Essays on asymmetric information problems without the single-crossing property: applications to corporate finance

The objective of this dissertation is to re-examine classical issues in corporate finance, applying a new analytical tool. The single-crossing property, also called Spence-irrlees condition, is not required in the models developed here. This property has been a standard assumption in adverse selection and signaling models developed so far. The classical papers by Guesnerie and Laffont (1984) and Riley (1979) assume it. In the simplest case, for a consumer with a privately known taste, the single-crossing property states that the marginal utility of a good is monotone with respect to the taste. This assumption has an important consequence to the result of the model: the relationship between the private parameter and the quantity of the good assigned to the agent is monotone. While single crossing is a reasonable property for the utility of an ordinary consumer, this property is frequently absent in the objective function of the agents for more elaborate models. The lack of a characterization for the non-single crossing context has hindered the exploration of models that generate objective functions without this property. The first work that characterizes the optimal contract without the single-crossing property is Araújo and Moreira (2001a) and, for the competitive case, Araújo and Moreira (2001b). The main implication is that a partial separation of types may be observed. Two sets of disconnected types of agents may choose the same contract, in adverse selection problems, or signal with the same levei of signal, in signaling models.

Non-monotone insurance contracts and their empirical consequences

The goal of this paper is to show the possibility of a non-monotone relation between coverage ans risk which has been considered in the literature of insurance models since the work of Rothschild and Stiglitz (1976). We present an insurance model where the insured agents have heterogeneity in risk aversion and in lenience (a prevention cost parameter). Risk aversion is described by a continuous parameter which is correlated with lenience and for the sake of simplicity, we assume perfect correlation. In the case of positive correlation, the more risk averse agent has higher cosr of prevention leading to a higher demand for coverage. Equivalently, the single crossing property (SCP) is valid and iplies a positive correlation between overage and risk in equilibrium. On the other hand, if the correlation between risk aversion and lenience is negative, not only may the SCP be broken, but also the monotonocity of contracts, i.e., the prediction that high (low) risk averse types choose full (partial) insurance. In both cases riskiness is monotonic in risk aversion, but in the last case there are some coverage levels associated with two different risks (low and high), which implies that the ex-ante (with respect to the risk aversion distribution) correlation between coverage and riskiness may have every sign (even though the ex-post correlation is always positive). Moreover, using another instrument (a proxy for riskiness), we give a testable implication to desentangle single crossing ans non single croosing under an ex-post zero correlation result: the monotonicity of coverage as a function os riskiness. Since by controlling for risk aversion (no asymmetric information), coverage is monotone function of riskiness, this also fives a test for asymmetric information. Finally, we relate this theoretical results to empirical tests in the recent literature, specially the Dionne, Gouruéroux and Vanasse (2001) work. In particular, they found an empirical evidence that seems to be compatible with asymmetric information and non single crossing in our framework. More generally, we build a hidden information model showing how omitted variables (asymmetric information) can bias the sign of the correlation of equilibrium variables conditioning on all observable variables. We show that this may be the case when the omitted variables have a non-monotonic relation with the observable ones. Moreover, because this non-dimensional does not capture this deature. Hence, our main results is to point out the importance of the SPC in testing predictions of the hidden information models.

Do dividends signal more earnings?

Signaling models have contributed to the corporate finance literature by formalizing "the informational content of dividends" hypothesis. However, these models are under criticism of empirical literature, as weak evidences were found supporting one of the main predicitions: the positive relation between changes in dividends and changes in earnings. We claim thaht the failure to verify this prediction does not invalidate the signaling approach. The models developed up to now assume or derive utility functions with the single-crossing property. We show thaht signaling is possible in the absence of this property and, in this case, changes in dividend and changes in earnings can be positively or negatively related.

