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.

Cohort Study on the Association Between Helmet Use and Traumatic Brain Injury in Snowboarders From a Swiss Tertiary Trauma Center.

BACKGROUND Since the introduction of helmets in winter sports there is on-going debate on whether they decrease traumatic brain injuries (TBI). METHODS This cohort study included 117 adult (≥ 16 years) snowboarders with TBI admitted to a level I alpine trauma center in Switzerland between 2000/2001 and 2010/2011. The primary objective was to examine the association between helmet use and moderate-to-severe TBI. Secondary objectives were to describe the epidemiology of TBI during the past decade in relation to increased helmet use. RESULTS Of 691 injured snowboarders evaluated, 117 (17%) suffered TBI. Sixty-six percent were men (median age, 23 years). Two percent of accidents were fatal. Ninety-two percent of patients sustained minor, 1% moderate, and 7% severe TBI according to the Glasgow coma scale. Pathologic computed tomography findings were present in 16% of patients, 26% of which required surgery. Eighty-three percent of TBIs occurred while riding on-slope. There was no trend in the TBI rate during the studied period, although helmet use increased from 10% to 69%. Comparing patients with and without a helmet showed no significant difference in odds ratios for the severity of TBI. However, of the 5 patients requiring surgery only 1 was wearing a helmet. Off-piste compared with on-slope snowboarders showed an odds ratio of 26.5 (P = 0.003) for sustaining a moderate-to-severe TBI. CONCLUSIONS Despite increased helmet use we found no decrease in TBI among snowboarders. The possibility of TBI despite helmet use and the dangers of riding off-piste should be a focus of future prevention programs.

The impact of associational life on trust in local institutions: a comparison of 57 Swiss municipalities

In this paper, we evaluate the impact of associational life on individual political trust in 57 Swiss municipalities. Our hierarchical regression models show that individual political trust is not only affected by individual associational membership but also by the exchange between associations and local political authorities in a community. In other words, if political authorities and associations are linked at the community level, citizens will place more trust in their local institutions. Furthermore, we find clear evidence for the rainmaker hypothesis: our results show that the positive effect of a vibrant connection between associational life and local politics on political trust is not solely confined to the associational members themselves, but rather indicate that the structure of the local civic culture fosters political trust among members and non-members at the same time. However, the internal democratic processes of associations have no effect on individuals’ trust in local political institutions.

Economic Rights, Human Development Effort and Institutions

This paper focuses on the link between economic rights and institutions. Simple analysis of data is used to demonstrate countries' human development effort in advancing economics rights of the citizens. A country's human development effort is evaluated on the basis of the well-being of the poorest members of the society. An analysis of data reveals that there is a wide variation in countries' pro-poor stance. While it is accepted that positive rights are pro-poor, this paper argues that so too are negative economic rights and in fact the two are complements rather than substitutes. Classifying countries into human development income deficit and human development effort deficit, it is demonstrated that a large number of countries could achieve higher welfare levels for the poor if they improved on bother positive and negative economic rights. The paper attempts to explain variations in the observed commitment to economic rights by focusing on pro-poor institutions. The basic thesis advanced in the paper is that pro-poor policies are more likely to be implemented and sustained in those institutions where power is sufficiently diffused such that even the poor have leverage over policy outcomes. The paper focuses on how institutions impact on power diffusion and therefore the adoption of pro-poor growth and policies. The failure of countries to adopt pro-poor growth and policies is attributed to institutional failures manifested in concentration of power. The policy recommendations emanating from the analysis focus on institutional reforms to enhance power diffusion. These policies include enlarging the political space through democratization, strengthening institutions and capacity to fight corruption and improve transparency, and bringing the government closer to the people through appropriate design and implementation of decentralization schemes. Some recent examples of improvements in economic rights following power diffusion are provided.

