Adverse selection, credit and efficiency: The case of the missing market

We analyze a standard environment of adverse selection in credit markets. In our environment,entrepreneurs who are privately informed about the quality of their projects needto borrow in order to invest. Conventional wisdom says that, in this class of economies, thecompetitive equilibrium is typically inefficient.We show that this conventional wisdom rests on one implicit assumption: entrepreneurscan only access monitored lending. If a new set of markets is added to provide entrepreneurswith additional funds, efficiency can be attained in equilibrium. An important characteristic ofthese additional markets is that lending in them must be unmonitored, in the sense that it doesnot condition total borrowing or investment by entrepreneurs. This makes it possible to attainefficiency by pooling all entrepreneurs in the new markets while separating them in the marketsfor monitored loans.

Hiring and firing costs, adverse selection and long-term unemployment

In this paper, we present a matching model with adverse selection that explains why flows into and out of unemployment are much lower in Europe compared to North America, while employment-to-employment flows are similar in the two continents. In the model,firms use discretion in terms of whom to fire and, thus, low quality workers are more likely to be dismissed than high quality workers. Moreover, as hiring and firing costs increase, firms find it more costly to hire a bad worker and, thus, they prefer to hire out of the pool of employed job seekers rather than out of the pool of the unemployed, who are more likely to turn out to be 'lemons'. We use microdata for Spain and the U.S. and find that the ratio of the job finding probability of the unemployed to the job finding probability of employed job seekers was smaller in Spain than in the U.S. Furthermore, using U.S. data, we find that the discrimination of the unemployed increased over the 1980's in those states that raised firing costs by introducing exceptions to the employment-at-will doctrine.

Improved estimation of the covariance matrix of stock returns with an application to portofolio selection

This paper proposes to estimate the covariance matrix of stock returnsby an optimally weighted average of two existing estimators: the samplecovariance matrix and single-index covariance matrix. This method isgenerally known as shrinkage, and it is standard in decision theory andin empirical Bayesian statistics. Our shrinkage estimator can be seenas a way to account for extra-market covariance without having to specifyan arbitrary multi-factor structure. For NYSE and AMEX stock returns from1972 to 1995, it can be used to select portfolios with significantly lowerout-of-sample variance than a set of existing estimators, includingmulti-factor models.

Tecnología del salado y secado artificial de la merluza (merluccius gayi peruanus)

Describe el desarrollo del proceso de salado y secado artificial de la merluza, como un método alternativo a la producción de filetes y bloques congelados, comprendiendo las experiencias comparativas de métodos de salado e igualmente las condiciones termodinámicas del aíre para el secado artificial, estudios de estabilidad de almacenamiento del producto experimental, calidad, rendimiento y aceptación por el consumidor. Además, se presenta sugerencias para las normas de procesamiento y calidad del producto.

Dynamic adverse selection and debt

This paper argues that the strategic use of debt favours the revelationof information in dynamic adverse selection problems. Our argument is basedon the idea that debt is a credible commitment to end long term relationships.Consequently, debt encourages a privately informed party to disclose itsinformation at early stages of a relationship. We illustrate our pointwith the financing decision of a monopolist selling a good to a buyerwhose valuation is private information. A high level of (renegotiable)debt, by increasing the scope for liquidation, may induce the highvaluation buyer to buy early at a high price and thus increase themonopolist's expected payoff. By affecting the buyer's strategy, it mayreduce the probability of excessive liquidation. We investigate theconsequences of good durability and we examine the way debt mayalleviate the ratchet effect.

Long-run selection and the work ethic

That individuals contribute in social dilemma interactions even when contributing is costly is a well-established observation in the experimental literature. Since a contributor is always strictly worse off than a non-contributor the question is raised if an intrinsic motivation to contribute can survive in an evolutionary setting. Using recent results on deterministic approximation of stochastic evolutionary dynamics we give conditions for equilibria with a positive number of contributors to be selected in the long run.

Equilibrium selection through incomplete information in coordination games: An experimental study

We perform an experiment on a pure coordination game with uncertaintyabout the payoffs. Our game is closely related to models that have beenused in many macroeconomic and financial applications to solve problemsof equilibrium indeterminacy. In our experiment each subject receives anoisy signal about the true payoffs. This game has a unique strategyprofile that survives the iterative deletion of strictly dominatedstrategies (thus a unique Nash equilibrium). The equilibrium outcomecoincides, on average, with the risk-dominant equilibrium outcome ofthe underlying coordination game. The behavior of the subjects convergesto the theoretical prediction after enough experience has been gained. The data (and the comments) suggest that subjects do not apply through"a priori" reasoning the iterated deletion of dominated strategies.Instead, they adapt to the responses of other players. Thus, the lengthof the learning phase clearly varies for the different signals. We alsotest behavior in a game without uncertainty as a benchmark case. The gamewith uncertainty is inspired by the "global" games of Carlsson and VanDamme (1993).

