Domestic Violence and Football in Glasgow: Are Reference Points Relevant?

Much research suggests that sporting events can trigger domestic violence with recent evidence suggesting that pre-match expectations (which can be interpreted as reference points) play an especially important role in this relationship. In particular, unexpectedly disappointing results have been associated with large increases in domestic violence. This paper contributes to this literature using a new data set containing every domestic violence incident in Glasgow over a period of more than eight years. We find that Old Firm matches, where Glasgow rivals Celtic and Rangers play, are associated with large increases in domestic violence (regardless of the timing or the outcome of the match). Non-Old Firm matches tend to have little impact on domestic violence. Furthermore, we fi nd little evidence for the importance of reference points. Matches with disappointing outcomes, relative to pre-match expectations, are found to be associated with unusual increases in domestic violence only in a very limited set of matches.

No Good Deals - No Bad Models

Faced with the problem of pricing complex contingent claims, an investor seeks to make his valuations robust to model uncertainty. We construct a notion of a model- uncertainty-induced utility function and show that model uncertainty increases the investor's eff ective risk aversion. Using the model-uncertainty-induced utility function, we extend the \No Good Deals" methodology of Cochrane and Sa a-Requejo [2000] to compute lower and upper good deal bounds in the presence of model uncertainty. We illustrate the methodology using some numerical examples.

Domestic Violence and Football in Glasgow: Are Reference Points Relevant?

Much research suggests that sporting events can trigger domestic violence with recent evidence suggesting that pre-match expectations (which can be interpreted as reference points) play an especially important role in this relationship. In particular, unexpectedly disappointing results have been associated with large increases in domestic violence. This paper contributes to this literature using a new data set containing every domestic violence incident in Glasgow over a period of more than eight years. We find that Old Firm matches, where Glasgow rivals Celtic and Rangers play, are associated with large increases in domestic violence (regardless of the timing or the outcome of the match). Non-Old Firm matches tend to have little impact on domestic violence. Furthermore, we find little evidence for the importance of reference points. Matches with disappointing outcomes, relative to pre-match expectations, are found to be associated with unusual increases in domestic violence only in a very limited set of matches.

How Optimal is US Monetary Policy?

Most of the literature estimating DSGE models for monetary policy analysis assume that policy follows a simple rule. In this paper we allow policy to be described by various forms of optimal policy - commitment, discretion and quasi-commitment. We find that, even after allowing for Markov switching in shock variances, the inflation target and/or rule parameters, the data preferred description of policy is that the US Fed operates under discretion with a marked increase in conservatism after the 1970s. Parameter estimates are similar to those obtained under simple rules, except that the degree of habits is significantly lower and the prevalence of cost-push shocks greater. Moreover, we find that the greatest welfare gains from the ‘Great Moderation’ arose from the reduction in the variances in shocks hitting the economy, rather than increased inflation aversion. However, much of the high inflation of the 1970s could have been avoided had policy makers been able to commit, even without adopting stronger anti-inflation objectives. More recently the Fed appears to have temporarily relaxed policy following the 1987 stock market crash, and has lost, without regaining, its post-Volcker conservatism following the bursting of the dot-com bubble in 2000.

Comparative Statics of Asset Prices: the effect of other assets' risk

Currently, financial economics is unable to predict changes in asset prices with respect to changes in the underlying risk factors, even when an asset's dividend is independent of a given factor. This paper takes steps towards addressing this issue by highlighting a crucial component of wealth effects on asset prices hitherto ignored by the literature. Changes in wealth do not only alter an agents risk aversion, but also her perceived 'riskiness' of a security. The latter enhances significantly the extent to which market- clearing leads to endogenously-generated correlation across asset prices, over and above that induced by correlation between payoffs, giving the appearance of 'contagion.'

Effects of stress on economic decision-making: Evidence from laboratory experiments

The ways in which preferences respond to the varying stress of economic environments is a key question for behavioral economics and public policy. We conducted a laboratory experiment to investigate the effects of stress on financial decision making among individuals aged 50 and older. Using the cold pressor task as a physiological stressor, and a series of intelligence tests as cognitive stressors, we find that stress increases subjective discounting rates, has no effect on the degree of risk-aversion, and substantially lowers the effort individuals make to learn about financial decisions.

