Entrepreneurial success and failure: Confidence and fallible judgement

Excess entry or the high failure rate of market-entry decisions is often attributed tooverconfidence exhibited by entreprene urs. We show analytically that whereas excess entryis an inevitable consequence of imperfect assessments of entrepreneurial skill, it does notimply overconfidence. Judgmental fallibility leads to excess entry even when everyone isunderconfident. Self-selection implies greater confidence (but not necessarilyoverconfidence) among those who start new businesses than those who do not and amongsuccessful entrants than failures. Our results question claims that entrepreneurs areoverconfident and emphasize the need to understand the role of judgmental fallibility inproducing economic outcomes.

The effect of divorce laws on divorce rates in Europe

This paper analyzes a panel of 18 European countries spanning from 1950 to 2003 toexamine the extent to which the legal reforms leading to easier divorce that took placeduring the second half of the 20th century have contributed to the increase in divorce rates across Europe. We use a quasi-experimental set-up and exploit the different timing of the reforms in divorce laws across countries. We account for unobserved country-specificfactors by introducing country fixed effects, and we include country-specific trends tocontrol for time-varying factors at the country level that may be correlated with divorcerates and divorce laws, such as changing social norms or slow moving demographictrends. We find that the reforms were followed by significant increases in divorce rates.Overall, we estimate that the introduction of no-fault, unilateral divorce increased thedivorce rate by about 1, a sizeable effect given the average rate of 4.2 divorces per 1,000married people in 2002.

Speculative dynamics in the term structure of interest rates

When long maturity bonds are traded frequently and traders have non-nestedinformation sets, speculative behavior in the sense of Harrison and Kreps (1978) arises.Using a term structure model displaying such speculative behavior, this paper proposesa conceptually and observationally distinct new mechanism generating time varying predictableexcess returns. It is demonstrated that (i) dispersion of expectations about futureshort rates is sufficient for individual traders to systematically predict excess returns and(ii) the new term structure dynamics driven by speculative trade is orthogonal to publicinformation in real time, but (iii) can nevertheless be quantified using only publicly availableyield data. The model is estimated using monthly data on US short to medium termTreasuries from 1964 to 2007 and it provides a good fit of the data. Speculative dynamicsare found to be quantitatively important, potentially accounting for a substantial fractionof the variation of bond yields and appears to be more important at long maturities.

Inflammatory markers and incident heart failure risk in older adults: the Health ABC (Health, Aging, and Body Composition) study.

OBJECTIVES: The purpose of this study was to evaluate the association between inflammation and heart failure (HF) risk in older adults. BACKGROUND: Inflammation is associated with HF risk factors and also directly affects myocardial function. METHODS: The association of baseline serum concentrations of interleukin (IL)-6, tumor necrosis factor-alpha, and C-reactive protein (CRP) with incident HF was assessed with Cox models among 2,610 older persons without prevalent HF enrolled in the Health ABC (Health, Aging, and Body Composition) study (age 73.6 +/- 2.9 years; 48.3% men; 59.6% white). RESULTS: During follow-up (median 9.4 years), HF developed in 311 (11.9%) participants. In models controlling for clinical characteristics, ankle-arm index, and incident coronary heart disease, doubling of IL-6, tumor necrosis factor-alpha, and CRP concentrations was associated with 29% (95% confidence interval: 13% to 47%; p < 0.001), 46% (95% confidence interval: 17% to 84%; p = 0.001), and 9% (95% confidence interval: -1% to 24%; p = 0.087) increase in HF risk, respectively. In models including all 3 markers, IL-6, and tumor necrosis factor-alpha, but not CRP, remained significant. These associations were similar across sex and race and persisted in models accounting for death as a competing event. Post-HF ejection fraction was available in 239 (76.8%) cases; inflammatory markers had stronger association with HF with preserved ejection fraction. Repeat IL-6 and CRP determinations at 1-year follow-up did not provide incremental information. Addition of IL-6 to the clinical Health ABC HF model improved model discrimination (C index from 0.717 to 0.734; p = 0.001) and fit (decreased Bayes information criterion by 17.8; p < 0.001). CONCLUSIONS: Inflammatory markers are associated with HF risk among older adults and may improve HF risk stratification.

