors’ performance evaluations less outcome dependent. Therefore, investors’ judgment and investment decisions might be less affected by noisy environmental factors that drive financial performance. The results also suggest that fairness perceptions of compensation contracts are essential for investors’ performance evaluations in that more transparent disclosure increases the perceived fairness of compensation and the performance evaluation of managers who are not responsible for a bad financial performance. These results have important practical implications as firms might choose to communicate their top management’s incentive compensation more transparently in order to benefit from less volatile expectations about their future performance. Similar to the first experiment, the experiment described in Essay 2 addresses the question of more transparent compensation disclosure. However, other than the first experiment, the second experiment does not analyze the effect of a more salient presentation of contract information but the informational effect of contract information itself. For this purpose, the experiment tests two conditions in which the assessment of the compensation contracts’ incentive compatibility, which determines executive effort, is either possible or not. On the one hand, the results suggest that the quality of investors’ expectations about executive effort is improved, but on the other hand investors might over-adjust their prior expectations about executive effort if being confronted with an unexpected financial performance and under-adjust if the financial performance confirms their prior expectations. Therefore, in the experiment, more transparent compensation disclosure does not lead to more correct overall judgments of executive effort and to even lower processing quality of outcome information. These results add to the literature on disclosure which predominantly advocates more transparency. The findings of the experiment however, identify decreased information processing quality as a relevant disclosure cost category. Firms might therefore carefully evaluate the additional costs and benefits of more transparent compensation disclosure. Together with the results from the experiment in Essay 1, the two experiments on compensation disclosure imply that firms should rather focus on their discretion how to present their compensation disclosure to benefit from investors’ improved fairness perceptions and their spill-over on performance evaluation. Essay 3 studies the behavioral effects of contextual factors in recruitment processes that do not affect the employer’s or the applicant’s bargaining power from a standard economic perspective. In particular, the experiment studies two common characteristics of recruitment processes: Pre-contractual competition among job applicants and job applicants’ non-binding effort announcements as they might be made during job interviews. Despite the standard economic irrelevance of these factors, the experiment develops theory regarding the behavioral effects on employees’ subsequent effort provision and the employers’ contract design choices. The experimental findings largely support the predictions. More specifically, the results suggest that firms can benefit from increased effort and, therefore, may generate higher profits. Further, firms may seize a larger share of the employment relationship’s profit by highlighting the competitive aspects of the recruitment process and by requiring applicants to make announcements about their future effort. Finally, Essay 4 studies the role of fairness perceptions for the public evaluation of executive compensation. Although economic criteria for the design of incentive compensation generally do not make restrictive recommendations with regard to the amount of compensation, fairness perceptions might be relevant from the perspective of firms and standard setters. This is because behavioral theory has identified fairness as an important determinant of individuals’ judgment and decisions. However, although fairness concerns about executive compensation are often stated in the popular media and even in the literature, evidence on the meaning of fairness in the context of executive compensation is scarce and ambiguous. In order to inform practitioners and standard setters whether fairness concerns are exclusive to non-professionals or relevant for investment professionals as well, the two surveys presented in Essay 4 aim to find commonalities in the opinions of representative eligible voters and investments professionals. The results suggest that fairness is an important criterion for both groups. Especially, exposure to risk in the form of the variable compensation share is an important criterion shared by both groups. The higher the assumed variable share, the higher is the compensation amount to be perceived as fair. However, to a large extent, opinions on executive compensation depend on personality characteristics, and to some extent, investment professionals’ perceptions deviate systematically from those of non-professionals. The findings imply that firms might benefit from emphasizing the riskiness of their managers’ variable pay components and, therefore, the findings are also in line with those of Essay 1.

Ear canal cholesteatoma: meta-analysis of clinical characteristics with update on classification, staging and treatment

We present an update on clinical evaluation, staging, classification and treatment of canal cholesteatoma, including a meta-analysis of clinical data of the last 30 years.