Optimal contracts, adverse selection and social preferences: An experiment

It has long been standard in agency theory to search for incentive-compatible mechanisms on the assumption that people care only about their own material wealth. However, this assumption is clearly refuted by numerous experiments, and we feel that it may be useful to consider nonpecuniary utility in mechanism design and contract theory. Accordingly, we devise an experiment to explore optimal contracts in an adverse-selection context. A principal proposes one of three contract menus, each of which offers a choice of two incentive-compatible contracts, to two agents whose types are unknown to the principal. The agents know the set of possible menus, and choose to either accept one of the two contracts offered in the proposed menu or to reject the menu altogether; a rejection by either agent leads to lower (and equal) reservation payoffs for all parties. While all three possible menus favor the principal, they do so to varying degrees. We observe numerous rejections of the more lopsided menus, and approach an equilibrium where one of the more equitable contract menus (which one depends on the reservation payoffs) is proposed and agents accept a contract, selecting actions according to their types. Behavior is largely consistent with all recent models of social preferences, strongly suggesting there is value in considering nonpecuniary utility in agency theory.

KIT mutations and dose selection for imatinib in patients with advanced gastrointestinal stromal tumours.

A recent randomized EORTC phase III trial, comparing two doses of imatinib in patients with advanced gastrointestinal stromal tumours (GISTs), reported dose dependency for progression-free survival. The current analysis of that study aimed to assess if tumour mutational status correlates with clinical response to imatinib. Pre-treatment samples of GISTs from 377 patients enrolled in phase III study were analyzed for mutations of KIT or PDGFRA by combination of D-HPLC and direct sequencing of tumour genomic DNA. Mutation types were correlated with patients' survival data. The presence of exon 9-activating mutations in KIT was the strongest adverse prognostic factor for response to imatinib, increasing the relative risk of progression by 171% (P<0.0001) and the relative risk of death by 190% (P<0.0001) when compared with KIT exon 11 mutants. Similarly, the relative risk of progression was increased by 108% (P<0.0001) and the relative risk of death by 76% (P=0.028) in patients without detectable KIT or PDGFRA mutations. In patients whose tumours expressed an exon 9 KIT oncoprotein, treatment with the high-dose regimen resulted in a significantly superior progression-free survival (P=0.0013), with a reduction of the relative risk of 61%. We conclude that tumour genotype is of major prognostic significance for progression-free survival and overall survival in patients treated with imatinib for advanced GISTs. Our findings suggest the need for differential treatment of patients with GISTs, with KIT exon 9 mutant patients benefiting the most from the 800 mg daily dose of the drug.

Adaptive model selection using empirical complexities

Given $n$ independent replicates of a jointly distributed pair $(X,Y)\in {\cal R}^d \times {\cal R}$, we wish to select from a fixed sequence of model classes ${\cal F}_1, {\cal F}_2, \ldots$ a deterministic prediction rule $f: {\cal R}^d \to {\cal R}$ whose risk is small. We investigate the possibility of empirically assessingthe {\em complexity} of each model class, that is, the actual difficulty of the estimation problem within each class. The estimated complexities are in turn used to define an adaptive model selection procedure, which is based on complexity penalized empirical risk.The available data are divided into two parts. The first is used to form an empirical cover of each model class, and the second is used to select a candidate rule from each cover based on empirical risk. The covering radii are determined empirically to optimize a tight upper bound on the estimation error. An estimate is chosen from the list of candidates in order to minimize the sum of class complexity and empirical risk. A distinguishing feature of the approach is that the complexity of each model class is assessed empirically, based on the size of its empirical cover.Finite sample performance bounds are established for the estimates, and these bounds are applied to several non-parametric estimation problems. The estimates are shown to achieve a favorable tradeoff between approximation and estimation error, and to perform as well as if the distribution-dependent complexities of the model classes were known beforehand. In addition, it is shown that the estimate can be consistent,and even possess near optimal rates of convergence, when each model class has an infinite VC or pseudo dimension.For regression estimation with squared loss we modify our estimate to achieve a faster rate of convergence.

Possíveis Impactos do Projeto: “Uso de Smen Resfriado e Inseminação Artificial em Caprinos Leiteiros na República de Cabo Verde

Este artigo procura discutir o contexto do projeto “Uso de sêmen resfriado e inseminação artificial em caprinos leiteiros na República de Cabo Verde”, suas implicações no sistema de criação de caprinos leiteiros, bem como seu impacto nos planos social, ambiental e econômico.

Possíveis Impactos do Projeto: “Uso de Smen Resfriado e Inseminação Artificial em Caprinos Leiteiros na República de Cabo Verde

Este artigo procura discutir o contexto do projeto “Uso de sêmen resfriado e inseminação artificial em caprinos leiteiros na República de Cabo Verde”, suas implicações no sistema de criação de caprinos leiteiros, bem como seu impacto nos planos social, ambiental e econômico.

