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.

Analysis of the Heat-Shock Response Displayed by Two Chaetomium Species Originating from Different Thermal Environments

Three features of the heat shock response, reorganization of protein expression, intracellular accumulation of trehalose, and alteration in unsaturation degree of fatty acids were investigated in the thermophilic fungus Chaetomium thermophile and compared to the response displayed by a closely related mesophilic species, C. brasiliense. Thermophilic heat shock response paralleled the mesophilic response in many respects like (i) the temperature difference observed between normothermia and the upper limit of translational activity, (ii) the transient nature of the heat shock response at the level of protein expression including both the induction of heat shock proteins (HSPs) as well as the repression of housekeeping proteins, (iii) the presence of representatives of high-molecular-weight {HSPs} families, (iv) intracellular accumulation of trehalose, and finally (v) modifications in fatty acid composition. On the other hand, a great variability between the two organisms was observed for the proteins expressed during stress, in particular a protein of the {HSP60} family that was only observed in C. thermophile. This peptide was also present constitutively at normal temperature and may thus fulfil thermophilic functions. It is shown that accumulation of trehalose does not play a part in thermophily but is only a stress response. C. thermophile contains less polyunsaturated fatty acids at normal temperature than C. brasiliense, a fact that can be directly related to thermophily. When subjected to heat stress, both organisms tended to accumulate shorter and less unsaturated fatty acids.

Impact of treatment characteristics on response of different breast cancer phenotypes: pooled analysis of the German neo-adjuvant chemotherapy trials

Pathological complete response (pCR) to neoadjuvant treatment correlates with outcome in breast cancer. We determined whether characteristics of neoadjuvant therapy are associated with pCR. We used multi-level models, which accounted for heterogeneity in pCR across trials and trial arms, to analyze individual patient data from 3332 women included in 7 German neoadjuvant trials with uniform protocols. PCR was associated with an increase in number of chemotherapy cycles (odds ratio [OR] 1.2 for every two additional cycles; P = 0.009), with higher cumulative anthracycline doses (OR 1.6; P = 0.002), higher cumulative taxane doses (OR 1.6; P = 0.009), and with capecitabine containing regimens (OR 1.62; P = 0.022). Association of pCR with increase in number of cycles appeared more pronounced in hormone receptor (HR)-positive tumors (OR 1.35) than in HR-negative tumors (OR 1.04; P for interaction = 0.046). Effect of anthracycline dose was particularly pronounced in HER2-negative tumors (OR 1.61), compared to HER2-positive tumors (OR 0.83; P for interaction = 0.14). Simultaneous trastuzumab treatment in HER2-positive tumors increased odds of pCR 3.2-fold (P < 0.001). No association of pCR and number of trastuzumab cycles was found (OR 1.20, P = 0.39). Dosing characteristics appear important for successful treatment of breast cancer. Longer treatment, higher cumulative doses of anthracyclines and taxanes, and the addition of capecitabine and trastuzumab are associated with better response. Tailoring according to breast cancer phenotype might be possible: longer treatment in HR-positive tumors, higher cumulative anthracycline doses for HER2-negative tumors, shorter treatment at higher cumulative doses for triple-negative tumors, and limited number of preoperative trastuzumab cycles in HER2-positive tumors.

Comparative human-horse sequence analysis of the CYP3A subfamily gene cluster

Cytochrome P450 enzymes (CYP450s) represent a superfamily of haem-thiolate proteins. CYP450s are most abundant in the liver, a major site of drug metabolism, and play key roles in the metabolism of a variety of substrates, including drugs and environmental contaminants. Interaction of two or more different drugs with the same enzyme can account for adverse effects and failure of therapy. Human CYP3A4 metabolizes about 50% of all known drugs, but little is known about the orthologous CYP450s in horses. We report here the genomic organization of the equine CYP3A gene cluster as well as a comparative analysis with the human CYP3A gene cluster. The equine CYP450 genes of the 3A family are located on ECA 13 between 6.97-7.53 Mb, in a region syntenic to HSA 7 99.05-99.35 Mb. Seven potential, closely linked equine CYP3A genes were found, in contrast to only four genes in the human genome. RNA was isolated from an equine liver sample, and the approximately 1.5-kb coding sequence of six CYP3A genes could be amplified by RT-PCR. Sequencing of the RT-PCR products revealed numerous hitherto unknown single nucleotide polymorphisms (SNPs) in these six CYP3A genes, and one 6-bp deletion compared to the reference sequence (EquCab2.0). The presence of the variants was confirmed in a sample of genomic DNA from the same horse. In conclusion, orthologous genes for the CYP3A family exist in horses, but their number differs from those of the human CYP3A gene family. CYP450 genes of the same family show high homology within and between mammalian species, but can be highly polymorphic.