A Theory of Wage Setting Behavior

Concerns for fairness, workers' morale and reciprocity infuence firms' wage setting policy. In this paper we formalize a theory of wage setting behavior in a simple and tractable model that explicitly considers these behavioral aspects. A worker is assumed to have reference-dependent preferences and displays loss aversion when evaluating the fairness of a wage contract. The theory establishes a wage-effort relationship that captures the worker's reference-dependent reciprocity, which in turn in uences the firm's optimal wage policy. The paper makes two key contributions: it identifies loss aversion as an explanation for a worker's asymmetric reciprocity; and it provides realistic and generalized microfoundation for downward wage rigidity. We further illustrate the implications of our theory for both wage setting and hiring behavior. Downward wage rigidity generates several implications for the outcome of the initial employment contract. The worker's reference wage, his extent of negative reciprocity and the firms expectations are key drivers of the propositions derived.

Cognition, Resources, and Institutions in the Explanation of Attitudes to Free Trade

This article proposes a framework for the analysis of attitudes to foreign trade policies that challenges the traditional skill-endowment approach. The traditional approach assumes informed individuals who calculate the costs and benefits of alternative policies. We propose that individuals lack information and that their positions rest on economic vulnerability, as mediated through risk-aversion. We also stress the role of environmental signals and political endorsements in guiding individuals' views on trade policy. We test this alternative approach with a Spanish survey conducted in May 2009 and the ISSP survey conducted in 2003 in a large number of less developed and more developed countries. The Spanish data show that the population is largely uninformed and that their ideas about the consequences of free trade policy do not explain attitudes among different socio-demographic groups. Meanwhile, the ISSP data contradict important aspects of the traditional approach and are consistent with the alternative approach.

Nash equilibrium strategies in discrete-time finite-horizon dynamic games with risk-and effort-averse players

The objective of this paper is to re-examine the risk-and effort attitude in the context of strategic dynamic interactions stated as a discrete-time finite-horizon Nash game. The analysis is based on the assumption that players are endogenously risk-and effort-averse. Each player is characterized by distinct risk-and effort-aversion types that are unknown to his opponent. The goal of the game is the optimal risk-and effort-sharing between the players. It generally depends on the individual strategies adopted and, implicitly, on the the players' types or characteristics.

Activity in inferior parietal and medial prefrontal cortex signals the accumulation of evidence in a probability learning task.

In an uncertain environment, probabilities are key to predicting future events and making adaptive choices. However, little is known about how humans learn such probabilities and where and how they are encoded in the brain, especially when they concern more than two outcomes. During functional magnetic resonance imaging (fMRI), young adults learned the probabilities of uncertain stimuli through repetitive sampling. Stimuli represented payoffs and participants had to predict their occurrence to maximize their earnings. Choices indicated loss and risk aversion but unbiased estimation of probabilities. BOLD response in medial prefrontal cortex and angular gyri increased linearly with the probability of the currently observed stimulus, untainted by its value. Connectivity analyses during rest and task revealed that these regions belonged to the default mode network. The activation of past outcomes in memory is evoked as a possible mechanism to explain the engagement of the default mode network in probability learning. A BOLD response relating to value was detected only at decision time, mainly in striatum. It is concluded that activity in inferior parietal and medial prefrontal cortex reflects the amount of evidence accumulated in favor of competing and uncertain outcomes.