Chapter II: Diagnostic methods

Non-invasive vascular studies can provide crucial information on the presence, location, and severity of critical limb ischaemia (CLI), as well as the initial assessment or treatment planning. Ankle-brachial index with Doppler ultrasound, despite limitations in diabetic and end-stage renal failure patients, is the first-line evaluation of CLI. In this group of patients, toe-brachial index measurement may better establish the diagnosis. Other non-invasive measurements, such as segmental limb pressure, continuous-wave Doppler analysis and pulse volume recording, are of limited accuracy. Transcutaneous oxygen pressure (TcPO(2)) measurement may be of value when rest pain and ulcerations of the foot are present. Duplex ultrasound is the most important non-invasive tool in CLI patients combining haemodynamic evaluation with imaging modality. Computed tomography angiography (CTA) and magnetic resonance angiography (MRA) are the next imaging studies in the algorithm for CLI. Both CTA and MRA have been proven effective in aiding the decision-making of clinicians and accurate planning of intervention. The data acquired with CTA and MRA can be manipulated in a multiplanar and 3D fashion and can offer exquisite detail. CTA results are generally equivalent to MRA, and both compare favourably with contrast angiography. The individual use of different imaging modalities depends on local availability, experience, and costs. Contrast angiography represents the gold standard, provides detailed information about arterial anatomy, and is recommended when revascularisation is needed.

On the accuracy of Software-based Energy Estimation Techniques

This paper examines the accuracy of software-based on-line energy estimation techniques. It evaluates today’s most widespread energy estimation model in order to investigate whether the current methodology of pure software-based energy estimation running on a sensor node itself can indeed reliably and accurately determine its energy consumption - independent of the particular node instance, the traffic load the node is exposed to, or the MAC protocol the node is running. The paper enhances today’s widely used energy estimation model by integrating radio transceiver switches into the model, and proposes a methodology to find the optimal estimation model parameters. It proves by statistical validation with experimental data that the proposed model enhancement and parameter calibration methodology significantly increases the estimation accuracy.

Toxic effects of brake wear particles on epithelial lung cells in vitro

ABSTRACT: BACKGROUND: Fine particulate matter originating from traffic correlates with increased morbidity and mortality. An important source of traffic particles is brake wear of cars which contributes up to 20% of the total traffic emissions. The aim of this study was to evaluate potential toxicological effects of human epithelial lung cells exposed to freshly generated brake wear particles. RESULTS: An exposure box was mounted around a car's braking system. Lung cells cultured at the air-liquid interface were then exposed to particles emitted from two typical braking behaviours ("full stop" and "normal deceleration"). The particle size distribution as well as the brake emission components like metals and carbons was measured on-line, and the particles deposited on grids for transmission electron microscopy were counted. The tight junction arrangement was observed by laser scanning microscopy. Cellular responses were assessed by measurement of lactate dehydrogenase (cytotoxicity), by investigating the production of reactive oxidative species and the release of the pro-inflammatory mediator interleukin-8. The tight junction protein occludin density decreased significantly (p < 0.05) with increasing concentrations of metals on the particles (iron, copper and manganese, which were all strongly correlated with each other). Occludin was also negatively correlated with the intensity of reactive oxidative species. The concentrations of interleukin-8 were significantly correlated with increasing organic carbon concentrations. No correlation was observed between occludin and interleukin-8, nor between reactive oxidative species and interleukin-8. CONCLUSION: These findings suggest that the metals on brake wear particles damage tight junctions with a mechanism involving oxidative stress. Brake wear particles also increase pro-inflammatory responses. However, this might be due to another mechanism than via oxidative stress.

Evaluation of peri-operative epidural analgesia with ropivacaine, ropivacaine and sufentanil, and ropivacaine, sufentanil and epinephrine in isoflurane anesthetized dogs undergoing tibial plateau levelling osteotomy

The purpose of this study was to compare four epidural protocols for peri-operative analgesia in dogs undergoing tibial plateau levelling osteotomy. Forty client-owned dogs were randomly assigned to one of four treatments - groups R0.5 and R1 received 0.5mg/kg and 1mg/kg ropivacaine, respectively. Group SR0.5 received 1mug/kg sufentanil plus 0.5mg/kg ropivacaine, and group SER0.5 received 1mug/kg sufentanil, 0.5mg/kg ropivacaine plus 6mug/kg epinephrine. Dilution, when required, was performed with saline, so that the injected volume was always 0.2mL/kg. Intra-operatively, nociception assessment was based on the evaluation of changes in heart rate, respiratory rate and mean arterial pressure. Post-operative pain assessment was performed using the Glasgow visual analogue pain scale, and an ad hoc multifactorial pain score. Motor block was evaluated using a modified Bromage score. Intra-operatively, none of the animals was hypotensive. All groups except SER0.5 required rescue intra-operative fentanyl (40%, 30% and 40% of the animals in groups R0.5, R1 and SR0.5, respectively). Group SER0.5 showed lower post-operative pain scores, and group R1 significantly greater motor block, compared to the other treatment groups. None of the dogs had urinary retention. Epidural sufentanil-epinephrine-ropivacaine provided superior peri-operative analgesia compared to the other treatments, without producing clinically relevant side effects.