Clinical outcome of patients with and without diabetes mellitus after percutaneous coronary intervention with the resolute zotarolimus-eluting stent: 2-year results from the prospectively pooled analysis of the international global RESOLUTE program

OBJECTIVES The aim of this study was to describe the process to obtain Food and Drug Administration (FDA) approval for the expanded indication for treatment with the Resolute zotarolimus-eluting stent (R-ZES) (Medtronic, Inc., Santa Rosa, California) in patients with coronary artery disease and diabetes. BACKGROUND The R-ZES is the first drug-eluting stent specifically indicated in the United States for percutaneous coronary intervention in patients with diabetes. METHODS We pooled patient-level data for 5,130 patients from the RESOLUTE Global Clinical Program. A performance goal prospectively determined in conjunction with the FDA was established as a rate of target vessel failure at 12 months of 14.5%. In addition to the FDA pre-specified cohort of less complex patients with diabetes (n = 878), we evaluated outcomes of the R-ZES in all 1,535 patients with diabetes compared with all 3,595 patients without diabetes at 2 years. RESULTS The 12-month rate of target vessel failure in the pre-specified diabetic cohort was 7.8% (upper 95% confidence interval: 9.51%), significantly lower than the performance goal of 14.5% (p < 0.001). After 2 years, the cumulative incidence of target lesion failure in patients with noninsulin-treated diabetes was comparable to that of patients without diabetes (8.0% vs. 7.1%). The higher risk insulin-treated population demonstrated a significantly higher target lesion failure rate (13.7%). In the whole population, including complex patients, rates of stent thrombosis were not significantly different between patients with and without diabetes (1.2% vs. 0.8%). CONCLUSIONS The R-ZES is safe and effective in patients with diabetes. Long-term clinical data of patients with noninsulin-treated diabetes are equivalent to patients without diabetes. Patients with insulin-treated diabetes remain a higher risk subset. (The Medtronic RESOLUTE Clinical Trial; NCT00248079; Randomized, Two-arm, Non-inferiority Study Comparing Endeavor-Resolute Stent With Abbot Xience-V Stent [RESOLUTE-AC]; NCT00617084; The Medtronic RESOLUTE US Clinical Trial (R-US); NCT00726453; RESOLUTE International Registry: Evaluation of the Resolute Zotarolimus-Eluting Stent System in a 'Real-World' Patient Population [R-Int]; NCT00752128; RESOLUTE Japan-The Clinical Evaluation of the MDT-4107 Drug-Eluting Coronary Stent [RJ]; NCT00927940).

Hormonal Contraceptive Use and the Prevalence of Endometriotic Lesions at Different Regions within the Peritoneal Cavity.

Endometriosis is an estrogen-dependent disease that can lead to chronic pain and subfertility. Endometriotic lesions found in different locations are heterogeneous and may represent a collection of related but distinct conditions. Whether there is a relationship between hormonal contraceptive (HC) use and endometriosis is still controversial. The purpose of this study was to determine whether HC use affected the prevalence of endometriotic lesions differently based on lesion location. Data was retrospectively collected from 161 patients presenting to the Berne University Women's Hospital between 2008 and 2012 for laparoscopic investigation. Women with histologically proven endometriosis were included in the study and patients were grouped according to lesion location and HC use. The results of the study indicate that HC users are significantly less likely to have endometriotic lesions on the ovaries, although in contrast, no difference was observed in the incidence of lesions in the rectovaginal septum (RVS) or peritoneal region. In addition, women using HC who were diagnosed with endometriotic lesions on the peritoneum were significantly younger than women with lesions in other locations. In conclusion, women with endometriosis who are currently using HC are less likely to have ovarian endometriotic lesions than in alternate locations.

Differences in coronary risk factors, procedural characteristics, mortality and stent thrombosis between two all-comers percutaneous coronary intervention registries from Europe and Japan: a patient-level data analysis of the Bern-Rotterdam and j-Cypher registries

Aims: The reported rate of stent thrombosis (ST) after drug-eluting stent (DES) implantation varies among registries. To investigate differences in baseline characteristics and clinical outcome in European and Japanese all-comers registries, we performed a pooled analysis of patient-level data. Methods and results: The j-Cypher registry (JC) is a multicentre observational study conducted in Japan, including 12,824 patients undergoing SES implantation. From the Bern-Rotterdam registry (BR) enrolled at two academic hospitals in Switzerland and the Netherlands, 3,823 patients with SES were included in the current analysis. Patients in BR were younger, more frequently smokers and presented more frequently with ST-elevation myocardial infarction (MI). Conversely, JC patients more frequently had diabetes and hypertension. At five years, the definite ST rate was significantly lower in JC than BR (JC 1.6% vs. BR 3.3%, p<0.001), while the unadjusted mortality tended to be lower in BR than in JC (BR 13.2% vs. JC 14.4%, log-rank p=0.052). After adjustment, the j-Cypher registry was associated with a significantly lower risk of all-cause mortality (HR 0.56, 95% CI: 0.49-0.64) as well as definite stent thrombosis (HR 0.46, 95% CI: 0.35-0.61). Conclusions: The baseline characteristics of the two large registries were different. After statistical adjustment, JC was associated with lower mortality and ST.