Essays in higher moment asset pricing and liquidity risk

This thesis focuses on theoretical asset pricing models and their empirical applications. I aim to investigate the following noteworthy problems: i) if the relationship between asset prices and investors' propensities to gamble and to fear disaster is time varying, ii) if the conflicting evidence for the firm and market level skewness can be explained by downside risk, Hi) if costly learning drives liquidity risk. Moreover, empirical tests support the above assumptions and provide novel findings in asset pricing, investment decisions, and firms' funding liquidity. The first chapter considers a partial equilibrium model where investors have heterogeneous propensities to gamble and fear disaster. Skewness preference represents the desire to gamble, while kurtosis aversion represents fear of extreme returns. Using US data from 1988 to 2012, my model demonstrates that in bad times, risk aversion is higher, more people fear disaster, and fewer people gamble, in contrast to good times. This leads to a new empirical finding: gambling preference has a greater impact on asset prices during market downturns than during booms. The second chapter consists of two essays. The first essay introduces a foramula based on conditional CAPM for decomposing the market skewness. We find that the major market upward and downward movements can be well preadicted by the asymmetric comovement of betas, which is characterized by an indicator called "Systematic Downside Risk" (SDR). We find that SDR can efafectively forecast future stock market movements and we obtain out-of-sample R-squares (compared with a strategy using historical mean) of more than 2.27% with monthly data. The second essay reconciles a well-known empirical fact: aggregating positively skewed firm returns leads to negatively skewed market return. We reconcile this fact through firms' greater response to negative maraket news than positive market news. We also propose several market return predictors, such as downside idiosyncratic skewness. The third chapter studies the funding liquidity risk based on a general equialibrium model which features two agents: one entrepreneur and one external investor. Only the investor needs to acquire information to estimate the unobservable fundamentals driving the economic outputs. The novelty is that information acquisition is more costly in bad times than in good times, i.e. counter-cyclical information cost, as supported by previous empirical evidence. Later we show that liquidity risks are principally driven by costly learning. Résumé Cette thèse présente des modèles théoriques dévaluation des actifs et leurs applications empiriques. Mon objectif est d'étudier les problèmes suivants: la relation entre l'évaluation des actifs et les tendances des investisseurs à parier et à crainadre le désastre varie selon le temps ; les indications contraires pour l'entreprise et l'asymétrie des niveaux de marché peuvent être expliquées par les risques de perte en cas de baisse; l'apprentissage coûteux augmente le risque de liquidité. En outre, des tests empiriques confirment les suppositions ci-dessus et fournissent de nouvelles découvertes en ce qui concerne l'évaluation des actifs, les décisions relatives aux investissements et la liquidité de financement des entreprises. Le premier chapitre examine un modèle d'équilibre où les investisseurs ont des tendances hétérogènes à parier et à craindre le désastre. La préférence asymétrique représente le désir de parier, alors que le kurtosis d'aversion représente la crainte du désastre. En utilisant les données des Etats-Unis de 1988 à 2012, mon modèle démontre que dans les mauvaises périodes, l'aversion du risque est plus grande, plus de gens craignent le désastre et moins de gens parient, conatrairement aux bonnes périodes. Ceci mène à une nouvelle découverte empirique: la préférence relative au pari a un plus grand impact sur les évaluations des actifs durant les ralentissements de marché que durant les booms économiques. Exploitant uniquement cette relation générera un revenu excédentaire annuel de 7,74% qui n'est pas expliqué par les modèles factoriels populaires. Le second chapitre comprend deux essais. Le premier essai introduit une foramule base sur le CAPM conditionnel pour décomposer l'asymétrie du marché. Nous avons découvert que les mouvements de hausses et de baisses majeures du marché peuvent être prédits par les mouvements communs des bêtas. Un inadicateur appelé Systematic Downside Risk, SDR (risque de ralentissement systématique) est créé pour caractériser cette asymétrie dans les mouvements communs des bêtas. Nous avons découvert que le risque de ralentissement systématique peut prévoir les prochains mouvements des marchés boursiers de manière efficace, et nous obtenons des carrés R hors échantillon (comparés avec une stratégie utilisant des moyens historiques) de plus de 2,272% avec des données mensuelles. Un investisseur qui évalue le marché en utilisant le risque de ralentissement systématique aurait obtenu une forte hausse du ratio de 0,206. Le second essai fait cadrer un fait empirique bien connu dans l'asymétrie des niveaux de march et d'entreprise, le total des revenus des entreprises positiveament asymétriques conduit à un revenu de marché négativement asymétrique. Nous décomposons l'asymétrie des revenus du marché au niveau de l'entreprise et faisons cadrer ce fait par une plus grande réaction des entreprises aux nouvelles négatives du marché qu'aux nouvelles positives du marché. Cette décomposition révélé plusieurs variables de revenus de marché efficaces tels que l'asymétrie caractéristique pondérée par la volatilité ainsi que l'asymétrie caractéristique de ralentissement. Le troisième chapitre fournit une nouvelle base théorique pour les problèmes de liquidité qui varient selon le temps au sein d'un environnement de marché incomplet. Nous proposons un modèle d'équilibre général avec deux agents: un entrepreneur et un investisseur externe. Seul l'investisseur a besoin de connaitre le véritable état de l'entreprise, par conséquent, les informations de paiement coutent de l'argent. La nouveauté est que l'acquisition de l'information coute plus cher durant les mauvaises périodes que durant les bonnes périodes, comme cela a été confirmé par de précédentes expériences. Lorsque la récession comamence, l'apprentissage coûteux fait augmenter les primes de liquidité causant un problème d'évaporation de liquidité, comme cela a été aussi confirmé par de précédentes expériences.