Na 1 Nachlass Max Horkheimer, 652 - Vorlesungen: "National Socialism", "Autoritarian doctrines and modern European institutions", "Eclipse of Reason" (p. IX 35a.1-2-IX 36.1-5b)

"National Socialism": 1. Ankündigung einer Vorlesungsreihe November/Dezember 1941 von: Herbert Marcuse, A.R.L. Gurland, Franz Neumann, Otto Kirchheimer, Frederick Pollock. a) als Typoskript verfielfältigt, 1 Blatt, b) Typoskript, 1 Blatt; 2. Antwortbrief auf Einladungen zur Vorlesungsreihe, von Neilson, William A.; Packelis, Alexander H.; Michael, Jerome; McClung Lee, Alfred; Youtz, R.P.; Ginsburg, Isidor; Ganey, G.; Nunhauer, Arthur. 8 Blätter; "Autoritarian doctrines and modern European institutions" (1924): 1. Vorlesungs-Ankündigung Typoskript, 2 Blatt; 2. Ankündigungen der Vorlesungen von Neumann, Franz L.: "Stratification and Dominance in Germany"; "Bureaucracy as a Social and Political Institution", Typoskript, 2 Blatt; 3. Evans, Austin P.: 1 Brief (Abschrift) an Frederick Pollock, New York, 26.2.1924; "Eclipse of Reason", Fünf Vorlesungen 1943/44:; 1. I. Lecture. a) Typoskript mit eigenhändigen Korrekturen, 38 Blatt b) Typoskript, 29 Blatt c) Typoskript mit eigenhändigen und handschriftlichen Korrekturen, 31 Blatt d) Teilstück, Typoskript mit eigenhändigen Korrekturen, 2 Blatt e) Entwürfe, Typoskript mit eigenhändigen Korrekturen, 6 Blatt; 2. II. Lecture. a) Typoskript mit eigenhändigen Korrekturen, 27 Blatt, b) Typoskript mit handschriftlichen Korrekturen, 37 Blatt; 3. III. Lecture. Typoskript mit eigenhändigen Korrekturen, 27 Blatt; 4. IV. Lecture. Typoskript mit eigenhändigen Korrekturen, 23 Blatt; 5. V. Lecture. a) Typoskript mit eigenhändigen Korrekturen, 25 Blatt, b) Teilstücke, Typoskript mit eigenhändigen und handschriftlichen Korrekturen, 3 Blatt;

Prevalence and risk factors of methicillin-resistant Staphylococcus aureus in critically-ill hospitalized patients in a tertiary care center in Houston, Texas: An active surveillance pilot project

Objective. The objective of this study is to determine the prevalence of MRSA colonization in adult patients admitted to intensive care units at an urban tertiary care hospital in Houston, Texas and to evaluate the risk factors associated with colonization during a three month active-screening pilot project. Design. This study used secondary data from a small cross-sectional pilot project. Methods. All patients admitted to the seven specialty ICUs were screened for MRSA by nasal culture. Results were obtained utilizing the BD GeneOhm™ IDI-MRSA assay in vitro diagnostic test, for rapid MRSA detection. Statistical analysis was performed using the STATA 10, Epi Info, and JavaStat. Results . 1283/1531 (83.4%) adult ICU admissions were screened for nasal MRSA colonization. Of those screened, demographic and risk factor data was available for 1260/1283 (98.2%). Unresolved results were obtained for 73 patients. Therefore, a total of 1187/1531 (77.5%) of all ICU admissions during the three month study period are described in this analysis. Risk factors associated with colonization included the following: hospitalization within the last six months (odds ratio 2.48 [95% CI, 1.70-3.63], p=0.000), hospitalization within the last 12 months, (odds ratio 2.27 [95% CI, 1.57-3.80], p=0.000), and having diabetes mellitus (odds ratio 1.63 [95% CI, 1.14-2.32], p=0.007). Conclusion. Based on the literature, the prevalence of MRSA for this population is typical of other prevalence studies conducted in the United States and coincides with the continual increasing trend of MRSA colonization. Significant risk factors were similar to those found in previous studies. Overall, the active surveillance screening pilot project has provided valuable information on a population not widely addressed. These findings can aid in future interventions for the education, control, prevention, and treatment of MRSA. ^

Pre-employment drug testing among job applicants at a Texas tertiary level pediatric hospital: 1992--2006

This study is a retrospective longitudinal study at Texas Children's Hospital, a 350-bed tertiary level pediatric teaching hospital in Houston, Texas, for the period 1990 to 2006. It measured the incidence and trends of positive pre-employment drug tests among new job applicants At TCH. ^ Over the study period, 16,219 job applicants underwent pre-employment drug screening at TCH. Of these, 330 applicants (2%) tested positive on both the EMIT and GC/MS. After review by the medical review officer, the number of true drug test positive applicants decreased to 126 (0.78%). ^ According to the overall annual positive drug test incidence rates, the highest overall incidence was in 2002 (14.71 per 1000 tests) and the lowest in 2004 (3.17 per 1000 tests). Despite a marked increase in 2002, over the 15-year study period the overall incidence tended to decrease. Incidence rates and trends of other illegal drugs are further discussed in the study. And in general, these incidence rates also decline in the study period. In addition to that, we found the overall, positive drug tests were more common in females than in males (55.5% versus 44.4%). ^

