Bargaining for power and information : an experimental and theoretical analysis of the interaction between institutions, externalities and adverse selection

Bargaining is the building block of many economic interactions, ranging from bilateral to multilateral encounters and from situations in which the actors are individuals to negotiations between firms or countries. In all these settings, economists have been intrigued for a long time by the fact that some projects, trades or agreements are not realized even though they are mutually beneficial. On the one hand, this has been explained by incomplete information. A firm may not be willing to offer a wage that is acceptable to a qualified worker, because it knows that there are also unqualified workers and cannot distinguish between the two types. This phenomenon is known as adverse selection. On the other hand, it has been argued that even with complete information, the presence of externalities may impede efficient outcomes. To see this, consider the example of climate change. If a subset of countries agrees to curb emissions, non-participant regions benefit from the signatories’ efforts without incurring costs. These free riding opportunities give rise to incentives to strategically improve ones bargaining power that work against the formation of a global agreement. This thesis is concerned with extending our understanding of both factors, adverse selection and externalities. The findings are based on empirical evidence from original laboratory experiments as well as game theoretic modeling. On a very general note, it is demonstrated that the institutions through which agents interact matter to a large extent. Insights are provided about which institutions we should expect to perform better than others, at least in terms of aggregate welfare. Chapters 1 and 2 focus on the problem of adverse selection. Effective operation of markets and other institutions often depends on good information transmission properties. In terms of the example introduced above, a firm is only willing to offer high wages if it receives enough positive signals about the worker’s quality during the application and wage bargaining process. In Chapter 1, it will be shown that repeated interaction coupled with time costs facilitates information transmission. By making the wage bargaining process costly for the worker, the firm is able to obtain more accurate information about the worker’s type. The cost could be pure time cost from delaying agreement or cost of effort arising from a multi-step interviewing process. In Chapter 2, I abstract from time cost and show that communication can play a similar role. The simple fact that a worker states to be of high quality may be informative. In Chapter 3, the focus is on a different source of inefficiency. Agents strive for bargaining power and thus may be motivated by incentives that are at odds with the socially efficient outcome. I have already mentioned the example of climate change. Other examples are coalitions within committees that are formed to secure voting power to block outcomes or groups that commit to different technological standards although a single standard would be optimal (e.g. the format war between HD and BlueRay). It will be shown that such inefficiencies are directly linked to the presence of externalities and a certain degree of irreversibility in actions. I now discuss the three articles in more detail. In Chapter 1, Olivier Bochet and I study a simple bilateral bargaining institution that eliminates trade failures arising from incomplete information. In this setting, a buyer makes offers to a seller in order to acquire a good. Whenever an offer is rejected by the seller, the buyer may submit a further offer. Bargaining is costly, because both parties suffer a (small) time cost after any rejection. The difficulties arise, because the good can be of low or high quality and the quality of the good is only known to the seller. Indeed, without the possibility to make repeated offers, it is too risky for the buyer to offer prices that allow for trade of high quality goods. When allowing for repeated offers, however, at equilibrium both types of goods trade with probability one. We provide an experimental test of these predictions. Buyers gather information about sellers using specific price offers and rates of trade are high, much as the model’s qualitative predictions. We also observe a persistent over-delay before trade occurs, and this mitigates efficiency substantially. Possible channels for over-delay are identified in the form of two behavioral assumptions missing from the standard model, loss aversion (buyers) and haggling (sellers), which reconcile the data with the theoretical predictions. Chapter 2 also studies adverse selection, but interaction between buyers and sellers now takes place within a market rather than isolated pairs. Remarkably, in a market it suffices to let agents communicate in a very simple manner to mitigate trade failures. The key insight is that better informed agents (sellers) are willing to truthfully reveal their private information, because by doing so they are able to reduce search frictions and attract more buyers. Behavior observed in the experimental sessions closely follows the theoretical predictions. As a consequence, costless and non-binding communication (cheap talk) significantly raises rates of trade and welfare. Previous experiments have documented that cheap talk alleviates inefficiencies due to asymmetric information. These findings are explained by pro-social preferences and lie aversion. I use appropriate control treatments to show that such consideration play only a minor role in our market. Instead, the experiment highlights the ability to organize markets as a new channel through which communication can facilitate trade in the presence of private information. In Chapter 3, I theoretically explore coalition formation via multilateral bargaining under complete information. The environment studied is extremely rich in the sense that the model allows for all kinds of externalities. This is achieved by using so-called partition functions, which pin down a coalitional worth for each possible coalition in each possible coalition structure. It is found that although binding agreements can be written, efficiency is not guaranteed, because the negotiation process is inherently non-cooperative. The prospects of cooperation are shown to crucially depend on i) the degree to which players can renegotiate and gradually build up agreements and ii) the absence of a certain type of externalities that can loosely be described as incentives to free ride. Moreover, the willingness to concede bargaining power is identified as a novel reason for gradualism. Another key contribution of the study is that it identifies a strong connection between the Core, one of the most important concepts in cooperative game theory, and the set of environments for which efficiency is attained even without renegotiation.