Evolutionary rates of Jurassic ammonites in relation to sea-level fluctuations

An analysis is presented of the diversity and faunal turnover of Jurassic ammonites related to transgressive /regressive events. The data set contained 400 genera and 1548 species belonging to 67 ammonite zones covering the entire Jurassic System. These data were used in the construction of faunal turnover curves and ammonite diversities, that correlate with sea-level fluctuation curves. Twenty-four events of ammonite faunal turnover are analyzed throughout the Jurassic. The most important took place at the Sinemurian-Carixian boundary, latest Carixian-Middle Domerian, Domerian-Toarcian boundary, latest Middle Toarcian-Late Toarcian, Toarcian-Aalenian boundary, latest Aalenian-earliest Bajocian, latest Early Bajocian-earliest Late Bojocian, Early Bathonian-Middle Bathonian boundary, latest Middle Bathonian-earliest Late Bathonian, latest Bathonian-Early Callovian, earliest Early Oxfordian-Middle Oxfordian, earliest Late Oxfordian-latest Oxfordian, latest Early Kimmeridgian, Late Kimmeridgian, middle Early Tithonian and Early Tithonian-Late Tithonian boundary. More than 75 percent of these turnovers correlate with regressive-transgressive cycles in the Exxon, and /or Hallam's sea-level curves. Inmost cases the extinction events coincide with regressive intervals, whereas origination and radiation events are related to transgressive cycles. The turnovers frequently coincide with major or minor discontinuities in the Subbetic basin (Betic Cordillera).

Risk management under a two-factor model of the term structure of interest rates

This paper presents several applications to interest rate risk managementbased on a two-factor continuous-time model of the term structure of interestrates previously presented in Moreno (1996). This model assumes that defaultfree discount bond prices are determined by the time to maturity and twofactors, the long-term interest rate and the spread (difference between thelong-term rate and the short-term (instantaneous) riskless rate). Several newmeasures of ``generalized duration" are presented and applied in differentsituations in order to manage market risk and yield curve risk. By means ofthese measures, we are able to compute the hedging ratios that allows us toimmunize a bond portfolio by means of options on bonds. Focusing on thehedging problem, it is shown that these new measures allow us to immunize abond portfolio against changes (parallel and/or in the slope) in the yieldcurve. Finally, a proposal of solution of the limitations of conventionalduration by means of these new measures is presented and illustratednumerically.

Psychological profile of adolescents with a kidney transplant.

To describe the psychological profile of renal transplant adolescents compared to healthy peers and to adolescents with CKD, three groups of adolescents aged 12-18 yr were selected: TX, CX, and adolescents with CKD. Psychiatric symptoms and disorders were evaluated through direct interviews (K-SADS-PL) and self-report questionnaires (YSR and CBCL). Forty TX (14 LRD and 26 DD transplant recipients), 40 CX and 20 CKD were included. Twelve of 40 (30%) TX, three of 20 (15%) CKD, and three of 40 (7.5%) CX had a history of learning difficulties (p = 0.03). Compared to CX, TX had lower total YSR competencies score (p = 0.028) and lower total CBCL competencies score (p = 0.003). Twenty-six of 40 (65%) TX, 12 of 20 (60%) CKD and 15 of 40 (37.5%) CX (p = 0.038) met DSM-IV diagnostic criteria for lifetime psychiatric disorder, with rates of depressive disorder of 35% among TX and CKD compared to 15.2% among CX (p = 0.043). Eight of 40 (20%) TX had a history of simple phobia. Nine of 40 (22.5%) TX met diagnostic criteria for ADHD as compared to one of 20 (5%) CKD and three of 40 (7.5%) CX. In the TX group, we found no significant differences in educational and psychiatric variables between LRD and DD. In conclusion, we found a high prevalence of psychiatric morbidity (depression, phobia, ADHD), educational impairment and social competence problems in the TX group. CKD scored in between TX and CX on most measures.