Mise en oeuvre de protocoles spatiaux pour analyser la modulation de processus cognitifs en fonction de la dimension émotionnelle chez le rongeur

Résumé : Emotion et cognition sont deux termes généralement employés pour désigner des processus psychiques de nature opposée. C'est ainsi que les sciences cognitives se sont longtemps efforcées d'écarter la composante «chaude »des processus «froids »qu'elles visaient, si ce n'est pour montrer l'effet dévastateur de la première sur les seconds. Pourtant, les processus cognitifs (de collecte, maintien et utilisation d'information) et émotioAnels (d'activation subjective, physiologique et comportementale face à ce qui est attractif ou aversif) sont indissociables. Par l'approche neuro-éthologique, à l'interface entre le substrat biologique et les manifestations comportementales, nous nous sommes intéressés à une fonction cognitive essentielle, la fonction mnésique, classiquement exprimée chez le rongeur par l'orientation spatiale. Au niveau du substrat, McDonald et White (1993) ont montré la dissociation de trois systèmes de mémoire, avec les rôles de l'hippocampe, du néostriatum et de l'amygdale dans l'encodage des informations respectivement épisodiques, procédurales et émotionnelles. Nous nous sommes penchés sur l'interaction entre ces systèmes en fonction de la dimension émotionnelle par l'éclairage du comportement. L'état émotionnel de l'animal dépend de plusieurs facteurs, que nous avons tenté de contrôler indirectement en comparant leurs effets sur l'acquisition, dans diverses conditions, de la tâche de Morris (qui nécessite la localisation dans un bassin de la position d'une plate-forme submergée), ainsi que sur le style d'exploration de diverses arènes, ouvertes ou fermées, plus ou moins structurées par la présence de tunnels en plexiglas transparent. Nous avons d'abord exploré le rôle d'un composant du système adrénergique dans le rapport à la difficulté et au stress, à l'aide de souris knock-out pour le récepteur à la noradrénaline a-1 B dans un protocole avec 1 ou 4 points de départ dans un bassin partitionné. Ensuite, nous nous sommes penchés, chez le rat, sur les effets de renforcement intermittent dans différentes conditions expérimentales. Dans ces conditions, nous avons également tenté d'analyser en quoi la situation du but dans un paysage donné pouvait interférer avec les effets de certaines formes de stress. Finalement, nous avons interrogé les conséquences de perturbations passées, y compris le renforcement partiel, sur l'organisation des déplacements sur sol sec. Nos résultats montrent la nécessité, pour les souris cont~ô/es dont l'orientation repose sur l'hippocampe, de pouvoir varier les trajectoires, ce qui favoriserait la constitution d'une carte cognitive. Les souris a->B KO s'avèrent plus sensibles au stress et capables de bénéficier de la condition de route qui permet des réponses simples et automatisées, sous-tendues par l'activité du striatum. Chez les rats en bassin 100% renforcé, l'orientation apparaît basée sur l'hippocampe, relayée par le striatum pour le développement d'approches systématiques et rapides, avec réorientation efficace en nouvelle position par réactivation dépendant de l'hippocampe. A 50% de renforcement, on observe un effet du type de déroulement des sessions, transitoirement atténué par la motivation Lorsque les essais s'enchaînent sans pause intrasession, les latences diminuent régulièrement, ce qui suggère une prise en charge possible par des routines S-R dépendant du striatum. L'organisation des mouvements exploratoires apparaît dépendante du niveau d'insécurité, avec différents profils intermédiaires entre la différentiation maximale et la thigmotaxie, qui peuvent être mis en relation avec différents niveaux d'efficacité de l'hippocampe. Ainsi, notre travail encourage à la prise en compte de la dimension émotionnelle comme modulatrice du traitement d'information, tant