Non-monotone insurence contracts and their empirical consequences

The goal of t.his paper is to show the possibility of a non-monot.one relation between coverage and risk which has been considered in the literature of insurance models since the work of Rothschild and Stiglitz (1976). We present an insurance model where the insured agents have heterogeneity in risk aversion and in lenience (a prevention cost parameter). Risk aversion is described by a continuou.'l parameter which is correlated with lenience and, for the sake of simplicity, we assume perfect correlation. In the case of positive correlation, the more risk averse agent has higher cost of prevention leading to a higher demand for coverage. Equivalently, the single crossing property (SCP) is valid and implies a positive correlation between coverage and risk in equilibrium. On the other hand, if the correlation between risk aversion and lenience is negative, not only may the sep be broken, but also the monotonicity of contracts, i.e., the prediction that high (Iow) risk averse types choose full (partial) insurance. In both cases riskiness is monotonic in risk aversion, but in the last case t,here are some coverage leveIs associated with two different risks (low and high), which implies that the ex-ante (with respect to the risk aversion distribution) correlation bet,ween coverage and riskiness may have every sign (even though the ex-post correlation is always positive). Moreover, using another instrument (a proxy for riskiness), we give a testable implication to disentangle single crossing and non single crossing under an ex-post zero correlation result: the monotonicity of coverage as a function of riskiness. Since by controlling for risk aversion (no asymmetric informat, ion), coverage is a monotone function of riskiness, this also gives a test for asymmetric information. Finally, we relate this theoretical results to empirica! tests in the recent literature, specially the Dionne, Gouriéroux and Vanasse (2001) work. In particular, they found an empirical evidence that seems to be compatible with asymmetric information and non single crossing in our framework. More generally, we build a hidden information model showing how omitted variabIes (asymmetric information) can bias the sign of the correlation of equilibrium variabIes conditioning on ali observabIe variabIes. We show that this may be t,he case when the omitted variabIes have a non-monotonic reIation with t,he observable ones. Moreover, because this non-monotonic reIat,ion is deepIy reIated with the failure of the SCP in one-dimensional screening problems, the existing lit.erature on asymmetric information does not capture t,his feature. Hence, our main result is to point Out the importance of t,he SCP in testing predictions of the hidden information models.

Do dividends signal more earnings? a theoretical analysis

The signaling models have contributed to the literature of corporate finance by the formalization of "the informational content of dividends hypothesis". However, these models are under criticism of empirical works, as weak evidences were found supporting one of the main predictions: the positive relation between changes in dividends and changes in earnings. We claim that the failure to verify this prediction does not invalidate the signaling approach. The mo deIs developed up to now assume or derive utility functions with the single-crossing property. We show that signaling is possible in the absence of this property and, in this case, changes in dividend and changes in earnings can be positively or negatively related.

Understanding the Impact of the Property Tax Appeal Process on Assessment Uniformity: Procedures, Structures, and Outcomes

Property taxes serve as a vital revenue source for local governments. The revenues derived from the property tax function as the primary funding source for a variety of critical local public service systems. Property tax appeal systems serve as quasi-administrative-judicial mechanisms intended to assure the public that property tax assessments are correct, fair, and equitable. Despite these important functions, there is a paucity of empirical research related to property tax appeal systems. This study contributes to property tax literature by identifying who participates in the property tax appeal process and examining their motivations for participation. In addition, the study sought to determine whether patterns of use and success in appeal systems affected the distribution of the tax burden. Data were collected by means of a survey distributed to single-family property owners from two Florida counties. In addition, state and county documents were analyzed to determine appeal patterns and examine the impact on assessment uniformity, over a three-year period. The survey data provided contextual evidence that single-family property owners are not as troubled by property taxes as they are by the conduct of local government officials. The analyses of the decision to appeal indicated that more expensive properties and properties excluded from initial uniformity analyses were more likely to be appealed, while properties with homestead exemptions were less likely to be appealed. The value change analyses indicated that appeals are clustered in certain geographical areas; however, these areas do not always experience a greater percentage of the value changes. Interestingly, professional representation did not increase the probability of obtaining a reduction in value. Other relationships between the variables were discovered, but often with weak predictive ability. Findings from the assessment uniformity analyses were also interesting. The results indicated that the appeals mechanisms in both counties improved assessment uniformity. On average, appealed properties exhibited greater horizontal and vertical inequities, as compared to non-appealed properties, prior to the appeals process. After, the appeal process was completed; the indicators of horizontal and vertical equity were largely improved. However, there were some indications of regressivity in the final year of the study.