Analysis of the erosive effect of different dietary substances and medications

Excessive consumption of acidic drinks and foods contributes to tooth erosion. The aims of the present in vitro study were twofold: (1) to assess the erosive potential of different dietary substances and medications; (2) to determine the chemical properties with an impact on the erosive potential. We selected sixty agents: soft drinks, an energy drink, sports drinks, alcoholic drinks, juice, fruit, mineral water, yogurt, tea, coffee, salad dressing and medications. The erosive potential of the tested agents was quantified as the changes in surface hardness (ΔSH) of enamel specimens within the first 2 min (ΔSH2-0 = SH2 min - SHbaseline) and the second 2 min exposure (ΔSH4-2 = SH4 min - SH2 min). To characterise these agents, various chemical properties, e.g. pH, concentrations of Ca, Pi and F, titratable acidity to pH 7·0 and buffering capacity at the original pH value (β), as well as degree of saturation (pK - pI) with respect to hydroxyapatite (HAP) and fluorapatite (FAP), were determined. Erosive challenge caused a statistically significant reduction in SH for all agents except for coffee, some medications and alcoholic drinks, and non-flavoured mineral waters, teas and yogurts (P < 0·01). By multiple linear regression analysis, 52 % of the variation in ΔSH after 2 min and 61 % after 4 min immersion were explained by pH, β and concentrations of F and Ca (P < 0·05). pH was the variable with the highest impact in multiple regression and bivariate correlation analyses. Furthermore, a high bivariate correlation was also obtained between (pK - pI)HAP, (pK - pI)FAP and ΔSH.

Fic domain-catalyzed adenylylation: insight provided by the structural analysis of the type IV secretion system effector BepA

Numerous bacterial pathogens subvert cellular functions of eukaryotic host cells by the injection of effector proteins via dedicated secretion systems. The type IV secretion system (T4SS) effector protein BepA from Bartonella henselae is composed of an N-terminal Fic domain and a C-terminal Bartonella intracellular delivery domain, the latter being responsible for T4SS-mediated translocation into host cells. A proteolysis resistant fragment (residues 10-302) that includes the Fic domain shows autoadenylylation activity and adenylyl transfer onto Hela cell extract proteins as demonstrated by autoradiography on incubation with α-[(32)P]-ATP. Its crystal structure, determined to 2.9-Å resolution by the SeMet-SAD method, exhibits the canonical Fic fold including the HPFxxGNGRxxR signature motif with several elaborations in loop regions and an additional β-rich domain at the C-terminus. On crystal soaking with ATP/Mg(2+), additional electron density indicated the presence of a PP(i) /Mg(2+) moiety, the side product of the adenylylation reaction, in the anion binding nest of the signature motif. On the basis of this information and that of the recent structure of IbpA(Fic2) in complex with the eukaryotic target protein Cdc42, we present a detailed model for the ternary complex of Fic with the two substrates, ATP/Mg(2+) and target tyrosine. The model is consistent with an in-line nucleophilic attack of the deprotonated side-chain hydroxyl group onto the α-phosphorus of the nucleotide to accomplish AMP transfer. Furthermore, a general, sequence-independent mechanism of target positioning through antiparallel β-strand interactions between enzyme and target is suggested.

Cholecystectomy concomitant with laparoscopic gastric bypass: a trend analysis of the nationwide inpatient sample from 2001 to 2008

Gallstone formation is common in obese patients, particularly during rapid weight loss. Whether a concomitant cholecystectomy should be performed during laparoscopic gastric bypass surgery is still contentious. We aimed to analyze trends in concomitant cholecystectomy and laparoscopic gastric bypass surgery (2001-2008), to identify factors associated with concomitant cholecystectomy, and to compare short-term outcomes after laparoscopic gastric bypass with and without concomitant cholecystectomy.

Use of endovascular therapy for peripheral arterial lesions: an analysis of the national trauma data bank from 2007 to 2009

An endovascular approach is increasingly used for the treatment of peripheral arterial trauma (PAT), but evidence supporting this approach is lacking. The objective of our study was to assess outcomes for endovascular repair (ER) versus operative repair (OR) in PAT.