Managing competition in professional services and the burden of inertia

Professional services require certain organizational patterns in order to avoid information asymmetries and external effects. These same patterns are used within production structures involving various degrees of monopoly. However, competitive restraints are justified today only when substantial external effects are clearly present, whereas information asymmetries hardly justify such restraints because reputational investments have become widespread in the economy and are relatively efficient in overcoming such asymmetries. As a consequence, innovation in the production of externalities can make competitive constraints unnecessary.

Spanish auditors and the 'true and fair view'

In 1990 a new Spanish 'Plan General de Contabilidad' (PGC) implementedthe requirements of the EU 4th and 7th Directives in Spain. Included in the PGC is the requirement, derived from the 4th Directive, that accounts should present a 'true and fair view', in Spanish 'imagen fiel'. Where the term has been used in English speaking jurisdictions it has proved to have a variety of shades of meaning, and to have had strikingly different impact in different countries. Within the European Union the term has been seen as a 'Trojan horse', inserted into the 4th Directive to inject an Anglo-Saxon approach of flexibility and judgement dependent accounting into a Continental European accounting tradition of detailed prescription and uniformity. In this paper we report on a survey of the views and experience of Spanish auditors relating to 'imagen fiel'. Specifically, we:1) Review the English language literature on 'true and fair view' to identify the key areas of controversy.2) Consider the significance of the 'true and fair view' within the EU 4th Directive.3) Report on the experience of Spanish auditors in working with this concept, their views on the value of the term, and their experience in use of the true and fair view 'override'.

EORTC-ROG expert opinion: radiotherapy volume and treatment guidelines for neoadjuvant radiation of adenocarcinomas of the gastroesophageal junction and the stomach.

PURPOSE: The Gastro-Intestinal Working Party of the EORTC Radiation Oncology Group (GIWP-ROG) developed guidelines for target volume definition in neoadjuvant radiation of adenocarcinomas of the gastroesophageal junction (GEJ) and the stomach. METHODS AND MATERIALS: Guidelines about the definition of the clinical target volume (CTV) are based on a systematic literature review of the location and frequency of local recurrences and lymph node involvement in adenocarcinomas of the GEJ and the stomach. Therefore, MEDLINE was searched up to August 2008. Guidelines concerning prescription, planning and treatment delivery are based on a consensus between the members of the GIWP-ROG. RESULTS: In order to support a curative resection of GEJ and gastric cancer, an individualized preoperative treatment volume based on tumour location has to include the primary tumour and the draining regional lymph nodes area. Therefore we recommend to use the 2nd English Edition of the Japanese Classification of Gastric Carcinoma of the Japanese Gastric Cancer Association which developed the concept of assigning tumours of the GEJ and the stomach to anatomically defined sub-sites corresponding respectively to a distinct lymphatic spread pattern. CONCLUSION: The GIWP-ROG defined guidelines for preoperative irradiation of adenocarcinomas of the GEJ and the stomach to reduce variability in the framework of future clinical trials.

Product market deregulation and the U.S. employment miracle

We consider the dynamic relationship between product market entry regulation and equilibrium unemployment. The main theoretical contribution is combining a job matchingmodel with monopolistic competition in the goods market and individual wage bargaining.Product market competition affects unemployment by two channels: the output expansion effect and a countervailing effect due to a hiring externality. Competition is then linked to barriers to entry. We calibrate the model to US data and perform a policy experiment to assess whether the decrease in trend unemployment during the 1980 s and 1990 s could be attributed to product market deregulation. Our quantitative analysis suggests that under individual bargaining, a decrease of less than two tenths of a percentage point of unemployment rates can be attributed to product market deregulation, a surprisingly small amount.

