Public and private learning from prices, strategic substitutability and complementarity, and equilibrium multiplicity

We study a general static noisy rational expectations model where investors have private information about asset payoffs, with common and private components, and about their own exposure to an aggregate risk factor, and derive conditions for existence and uniqueness (or multiplicity) of equilibria. We find that a main driver of the characterization of equilibria is whether the actions of investors are strategic substitutes or complements. This latter property in turn is driven by the strength of a private learning channel from prices, arising from the multidimensional sources of asymmetric information, in relation to the usual public learning channel. When the private learning channel is strong (weak) in relation to the public we have strong (weak) strategic complementarity in actions and potentially multiple (unique) equilibria. The results enable a precise characterization of whether information acquisition decisions are strategic substitutes or complements. We find that the strategic substitutability in information acquisition result obtained in Grossman and Stiglitz (1980) is robust. JEL Classification: D82, D83, G14 Keywords: Rational expectations equilibrium, asymmetric information, risk exposure, hedging, supply information, information acquisition.

Cronyism in Business, Public Sector and Politics

This paper contrasts the incentives for cronyism in business, the public sector and politics within an agency problem model with moral hazard. The analysis is focused on the institutional differences between private, public and political organizations. In business, when facing a residual claimant contract, a chief manager ends up with a relatively moderate …rst-best level of cronyism within a …firm. The institutional framework of the public sector does not allow explicit contracting, which leads to a more severe cronyism problem within public organizations. Finally, it is shown that the nature of political appointments (such that the subordinate's reappointment is conditioned on the chief's re-election) together with implicit contracting makes political cronyism the most extreme case. JEL classifi…cation: D72, D73, D86. Keywords: Cronyism; Meritocracy; Manager; Bureaucrat; Politician.

How much risk is mitigated by LTC Insurance? A case study of the public system in Spain

We present a methodology that allows to calculate the impact of a given Long-Term Care (LTC) insurance protection system on the risk of incurring extremely large individual lifetime costs. Our proposed methodology is illustrated with a case study. According to our risk measure, the current Spanish public LTC system mitigates individual risk by more than 30% compared to the situation where no public protection were available. We show that our method can be used to compare risk reduction of alternative LTC insurance plans.

Stress Perception in Public Organizations: Expanding the Job Demands - Job Resources Model by Including Public Service Motivation

Although stress has been a longstanding issue in organizations and management studies, it has never been studied in relation to Public Service Motivation. This article therefore aims to integrate PSM into the job demands-job resources model of stress in order to determine whether PSM might contribute to stress in public organizations. Drawing upon original data from a questionnaire in a Swiss municipality, this study unsurprisingly shows that "red tape" is an antecedent of stress perception, whereas satisfaction with organizational support, positive feedback, and recognition significantly decrease the level of perceived stress. Astonishingly, the empirical results show that PSM is positively and significantly related to stress perception. By increasing individuals' expectations towards their jobs, PSM might thus contribute to increased pressure on public agents. Ultimately, this article investigates the "dark side" of PSM, which has been neglected by the literature thus far.

The Original Risk: Over-Theologizing Ethics and Under-Theologizing Sin

The project of articulating a theological ethics on the basis of liturgical anthropology is bound to fail if the necessary consequence is that one has to quit the forum of critical modern rationality. The risk of Engelhardt's approach is to limit rationality to a narrow vision of reason. Sin is not to be understood as the negation of human holiness, but as the negation of divine holiness. The only way to renew theological ethics is to understand sin as the anthropological and ethical expression of the biblical message of the justification by faith only. Sin is therefore a secondary category, which can only by interpreted in light of the positive manifestation of liberation, justification, and grace. The central issue of Christian ethics is not ritual purity or morality, but experience, confession and recognition of our own injustice in our dealing with God and men.

The link between public support and private R&D effort: What is the optimal subsidy?

The effectiveness of R&D subsidies can vary substantially depending on their characteristics. Specifically, the amount and intensity of such subsidies are crucial issues in the design of public schemes supporting private R&D. Public agencies determine the intensities of R&D subsidies for firms in line with their eligibility criteria, although assessing the effects of R&D projects accurately is far from straightforward. The main aim of this paper is to examine whether there is an optimal intensity for R&D subsidies through an analysis of their impact on private R&D effort. We examine the decisions of a public agency to grant subsidies taking into account not only the characteristics of the firms but also, as few previous studies have done to date, those of the R&D projects. In determining the optimal subsidy we use both parametric and nonparametric techniques. The results show a non-linear relationship between the percentage of subsidy received and the firms’ R&D effort. These results have implications for technology policy, particularly for the design of R&D subsidies that ensure enhanced effectiveness.

Community Education Needs to be Supported by Strong Public Policy to Tackle Food Poverty

Community education needs to be supported by strong public policy if it is to be fully effective at tackling food poverty and obesity, a project evaluation by the Institute of Public Health in Ireland (IPH) has found. In its evaluation of Decent Food for All (DFfA) - a major project to improve community diet and health - IPH found that where people live and shop had a greater impact on their diet than their own individual awareness and attitudes. Access Tackling Food Poverty: lessons from the Decent Food for All intervention at www.publichealth.ie DFfA was funded by safefood (the Food Safety Promotion Board) and the Food Standards Agency Northern Ireland. The project lasted four years and included hundreds of community education activities designed to improve diet in poorer parts of Armagh and South Tyrone. safefood commissioned IPH to undertake the evaluation of DFfA. Dr. Kevin Balanda, IPH Associate Director, said 'The aim of the project was to reduce food poverty (this is defined as not being able to consume adequate healthy food) and improve health in the target communities. DFfA delivered over 370 core activities to 3,100 residents including local education talks on diet, cookery workshops, fresh fruit in schools, healthy food tastings and information stands. One in eight residents in the target areas participated in at least one of these activities.' The evaluation found that over 1 in 5 adults in the target areas reported they had cut their weekly food spending in the last six months to pay other household bills such as rent, electricity and gas. During the four years of the DFfA activities, this percentage had not changed significantly. There were mixed changes in the nature of food in local stores. While the overall availability and price of food increased, both ﾓhealthierﾔ food and ﾓunhealthierﾔ food were included in that increase. It was only in the larger ﾓmultiple/discount freezerﾔ type of shops that the overall price of food had decreased.

Review of Health Impact Assessment for the Institute of Public Health in Ireland

IPH commissioned a review of HIA work in 2009 to detail progress and achievements of HIA from 2001. This included an assessment of current levels of HIA awareness and activity and suggestions for the direction of future work.