Variations of clinopyroxene/melt element partitioning during assimilation of olivine/peridotite by low-Mg diorite magma

The effects of crystal chemistry and melt composition on the control of clinopyroxene/melt element partitioning (D) during the assimilation of olivine/peridotite by felsic magma have been investigated in Mesozoic high-Mg diorites from North China. The assimilation resulted in significant increase of Mg, Cr and Ni and only slight (< 30%) decrease of incompatible elements of the magma, and the compositional variations have been mirrored by the normally and reversely zoned clinopyroxene microphenocrysts formed at the early stage of the magma evolution. The Mg# [100 × Mg / (Mg + Fe)] values of the reversely zoned clinopyroxenes increase from 65 to 75 in the core to 85–90 in the high-Mg midsection, and reduce back to 73–79 at the rim. Trace element profiles across all these clinopyroxene domains have been measured by LA-ICP-MS. The melt trace element composition has been constrained from bulk rock analyses of the fine-grained low- and high-Mg diorites. Clinopyroxene/melt partition coefficients for rare earth elements (REE) and Y in the high-Mg group zonings (Mg# > 73–79, DDy < 1.2) are positively correlated with tetrahedral IVAl and increase by a factor of 3–4 as tetrahedral IVAl increases from 0.01 to 0.1 per formula unit (pfu). These systematic variations are interpreted to be controlled by the clinopyroxene composition. In contrast, partition coefficients for low-Mg group zonings (Mg# < 75–79, DDy > 1.2) are elevated by up to an order of magnitude (for REE and Y) or more (for Zr and Hf) at similar IVAl, indicating dominant control of melt composition/structure. DZr and DHf show a larger sensitivity to the compositional change of crystal and melt than DREE. DTi values for the low- and high-Mg zonings show a uniform dependence on IVAl. DSr and DLi are insensitive to the compositional change of clinopyroxene and melt, resulting in Sr depletions in the clinopyroxene zonings with elevated REE without crystallization of plagioclase. Our observations show that crystal chemistry and melt composition/structure may alternatively control clinopyroxene/melt partitioning during the assimilation of peridotite by felsic magma, and may be useful for deciphering clinopyroxene compositions and related crust–mantle processes.

The impact of structural conditions in communes on sports behaviour of adolescents and young adults in Switzerland

Young peoples’ sport activity differs considerably depending on the linguistic region in Switzerland (Lamprecht, Fischer, & Stamm, 2014). This appears to be based on cultural as well as on structural differences. The question then arises how differing structural conditions in communes (e.g. sport facilities, significance of the municipal promotion of sport) across different linguistic regions of Switzerland cause variation in sport behaviour. Based on the theory of social action (Coleman, 1990), it is assumed that individual behaviour is not only determined by individual but also by structural and socio - cultural factors in which a person is socially embedded . In 33 municipalities of the German and French speaking region of Switzerland, multilevel data was gathered analysing possible influences of structural factors on sports behaviour. Using an online survey, 15 to 30 year old inhabitants (N=3677) were questi oned about their sports participation, as well as their perception of sport - related structural characteristics in their commune. To collect information about communes’ sport facilities, sport providers as well as representatives of the municipal administra tion were interviewed and document analyses were conducted. Representatives of the municipal administration attach more importance to sport promotion in the German speaking than in French - speaking municipalities. Young people living in the French speaking commune are less satisfied with the sport facilities (F(1,3266)=31.31, p<.01) and they are less physically active than their German - speaking counterparts (Chi2(1,N=3537)=22.51, p<.05). These first findings show the impact of structural conditions in commun es on sport participation of adolescents and young people. However, further multilevel analyses will be conducted for a better understanding of correlations between structural conditions and different sports behaviour of young people. References Coleman, J. S. (1990). Foundations of social theory. Cambridge, MA: Belknap. Lamprecht, M., Fischer, A. & Stamm, H. (2014). Sport Schweiz 2014. Sportaktivität und Sportinteresse der Schweizer Bevölkerung. Magglingen: BASPO.