en phase d'exploration de l'environnement que d'exploitation des connaissances spatiales. Abstract : Emotion and cognition are terms widely used to refer to opposite mental processes. Hence, cognitive science research has for a long time pushed "hot" components away from "cool" targeted processes, except for assessing devastating effects of the former upon the latter. However, cognitive processes (of information collection, preservation, and utilization) and emotional processes (of subjective, physiological, and behavioral activation roue to attraction or aversion) are inseparable. At the crossing between biological substrate and behavioral expression, we studied a chief cognitive function, memory, classically shown in animals through spatial orientation. At the substrate level, McDonald et White (1993) have shown a dissociation between three memory systems, with the hippocampus, neostriatum, and amygdala, encoding respectively episodic, habit, and emotional information. Through the behavior of laboratory rodents, we targeted the interaction between those systems and the emotional axis. The emotional state of an animal depends on different factors, that we tried to check in a roundabout way by the comparison of their effects on acquisition, in a variety of conditions, of the Morris task (in which the location of a hidden platform in a pool is required), as well as on the exploration profile in different apparatus, open-field and closed mazes, more or less organized by clear Plexiglas tunnels. We first tracked the role, under more or less difficult and stressful conditions, of an adrenergic component, with knock-out mice for the a-1 B receptor in a partitioned water maze with 1 or 4 start positions. With rats, we looked for the consequences of partial reinforcement in the water maze in different experimental conditions. In those conditions, we further analyzed how the situation of the goal in the landscape could interfere with the effect of a given stress. At last, we conducted experiments on solid ground, in an open-field and in radial mazes, in order to analyze the organization of spatial behavior following an aversive life event, such as partial reinforcement training in the water maze. Our results emphasize the reliance of normal mice to be able to vary approach trajectories. One of our leading hypotheses is that such strategies are hippocampus-dependent and are best developed for of a "cognitive map like" representation. Alpha-1 B KO mice appear more sensitive to stress and able to take advantage of the route condition allowing simple and automated responses, most likely striatum based. With rats in 100% reinforced water maze, the orientation strategy is predominantly hippocampus dependent (as illustrated by the impairment induced by lesions of this structure) and becomes progressively striatum dependent for the development of systematic and fast successful approaches. Training towards a new platform position requires a hippocampus based strategy. With a 50% reinforcement rate, we found a clear impairment related to intersession disruption, an effect transitorily minimized by motivation enhancement (cold water). When trials are given without intrasession interruption, latencies consistently diminish, suggesting a possibility for striatum dependent stimulus-response routine to occur. The organization of exploratory movements is shown to depend on the level of subjective security, with different intermediary profiles between maximum differentiation and thigmotaxy, which can be considered in parallel with different efficiency levels of the hippocampus dependent strategies. Thus, our work fosters the consideration of emotion as a cognitive treatment modulator, during spatial exploration as well as spatial learning. It leads to a model in which the predominance of hippocampus based exploration is challenged by training conditions of various nature.