Multi-objective optimisation of horizontal axis wind turbine structure and energy production using aerofoil and blade properties as design variables

The design of wind turbine blades is a true multi-objective engineering task. The aerodynamic effectiveness of the turbine needs to be balanced with the system loads introduced by the rotor. Moreover the problem is not dependent on a single geometric property, but besides other parameters on a combination of aerofoil family and various blade functions. The aim of this paper is therefore to present a tool which can help designers to get a deeper insight into the complexity of the design space and to find a blade design which is likely to have a low cost of energy. For the research we use a Computational Blade Optimisation and Load Deflation Tool (CoBOLDT) to investigate the three extreme point designs obtained from a multi-objective optimisation of turbine thrust, annual energy production as well as mass for a horizontal axis wind turbine blade. The optimisation algorithm utilised is based on Multi-Objective Tabu Search which constitutes the core of CoBOLDT. The methodology is capable to parametrise the spanning aerofoils with two-dimensional Free Form Deformation and blade functions with two tangentially connected cubic splines. After geometry generation we use a panel code to create aerofoil polars and a stationary Blade Element Momentum code to evaluate turbine performance. Finally, the obtained loads are fed into a structural layout module to estimate the mass and stiffness of the current blade by means of a fully stressed design. For the presented test case we chose post optimisation analysis with parallel coordinates to reveal geometrical features of the extreme point designs and to select a compromise design from the Pareto set. The research revealed that a blade with a feasible laminate layout can be obtained, that can increase the energy capture and lower steady state systems loads. The reduced aerofoil camber and an increased L/. D-ratio could be identified as the main drivers. This statement could not be made with other tools of the research community before. © 2013 Elsevier Ltd.

An Improvement on 2× 2 Silicon-on-Insulator Mach-Zehnder Thermo-Optical Switch

An improved 2 ×2 silicon-on-insulator Mach-Zehnder thermo-optical switch is designed and fabricated, which is based on strongly guided multimode interference couplers and single- mode phase-shifting arms. The multimode interference couplers and input/output waveguides are deeply etched to improve coupler performances and coupler-waveguide coupling efficiencies. However, shallow etching is used in the phase-shifting arms to guarantee single-mode property. The strongly guided coupler presents an attractive uniformity about 0. 03 dB and a low propagation loss of -0.6 dB. The 2× 2 switch shows an insertion loss as low as -6.8 dB, where the fiber-waveguide coupling loss of -4.3 dB is included, and the response-time is measured as short as 6.8 μs, which are much better than our previous results.

岩石磨蚀性和TBM滚刀磨损机理研究

Using the popular CERCHAR testing to measure the abrasiveness of rock which is CERCHAR abrasiveness index(CAI). The digital imagine processing program IPP is used to quantify the rock texture such as the grain size, the shape of grain and the index of grain homogeneity. And the rock mechanical testing machine are used to measure the strength, hardness and elastic modulus. Basic on these three experiments, this paper finds the relationship between the CAI and physical and mechanical properties of rock. They are both the mesostructure and macroscopical properties of rock. According to the theory of tribology and wear, this paper finds the disc cutter wear mechanism during the machine and rock interaction process. The detail research results are as follows: (1) The size and form of the mineral grains constituting the rocks affect the abrasiveness of the rock. The rock abrasiveness CAI is a function of the product of the texture coefficient(TC) multiplying equivalent quarts content(Q%). (2) There is no obvious relationship between the rock abrasiveness CAI and the single macroscopical property of rock such as hardness, unconfined compressive strength, tensile strength and elastic modulus. But when taking the texture coefficient(TC) and the mineral composition in consideration, it shows that the rock abrasiveness CAI is relative to the combination of the rock mechanical property, the texture coefficient(TC) and the mineral composition. That is to say various factors which are from the mesostructure feature to the macroscopical property of rock control the rock abrasiveness. (3) The disc cutter penetrating into rock is a machine/rock interaction process. During this interaction, the wear of disc cutter is mainly coming from the abrasive of abrasiveness matters. First, the surface of the cutter ring is hunched, and then the material of the cutter ring is being wiped off during the iterative interaction. Second, the hard mineral in the rock and the muck will microcosmic cutting the surface material of cutter ring. (4) The disc cutters consumption is determined by the machine parameters and the geology condition. The machine parameters include the thrust and the revolution rate of the cutterhead. The geology condition include two aspects: the macroscopical properties which are the strength and/or hardness of rock, the presence of discontinuities in rock mass, the hardness, sharp, edge and size of the muck and so on. And the mesostructure features which are the hard mineral composition, the sharp and size of the grain of the rock.