Endogenous labor market participation and the business cycle

Existing models of equilibrium unemployment with endogenous labor market participation are complex, generate procyclical unemployment rates and cannot match unemployment variability relative to GDP. We embed endogenous participation in a simple, tractable job market matching model, show analytically how variations in the participation rate are driven by the cross-sectional density of home productivity near the participation threshold, andhow this density translates into an extensive-margin labor supply elasticity. A calibration of the model to macro data not only matches employment and participation variabilities but also generates strongly countercyclical unemployment rates. With some wage rigidity the model also matches unemployment variations well. Furthermore, the labor supply elasticity implied by our calibration is consistent with microeconometric evidence for the US.

Optimal law enforcement and criminal organization

In this paper, we take an organizational view of organized crime. In particular, we study the organizational consequences of product illegality attending at the following characteristics: (i) contracts are not enforceable in court, (ii) all participants are subject to the risk of being punished, (iii) employees present a major threat to the entrepreneur having the most detailed knowledge concerning participation, (iv) separation between ownership and management is difficult because record-keeping and auditing augments criminal evidence.

Forward induction and the excess capacity puzzle: An experimental investigation

While the theoretical industrial organization literature has long arguedthat excess capacity can be used to deter entry into markets, there islittle empirical evidence that incumbent firms effectively behave in thisway. Bagwell and Ramey (1996) propose a game with a specific sequence ofmoves and partially-recoverable capacity costs in which forward inductionprovides a theoretical rationalization for firm behavior in the field. Weconduct an experiment with a game inspired by their work. In our data theincumbent tends to keep the market, in contrast to what the forwardinduction argument of Bagwell and Ramey would suggest. The results indicatethat players perceive that the first mover has an advantage without havingto pre-commit capacity. In our game, evolution and learning do not driveout this perception. We back these claims with data analysis, atheoretical framework for dynamics, and simulation results.

Comment to "Weak instruments robust tests in GMM and the New Keynesian Phillips curve" by Frank Kleibergen and Sophocles Mavroeidis

I discuss the identifiability of a structural New Keynesian Phillips curve when it is embedded in a small scale dynamic stochastic general equilibrium model. Identification problems emerge because not all the structural parameters are recoverable from the semi-structural ones and because the objective functions I consider are poorly behaved. The solution and the moment mappings are responsible for the problems.

Audit quality: Attributes, private safeguards and the role of regulation

This article examines the private mechanisms used to safeguard quality in auditing, with a view to defining rules capable of facilitating the performance of market forces. An outline is given of a general theory of private quality assurance in auditing, based on the use of quasi-rents to self-enforce quality dimensions. Particular attention is paid to the role of fee income diversification as the key ingredient of private incentives for audit quality. The role of public regulation is then situated in the context defined by the presence of these safeguard mechanisms. This helps in defining the content of rules and the function of regulatory bodies in facilitating and strengthening the protective operation of the market. By making sense of the interaction between regulation, quality attributes and private safeguards, the analysis helps to evaluate the relative merits of different regulatory options.

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.

Crescent and star shapes of members of the Chlamydiales order: impact of fixative methods.

Members of the Chlamydiales order all share a biphasic lifecycle alternating between small infectious particles, the elementary bodies (EBs) and larger intracellular forms able to replicate, the reticulate bodies. Whereas the classical Chlamydia usually harbours round-shaped EBs, some members of the Chlamydia-related families display crescent and star-shaped morphologies by electron microscopy. To determine the impact of fixative methods on the shape of the bacterial cells, different buffer and fixative combinations were tested on purified EBs of Criblamydia sequanensis, Estrella lausannensis, Parachlamydia acanthamoebae, and Waddlia chondrophila. A linear discriminant analysis was performed on particle metrics extracted from electron microscopy images to recognize crescent, round, star and intermediary forms. Depending on the buffer and fixatives used, a mixture of alternative shapes were observed in varying proportions with stars and crescents being more frequent in C. sequanensis and P. acanthamoebae, respectively. No tested buffer and chemical fixative preserved ideally the round shape of a majority of bacteria and other methods such as deep-freezing and cryofixation should be applied. Although crescent and star shapes could represent a fixation artifact, they certainly point towards a diverse composition and organization of membrane proteins or intracellular structures rather than being a distinct developmental stage.