Faces and emotions: brain electric field sources during covert emotional processing

Covert brain activity related to task-free, spontaneous (i.e. unrequested), emotional evaluation of human face images was analysed in 27-channel averaged event-related potential (ERP) map series recorded from 18 healthy subjects while observing random sequences of face images without further instructions. After recording, subjects self-rated each face image on a scale from “liked” to “disliked”. These ratings were used to dichotomize the face images into the affective evaluation categories of “liked” and “disliked” for each subject and the subjects into the affective attitudes of “philanthropists” and “misanthropists” (depending on their mean rating across images). Event-related map series were averaged for “liked” and “disliked” face images and for “philanthropists” and “misanthropists”. The spatial configuration (landscape) of the electric field maps was assessed numerically by the electric gravity center, a conservative estimate of the mean location of all intracerebral, active, electric sources. Differences in electric gravity center location indicate activity of different neuronal populations. The electric gravity center locations of all event-related maps were averaged over the entire stimulus-on time (450 ms). The mean electric gravity center for disliked faces was located (significant across subjects) more to the right and somewhat more posterior than for liked faces. Similar differences were found between the mean electric gravity centers of misanthropists (more right and posterior) and philanthropists. Our neurophysiological findings are in line with neuropsychological findings, revealing visual emotional processing to depend on affective evaluation category and affective attitude, and extending the conclusions to a paradigm without directed task.

First foot prints of chemistry on the shore of the Island of Superheavy Elements

Chemistry has arrived on the shore of the Island of Stability with the first chemical investigation of the superheavy elements Cn, 113, and 114. The results of three experimental series leading to first measured thermodynamic data and qualitatively evaluated chemical properties for these elements are described. An interesting volatile compound class has been observed in the on-line experiments for the elements Bi and Po. Hence, an exciting chemical study of their heavier transactinide homologues, elements 115 and 116 is suggested.

ISVI-IUA consensus document - diagnostic guidelines on vascular anomalies: vascular malformations and hemangiomas.

The diagnostic approach to vascular anomalies should include the distinction between vascular tumors (i.e. hemangiomas) and congential vascular malformations (CVMs). This step is based more on history and clinical examination rather than on instrumental evaluation. In children Duplex ultrasound and histology can be helpful to separate hypervasularized tumors from CVMs. Appropriate record of objective measures as size or flow volume is required in order to evaluate the progress of the pathology and/or to assess the results of adopted therapeutic interventions. The anatomic, pathological and hemodynamic characteristics, the secondary effects on the surrounding tissues and the systemic manifestations should be defined. Basic diagnostic tools are Duplex sonography followed by MRI or CT scanning. The definition of the vascular anomaly should be according to the Hamburg classification and should separate vascular tumors from vacular malformations followed by separation of high flow from low flow CVMs. Diagnostic investigations are best undertaken at centers where subsequent therapeutic interventions will be performed.

Communion-over-Agency effects on advertising effectiveness

Gender-stereotypical portrayals of communal women and agentic men are highly common in advertising. But past research indicates that advertising effectiveness is higher when endorsers are portrayed as communal – irrespective of their gender. The aim of the current research is to explore this communion-over-agency effect on advertising effectiveness and its underlying mechanism. Two studies provide evidence for a communion-over-agency effect on advertising effectiveness (i.e., attitude toward the ad and brand). These studies show that the communion-over-agency effect on attitude toward the ad is mediated by endorser likeability (simple mediation). The effect on attitude toward the brand is mediated by endorser likeability and attitude toward the ad (serial multiple mediation). In concert, this research underscores the significance of communion (and agency) on endorser evaluation and advertising effectiveness.

Pupillometry: the eyes shed fresh light on the mind

Recent studies provide promising methodological advances in the use of pupillometry as on-line measurement of cognitive processes and show that visual attention allocation, mind-wandering, mental imagery, and even rhyme expectations can influence the size of the human pupil.