Catastrophic medical expenditure risk

Medical expenditure risk can pose a major threat to living standards. We derive decomposable measures of catastrophic medical expenditure risk from reference-dependent utility with loss aversion. We propose a quantile regression based method of estimating risk exposure from cross-section data containing information on the means of financing health payments. We estimate medical expenditure risk in seven Asian countries and find it is highest in Laos and China, and is lowest in Malaysia. Exposure to risk is generally higher for households that have less recourse to self-insurance, lower incomes, wealth and education, and suffer from chronic illness.

Cardenolides in nectar may be more than a consequence of allocation to other plant parts: a phylogenetic study of Asclepias

The primary function of secondary plant metabolites is thought to be defence against herbivores. The frequent occurrence of these same noxious compounds in floral nectar, which functions primarily to attract pollinators, has been seen as paradoxical. Although these compounds may have an adaptive purpose in nectar, they may also occur as a nonadaptive consequence of chemical defence in other plant parts. If nectar chemistry reflects physiological constraints or passive leakage from other tissues, we expect that the identity and relative concentration of nectar cardenolides to be correlated with those of other plant parts; in contrast, discordant distributions of compounds in nectar and other tissues may suggest adaptive roles in nectar. We compared the concentrations and identities of cardenolides in the nectar, leaves and flowers of 12 species from a monophyletic clade of Asclepias. To measure putative toxicity of nectar cardenolides, we then examined the effects of a standard cardenolide (digoxin) on the behaviour of bumblebees, a common generalist pollinator of Asclepias. We found that the average cardenolide concentrations in nectar, leaves and flowers of the 12 Asclepias species were positively correlated as predicted by nonadaptive hypotheses. However, significant differences in the identities and concentrations of individual cardenolides between nectar and leaves suggest that the production or allocation of cardenolides may be independently regulated at each plant part. In addition, cardenolide concentrations in leaves and nectar exhibited no phylogenetic signal. Surprisingly, bumblebees did not demonstrate an aversion to digoxin-rich nectar, which may indicate that nectar cardenolides have little effect on pollination. Although the idea that discordant patterns of secondary metabolites across tissue types may signal adaptive functions is attractive, there is evidence to suggest constraint contributes to nectar secondary chemistry. Further work testing the ecological impacts of such patterns will be critical in determining the functional significance of nectar cardenolides

Delta9-tetrahydrocannabinol decreases somatic and motivational manifestations of nicotine withdrawal in mice

The possible interactions between Delta9-tetrahydrocannabinol (THC) and nicotine remain unclear in spite of the current association of cannabis and tobacco in humans. The aim of the present study was to explore the interactions between these two drugs of abuse by evaluating the consequences of THC administration on the somatic manifestations and the aversive motivational state associated to nicotine withdrawal in mice. Acute THC administration significantly decreased the incidence of several nicotine withdrawal signs precipitated by mecamylamine or naloxone, such as wet-dog-shakes, paw tremor and scratches. In both experimental conditions, the global withdrawal score was also significantly attenuated by acute THC administration. THC also reversed conditioned place aversion associated to naloxone precipitated nicotine withdrawal. We have then evaluated whether this effect of THC was due to possible adaptive changes induced by chronic nicotine on CB1 cannabinoid receptors. The stimulation of GTPS-binding proteins by the cannabinoid agonist WIN 55,212-2 and the density of CB1 cannabinoid receptor binding labelled with [3H] CP-55,940 were not modified by chronic nicotine treatment in the different brain structures investigated. Finally, we evaluated the consequences of THC administration on c-Fos expression in several brain structures after chronic nicotine administration and withdrawal. c-Fos was decreased in the caudate putamen and the dentate gyrus after mecamylamine precipitated nicotine withdrawal. However, acute THC administration did not modify c-Fos expression under these experimental conditions. Taken together, these results indicate that THC administration attenuated somatic signs of nicotine withdrawal and this effect was not associated to compensatory changes on CB1 cannabinoid receptors during chronic nicotine administration. In addition, THC also ameliorated the aversive motivational consequences of nicotine withdrawal.