Money distribution with intermediation

This pap er analyzes the distribution of money holdings in a commo dity money search-based mo del with intermediation. Intro ducing heterogeneity of costs to the Kiyotaki e Wright ( 1989 ) mo del, Cavalcanti e Puzzello ( 2010) gives rise to a non-degenerated distribution of money. We extend further this mo del intro ducing intermediation in the trading pro cess. We show that the distribution of money matters for savings decisions. This gives rises to a xed p oint problem for the saving function that di cults nding the optimal solution. Through some examples, we show that this friction shrinks the distribution of money. In contrast to the Cavalcanti e Puzzello ( 2010 ) mo del, the optimal solution may not present the entire surplus going to the consumer. At the end of the pap er, we present a strong result, for a su cient large numb er of intermediaries the distribution of money is degenerated.

Inflation when the planner wants less spending

I study optima in a random-matching model of outside money. The examples in this paper show a conflict between private and collective interests. While the planner worry about the extensive and intensive margin effects of trades in a steady state, people want the exhaust the gains from trades immediately, i.e., once in a meeting, consumers prefer spend more for a better output than take the risk of saving money and wait for good meetings in the future. Thus, the conflict can force the planner to choose allocations with a more disperse money distribution, mainly if people are im- patient. When the patient rate is low enough, the planner uses a expansionary policy to generate a better distribution of money for future trades.

Legal enforcement, collateral and heterogeneity of project financing contracts

This paper employs mechanism design to study the effects of imperfect legal enforcement on optimal scale of projects, borrowing interest rates and the probability of default. The analysis departs from an environment that combines asymmetric information about cash flows and limited commitment by borrowers. Incentive for repayment comes from the possibility of liquidation of projects by a court, but courts are costly and may fail to liquidate. The value of liquidated assets can be used as collateral: it is transferred to the lender when courts liquidate. Examples reveal that costly use of courts may be optimal, which contrasts with results from most limited commitment models, where punishments are just threats, never applied in optimal arrangements. I show that when voluntary liquidation is allowed, both asymmetric information and uncertainty about courts are necessary conditions for legal punishments ever to be applied. Numerical solutions for several parametric specifications are presented, allowing for heterogeneity on initial wealth and variability of project returns. In all such solutions, wealthier individuals borrow with lower interest rates and run higher scale enterprises, which is consistent with stylized facts. The reliability of courts has a consistently positive effect on the scale of projects. However its effect on interest rates is subtler and depends essentially on the degree of curvature of the production function. Numerical results also show that the possibility of collateral seizing allows comovements of the interest rates and the probability of repayment.

Non-Linear Pricing in Imperfectly Competitive Markets

This thesis is dedicated to the analysis of non-linear pricing in oligopoly. Non-linear pricing is a fairly predominant practice in most real markets, mostly characterized by some amount of competition. The sophistication of pricing practices has increased in the latest decades due to the technological advances that have allowed companies to gather more and more data on consumers preferences. The first essay of the thesis highlights the main characteristics of oligopolistic non-linear pricing. Non-linear pricing is a special case of price discrimination. The theory of price discrimination has to be modified in presence of oligopoly: in particular, a crucial role is played by the competitive externality that implies that product differentiation is closely related to the possibility of discriminating. The essay reviews the theory of competitive non-linear pricing by starting from its foundations, mechanism design under common agency. The different approaches to model non-linear pricing are then reviewed. In particular, the difference between price and quantity competition is highlighted. Finally, the close link between non-linear pricing and the recent developments in the theory of vertical differentiation is explored. The second essay shows how the effects of non-linear pricing are determined by the relationship between the demand and the technological structure of the market. The chapter focuses on a model in which firms supply a homogeneous product in two different sizes. Information about consumers' reservation prices is incomplete and the production technology is characterized by size economies. The model provides insights on the size of the products that one finds in the market. Four equilibrium regions are identified depending on the relative intensity of size economies with respect to consumers' evaluation of the good. Regions for which the product is supplied in a single unit or in several different sizes or in only a very large one. Both the private and social desirability of non-linear pricing varies across different equilibrium regions. The third essay considers the broadband internet market. Non discriminatory issues seem the core of the recent debate on the opportunity or not of regulating the internet. One of the main questions posed is whether the telecom companies, owning the networks constituting the internet, should be allowed to offer quality-contingent contracts to content providers. The aim of this essay is to analyze the issue through a stylized two-sided market model of the web that highlights the effects of such a discrimination over quality, prices and participation to the internet of providers and final users. An overall welfare comparison is proposed, concluding that the final effects of regulation crucially depend on both the technology and preferences of agents.

The Making of Optimal and Consistent Policy: An Implementation Theory Framework for Monetary Policy

This paper shows that optimal policy and consistent policy outcomes require the use of control-theory and game-theory solution techniques. While optimal policy and consistent policy often produce different outcomes even in a one-period model, we analyze consistent policy and its outcome in a simple model, finding that the cause of the inconsistency with optimal policy traces to inconsistent targets in the social loss function. As a result, the social loss function cannot serve as a direct loss function for the central bank. Accordingly, we employ implementation theory to design a central bank loss function (mechanism design) with consistent targets, while the social loss function serves as a social welfare criterion. That is, with the correct mechanism design for the central bank loss function, optimal policy and consistent policy become identical. In other words, optimal policy proves implementable (consistent).