Jack-of-all-trades effects drive biodiversity–ecosystem multifunctionality relationships in European forests

There is considerable evidence that biodiversity promotes multiple ecosystem functions (multifunctionality), thus ensuring the delivery of ecosystem services important for human well-being. However, the mechanisms underlying this relationship are poorly understood, especially in natural ecosystems. We develop a novel approach to partition biodiversity effects on multifunctionality into three mechanisms and apply this to European forest data. We show that throughout Europe, tree diversity is positively related with multifunctionality when moderate levels of functioning are required, but negatively when very high function levels are desired. For two well-known mechanisms, ‘complementarity’ and ‘selection’, we detect only minor effects on multifunctionality. Instead a third, so far overlooked mechanism, the ‘jack-of-all-trades’ effect, caused by the averaging of individual species effects on function, drives observed patterns. Simulations demonstrate that jack-of-all-trades effects occur whenever species effects on different functions are not perfectly correlated, meaning they may contribute to diversity–multifunctionality relationships in many of the world’s ecosystems.

Apatite as an indicator of fluid salinity: An experimental study of chlorine and fluorine partitioning in subducted sediments

In order to constrain the salinity of subduction zone fluids, piston-cylinder experiments have been conducted to investigate the partitioning behaviour of Cl and F in subducted sediments. These experiments were performed at H2O-undersaturated conditions with a synthetic pelite starting composition containing 800 ppm Cl, over a pressure and temperature range of 2.5–4.5 GPa and 630–900 °C. Repetitive experiments were conducted with 1900 ppm Cl + 1000 ppm F, and 2100 ppm Cl. Apatite represents the most Cl-abundant mineral phase, with Cl concentration varying in the range 0.1–2.82 wt%. Affinity for Cl decreases over the following sequence: aqueous fluid > apatite ⩾ melt > other hydrous minerals (phengite, biotite and amphibole). It was found that addition of F to the Cl-bearing starting composition significantly lowers the Cl partition coefficients between apatite and melt (DClAp–melt) and apatite and aqueous fluid (DClAp–aq). Cl–OH exchange coefficients between apatite and melt (KdCl–OHAp–melt) and apatite and aqueous fluid (KdCl–OHAp–aq) were subsequently calculated. KdCl–OHAp–melt was found to vary from 1 to 58, showing an increase with temperature and a decrease with pressure and displaying a regular decrease with increasing H2O content in melt. Mole fractions of Cl and OH in melt were calculated based on an ideal mixing model for H2O, OH, O, Cl and F. The Cl contents of other hydrous minerals (phengite, biotite and amphibole) fall between 200 and 800 ppm, with resultant Cl partition coefficients from 0.02 to 0.49, appearing independent of the bulk Cl and F content. Preliminary data from this study show that the partitioning behaviour of F is strongly in favour of apatite relative to melt and phengite, with DFAp–melt = 15–51. Apatites from representative eclogite facies metasediments were examined and found to have low Cl contents close to ∼100 ppm. Calculations using our experimentally determined KdCl–OHAp–aq of 0.004 at 2.5 GPa, 630 °C indicate a low salinity character (0.5–2 wt% NaCleq) for the fluid formed during dehydration of subducted oceanic sediment at ∼80 km depth.