F-LQE: a Fuzzy Link Quality Estimator for wireless sensor networks

Radio Link Quality Estimation (LQE) is a fundamental building block for Wireless Sensor Networks, namely for a reliable deployment, resource management and routing. Existing LQEs (e.g. PRR, ETX, Fourbit, and LQI ) are based on a single link property, thus leading to inaccurate estimation. In this paper, we propose F-LQE, that estimates link quality on the basis of four link quality properties: packet delivery, asymmetry, stability, and channel quality. Each of these properties is defined in linguistic terms, the natural language of Fuzzy Logic. The overall quality of the link is specified as a fuzzy rule whose evaluation returns the membership of the link in the fuzzy subset of good links. Values of the membership function are smoothed using EWMA filter to improve stability. An extensive experimental analysis shows that F-LQE outperforms existing estimators.

Nonclassical light revealed by the joint statistics of simultaneous measurements

Nonclassicality cannot be a single-observable property, since the statistics of any quantum observable is compatible with classical physics. We develop a general procedure to reveal nonclassical behavior of light states from the joint statistics arising in the practical measurement of multiple observables. Beside embracing previous approaches, this protocol can disclose nonclassical features for standard examples of classical-like behavior, such as SU(2) and Glauber coherent states. When combined with other criteria, this would imply that every light state is nonclassical.

Exploration of mechanisms underlying the strain-rate-dependent mechanical property of single chondrocytes

Based on the characterization by Atomic Force Microscopy (AFM), we report that the mechanical property of single chondrocytes has dependency on the strain-rates. By comparing the mechanical deformation responses and the Young’s moduli of living and fixed chondrocytes at four different strain-rates, we explore the deformation mechanisms underlying this dependency property. We found that the strain-rate-dependent mechanical property of living cells is governed by both of the cellular cytoskeleton (CSK) and the intracellular fluid when the fixed chondrocytes is mainly governed by their intracellular fluid which is called the consolidation-dependent deformation behavior. Finally, we report that the porohyperelastic (PHE) constitutive material model which can capture the consolidation-dependent behavior of both living and fixed chondrocytes is a potential candidature to study living cell biomechanics.

Property-performance control of multidimensional, hierarchical, single-crystalline ZnO nanoarchitectures

Diverse morphologies of multidimensional hierarchical single-crystalline ZnO nanoarchitectures including nanoflowers, nanobelts, and nanowires are obtained by use of a simple thermal evaporation and vapour-phase transport deposition technique by placing Au-coated silicon substrates in different positions inside a furnace at process temperatures as low as 550 °C. The nucleation and growth of ZnO nanostructures are governed by the vapour–solid mechanism, as opposed to the commonly reported vapour–liquid–solid mechanism, when gold is used in the process. The morphological, structural, compositional and optical properties of the synthesized ZnO nanostructures can be effectively tailored by means of the experimental parameters, and these properties are closely related to the local growth temperature and gas-phase supersaturation at the sample position. In particular, room-temperature photoluminescence measurements reveal an intense near-band-edge ultraviolet emission at about 386 nm for nanobelts and nanoflowers, which suggests that these nanostructures are of sufficient quality for applications in, for example, optoelectronic devices.