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 need to borrow in order to invest. Conventional wisdom says that, in this class of economies, the competitive equilibrium is typically inefficient. We show that this conventional wisdom rests on one implicit assumption: entrepreneurs can only access monitored lending. If a new set of markets is added to provide entrepreneurs with additional funds, efficiency can be attained in equilibrium. An important characteristic of these additional markets is that lending in them must be unmonitored, in the sense that it does not condition total borrowing or investment by entrepreneurs. This makes it possible to attain efficiency by pooling all entrepreneurs in the new markets while separating them in the markets for monitored loans.

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.

Optimal Design of Permit Markets with an Ex Ante Pollution Target, August 2006

In this paper, we examine the design of permit trading programs when the objective is to minimize the cost of achieving an ex ante pollution target, that is, one that is defined in expectation rather than an ex post deterministic value. We consider two potential sources of uncertainty, the presence of either of which can make our model appropriate: incomplete information on abatement costs and uncertain delivery coefficients. In such a setting, we find three distinct features that depart from the well-established results on permit trading: (1) the regulator’s information on firms’ abatement costs can matter; (2) the optimal permit cap is not necessarily equal to the ex ante pollution target; and (3) the optimal trading ratio is not necessarily equal to the delivery coefficient even when it is known with certainty. Intuitively, since the regulator is only required to meet a pollution target on average, she can set the trading ratio and total permit cap such that there will be more pollution when abatement costs are high and less pollution when abatement costs are low. Information on firms’ abatement costs is important in order for the regulator to induce the optimal alignment between pollution level and abatement costs.

Monoclonal antibodies to carcinoembryonic antigen: ionic strength as a factor in the selection of antibodies for immunoscintigraphy.

As part of an ongoing effort to improve the technique of immunoscintigraphy for the detection of human carcinomas with radiolabeled monoclonal antibodies (MABs) to carcinoembryonic antigen (CEA), we have developed a series of MABs to CEA and have studied the effects of low- and physiological molarity buffers on their CEA binding and affinity, as well as their cross-reactivity with granulocyte glycoprotein(s). These in vitro results in different buffer systems were then correlated with the use of these MABs to CEA in the detection of human colon carcinoma grafts in nude mice. Our results show that the binding of CEA by some MABs is influenced by ionic strength and that this may be an important factor in their successful use for the immunolocalization of carcinomas in vivo.

Adjustment to Target Capital, Finance, and Growth

Does financial development result in capital being reallocated more rapidly to industries where it is most productive? We argue that if this was the case, financially developed countries should see faster growth in industries with investment opportunities due to global demand and productivity shifts. Testing this cross-industry cross-country growth implication requires proxies for (latent) global industry investment opportunities. We show that tests relying only on data from specific (benchmark) countries may yield spurious evidence for or against the hypothesis. We therefore develop an alternative approach that combines benchmark-country proxies with a proxy that does not reflect opportunities specific to a country or level of financial development. Our empirical results yield clear support for the capital reallocation hypothesis.

A Model of Collateral, Investment, and Adverse Selection

This paper characterizes the relationship between entrepreneurial wealth and aggregate investment under adverse selection. Its main finding is that such a relationship need not be monotonic. In particular, three results emerge from the analysis: (i) pooling equilibria, in which investment is independent of entrepreneurial wealth, are more likely to arise when entrepreneurial wealth is relatively low; (ii) separating equilibria, in which investment is increasing in entrepreneurial wealth, are most likely to arise when entrepreneurial wealth is relatively high and; (iii) for a given interest rate, an increase in entrepreneurial wealth may generate a discontinuous fall in investment.

Time Series Input Selection using Multiple Kernel Learning

In this paper we study the relevance of multiple kernel learning (MKL) for the automatic selection of time series inputs. Recently, MKL has gained great attention in the machine learning community due to its flexibility in modelling complex patterns and performing feature selection. In general, MKL constructs the kernel as a weighted linear combination of basis kernels, exploiting different sources of information. An efficient algorithm wrapping a Support Vector Regression model for optimizing the MKL weights, named SimpleMKL, is used for the analysis. In this sense, MKL performs feature selection by discarding inputs/kernels with low or null weights. The approach proposed is tested with simulated linear and nonlinear time series (AutoRegressive, Henon and Lorenz series).

Type I signal peptidase from Leishmania is a target of the immune response in human cutaneous and visceral leishmaniasis.

The gene encoding type I signal peptidase (Lmjsp) has been cloned from Leishmania major. Lmjsp encodes a protein of 180 amino residues with a predicted molecular mass of 20.5 kDa. Comparison of the protein sequence with those of known type I signal peptidases indicates homology in five conserved domains A-E which are known to be important, or essential, for catalytic activity. Southern blot hybridisation analysis indicates that there is a single copy of the Lmjsp gene. A recombinant SPase protein and a synthetic peptide of the L. major signal peptidase were used to examine the presence of specific antibodies in sera from either recovered or active individuals of both cutaneous and visceral leishmaniasis. This evaluation demonstrated that sera from cutaneous and visceral forms of leishmaniasis are highly reactive to both the recombinant and synthetic signal peptidase antigens. Therefore, the Leishmania signal peptidase, albeit localised intracellularly, is a significant target of the Leishmania specific immune response and highlights its potential use for serodiagnosis of cutaneous and visceral leishmaniasis.

