Delegation and information sharing in oligopoly

Information sharing in oligopoly has been analyzed by assuming that firms behave as a sole economic agent. In this paper I assume that ownership and management are separated. Managers are allowed to falsely report their costs to owners and rivals. Under such circumstances, if owners want to achieve information sharing they must use managerial contracts that implement truthful cost reporting by managers as a dominant strategy. I show that, contrary to the classical result, without the inclusion of message-dependent payments in managerial contracts there will be no information sharing. On the other hand, with the inclusion of such publicly observable payments and credible ex-ante commitment by owners not to modify these payments, there will be perfect information sharing without the need for third parties. Keywords: Information sharing, Delegation, Managerial contracts. JEL classification numbers: D21, D82, L13, L21

Sharing the surplus: a just and efficient proposal for environments with externalities

Economic activities, both on the macro and micro level, often entail wide-spread externalities. This in turn leads to disputes regarding the compensation levels to the various parties affected. We propose a general, yet simple, method of deciding upon the distribution of the gains (costs) of cooperation in the presence of externalities. This method is shown to be the unique one satisfying several desirable properties. Furthermore, we illustrate the use of this method to resolve the sharing of benefits generated by international climate control agreements.

Information-sharing implications of horizontal mergers

We analyze the effects of uncertainty and private information on horizontal mergers. Firms face uncertain demands or costs and receive private signals. They may decide to merge sharing their private information. If the uncertainty parameters are independent and the signals are perfect, uncertainty generates an informational advantage only to the merging firms, increasing merger incentives and decreasing free-riding effects. Thus, mergers become more profitable and stable. These results generalize to the case of correlated parameters if the correlation is not very severe, and for perfect correlation if the firms receive noisy signals. From the normative point of view, mergers are socially less harmful compared to deterministic markets and may even be welfare enhancing. If the signals are, instead, publicly observed, uncertainty does not necessarily give more incentives to merge, and mergers are not always less socially harmful.

Investor protection, risk sharing and inequality

This paper studies the relationship between investor protection, financial risk sharing and income inequality. In the presence of market frictions, better protection makes investors more willing to take on entrepreneurial risk while lending to firms. This implies lower cost of external finance and better risk sharing between financiers and entrepreneurs. Investor protection, by boosting the market for risk sharing plays the twofold role of encouraging agents to undertake risky enterprises and providing them with insurance. By increasing the number of risky projects, it raises income inequality. By extending insurance to more agents, it reduces it. As a result, the relationship between the size of the market for risk sharing and income inequality is hump-shaped. Empirical evidence from a cross-section of sixty-eight countries, and a panel of fifty countries over the period 1976-2000, supports the predictions of the model.

Men perform comparably to women in a perspective taking task after administration of intranasal oxytocin but not after placebo

Oxytocin (OT) is thought to play an important role in human interpersonal information processing and behavior. By inference, OT should facilitate empathic responding, i.e. the ability to feel for others and to take their perspective. In two independent double-blind, placebo-controlled between-subjects studies, we assessed the effect of intranasally administered OT on affective empathy and perspective taking, whilst also examining potential sex differences (e.g., women being more empathic than men). In study 1, we provided 96 participants (48 men) with an empathy scenario and recorded self reports of empathic reactions to the scenario, while in study 2, a sample of 120 individuals (60 men) performed a computerized implicit perspective taking task. Whilst results from Study 1 showed no influence of OT on affective empathy, we found in Study 2 that OT exerted an effect on perspective taking ability in men. More specifically, men responded faster than women in the placebo group but they responded as slowly as women in the OT group. We conjecture that men in the OT group adopted a social perspective taking strategy, such as did women in both groups, but not men in the placebo group. On the basis of results across both studies, we suggest that self-report measures (such as used in Study 1) might be less sensitive to OT effects than more implicit measures of empathy such as that used in Study 2. If these assumptions are confirmed, one could infer that OT effects on empathic responses are more pronounced in men than women, and that any such effect is best studied using more implicit measures of empathy rather than explicit self-report measures.

Endocrine response and perceived stress test during an experimental challenge task in adult survivors of a childhood cancer.

