On the valuation and incentive effects of executive cash bonus contracts

Executive compensation packages are often valued in an inconsistent manner: while employee stock options (ESOs) are typically valued ex-ante, cash bonuses are valued ex-post. This renders the existing valuation models of employee compensation packages theoretically unsatisfactory and, potentially, empirically distortive. In this paper, we propose an option-based framework for ex-ante valuation of cash bonus contracts. After obtaining closed-form expressions for ex-ante values of several frequently used types of bonus contracts, we utilize them to explore the e¤ects that the shape of a bonus contract has on the executive s attitude toward risk-taking. We, also, study pay-performance sensitivity of such contracts. We show that the terms of a bonus contract can dramatically impact both risk-taking behavior as well as pay-performance incentives. Several testable predictions are made, and venues of future research outlined.

Transportation choices and the value of statistical life

This paper exploits an unusual transportation setting to estimate the value of a statistical life(VSL). We estimate the trade-offs individuals are willing to make between mortality risk andcost as they travel to and from the international airport in Sierra Leone (which is separated fromthe capital Freetown by a body of water). Travelers choose from among multiple transportoptions ? namely, ferry, helicopter, hovercraft, and water taxi. The setting and original datasetallow us to address some typical omitted variable concerns in order to generate some of the firstrevealed preference VSL estimates from Africa. The data also allows us to compare VSLestimates for travelers from 56 countries, including 20 African and 36 non-African countries, allfacing the same choice situation. The average VSL estimate for African travelers in the sample isUS$577,000 compared to US$924,000 for non-Africans. Individual characteristics, particularlyjob earnings, can largely account for the difference between Africans and non-Africans; Africansin the sample typically earn somewhat less. There is little evidence that individual VSL estimatesare driven by a lack of information, predicted life expectancy, or cultural norms around risktakingor fatalism. The data implies an income elasticity of the VSL of 1.77. These revealedpreference VSL estimates from a developing country fill an important gap in the existingliterature, and can be used for a variety of public policy purposes, including in current debateswithin Sierra Leone regarding the desirability of constructing new transportation infrastructure.

Detecting Heterogeneous Risk Attitudes with Mixed Gambles

We propose a task for eliciting attitudes toward risk that is close to real-world risky decisions which typically involve gains and losses. The task consists of accepting or rejecting gambles that provide a gain with probability p and a loss with probability 1−p . We employ finite mixture models to uncover heterogeneity in risk preferences and find that (i) behavior is heterogeneous, with one half of the subjects behaving as expected utility maximizers, (ii) for the others, reference-dependent models perform better than those where subjects derive utility from final outcomes, (iii) models with sign-dependent decision weights perform better than those without, and (iv) there is no evidence for loss aversion. The procedure is sufficiently simple so that it can be easily used in field or lab experiments where risk elicitation is not the main experiment.

Medidas de intervención para promoción de conductas saludables y prevención de riesgos laborales relacionados con accidentalidad y enfermedad laboral en trabajadores de minas de Carbón

Colombia en su legislación normatiza el sector de la minería de carbón, sin embargo se considera que las estrategias no han sido suficientes para la identificación, prevención y control de la accidentalidad y enfermedad laboral. Durante el año 2013 el índice de fatalidad fue de 1,59. Estadísticas del año 2004 evidencian que las neumoconiosis fueron las mayores causas de invalidez de origen profesional. Objetivo: Categorizar actividades de intervención en promoción y prevención de accidentalidad y enfermedad laboral en trabajadores de la minería de carbón. Metodología: Se realizó una revisión de literatura sobre minería de carbón y salud la cual fue obtenida de las bases de datos PUBMED, Sciendirect, VHL, SINAB por literatura publicada sin límites de año, en idioma inglés, español o portugués. Para la búsqueda se utilizaron términos en lenguaje controlado (términos MESH), revisión por pares de títulos y resúmenes. Las publicaciones fueron seleccionadas para revisión de texto completo bajo criterios de inclusión y exclusión. Los códigos contemplados para esta revisión fueron: a) país donde la intervención se llevó a cabo, b) salud ocupacional, c) prevención de accidentalidad, d) programas de promoción, e) tecnologías, f) resultados obtenidos. Resultados: Del total de 2500 artículos seleccionados por los autores principales se realizó la revisión de los primeros 300 artículos, 32 hacen referencia al tema de salud ocupacional y minería de carbón, 10 contienen intervenciones consideradas de relevancia para esta revisión bibliográfica. Se presentan intervenciones estadísticamente significativas (p<0.05) y que han demostrado ser de impacto positivo en la minería de carbón en promoción y prevención de accidentalidad y enfermedad ocupacional. Conclusiones: Se identificaron las siguientes cuatro tipos de intervención: 1) las de carácter educativo que hacen referencia a las capacitaciones participativas, el entrenamiento por medio de “degraded image”, la realización de gestión de autocontrol y retroalimentación para el uso de elementos de protección personal (EPP), la aplicación del Modelo de Proceso Paralelo Extendido; 2) intervenciones preventivas como la medición de alcoholimetría antes del turno, la presencia de personal de enfermería en minas de carbón y el reconocimiento de los predictores de la enfermedad para optimizar la prevención primaria; 3)intervenciones de vigilancia como la promovida en la metodología Estadísticas Europeas de Accidentes de Trabajo (EEAT) para la investigación de los accidentes de trabajo, la aplicación de las recomendaciones de la Organización Mundial de la Salud (OMS) para la detección de la neumoconiosis y 4) De carácter tecnológico consistente en la intervención de tareas a partir de los resultados de la aplicación del software desarrollado por el Instituto Nacional para la Seguridad y Salud Ocupacional (NIOSH). Estas intervenciones han demostrado ser eficaces en la promoción y prevención de accidentalidad y enfermedad ocupacional por lo cual se recomienda su aplicación en Colombia posterior al análisis de costo-efectividad.