Recognizing a Single-Issue Spatial Election

A single-issue spatial election is a voter preference profile derived from an arrangement of candidates and voters on a line, with each voter preferring the nearer of each pair of candidates. We provide a polynomial-time algorithm that determines whether a given preference profile is a single-issue spatial election and, if so, constructs such an election. This result also has preference representation and mechanism design applications.

Taxation of couples: a mirrleesian approach for non-unitary households

Optimal tax theory in the Mirrlees’ (1971) tradition implicitly relies on the assumption that all agents are single or that couples may be treated as individuals, despite accumulating evidence against this view of household behavior. We consider an economy where agents may either be single or married, in which case choices result from Nash bargaining between spouses. In such an environment, tax schedules must play the double role of: i) defining households’ objective functions through their impact on threat points, and; ii) inducing the desired allocations as optimal choices for households given these objectives. We find that the taxation principle, which asserts that there is no loss in relying on tax schedules is not valid here: there are constrained efficient allocations which cannot be implemented via taxes. More sophisticated mechanisms expand the set of implementable allocations by: i) aligning the households’ and planner’s objectives; ii) manipulating taxable income elasticities, and; iii) freeing the design of singles’ tax schedules from its consequences on households’ objectives.

Auctions with Untrustworthy Bidders

The paper analyzes auctions which are not completely enforceable. In such auctions, economic agents may fail to carry out their obligations, and parties involved cannot rely on external enforcement or control mechanisms for backing up a transaction. We propose two mechanisms that make bidders directly or indirectly reveal their trustworthiness. The first mechanism is based on discriminating bidding schedules that separate trustworthy from untrustworthy bidders. The second mechanism is a generalization of the Vickrey auction to the case of untrustworthy bidders. We prove that, if the winner is considered to have the trustworthiness of the second-highest bidder, truthfully declaring one's trustworthiness becomes a dominant strategy. We expect the proposed mechanisms to reduce the cost of trust management and to help agent designers avoid many market failures caused by lack of trust.

A constraint and position identification (CPI) approach for the synthesis of decoupled spatial translational compliant parallel manipulators

This paper introduces a screw theory based method termed constraint and position identification (CPI) approach to synthesize decoupled spatial translational compliant parallel manipulators (XYZ CPMs) with consideration of actuation isolation. The proposed approach is based on a systematic arrangement of rigid stages and compliant modules in a three-legged XYZ CPM system using the constraint spaces and the position spaces of the compliant modules. The constraint spaces and the position spaces are firstly derived based on the screw theory instead of using the rigid-body mechanism design experience. Additionally, the constraint spaces are classified into different constraint combinations, with typical position spaces depicted via geometric entities. Furthermore, the systematic synthesis process based on the constraint combinations and the geometric entities is demonstrated via several examples. Finally, several novel decoupled XYZ CPMs with monolithic configurations are created and verified by finite elements analysis. The present CPI approach enables experts and beginners to synthesize a variety of decoupled XYZ CPMs with consideration of actuation isolation by selecting an appropriate constraint and an optimal position for each of the compliant modules according to a specific application.

Essays on Matching Markets and Their Equilibria

Matching theory and matching markets are a core component of modern economic theory and market design. This dissertation presents three original contributions to this area. The first essay constructs a matching mechanism in an incomplete information matching market in which the positive assortative match is the unique efficient and unique stable match. The mechanism asks each agent in the matching market to reveal her privately known type. Through its novel payment rule, truthful revelation forms an ex post Nash equilibrium in this setting. This mechanism works in one-, two- and many-sided matching markets, thus offering the first mechanism to unify these matching markets under a single mechanism design framework. The second essay confronts a problem of matching in an environment in which no efficient and incentive compatible matching mechanism exists due to matching externalities. I develop a two-stage matching game in which a contracting stage facilitates subsequent conditionally efficient and incentive compatible Vickrey auction stage. Infinite repetition of this two-stage matching game enforces the contract in every period. This mechanism produces inequitably distributed social improvement: parties to the contract receive all of the gains and then some. The final essay demonstrates the existence of prices which stably and efficiently partition a single set of agents into firms and workers, and match those two sets to each other. This pricing system extends Kelso and Crawford's general equilibrium results in a labor market matching model and links one- and two-sided matching markets as well.