Environmental sustainability and the human element: Decision making in National Cancer Institute-designated cancer centers and Practice Greenhealth subscribing institutions

Background. Various aspects of sustainability have taken root in the hospital environment; however, decisions to pursue sustainable practices within the framework of a master plan are not fully developed in National Cancer Institute (NCI) -designated cancer centers and subscribing institutions to the Practice Greenhealth (PGH) listserv.^ Methods. This cross sectional study was designed to identify the organizational characteristics each study group pursed to implement sustainability practices, describe the barriers they encountered and reasons behind their choices for undertaking certain sustainability practices. A web-based questionnaire was pilot tested, and then sent out to 64 NCI-designated cancer centers and 1638 subscribing institutions to the PGH listserv.^ Results. Complete responses were received from 39 NCI-designated cancer centers and 58 subscribing institutions to the PGH listserv. NCI-designated cancer centers reported greater progress in integrating sustainability criteria into design and construction projects than hospitals of institutions subscribing to the PHG listserv (p-value = <0.05). Statistically significant differences were also identified between these two study groups in undertaking work life options, conducting energy usage assessments, developing energy conservation and optimization plans, implementing solid waste and hazardous waste minimization programs, using energy efficient vehicles and reporting sustainability progress to external stakeholders. NCI-designated cancer centers were further along in implementing these programs (p-value = <0.05). In comparing the self-identified NCI-designated cancer centers to centers that indicated they were both and NCI and PGH, the later had made greater progress in using their collective buying power to pursue sustainable purchasing practices within the medical community (p-value = <0.05). In both study groups, recycling programs were well developed.^ Conclusions. Employee involvement was viewed as the most important reason for both study groups to pursue recycling initiatives and incorporated environmental criteria into purchasing decisions. A written sustainability commitment did not readily translate into a high percentage that had developed a sustainability master plan. Coordination of sustainability programs through a designated sustainability professional was not being undertaken by a large number of institutions within each study group. This may be due to the current economic downturn or management's attention to the emerging health care legislation being debated in congress. ^ Lifecycle assessments, an element of a carbon footprint, are seen as emerging areas of opportunity for health care institutions that can be used to evaluate the total lifecycle costs of products and services.^

Exploring the use of pharmaceutical patient assistance programs as an option to improve access to and affordability of prescription drugs

Background. Pharmaceutical-sponsored patient assistance programs (PAPs) are charity programs that provide free or reduced-priced medications to eligible patients. PAPs have the potential to improve prescription drug accessibility for patients but currently there is limited information about their use and effectiveness. ^ Objectives and methods. This dissertation described the use of PAPs in the U.S. through the conduct of two studies: (1) a systematic review of primary studies of PAPs from commercially-published and “grey” literature sources; and (2) a retrospective, cross-sectional study of cancer patients' use of PAPs at a tertiary care cancer outpatient center. ^ Results. (1) The systematic review identified 33 studies: 15 evaluated the impact of PAP enrollment assistance programs on patient healthcare outcomes; 7 assessed institutional costs of providing enrollment assistance; 7 surveyed stakeholders; 4 examined other aspects. Standardized mean differences calculated for disease indicator outcomes (most of which were single group, pre-posttest designs) showed significant decreases in glycemic and lipid control, and inconsistent results for blood pressure. Grey literature abstracts reported insufficient statistics for calculations. Study heterogeneity made weighted summary estimates inappropriate. Economic analyses indicated positive financial benefits to institutions providing enrollment assistance (cost) compared to the wholesale value of the medications provided (benefit); analyses did not value health outcomes. Mean quality of reporting scores were higher for observational studies in commercially-published articles versus full text, grey literature reports. (2) The cross-sectional study found that PAP outpatients were significantly more likely to be uninsured, indigent, and < 65 years old than non-PAP patients. Nearly all non-PAP and PAP prescriptions were for non-cancer conditions, either for co-morbidities (e.g., hypertension) or the management of treatment side effects (e.g., pain). Oral chemotherapies from PAPs were significantly more likely to be for breast versus other cancers, and be a newer, targeted versus traditional chemotherapy.^ Conclusions. In outpatient settings, PAP enrollment assistance plus additional medication services (e.g., counseling, reminders, and free samples) is associated with improved disease indicators for patients. Healthcare institutions, including cancer centers, can offset financial losses from uncompensated drug costs and recoup costs invested in enrollment assistance programs by procuring free PAP medications. Cancer patients who are indigent and uninsured may be able to access more outpatient medications for their supportive care needs through PAPs, than for cancer treatment options like oral chemotherapies. Because of the selective availability of drugs through PAPs, there may be more options for newer, oral, targeted chemotherapies for the treatment breast cancer versus other for other cancers.^