Development and validating an educational booklet for childbirth companions

Objective The article describes the steps in producing and validating an educational booklet for childbirth companions. Method Methodological study conducted in 2011 consisting of the following steps: situational assessment; establishing brochure content; content selection and referencing; drafting the text; design of illustrations; layout; consultation of specialists; consultation of target audience; amendments; proofreading; evaluation using the Flesch Reading Ease Formula. The topics portrayed the sequence of events involving support from gestation to the postpartum period. Results The concordance rate among companions was greater than or equal to 81.8% for the topics organisation, writing style, presentation and motives. The overall Content Validity Index of the booklet was 0.94. The booklet was classified as easy reading or very easy reading according to the results of the Flesch Reading Ease Formula. Conclusion The presentation and content of the manual were validated for use with the target audience by the specialists and representatives of the target audience.

Myocardial flow reserve by Rb-82 cardiac PET improves the selection of patients eligible for invasive coronary angiography

Aim: We asked whether myocardial flow reserve (MFR) by Rb-82 cardiac PET improve the selection of patients eligible for invasive coronary angiography (ICA). Material and Methods: We enrolled 26 consecutive patients with suspected or known coronary artery disease who performed dynamic Rb-82 PET/CT and (ICA) within 60 days; 4 patients who underwent revascularization or had any cardiovascular events between PET and ICA were excluded. Myocardial blood flow at rest (rMBF), at stress with adenosine (sMBF) and myocardial flow reserve (MFR=sMBF/rMBF) were estimated using the 1-compartment Lortie model (FlowQuant) for each coronary arteries territories. Stenosis severity was assessed using computer-based automated edge detection (QCA). MFR was divided in 3 groups: G1:MFR<1.5, G2:1.5≤MFR<2 and G3:2≤MFR. Stenosis severity was graded as non-significant (<50% or FFR ≥0.8), intermediate (50%≤stenosis<70%) and severe (≥70%). Correlation between MFR and percentage of stenosis were assessed using a non-parametric Spearman test. Results: In G1 (44 vessels), 17 vessels (39%) had a severe stenosis, 11 (25%) an intermediate one, and 16 (36%) no significant stenosis. In G2 (13 vessels), 2 (15%) vessels presented a severe stenosis, 7 (54%) an intermediate one, and 4 (31%) no significant stenosis. In G3 (9 vessels), 0 vessel presented a severe stenosis, 1 (11%) an intermediate one, and 8 (89%) no significant stenosis. Of note, among 11 patients with 3-vessel low MFR<1.5 (G1), 9/11 (82%) had at least one severe stenosis and 2/11 (18%) had at least one intermediate stenosis. There was a significant inverse correlation between stenosis severity and MFR among all 66 territories analyzed (rho= -0.38, p=0.002). Conclusion: Patients with MFR>2 could avoid ICA. Low MFR (G1, G2) on a vessel-based analysis seems to be a poor predictor of severe stenosis severity. Patients with 3-vessel low MFR would benefit from ICA as they are likely to present a significant stenosis in at least one vessel.

MAF1: a new target of mTORC1.

Yeast and mammalian MAF1 are both regulated by the TOR (target of rapamycin) pathway. However, the exact mechanisms of regulation diverge at TOR, with yeast Maf1 phosphorylated mainly by the TORC1 (TOR complex 1) substrate Sch9 kinase and mammalian MAF1 by mTORC1 (mammalian target of rapamycin complex 1) itself. Sch9 phosphorylation of yeast Maf1 regulates Maf1 localization, but it is less clear whether phosphorylation of human MAF1 regulates its localization. Replacement of phosphosites with alanine decreases Pol III (RNA polymerase III) transcription, but the effect is much more pronounced for human MAF1 than for the yeast protein. In both cases, Pol III repression can be further increased by rapamycin treatment or, in mammalian cells, serum starvation, suggesting that the TOR pathway controls another aspect of Pol III transcription that is closely linked to MAF1, as it depends on the presence of MAF1.

Genetic team composition and level of selection in the evolution of cooperation

In cooperative multiagent systems, agents interac to solve tasks. Global dynamics of multiagent teams result from local agent interactions, and are complex and difficult to predict. Evolutionary computation has proven a promising approach to the design of such teams. The majority of current studies use teams composed of agents with identical control rules ("geneti- cally homogeneous teams") and select behavior at the team level ("team-level selection"). Here we extend current approaches to include four combinations of genetic team composition and level of selection. We compare the performance of genetically homo- geneous teams evolved with individual-level selection, genetically homogeneous teams evolved with team-level selection, genetically heterogeneous teams evolved with individual-level selection, and genetically heterogeneous teams evolved with team-level selection. We use a simulated foraging task to show that the optimal combination depends on the amount of cooperation required by the task. Accordingly, we distinguish between three types of cooperative tasks and suggest guidelines for the optimal choice of genetic team composition and level of selection

Lentiviral vectors: a powerful tool to target astrocytes in vivo.

The morphological and functional diversity of astrocytes, and their essential contribution in physiological and pathological conditions, are starting to emerge. However, experimental systems to investigate neuron-glia interactions and develop innovative approaches for the treatment of central nervous system (CNS) disorders are still very limited. Fluorescent reporter genes have been used to visualize populations of astrocytes and produce an atlas of gene expression in the brain. Knock-down or knock-out of astrocytic proteins using transgenesis have also been developed, but these techniques remain complex and time-consuming. Viral vectors have been developed to overexpress or silence genes of interest as they can be used for both in vitro and in vivo studies in adult mammalian species. In most cases, high transduction efficiency and long-term transgene expression are observed in neurons but there is limited expression in astrocytes. Several strategies have been developed to shift the tropism of lentiviral vectors (LV) and allow local and controlled gene expression in glial cells. In this review, we describe how modifications of the interaction between the LV envelope glycoprotein and the surface receptor molecules on target cells, or the integration of cell-specific promoters and miRNA post-transcriptional regulatory elements have been used to selectively express transgenes in astrocytes.