Coherence and Historical understanding in children's Biography and Historical Nonfiction Literature: A Content Analysis of Selected Orbis Pictus Books

The purpose of this study was to investigate a selection of children's historical nonfiction literature for evidence of coherence. Although research has been conducted on coherence of textbook material and its influences on comprehension there has been limited study on coherence in children's nonfiction literature. Generally, textual coherence has been seen as critical in the comprehensibility of content area textbooks because it concerns the unity of connections among ideas and information. Disciplinary coherence concerns the extent to which authors of historical text show readers how historians think and write. Since young readers are apprentices in learning historical content and conventions of historical thinking, evidence of disciplinary coherence is significant in nonfiction literature for young readers. The sample of the study contained 32 books published between 1989 and 2000 ranging in length from less than 90 pages to more than 150 pages. Content analysis was the quantitative research technique used to measure 84 variables of textual and disciplinary coherence in three passages of each book, as proportions of the total number of words for each book. Reliability analyses and an examination of 750 correlations showed the extent to which variables were related in the books. Three important findings emerged from the study that should be considered in the selection and use of children's historical nonfiction literature in classrooms. First, characteristics of coherence are significantly related together in high quality nonfiction literature. Second, shorter books have a higher proportion of textual coherence than longer books as measured in three passages. Third, presence of the author is related to characteristics of coherence throughout the books. The findings show that nonfiction literature offers students content that researchers have found textbooks lack. Both younger and older students have the opportunity to learn the conventions of historical thinking as they learn content through nonfiction literature. Further, the children's literature, represented in the Orbis Pictus list, shows students that authors select, interpret, and question information, and give other interpretations. The implications of the study for teaching history, teacher preparation in content and literacy, school practices, children's librarians, and publishers of children's nonfiction are discussed.

A Mathematical Model for Simplifying Representations of Objects in a Geographic Information System

The study of operations on representations of objects is well documented in the realm of spatial engineering. However, the mathematical structure and formal proof of these operational phenomena are not thoroughly explored. Other works have often focused on query-based models that seek to order classes and instances of objects in the form of semantic hierarchies or graphs. In some models, nodes of graphs represent objects and are connected by edges that represent different types of coarsening operators. This work, however, studies how the coarsening operator "simplification" can manipulate partitions of finite sets, independent from objects and their attributes. Partitions that are "simplified first have a collection of elements filtered (removed), and then the remaining partition is amalgamated (some sub-collections are unified). Simplification has many interesting mathematical properties. A finite composition of simplifications can also be accomplished with some single simplification. Also, if one partition is a simplification of the other, the simplified partition is defined to be less than the other partition according to the simp relation. This relation is shown to be a partial-order relation based on simplification. Collections of partitions can not only be proven to have a partial- order structure, but also have a lattice structure and are complete. In regard to a geographic information system (GIs), partitions related to subsets of attribute domains for objects are called views. Objects belong to different views based whether or not their attribute values lie in the underlying view domain. Given a particular view, objects with their attribute n-tuple codings contained in the view are part of the actualization set on views, and objects are labeled according to the particular subset of the view in which their coding lies. Though the scope of the work does not mainly focus on queries related directly to geographic objects, it provides verification for the existence of particular views in a system with this underlying structure. Given a finite attribute domain, one can say with mathematical certainty that different views of objects are partially ordered by simplification, and every collection of views has a greatest lower bound and least upper bound, which provides the validity for exploring queries in this regard.

Temporal and spatial regulation of cell division by the nucleoid in Escherichia coli

Selection of division sites and coordination of cytokinesis with other cell cycle events are critical for every organism to proliferate. In E. coli, the nucleoid is proposed to exclude division from the site of the chromosome (nucleoid occlusion model). We studied the effect of the nucleoid on timing and placement of cell division. An early cell division protein, FtsZ, was used to follow development of the division septum. FtsZ forms a ring structure (Z ring) at potential division sites. The dynamics of Z ring was visualized in live cells by fusing FtsZ with a green fluorescent protein (GFP). Emanating FtsZ-GFP polymers from the constricted septum or aggregates in daughter cells were also observed, probably representing the FtsZ depolymerization and immature FtsZ nucleation processes. We next examined the nucleoid occlusion model. Mutants carrying abnormally positioned chromosomes were employed. In chromosomal partition mutants, replicated chromosomes cannot segregate. The Z ring was excluded from midcell to the edge of the nucleoid. This negative effect of nucleoids was further confirmed in replication deficient dnaA mutants, in which only a single chromosome is present in the cell center. These results suggest that the nucleoid, replicating or not, inhibits division in the area where the chromosome occupies. In addition, increasing the level of FtsZ does not overcome nucleoid inhibition. Interestingly in anucleate cells produced by both mutants, the Z ring was localized in the central part of the cell, which indicates that the nucleoid is not required for FtsZ assembly. Relaxation of chromosomes by reducing the gyrase activity or disruption of protein translation/translocation did not abolish the division inhibition capacity of the nucleoid. However, preventing transcription did compromise the nucleoid occlusion effect, leading to formation of multiple FtsZ rings above the nucleoid. In summary, we demonstrate that nucleoids negatively regulate the timing and position of division by inhibiting FtsZ assembly at unselected sites. Relief of this inhibition at midcell is coincident with the completion of DNA replication. On the other hand, FtsZ assembly does not require the nucleoid. ^