Aerodynamic characteristics of a wrap-around fin rocket

Purpose – The purpose of this paper is to investigate the aerodynamics characteristics (especially the side force/moment and rolling characteristics), to analyze the impacts generated by different parameters of wrap-around fins (WAFs) and to find the corresponding mechanism.Design/methodology/approach – The paper has adopted three different types of WAFs for the rocket configurations and the sub-regions dividedtechnology to investigate the lateral and rolling characteristics of WAFs, including the fins with variations in span to chord ratio, thickness,leading-edge sweep, curvature radius, fin numbers, setting angles and rotated angles. Simulations have been performed at Mach numbers from 3 to 4 through an angle-of-attack range of about 0° to 10° and at model rolling angles of 45° to 90°.Findings – The paper shows that the WAF configurations can greatly improve the longitudinal stability and enhance the longitudinal aerodynamic characteristics for the whole rocket. The total drag of the whole rocket is mainly stemmed from the body, while the drag generated by the WAF account for only about 7.42 per cent. The extra side forces and rolling moments are due largely to the unequal pressure distributions on both sides of the fin (windward or leeward). Maintaining a certain negative setting angle (d) can effectively avoid the coning movement and improve the flight stability at high angles of attack. The size of the span and chord are two main factors in controlling the longitudinal characteristics. For the side force/moment and rolling characteristics, different geometric parameters of the WAFs have played different roles.Originality/value – The paper provides the qualitative and quantitative analysis for different WAFs configurations by investigating the curves ofdifferent parameters and contouring of static pressure distributions. Findings can provide some suggestions for the designers for avoiding some significant dynamic problems, such as Magnus instability and roll rate variations during flight.

Designer policy for carbon and biodiversity co-benefits under global change

Carbon payments can help mitigate both climate change and biodiversity decline through the reforestation of agricultural land. However, to achieve biodiversity co-benefits, carbon payments often require support from other policy mechanisms such as regulation, targeting, and complementary incentives. We evaluated 14 policy mechanisms for supplying carbon and biodiversity co-benefits through reforestation of carbon plantings (CP) and environmental plantings (EP) in Australia's 85.3 Mha agricultural land under global change. The reference policy - uniform payments (bidders are paid the same price) with land-use competition (both CP and EP eligible for payments), targeting carbon - achieved significant carbon sequestration but negligible biodiversity co-benefits. Land-use regulation (only EP eligible) and two additional incentives complementing the reference policy (biodiversity premium, carbon levy) increased biodiversity co-benefits, but mostly inefficiently. Discriminatory payments (bidders are paid their bid price) with land-use competition were efficient, and with multifunctional targeting of both carbon and biodiversity co-benefits increased the biodiversity co-benefits almost 100-fold. Our findings were robust to uncertainty in global outlook, and to key agricultural productivity and land-use adoption assumptions. The results suggest clear policy directions, but careful mechanism design will be key to realising these efficiencies in practice. Choices remain for society about the amount of carbon and biodiversity co-benefits desired, and the price it is prepared to pay for them.

Design of mechanism-based inhibitors of transthyretin amyloidosis:Studies with biphenyl ethers and new structural templates

Transthyretin (TTR), a tetrameric thyroxine (T4) carrier protein, is associated with a variety of amyloid diseases. In this study, we explore the potential of biphenyl ethers (BPE), which are shown to interact with a high affinity to its T4 binding site thereby preventing its aggregation and fibrillogenesis. They prevent fibrillogenesis by stabilizing the tetrameric ground state of transthyretin. Additionally, we identify two new structural templates (2-(5-mercapto-[1,3,4]oxadiazol-2-yl)-phenol and 2,3,6-trichloro-N-(4H-[1,2,4]triazol-3-yl) represented as compounds 11 and 12, respectively, throughout the manuscript) exhibiting the ability to arrest TTR amyloidosis. The dissociation constants for the binding of BPEs and compound 11 and 12 to TTR correlate with their efficacies of inhibiting amyloidosis. They also have the ability to inhibit the elongation of intermediate fibrils as well as show nearly complete (> 90%) disruption of the preformed fibrils. The present study thus establishes biphenyl ethers and compounds 11 and 12 as very potent inhibitors of TTR fibrillization and inducible cytotoxicity.

Design of mechanism-based inhibitors of transthyretin amyloidosis: Studies with biphenyl ethers and new structural templates

Transthyretin (TTR), a tetrameric thyroxine (T4) carrier protein, is associated with a variety of amyloid diseases. In this study, we explore the potential of biphenyl ethers (BPE), which are shown to interact with a high affinity to its T4 binding site thereby preventing its aggregation and fibrillogenesis. They prevent fibrillogenesis by stabilizing the tetrameric ground state of transthyretin. Additionally, we identify two new structural templates (2-(5-mercapto-[1,3,4]oxadiazol-2-yl)-phenol and 2,3,6-trichloro-N-(4H-[1,2,4]triazol-3-yl) represented as compounds 11 and 12, respectively, throughout the manuscript) exhibiting the ability to arrest TTR amyloidosis. The dissociation constants for the binding of BPEs and compound 11 and 12 to TTR correlate with their efficacies of inhibiting amyloidosis. They also have the ability to inhibit the elongation of intermediate fibrils as well as show nearly complete (> 90%) disruption of the preformed fibrils. The present study thus establishes biphenyl ethers and compounds 11 and 12 as very potent inhibitors of TTR fibrillization and inducible cytotoxicity.