Avaliação de Recursos Hídricos e Viabilidade da Recarga Artificial de Aquíferos na Bacia Hidrográfica dos Engenhos na Ilha de Santiago - Cabo Verde

A existência de água é um fator determinante no desenvolvimento socioeconómico da Bacia Hidrográfica dos Engenhos. Situada numa região de escassez hídrica, qualquer projeto no âmbito da distribuição de água às populações e/ou para outros fins, bem como a recolha e o destino a dar às águas residuais, é de capital importância para a fixação de pessoas e para a criação de riqueza. Objeto de vários estudos e trabalhos sobre os recursos hídricos da região e sobre o Arquipélago de Cabo Verde, este é mais um que procura avaliar a disponibilidade hídrica anual em resultado da precipitação média anual na Bacia Hidrográfica dos Engenhos e, com vista ao aumento da qualidade e quantidade de água disponível, analisar a viabilidade em implementar a técnica de recarga artificial de aquíferos, a partir de caudal excedentário de nascentes, durante a época da chuva. Esta dissertação está estruturada em sete capítulos. No primeiro, de introdução, procurou-se fazer o enquadramento geral da temática abordada, definir objetivos e metodologia de trabalho. O capítulo segundo é dedicado à revisão bibliográfica e o terceiro ao enquadramento geohidrológico e geográfico da ilha de Santiago. Os capítulos seguintes, do quarto ao sexto, são dedicados à caracterização da Bacia Hidrográfica dos Engenhos, cálculo de disponibilidades hídricas e desenvolver um projeto de recarga artificial de aquíferos para aumento da quantidade e qualidade da água. Por último, no capítulo sétimo, tecem-se algumas conclusões e recomendações a ter em conta na gestão de recursos hídricos da região, com vista a ultrapassar problemas relacionados com a escassez e melhorar as condições de vida das populações residentes no local.

Revealed preference and indifferent selection

It is shown that preferences can be constructed from observed choice behavior in a way that is robust to indifferent selection (i.e., the agent is indifferent between two alternatives but, nevertheless, is only observed selecting one of them). More precisely, a suggestion by Savage (1954) to reveal indifferent selection by considering small monetary perturbations of alternatives is formalized and generalized to a purely topological framework: references over an arbitrary topological space can be uniquely derived from observed behavior under the assumptions that they are continuous and nonsatiated and that a strictly preferred alternative is always chosen, and indifferent selection is then characterized by discontinuity in choice behavior. Two particular cases are then analyzed: monotonic preferences over a partially ordered set, and preferences representable by a continuous pseudo-utility function.

O desmame precoce pela substituição do aleitamento natural por artificial: intervenção de enfermagem

O desmame precoce é um tema que vem sendo discutido com muita frequência, contudo, observa-se que essa prática está sendo banido, o que põe em risco o desenvolvimento do bebé, já que o desmame precoce é o principal responsável pela desnutrição e mortalidade infantil no primeiro ano de vida. Faz-se necessária a detenção precoce dos factores de risco á interrupção do aleitamento materno exclusivo. O presente trabalho tem como objetivo perceber o quanto o desmame precoce através da substituição do aleitamento natural pelo aleitamento artificial prejudica tanto o bebé quanto a mãe. O aleitamento materno exclusivo é uma das primeiras intervenções de saúde infantil que a mãe pode empreender para assegurar a saúde de seu bebé. Relativamente à metodologia foi eleita uma abordagem qualitativa e para recolha dos dados foi aplicado um questionário estruturado, contendo perguntas objetivas sobre o aleitamento materno exclusivo e o desmame precoce que foram posteriormente submetidos a uma análise de conteúdo. Foram entrevistadas 33 mães lactantes com idade compreendida entre os 15 aos 43 anos de idade, no Serviço da Maternidade do Hospital Baptista de Sousa em São Vicente de 23 de Maio á 18 de Junho de 2014. Autores como Couto (2009, p.216) “têm comprovado os benefícios do aleitamento natural na saúde do bebé/mãe, no fortalecimento do vínculo afetivo entre ambos, bem como na economia das famílias, instituições de saúde e dos governos”. Nesse contexto percebe-se a importância da intervenção do enfermeiro no processo do aleitamento natural, já que ele é o educador, incentivador e promotor desse benefício. Nos resultados das entrevistas mostraram que a maioria (88%) das inquiridas têm conhecimento do aleitamento materno obtido através do enfermeiro, médico, pediatras, familiares, comunicação social, e de outras formas, e têm a noção de que até 6 meses é o periodo ideal para o aleitamento materno exclusivo. As inquiridas apontaram que factores tais como problemas com as mamas, choro do bebé, regresso da mãe ao trabalho, infeção por HIV, doenças crónias e estar debilitada contribuem para o desmame precoce.