On the design of education conditional cash transfer programs and non education outcomes: the case of teenage pregnancy

We investigate the effect of education Conditional Cash Transfer programs (CCTs) on teenage pregnancy. Our main concern is with how the size and sign of the effect may depend on the design of the program. Using a simple model we show that an education CCT that conditions renewal on school performance reduces teenage pregnancy; the program can increase teenage pregnancy if it does not condition on school performance. Then, using an original data base, we estimate the causal impact on teenage pregnancy of two education CCTs implemented in Bogot´a (Subsidio Educativo, SE, and Familias en Acci´on, FA); both programs differ particularly on whether school success is a condition for renewal or not. We show that SE has negative average effect on teenage pregnancy while FA has a null average effect. We also find that SE has either null or no effect for adolescents in all age and grade groups while FA has positive, null or negative effects for adolescents in different age and grade groups. Since SE conditions renewal on school success and FA does not, we can argue that the empirical results are consistent with the predictions of our model and that conditioning renewal of the subsidy on school success crucially determines the effect of the subsidy on teenage pregnancy

Percepción del riesgo biológico en el personal asistencial en un hospital de alta complejidad de la ciudad de Bogotá.

OBJETIVOS: Identificar la percepción del riesgo biológico de los trabajadores asistenciales del Hospital Central de la Policía Nacional en la ciudad de Bogotá. METODOS: se realizó un estudio analítico de corte transversal para describir la percepción acerca del riesgo biológico en 159 trabajadores asistenciales de un hospital de alta complejidad en la ciudad de Bogotá (Colombia), la información se recolectó por medio de la utilización de la encuesta validada nota técnica 578 (Portell M, Solé M, 2001). Se realizó la caracterización de la población por variables de sexo, edad, tiempo de experiencia y servicio al cual pertenece y se promediaron las respuestas obtenidas para cada ítem encuestado, obteniendo una clasificación para cada dimensión de percepción de riesgo baja (1 a 3), media (4 a 5) o alta (6 a 7). Resultados: De los 159 trabajadores asistenciales encuestados el 80.4% eran de género femenino, el 22.2% pertenecían al servicio de urgencias, el 16,5% al servicio de medicina interna y el 9.5% al servicio de pediatría, de los encuestados el 62.9% fueron auxiliares de enfermería, el 21,4% enfermeras jefes y el 6.9% médicos. Se obtuvo una percepción de riesgo alta (media aritmética mayor de 5) para todas las variables incluidas en la encuesta, demostrando conocimiento de todo el personal acerca de la alta exposición a accidentes de tipo biológico. No se encontró asociación entre la labor desempeñada y la percepción del riesgo biológico, sin embargo, se encontró una asociación entre el tiempo de experiencia del trabajador y una disminución en la magnitud del riesgo percibido (Chi cuadrado de asociación, p=0.042). Conclusiones: Los trabajadores asistenciales identifican la magnitud del riesgo biológico al que se encuentran expuestos en sus labores del día a día, sin embargo, es necesaria una mayor participación por parte del personal directivo y de los responsables de la prevención en temas de reacción ante accidentes y en la valoración del riesgo, especialmente en personas que llevan mucho tiempo desempeñando la labor.