Abnormal Lung Function and Risk for Heart Failure in the Elderly: The Health, Aging, and Body Composition Study

Background: Chronic obstructive pulmonary disease (COPD) has been associated with increased risk for heart failure (HF). The impact of subclinical abnormal spirometric findings on HF risk among older adults without history of COPD is not well elucidated. Methods: We evaluated 2125 participants (age 73.6±2.9 years; 50.5% men; 62.3% white; 45.6/9.4% past/current smokers; body mass index [BMI] 27.2±4.6 kg/m2) without prevalent COPD or HF who underwent baseline spirometry in the Health ABC Study. Abnormal lung function was defined either as forced vital capacity (FVC) below lower limit of normal (LLN) or forced expiratory volume in 1st sec (FEV1) to FVC ratio below LLN. Results: On follow-up (median, 9.4 years), 68 of 350 (19.4%) participants with abnormal lung function developed HF, as compared to 172 of 1775 (9.7%) participants with normal lung function (hazard ratio [HR], 2.31; 95% confidence interval [CI], 1.74 -3.06; P<.001). This increased risk persisted after adjusting for all other independent predictors of HF in the Health ABC Study, BMI, incident coronary events, and several inflammatory markers (HR, 1.82; 95% CI, 1.30 -2.54; P<.001), and remained constant over time. Baseline FVC and FEV1 had a linear association with HF risk (Figure). In adjusted models, HF risk increased by 21% (95% CI, 10 -36%) per 10% decrease in FVC and 18% (95% CI, 10 -28%) per 10% decrease in FEV1 (both P<.001); this association persisted among participants with normal lung function at baseline. Findings were consistent across sex, race, and smoking status. Conclusions: Subclinical abnormal spirometric findings are prevalent among older adults and are independently associated with risk for incident HF.

Failure to collude in the presence of asymmetric information

In this paper, we design the optimal contract when two agents can collude under asymmetric information. They have correlated types, produce complementary inputs and are protected by limited liability. Therefore, a joint manipulation of reports allows them to internalize informational and productive externalities. We show that by taking advantage of the transaction costs created by asymmetric information, even though they collude, the principal can achieve the outcome without collusion regardless of the sign and the degree of correlation. In particular, the principal can implement a non-monotonic quantity schedule in a collusion-proof way while this is impossible if collusion occurs under complete information.

A two-mean reverting-factor model of the term structure of interest rates

This paper presents a two--factor model of the term structure ofinterest rates. We assume that default free discount bond prices aredetermined by the time to maturity and two factors, the long--term interestrate and the spread (difference between the long--term rate and theshort--term (instantaneous) riskless rate). Assuming that both factorsfollow a joint Ornstein--Uhlenbeck process, a general bond pricing equationis derived. We obtain a closed--form expression for bond prices andexamine its implications for the term structure of interest rates. We alsoderive a closed--form solution for interest rate derivatives prices. Thisexpression is applied to price European options on discount bonds andmore complex types of options. Finally, empirical evidence of the model'sperformance is presented.

Outcome and patterns of failure in testicular lymphoma: a multicenter Rare Cancer Network study.