ON THE ROLE OF PERIOD-2 IN THE CIRCADIAN AND HOMEOSTATIC REGULATION OF SLEEP

Humans spend one third of their life sleeping, then we could raise the basic question: Why do we sleep? Despite the fact that we still don't fully understand its function, we made much progress in understanding at different levels how sleep is regulated. One model suggests that sleep is regulated by two processes: a homeostatic process that tracks the need for sleep and by a circadian rhythm that determines the preferred time-of-day sleep occurs. At the molecular level circadian rhythms are a property of interlocking transcriptional regula-tors referred to as clock genes. The heterodimeric transcription factors BMAL1::CLOCK/NPAS2 drive the transcription of many target genes including the clock genes Cryptochome1 (Cry1), Cry2, Period1 (Per1), and Per2. The encoded CRY/PER proteins are transcriptional inhibitors of BMAL1::CLOCK/NPAS2 thereby providing negative feedback to their own transcription. These genes seem, however, also involved in sleep homeostasis because the brain expression of clock genes, es-pecially that of Per2, increase as a function of time-spent-awake and because mice lacking clock genes display altered sleep homeostasis. The aim of first part of my doctoral work has been to advance our understanding the link that exists between sleep homeostasis and circadian rhythms investigating a possible mechanism by which sleep deprivation could alter clock gene expression by quantifying DNA-binding of the core-clock genes BMAL1, CLOCK and NPAS2 to their target chromatin loci including the E-box enhancers of the Per2 promoter. We made use of chromatin immunoprecipitation (ChIP) and quantitative poly-merase chain reaction (qPCR) to show that DNA-binding of CLOCK and BMAL1 to their target genes changes as a function of time-of-day in both liver and cerebral cortex. We then performed a 6h sleep deprivation (SD) and observed a significant decrease in DNA-binding of CLOCK and BMAL1 to Dbp. This is consistent with a decrease in Dbp mRNA levels after SD. The DNA-binding of NPAS2 and BMAL1 to Per2 was similarly decreased following SD. However, SD has been previously shown to in-crease Per2 expression in the cortex which seems paradoxical. Our results demonstrate that sleep-wake history can affect the molecular clock machinery directly at the level of the chromatin thereby altering the cortical expression of Dbp and Per2, and likely other targets. However, the precise dy-namic relationship between DNA-binding and mRNA expression, especially for Per2, remains elusive. The second aim of my doctoral work has been to perform an in depth characterization of cir-cadian rhythmicity, sleep architecture, analyze the response to SD in full null-Per2 knock-out (Per2-/-) mice, and Per1-/- mice, as well as their double knock-out offspring (Per1,2-/-) and littermate wildtype (Wt) mice. The techniques used include locomotor activity recording by passive infrared (PIR) sen-sors, EEG/EMG surgery, recording, and analysis, and cerebral cortex extraction and quantification of mRNA levels by qPCR. Under standard LD12:12 conditions, we found that wakefulness onset, as well as the time courses of clock gene expression in the brain and corticosterone plasma levels were ad-vanced by about 2h in Per2-/- mice compared to Wt mice. When released under constant dark condi-tions almost all Per2-/- mice (97%) became arrhythmic immediately. From these observations, we conclude that while Per2-/- mice seem to be able to anticipate dark onset, this does not result from a self-sustained circadian clock. Our results suggest instead that the earlier onset of activity results from a labile, not-self sustained 22h rhythm linked to light onset suggesting the existence of a light-driven rhythm. Analyses of sleep under LD12:12 conditions revealed that in both Per2-/- and Per1,2-/- mice the same sleep phenotypes are observed compared to Wt mice: increased NREM sleep frag-mentation and inability to adequately compensate the loss of NREM sleep. That suggests a possible role of PER2 in sleep consolidation and recovery.