Perceptions of chief executives of Texas Catholic health care institutions regarding the poor and the provision of Catholic health care

Perceptions of chief executive officers (CEOs) of Texas Catholic health care institutions regarding the poor and the provision of Catholic health care were the focus for this study. A total of 40 health care administrators were asked to participate in a survey. Thirty-seven CEOs responded, including seven religious superiors, six health system CEOs and 24 hospital CEOs. Survey items concerning Catholic health for the poor centered on obligations and responsibilities of Catholic hospitals, means of achieving those obligations, and assessment of whether hospitals' objectives were being met. In addition, respondents' attitudes and beliefs about poor people in general were examined. Independent variables were CEO type, gender, religious preference, member of a religious order, and educational preparation. For purposes of analysis, most survey items were classified by level of consensus exhibited by respondents. The respondents to this survey agreed on most issues concerning poor people and the provision of Catholic health care. However, there were areas of disagreement particularly in Part I of the survey which dealt with responsibility/obligation, means/methods, and assessment of health care delivery for the poor. ^

Kawasaki syndrome: Cluster analysis of incident cases presenting to a pediatric tertiary care hospital in Texas from January 1, 2005 to December 31, 2009

Background: Despite almost 40 years of research into the etiology of Kawasaki Syndrome (KS), there is little research published on spatial and temporal clustering of KS cases. Previous analysis has found significant spatial and temporal clustering of cases, therefore cluster analyses were performed to substantiate these findings and provide insight into incident KS cases discharged from a pediatric tertiary care hospital. Identifying clusters from a single institution would allow for prospective analysis of risk factors and potential exposures for further insight into KS etiology. ^ Methods: A retrospective study was carried out to examine the epidemiology and distribution of patients presenting to Texas Children’s Hospital in Houston, Texas, with a diagnosis of Acute Febrile Mucocutaneous Lymph Node Syndrome (MCLS) upon discharge from January 1, 2005 to December 31, 2009. Spatial, temporal, and space-time cluster analyses were performed using the Bernoulli model with case and control event data. ^ Results: 397 of 102,761 total patients admitted to Texas Children’s Hospital had a principal or secondary diagnosis of Acute Febrile MCLS upon over the 5 year period. Demographic data for KS cases remained consistent with known disease epidemiology. Spatial, temporal, and space-time analyses of clustering using the Bernoulli model demonstrated no statistically significant clusters. ^ Discussion: Despite previous findings of spatial-temporal clustering of KS cases, there were no significant clusters of KS cases discharged from a single institution. This implicates the need for an expanded approach to conducting spatial-temporal cluster analysis and KS surveillance given the limitations of evaluating data from a single institution.^

An outbreak of Multi-Drug Resistant Acinetobacter in the burn intensive care unit of a large tertiary care center

Risk factors for Multi-Drug Resistant Acinetobacter (MDRA) acquisition were studied in patients in a burn intensive care unit (ICU) where there was an outbreak of MDRA. Forty cases were matched with eighty controls based on length of stay in the Burn ICU and statistical analysis was performed on data for several different variables. Matched analysis showed that mechanical ventilation, transport ventilation, number of intubations, number of bronchoscopy procedures, total body surface area burn, and prior Methicillin Resistant Staphylococcus aureus colonization were all significant risk factors for MDRA acquisition. ^ MDRA remains a significant threat to the burn population. Treatment for burn patients with MDRA is challenging as resistance to antibiotics continues to increase. This study underlined the need to closely monitor the most critically ill ventilated patients during an outbreak of MDRA as they are the most at risk for MDRA acquisition.^