PURPOSE: To assess the outcome and patterns of failure in patients with testicular lymphoma treated by chemotherapy (CT) and/or radiation therapy (RT). METHODS AND MATERIALS: Data from a series of 36 adult patients with Ann Arbor Stage I (n = 21), II (n = 9), III (n = 3), or IV (n = 3) primary testicular lymphoma, consecutively treated between 1980 and 1999, were collected in a retrospective multicenter study by the Rare Cancer Network. Median age was 64 years (range: 21-91 years). Full staging workup (chest X-ray, testicular ultrasound, abdominal ultrasound, and/or thoracoabdominal computer tomography, bone marrow assessment, full blood count, lactate dehydrogenase, and cerebrospinal fluid evaluation) was completed in 18 (50%) patients. All but one patient underwent orchidectomy, and spermatic cord infiltration was found in 9 patients. Most patients (n = 29) had CT, consisting in most cases of cyclophosphamide, doxorubicin, vincristine, and prednisolone (CHOP) with (n = 17) or without intrathecal CT. External RT was delivered to scrotum alone (n = 12) or testicular, iliac, and para-aortic regions (n = 8). The median RT dose was 31 Gy (range: 20-44 Gy) in a median of 17 fractions (10-24), using a median of 1.8 Gy (range: 1.5-2.5 Gy) per fraction. The median follow-up period was 42 months (range: 6-138 months). RESULTS: After a median period of 11 months (range: 1-76 months), 14 patients presented lymphoma progression, mostly in the central nervous system (CNS) (n = 8). Among the 17 patients who received intrathecal CT, 4 had a CNS relapse (p = NS). No testicular, iliac, or para-aortic relapse was observed in patients receiving RT to these regions. The 5-year overall, lymphoma-specific, and disease-free survival was 47%, 66%, and 43%, respectively. In univariate analyses, statistically significant factors favorably influencing the outcome were early-stage and combined modality treatment. Neither RT technique nor total dose influenced the outcome. Multivariate analysis revealed that the most favorable independent factors predicting the outcome were younger age, early-stage disease, and combined modality treatment. CONCLUSIONS: In this multicenter retrospective study, CNS was found to be the principal site of relapse, and no extra-CNS lymphoma progression was observed in the irradiated volumes. More effective CNS prophylaxis, including combined modalities, should be prospectively explored in this uncommon site of extranodal lymphoma.

n-3 fatty acids and cardiovascular outcomes in patients with dysglycemia.

BACKGROUND: The use of n-3 fatty acids may prevent cardiovascular events in patients with recent myocardial infarction or heart failure. Their effects in patients with (or at risk for) type 2 diabetes mellitus are unknown. METHODS: In this double-blind study with a 2-by-2 factorial design, we randomly assigned 12,536 patients who were at high risk for cardiovascular events and had impaired fasting glucose, impaired glucose tolerance, or diabetes to receive a 1-g capsule containing at least 900 mg (90% or more) of ethyl esters of n-3 fatty acids or placebo daily and to receive either insulin glargine or standard care. The primary outcome was death from cardiovascular causes. The results of the comparison between n-3 fatty acids and placebo are reported here. RESULTS: During a median follow up of 6.2 years, the incidence of the primary outcome was not significantly decreased among patients receiving n-3 fatty acids, as compared with those receiving placebo (574 patients [9.1%] vs. 581 patients [9.3%]; hazard ratio, 0.98; 95% confidence interval [CI], 0.87 to 1.10; P=0.72). The use of n-3 fatty acids also had no significant effect on the rates of major vascular events (1034 patients [16.5%] vs. 1017 patients [16.3%]; hazard ratio, 1.01; 95% CI, 0.93 to 1.10; P=0.81), death from any cause (951 [15.1%] vs. 964 [15.4%]; hazard ratio, 0.98; 95% CI, 0.89 to 1.07; P=0.63), or death from arrhythmia (288 [4.6%] vs. 259 [4.1%]; hazard ratio, 1.10; 95% CI, 0.93 to 1.30; P=0.26). Triglyceride levels were reduced by 14.5 mg per deciliter (0.16 mmol per liter) more among patients receiving n-3 fatty acids than among those receiving placebo (P<0.001), without a significant effect on other lipids. Adverse effects were similar in the two groups. CONCLUSIONS: Daily supplementation with 1 g of n-3 fatty acids did not reduce the rate of cardiovascular events in patients at high risk for cardiovascular events. (Funded by Sanofi; ORIGIN ClinicalTrials.gov number, NCT00069784.).