BACKGROUND: Although long-term implications of cancer in childhood or adolescence with regard to medical conditions are well documented, the impact on mental health and on response to stress, which may be an indicator of psychological vulnerability, is not yet well understood. In this study, psychological and physiological responses to stress were examined.¦PROCEDURE: Fifty-three participants aged 18-39 years (n = 25 survivors of childhood or adolescence cancer, n = 28 controls) underwent an experimental stress test, the Trier Social Stress Test (TSST). Participants were asked to provide repeated evaluations of perceived stress on visual-analogical scales and blood samples were collected before and after the TSST to measure plasma cortisol.¦RESULTS: The psychological perception of stress was not different between the two groups. However, the cancer survivors group showed a higher global plasma cortisol level as well as higher amplitude in the response to the TSST. The global cortisol level in cancer survivors was increased when depression symptoms were present. The subjective perception of stress and the plasma cortisol levels were only marginally correlated in both groups.¦CONCLUSIONS: It is suggested that the exposure to a life-threatening experience in childhood/adolescence increases the endocrine response to stress, and that the presence of depressive symptoms is associated with an elevation of plasma cortisol levels. A better knowledge of these mechanisms is important given that the dysregulations of the stress responses may cause psychological vulnerability. Pediatr Blood Cancer 2012; 59: 138-143. © 2011 Wiley Periodicals, Inc.

The Importance of Revenue Sharing for the Local Economic Impacts of a Renewable Energy Project: A Social Accounting Matrix Approach

As demand for electricity from renewable energy sources grows, there is increasing interest, and public and financial support, for local communities to become involved in the development of renewable energy projects. In the UK, “Community Benefit” payments are the most common financial link between renewable energy projects and local communities. These are “goodwill” payments from the project developer for the community to spend as it wishes. However, if an ownership stake in the renewable energy project were possible, receipts to the local community would potentially be considerably higher. The local economic impacts of these receipts are difficult to quantify using traditional Input-Output techniques, but can be more appropriately handled within a Social Accounting Matrix (SAM) framework where income flows between agents can be traced in detail. We use a SAM for the Shetland Islands to evaluate the potential local economic and employment impact of a large onshore wind energy project proposed for the Islands. Sensitivity analysis is used to show how the local impact varies with: the level of Community Benefit payments; the portion of intermediate inputs being sourced from within the local economy; and the level of any local community ownership of the project. By a substantial margin, local ownership confers the greatest economic impacts for the local community.

Complete Markets Strikes Back: Revisiting Risk Sharing Tests under Discount Rate Heterogeneity

Recent risk sharing tests strongly reject the hypothesis of complete markets, because in the data: (1) the individual consumption comoves with income and (2) the consumption dispersion increases over the life cycle. In this paper, I revisit the implications of these risk sharing tests in the context of a complete market model with discount rate heterogeneity, which is extended to introduce the individual choices of effort in education. I .nd that a complete market model with discount rate heterogeneity can pass both types of the risk sharing tests. The endogenous positive correlation between income growth rate and patience makes the individual consumption comove with income, even if the markets are complete. I also show that this model is quantitatively admissible to account for both the observed comovement of consumption and income and the increase of consumption dispersion over the life cycle.

La médecine de famille en Suisse à l'horizon 2030: quelle place pour la délégation des tâches médicales. [Family practitioners in Switzerland by 2030: which roles for medical task delegation?]

Due to population aging, by 2030 Switzerland may face a demand of 24 million family practitioner visits, a growth of 13 percent from the 2005 level. This result is based on the assumption that the per capita demand for doctor visits remains what was observed in 2005 by age groups and sex. During the same period, the total number of practitioners may decrease by 14 percent whereas the female proportion of such practitioners may double. These changes may cause a 33 percent decrease in the supply of physician visits to reach only 14 millions. The comparison of the demand and supply of family doctor visits reveals that by 2030, 10 million visits may be unmet which represents 40 percent of the demand. On the supply side, a full scale implementation of task delegation may partially reduce that gap (minus 2 millions). On the demand side, improved health status may bring in a larger decrease in the needs for visits (minus 4 million).