A behavioral comparison between motorcyclists and a matched group of non-motorcycling car drivers: factors influencing accident risk

Motorcyclists and a matched group of non-motorcycling car drivers were assessed on behavioral measures known to relate to accident involvement. Using a range of laboratory measures, we found that motorcyclists chose faster speeds than the car drivers, overtook more, and pulled into smaller gaps in traffic, though they did not travel any closer to the vehicle in front. The speed and following distance findings were replicated by two further studies involving unobtrusive roadside observation. We suggest that the increased risk-taking behavior of motorcyclists was only likely to account for a small proportion of the difference in accident risk between motorcyclists and car drivers. A second group of motorcyclists was asked to complete the simulator tests as if driving a car. They did not differ from the non-motorcycling car drivers on the risk-taking measures but were better at hazard perception. There were also no differences for sensation seeking, mild social deviance, and attitudes to riding/driving, indicating that the risk-taking tendencies of motorcyclists did not transfer beyond motorcycling, while their hazard perception skill did. (C) 2002 Elsevier Science Ltd. All rights reserved.

Responsibility effects in decision making under risk

We systematically explore decision situations in which a decision maker bears responsibility for somebody else's outcomes as well as for her own in situations of payoff equality. In the gain domain we confirm the intuition that being responsible for somebody else's payoffs increases risk aversion. This is however not attributable to a 'cautious shift' as often thought. Indeed, looking at risk attitudes in the loss domain, we find an increase in risk seeking under responsibility. This raises issues about the nature of various decision biases under risk, and to what extent changed behavior under responsibility may depend on a social norm of caution in situations of responsibility versus naive corrections from perceived biases. To further explore this issue, we designed a second experiment to explore risk-taking behavior for gain prospects offering very small or very large probabilities of winning. For large probabilities, we find increased risk aversion, thus confirming our earlier finding. For small probabilities however, we find an increase of risk seeking under conditions of responsibility. The latter finding thus discredits hypotheses of a social rule dictating caution under responsibility, and can be explained through flexible self-correction models predicting an accentuation of the fourfold pattern of risk attitudes predicted by prospect theory. An additional accountability mechanism does not change risk behavior, except for mixed prospects, in which it reduces loss aversion. This indicates that loss aversion is of a fundamentally different nature than probability weighting or utility curvature. Implications for debiasing are discussed.

Moral hazard and nonlinear pricing in a general equilibrium model

The paper analyzes a two period general equilibrium model with individual risk and moral hazard. Each household faces two individual states of nature in the second period. These states solely differ in the household's vector of initial endowments, which is strictly larger in the first state (good state) than in the second state (bad state). In the first period households choose a non-observable action. Higher leveis of action give higher probability of the good state of nature to occur, but lower leveIs of utility. Households have access to an insurance market that allows transfer of income across states of oature. I consider two models of financiaI markets, the price-taking behavior model and the nonlínear pricing modelo In the price-taking behavior model suppliers of insurance have a belief about each household's actíon and take asset prices as given. A variation of standard arguments shows the existence of a rational expectations equilibrium. For a generic set of economies every equilibrium is constraíned sub-optímal: there are commodity prices and a reallocation of financiaI assets satisfying the first period budget constraint such that, at each household's optimal choice given those prices and asset reallocation, markets clear and every household's welfare improves. In the nonlinear pricing model suppliers of insurance behave strategically offering nonlinear pricing contracts to the households. I provide sufficient conditions for the existence of equilibrium and investigate the optimality properties of the modeI. If there is a single commodity then every equilibrium is constrained optimaI. Ir there is more than one commodity, then for a generic set of economies every equilibrium is constrained sub-optimaI.

Repeated predictable or unpredictable stress: effects on cocaine-induced locomotion and cyclic AMP-dependent protein kinase activity

Stressful experiences appear to have a strong influence on susceptibility to drug taking behavior. Cross-sensitization between stress and drug-induced locomotor response has been found. Locomotor response to novelty or cocaine (10 mg/kg, i.p.), cyclic AMP-dependent protein kinase (PKA) activity in the nucleus accumbens and basal corticosterone levels were evaluated in male adult rats exposed to acute and chronic predictable or unpredictable stress. Rats exposed to a 14-day predictable stress showed increased locomotor response to novelty and to cocaine, whereas rats exposed to chronic unpredictable stress demonstrated increased cyclic AMP-dependent PKA activity in the nucleus accumbens. Both predictable and unpredictable stress increased basal corticosterone plasma levels. These experiments demonstrated that stress-induced early cocaine sensitization depends on the stress regime and is apparently dissociated from stress-induced changes in cyclic AMP-dependent PKA activity and corticosterone levels. (C) 2002 Elsevier B.V. B.V. All rights reserved.