Advance P. Chem. Problems (I) Populations, Partition Functions, Particle in Box, Harmonic Oscillators, Angular Momentum and Rigid Rotor

This is a set of P. Chem. problems posed at slightly higher than the normal text book level, for students who are continuing in the study of this subject.

The Secret Life of Mundane Transaction Costs

Transaction costs, one often hears, are the economic equivalent of friction in physical systems. Like physicists, economists can sometimes neglect friction in formulating theories; but like engineers, they can never neglect friction in studying how the system actually does let alone should work. Interestingly, however, the present-day economics of organization also ignores friction. That is, almost single-mindedly, the literature analyzes transactions from the point of view of misaligned incentives and (especially) transaction-specific assets. The costs involved are certainly costs of running the economic system in some sense, but they are not obviously frictions. Stories about frictions in trade are not nearly as intriguing as stories about guileful trading partners and expensive assets placed at risk. But I will argue that these seemingly dull categories of cost what Baldwin and Clark (2003) call mundane transaction costs actually have a secret life. They are at least as important as, and quite probably far more important than, the more glamorous costs of asset specificity in explaining the partition between firm and market. These costs also have a secret life in another sense: they have a secret life cycle. I will argue that these mundane transaction costs provide much better material for helping us understanding how the boundaries among firms, markets, and hybrid forms change over time.

Mathematical and empirical examinations of some epidemiological procedures

In epidemiology literature, it is often required to investigate the relationships between means where the levels of experiment are actually monotone sets forming a partition on the range of sampling values. With this need, the analysis of these group means is generally performed using classical analysis of variance (ANOVA). However, this method has never been challenged. In this dissertation, we will formulate and present our examination of its validity. First, the classical assumptions of normality and constant variance are not always true. Second, under the null hypothesis of equal means, the test statistic for the classical ANOVA technique is still valid. Third, when the hypothesis of equal means is rejected, the classical analysis techniques for hypotheses of contrasts are not valid. Fourth, under the alternative hypothesis, we can show that the monotone property of levels leads to the conclusion that the means are monotone. Fifth, we propose an appropriate method for handing the data in this situation. ^

Geochemistry of ODP Leg 135 vitrophyric rhyolite samples

In-situ proton-microprobe analyses are presented for glasses, plagioclases, pyroxenes, olivines, and spinels in eleven samples from Sites 834-836, 839, and 841 (vitrophyric rhyolite), plus a Tongan dacite. Elements analyzed are Mn, Ni, Cu, Zn, Ga, Rb, Sr, Y, Zr, Pb, and Sn (in spinels only). The data are used to calculate two sets of partition coefficients, one set based on the ratio of element in mineral/element in coexisting glass. The second set of coefficients, thought to be more robust, is corrected by application of the Rayleigh fractionation equations, which requires additional use of modal data. Data are presented for phenocryst core-rim phases and microphenocryst-groundmass phases from a few samples. Comparison with published coefficients reveals an overall consistency with those presented here, but with some notable anomalies. Examples are relatively high Zr values for pyroxenes and abnormally low Mn values in olivines and clinopyroxenes from Site 839 lavas. Some anomalies may reflect kinetic effects, but interpretation of the coefficients is complicated, especially in olivines from Sites 836 and 839, by possible crystal-liquid disequilibrium resulting from mixing processes.