Le traitement de l'échinococcose alvéolaire humaine: une approche multidisciplinaire [Treatment of alveolar echinococcosis: a multidisciplinary task]

Alveolar echinococcosis is characterized by a long asymptomatic period but, without treatment, up to 80% of patients may die within ten years of diagnosis. Owing to a lack of fast-acting and fully effective chemotherapy, partial radical hepatic resection is the only chance of cure. One-third of patients are now treated in this way, and complex vascular and biliary reconstruction procedures are sometimes necessary. Liver transplantation may also be indicated for highly selected patients (about 5%) with life-threatening complications after failure of other treatments. Interventional radiology and endoscopy can be used to drain liver abscesses and/or infected and obstructed bile ducts, either as palliative procedures or as a bridge to radical resection. Parasitostatic benzimidazole therapy, especially based on continuous albendazole administration, is mandatory for at least two years after radical resection, and for life in inoperable patients.

Dynamic stackelberg game with risk-averse players: optimal risk-sharing under asymmetric information

The objective of this paper is to clarify the interactive nature of the leader-follower relationship when both players are endogenously risk-averse. The analysis is placed in the context of a dynamic closed-loop Stackelberg game with private information. The case of a risk-neutral leader, very often discussed in the literature, is only a borderline possibility in the present study. Each player in the game is characterized by a risk-averse type which is unknown to his opponent. The goal of the leader is to implement an optimal incentive compatible risk-sharing contract. The proposed approach provides a qualitative analysis of adaptive risk behavior profiles for asymmetrically informed players in the context of dynamic strategic interactions modelled as incentive Stackelberg games.

Task force IV: Clinical use of ambulatory blood pressure monitoring. Participants of the 1999 Consensus Conference on Ambulatory Blood Pressure Monitoring

OBJECTIVE: To reach a consensus on the clinical use of ambulatory blood pressure monitoring (ABPM). METHODS: A task force on the clinical use of ABPM wrote this overview in preparation for the Seventh International Consensus Conference (23-25 September 1999, Leuven, Belgium). This article was amended to account for opinions aired at the conference and to reflect the common ground reached in the discussions. POINTS OF CONSENSUS: The Riva Rocci/Korotkoff technique, although it is prone to error, is easy and cheap to perform and remains worldwide the standard procedure for measuring blood pressure. ABPM should be performed only with properly validated devices as an accessory to conventional measurement of blood pressure. Ambulatory recording of blood pressure requires considerable investment in equipment and training and its use for screening purposes cannot be recommended. ABPM is most useful for identifying patients with white-coat hypertension (WCH), also known as isolated clinic hypertension, which is arbitrarily defined as a clinic blood pressure of more than 140 mmHg systolic or 90 mmHg diastolic in a patient with daytime ambulatory blood pressure below 135 mmHg systolic and 85 mmHg diastolic. Some experts consider a daytime blood pressure below 130 mmHg systolic and 80 mmHg diastolic optimal. Whether WCH predisposes subjects to sustained hypertension remains debated. However, outcome is better correlated to the ambulatory blood pressure than it is to the conventional blood pressure. Antihypertensive drugs lower the clinic blood pressure in patients with WCH but not the ambulatory blood pressure, and also do not improve prognosis. Nevertheless, WCH should not be left unattended. If no previous cardiovascular complications are present, treatment could be limited to follow-up and hygienic measures, which should also account for risk factors other than hypertension. ABPM is superior to conventional measurement of blood pressure not only for selecting patients for antihypertensive drug treatment but also for assessing the effects both of non-pharmacological and of pharmacological therapy. The ambulatory blood pressure should be reduced by treatment to below the thresholds applied for diagnosing sustained hypertension. ABPM makes the diagnosis and treatment of nocturnal hypertension possible and is especially indicated for patients with borderline hypertension, the elderly, pregnant women, patients with treatment-resistant hypertension and patients with symptoms suggestive of hypotension. In centres with sufficient financial resources, ABPM could become part of the routine assessment of patients with clinic hypertension. For patients with WCH, it should be repeated at annual or 6-monthly intervals. Variation of blood pressure throughout the day can be monitored only by ABPM, but several advantages of the latter technique can also be obtained by self-measurement of blood pressure, a less expensive method that is probably better suited to primary practice and use in developing countries. CONCLUSIONS: ABPM or equivalent methods for tracing the white-coat effect should become part of the routine diagnostic and therapeutic procedures applied to treated and untreated patients with elevated clinic blood pressures. Results of long-term outcome trials should better establish the advantage of further integrating ABPM as an accessory to conventional sphygmomanometry into the routine care of hypertensive patients and should provide more definite information on the long-term cost-effectiveness. Because such trials are not likely to be funded by the pharmaceutical industry, governments and health insurance companies should take responsibility in this regard.