Social defeat stress in rats: escalation of cocaine and speedball binge self-administration, but not heroin

Exposure to intermittent episodes of social defeat stress can increase drug seeking and leads to intense drug taking in rats.This study investigated the consequences of repeated, intermittent social defeat stress on patterns of drug self-administration in rats with access to heroin, cocaine, or a heroin-cocaine combination (speedball).Male Long-Evans rats were either handled (controls) or subjected to 25-min social defeat stress episodes on days 1, 4, 7, and 10 during confrontations with an aggressive resident. Ten days following the last defeat, rats were assessed for locomotor cross-sensitization in response to heroin or cocaine. Animals were then prepared with intrajugular catheters for drug self-administration. Separate groups of controls and defeated rats were examined for self-administration of heroin (experiment 1), a heroin-cocaine combination (experiment 2), or cocaine (experiment 3). Drug self-administration patterns were evaluated using fixed or progressive ratio schedules of reinforcement during limited access sessions or a 24-h unlimited access binge.Rats with a history of intermittent social defeat stress showed sensitized locomotor behavior when challenged with heroin or cocaine relative to controls. During the 24-h binge session, defeated rats escalated cocaine-taking behavior (ca. 110 mg/kg vs. 66 mg/kg in controls), persisted in self-administering cocaine or the heroin-cocaine mixture for more hours, and showed a tendency for increased heroin-cocaine intake, but no effects on heroin taking.A history of social defeat stress seems to preferentially promote escalated intake of cocaine but not heroin, unless a heroin-cocaine combination is available.

Prevention of social stress-escalated cocaine self-administration by CRF-R1 antagonist in the rat VTA

Intermittent exposure to social defeat stress can induce long-term neural plasticity that may influence escalated cocaine-taking behavior. Stressful encounters can lead to activation of dopamine neurons in the ventral tegmental area (VTA), which are modulated by corticotropin releasing factor (CRF) neurons.The study aims to prevent the effects of intermittently scheduled, brief social defeat stress on subsequent intravenous (IV) cocaine self-administration by pretreatment with a CRF receptor subtype 1 (CRF-R1) antagonist.Long-Evans rats were submitted to four intermittent social defeat experiences separated by 72 h over 10 days. Two experiments examined systemic or intra-VTA antagonism of CRF-R1 subtype during stress on the later expression of locomotor sensitization and cocaine self-administration during fixed (0.75 mg/kg/infusion) and progressive ratio schedules of reinforcement (0.3 mg/kg/infusion), including a continuous 24-h "binge" (0.3 mg/kg/infusion).Pretreatment with a CRF-R1 antagonist, CP 154,526, (20 mg/kg i.p.) prior to each social defeat episode prevented the development of stress-induced locomotor sensitization to a cocaine challenge and prevented escalated cocaine self-administration during a 24-h "binge". In addition, pretreatment with a CRF-R1 antagonist (0.3 mu g/0.5 mu l/side) into the VTA prior to each social defeat episode prevented stress-induced locomotor sensitization to a cocaine challenge and prevented escalated cocaine self-administration during a 24-h "binge".The current results suggest that CRF-R1 subtype in the VTA is critically involved in the development of stress-induced locomotor sensitization which may contribute to escalated cocaine self-administration during continuous access in a 24-h "binge".

Ethobehavioral Studies of Fear, Sex, and Biological Rhythms

Thesis (Ph.D.)--University of Washington, 2016-06

Drug use patterns and mental health of regular amphetamine users during a reported 'heroin drought'

Aims The present study extends the findings of a pilot study conducted among regular amphetamine users in Newcastle, NSW, in 1998. It compares key features between current participants in a state capital city (Brisbane) and a regional city (Newcastle) and between the 1998 and current Newcastle sample. Design Cross-sectional survey. Setting Brisbane and Newcastle, Australia. Participants The survey was conducted among 214 regular amphetamine users within the context of a randomized controlled trial of brief interventions for amphetamine use. Measurements Demographic characteristics, past and present alcohol and other drug use and mental health, treatment, amphetamine-related harms and severity of dependence. Findings The main findings were as follows: (i) the rate of mental health problems was high among regular amphetamine users and these problems commonly emerged after commencement of regular amphetamine use; (ii) there were regional differences in drug use with greater accessibility to a wider range of drugs in a state capital city and greater levels of injecting risk-taking behaviour outside the capital city environment; and (iii) there was a significant increase in level of amphetamine use and percentage of alcohol users, a trend for a higher level of amphetamine dependence and a significant reduction in the percentage of people using heroin and benzodiazepines among the 2002 Newcastle cohort compared to the 1998 cohort. Conclusions Further longitudinal research is needed to elucidate transitions from one drug type to another and from recreational to injecting and regular use and the relationship between drug use and mental health in prospective studies among users. Implications Intervention research should evaluate the effectiveness of interventions aimed at: preventing transition to injecting and regular use of amphetamines; toward reducing levels of depression among amphetamine users and interventions among people with severe psychopathology and personality disorders; and toward reducing the prevalence of tobacco dependence among amphetamine users.