CIPWFULL: A FORTRAN Program for Calculation of Comprehensive CIPW Norms of Igneous Rocks

CIPWFULL is a user-friendly, stand-alone FORTRAN software program that is designed to calculate the comprehensive CIPW normative mineral composition of igneous rocks and strictly adheres to the original formulation of the CIPW protocol. This faithful adherence alleviates inaccuracies in normative mineral calculations by programs commonly used by petrologists. Additionally, several of the most important petrological and mineralogical parameters of igneous rocks are calculated by the program. Along with all the regular major oxide elements, all the significant minor elements whose contents can potentially effect the CIPW normative mineral composition are included. CIPWFULL also calculates oxidation ratios for igneous rock samples that have only one oxidation state of iron reported in the specimen analysis. It also provides an option for normalization of analyses to unity on a hydrous-free basis in order to facilitate comparison of norms among rock groups. Other capabilities of the program cater for rare situations, like the presence of cancrinite or exclusion from the norm calculation of rare rocks like carbonatite. Several mineralogical, petrological and discriminatory parameters and indexes are additionally calculated by the CIPWFULL program. The CIPWFULL program is very efficient and flexible and allows for a user-defined free-format input of all the chemical species, and it permits feeding of minor elements as parts per million or oxide percentages. Results of calculations are printed in a formatted ASCII text file and may be optionally casted into a space-delimited text files that are ready to be imported to general spreadsheet programs. CIPWFULL is DOS-based and is implemented on WINDOWS and mainframe platforms.

Isotopic and chemical compositions of rocks and minerals from the TAG hydrothermal mound, ODP Site 957

Strontium- and oxygen-isotopic measurements of samples recovered from the Trans-Atlantic Geotraverse (TAG) hydrothermal mound during Leg 158 of the Ocean Drilling Program provide important constraints on the nature of fluid-rock interactions during basalt alteration and mineralization within an active hydrothermal deposit. Fresh Mid-Ocean Ridge Basalt (MORB), with a 87Sr/86Sr of 0.7026, from the basement beneath the TAG mound was altered at both low and high temperatures by seawater and altered at high temperature by near end-member black smoker fluids. Pillow breccias occurring beneath the margins of the mound are locally recrystallized to chlorite by interaction with large volumes of conductively heated seawater (>200°C). The development of a silicified, sulfide-mineralized stockwork within the basaltic basement follows a simple paragenetic sequence of chloritization followed by mineralization and the development of a quartz+pyrite+paragonite stockwork cut by quartz-pyrite veins. Initial alteration involved the development of chloritic alteration halos around basalt clasts by reaction with a Mg-bearing mixture of upwelling, high-temperature (>300°C), black smoker-type fluid with a minor (<10%) proportion of seawater. Continued high-temperature (>300°C) interaction between the wallrock and these Mg-bearing fluids results in the complete recrystallization of the wallrock to chlorite+quartz+pyrite. The quartz+pyrite+paragonite assemblage replaces the chloritized basalts, and developed by reaction at 250-360°C with end-member hydrothermal fluids having 87Sr/86Sr ~0.7038, similar to present-day vent fluids. The uniformity of the 87Sr/86Sr ratios of hydrothermal assemblages throughout the mound and stockwork requires that the 87Sr/86Sr ratio of end-member hydrothermal fluids has remained relatively constant for a time period longer than that required to change the interior thermal structure and plumbing network of the mound and underlying stockwork. Precipitation of anhydrite in breccias and as late-stage veins throughout most of the mound and stockwork, down to at least 125 mbsf, records extensive entrainment of seawater into the hydrothermal deposit. 87Sr/86Sr ratios indicate that most of the anhydrite formed from ~2:1 mixture of seawater and black smoker fluids (65%±15% seawater). Oxygen-isotopic compositions imply that anhydrite precipitated at temperatures between 147°C and 270°C and require that seawater was conductively heated to between 100°C and 180°C before mixing and precipitation occurred. Anhydrite from the TAG mound has a Sr-Ca partition coefficient Kd ~0.60±0.28 (2 sigma). This value is in agreement with the range of experimentally determined partition coefficients (Kd ~0.27-0.73) and is similar to those calculated for anhydrite from active black smoker chimneys from 21°N on the East Pacific Rise. The d18O (for SO4) of TAG anhydrite brackets the value of seawater sulfate oxygen (~9.5?). Dissolution of anhydrite back into the oceans during episodes of hydrothermal quiescence provides a mechanism of buffering seawater sulfate oxygen to an isotopically light composition, in addition to the precipitation and dissolution of anhydrite within the oceanic basement during hydrothermal recharge at the mid-ocean ridges.