Focal dystonia and the Sensory-Motor Integrative Loop for Enacting (SMILE).

Performing accurate movements requires preparation, execution, and monitoring mechanisms. The first two are coded by the motor system, the latter by the sensory system. To provide an adaptive neural basis to overt behaviors, motor and sensory information has to be properly integrated in a reciprocal feedback loop. Abnormalities in this sensory-motor loop are involved in movement disorders such as focal dystonia, a hyperkinetic alteration affecting only a specific body part and characterized by sensory and motor deficits in the absence of basic motor impairments. Despite the fundamental impact of sensory-motor integration mechanisms on daily life, the general principles of healthy and pathological anatomic-functional organization of sensory-motor integration remain to be clarified. Based on the available data from experimental psychology, neurophysiology, and neuroimaging, we propose a bio-computational model of sensory-motor integration: the Sensory-Motor Integrative Loop for Enacting (SMILE). Aiming at direct therapeutic implementations and with the final target of implementing novel intervention protocols for motor rehabilitation, our main goal is to provide the information necessary for further validating the SMILE model. By translating neuroscientific hypotheses into empirical investigations and clinically relevant questions, the prediction based on the SMILE model can be further extended to other pathological conditions characterized by impaired sensory-motor integration.

Thermal activation and ATP dependence of the cytoskeleton remodeling dynamics

The cytoskeleton (CSK) is a nonequilibrium polymer network that uses hydrolyzable sources of free energy such as adenosine triphosphate (ATP) to remodel its internal structure. As in inert nonequilibrium soft materials, CSK remodeling has been associated with structural rearrangements driven by energy-activated processes. We carry out particle tracking and traction microscopy measurements of alveolar epithelial cells at various temperatures and ATP concentrations. We provide the first experimental evidence that the remodeling dynamics of the CSK is driven by structural rearrangements over free-energy barriers induced by thermally activated forces mediated by ATP. The measured activation energy of these forces is ~40kBTr (kB being the Boltzmann constant and Tr being the room temperature). Our experiments provide clues to understand the analogy between the dynamics of the living CSK and that of inert nonequilibrium soft materials.

The red island and the seven dwarfs: body size reduction in Cheirogaleidae

AimSmall body size in Madagascar's dwarf and mouse lemurs (Cheirogaleidae) is generally viewed as primitive. We investigated the evolution of body size in this family and in its sister-taxon, the Lepilemuridae, from phylogenetic, ontogenetic and adaptive perspectives. LocationMadagascar. MethodsWe used a phylogenetic method to reconstruct the evolution of body size in lemurs, and allometric regression models of gestation periods and static and growth allometries in Cheirogaleidae and Lepilemuridae to test the hypothesis that dwarfing occurred as a result of truncated ontogeny (progenesis). We also examined adaptive hypotheses relating body size to environmental variability, life history, seasonality of reproduction, hypothermy (use of torpor), and a diet rich in plant exudates. ResultsOur results indicated that cheirogaleids experienced at least four independent events of body size reduction from an ancestor as large as living Lepilemuridae, by means of progenesis. Our interpretation is supported by the paedomorphic appearance and parallel ontogenetic trajectories of the dwarf taxa, as well as their very short gestation periods and increased fecundity. Lepilemur species that occupy more predictable environments are significantly larger than those occupying unpredictable habitats. Main conclusionsCheirogaleidae appear to be paedomorphic dwarfs, a consequence of progenesis, probably as an adaptation to high environmental unpredictability. Although the capacity to use hypothermy is related to small body size, this advantage is unlikely to have driven dwarfing in cheirogaleids. We propose that gummmivory/exudativory co-evolved with body size reduction in this clade, probably from a folivorous ancestor. Their small size is derived, and their suitability as models for the ancestral primate' is therefore dubious.