Separation and hedging results with state-contingent production

A state-contingent model of production under uncertainty is developed and compared with more traditional models of production under uncertainty. Producer behaviour with both production and price risk, in the presence and in the absence of futures and forward markets, is analysed in this state-contingent framework. Conditions for the optimal hedge to be positive or negative are derived. We also show that, under plausible conditions, a risk-averse producer facing price uncertainty and the ability to hedge price risk will never willingly adopt a nonstochastic technology. New separation results, which hold in the presence of both price and production risk, are then developed. These separation results generalize Townsend's spanning results by reducing the number of necessary forward markets by one.

A state-contingent production approach to principal-agent problems with an application to point-source pollution control

Two basic representations of principal-agent relationships, the 'state-space' and 'parameterized distribution' formulations, have emerged. Although the state-space formulation appears more natural, analytical studies using this formulation have had limited success. This paper develops a state-space formulation of the moral-hazard problem using a general representation of production under uncertainty. A closed-form solution for the agency-cost problem is derived. Comparative-static results are deduced. Next we solve the principal's problem of selecting the optimal output given the agency-cost function. The analysis is applied to the problem of point-source pollution control. (C) 1998 Published by Elsevier Science S.A. All rights reserved.

Optimal taxation without state-contingent debt

To recover a version of Barro's (1979) `random walk'tax smoothing outcome, we modify Lucas and Stokey's (1983) economyto permit only risk--free debt. This imparts near unit root like behaviorto government debt, independently of the government expenditureprocess, a realistic outcome in the spirit of Barro's. We showhow the risk--free--debt--only economy confronts the Ramsey plannerwith additional constraints on equilibrium allocations thattake the form of a sequence of measurability conditions.We solve the Ramsey problem by formulating it in terms of a Lagrangian,and applying a Parameterized Expectations Algorithm tothe associated first--order conditions. The first--order conditions andnumerical impulse response functions partially affirmBarro's random walk outcome. Though the behaviors oftax rates, government surpluses, and government debts differ, allocationsare very close for computed Ramsey policies across incomplete and completemarkets economies.

Pilot study of hyperopic LASIK using the solid-state laser technology

Background To evaluate and report the visual, refractive, and aberrometric outcomes of LASIK for the correction of low to moderate hyperopia in a pilot group using a commercially available solid-state laser. Methods Prospective pilot study including 11 consecutive eyes with low to moderate hyperopia of six patients undergoing LASIK surgery using the Pulzar Z1 solid-state laser (CustomVis Laser Pty Ltd., currently CV Laser). Visual, refractive, and aberrometric changes were evaluated. Potential complications were evaluated as well. Mean follow-up time was 6.6 months (range, 3 to 11 months). Results A significant improvement in LogMAR uncorrected distance visual acuity (UDVA) was observed postoperatively (p = 0.01). No significant change was detected in LogMAR corrected distance visual acuity (CDVA) (p = 0.21). Postoperative LogMAR UDVA was 0.1 (about 20/25) or better in ten eyes (90.9 %). Mean overall efficacy and safety indices were 1.03 and 1.12. Postoperatively, no losses of lines of CDVA were observed. Postoperative spherical equivalent was within ±1.00 D in ten eyes (90.9 %). With regard to aberrations, no statistically significant changes were found in higher order and primary coma RMS postoperatively (p ≥ 0.21), and only minimal but statistically significant negativization of primary spherical aberration (p = 0.02) was observed. No severe complications were observed. Conclusion LASIK surgery using the solid-state laser technology seems to be a useful procedure for the correction of low to moderate hyperopia, with minimal induction of higher order aberrations.

Effective practices : state developed technology.

"Early and Periodic Screening, Diagnosis and Treatment"--Cover.

Estimating state-contingent production frontiers

Chambers and Quiggin (2000) use state-contingent representations of risky production technologies to establish important theoretical results concerning producer behavior under uncertainty. Unfortunately, perceived problems in the estimation of state-contingent models have limited the usefulness of the approach in policy formulation. We show that fixed and random effects state-contingent production frontiers can be conveniently estimated in a finite mixtures framework. An empirical example is provided. Compared to conventional estimation approaches, we find that estimating production frontiers in a state-contingent framework produces significantly different estimates of elasticities, firm technical efficiencies, and other quantities of economic interest.

The state-contingent approach to production under uncertainty

The central claim of this paper is that the state-contingent approach provides the best way to think about all problems in the economics of uncertainty, including problems of consumer choice, the theory of the firm, and principal-agent relationships. This claim is illustrated by recent developments in, and applications of, the state-contingent approach.

Estimating State-contingent Production Frontiers

Chambers and Quiggin (2000) use state-contingent representations of risky production technologies to establish important theoretical results concerning producer behavior under uncertainty. Unfortunately, perceived problems in the estimation of state-contingent models have limited the usefulness of the approach in policy formulation. We show that fixed and random effects state-contingent production frontiers can be conveniently estimated in a finite mixtures framework. An empirical example is provided. Compared to conventional estimation approaches, we find that estimating production frontiers in a statecontingent framework produces significantly different estimates of elasticities, firm technical efficiencies and other quantities of economic interest.

Iowa State Government Technology Assessment Project, 1995

The State of Iowa is conducting an as5essment of Information Technology (IT) in the Executive Branch. The purpose of this assessment is to gather data on costs, applications, systems, utilization, operations, hardware assets, administration and activities associated with the provision of IT services. To accomplish this, two leading technology vendors conducted an intense assessment. These vendors, Integrated System Solutions Corporation (ISSC), and Electronic Data Systems (EDS) analyzed extensive data provided by the various ·agencies and conducted on-site interviews during the week of November 13, 1995. Additionally, in the first week of December, the American Federation of State, County, and Municipal Employees (AFSCME) Iowa Council 61 sponsored an assessment. These assessments are included as appendices B, C, and D to this report.

Price stabilization and the risk-averse firm

An analytically simple and tractable approach to firm-level welfare analysis of complete and partial mean-preserving price stabilization for producers with general risk-averse preferences facing a stochastic technology is developed. Necessary and sufficient conditions for price stabilization to be welfare enhancing are derived under different assumptions of the producer's preferences and the producer's technology. Existing stabilization results for the risk-averse firm are shown to be corollaries of these more general results.

Diversity Arrays: a solid state technology for sequence information independent genotyping

Here we present the successful application of the microarray technology platform to the analysis of DNA polymorphisms. Using the rice genome as a model, we demonstrate the potential of a high-throughput genome analysis method called Diversity Array Technology, DArT‘. In the format presented here the technology is assaying for the presence (or amount) of a specific DNA fragment in a representation derived from the total genomic DNA of an organism or a population of organisms. Two different approaches are presented: the first involves contrasting two representations on a single array while the second involves contrasting a representation with a reference DNA fragment common to all elements of the array. The Diversity Panels created using this method allow genetic fingerprinting of any organism or group of organisms belonging to the gene pool from which the panel was developed. Diversity Arrays enable rapid and economical application of a highly parallel, solid-state genotyping technology to any genome or complex genomic mixtures.

Influence of the Difference Between Corneal and Refractive Astigmatism on LASIK Outcomes Using Solid-State Technology

Purpose: To evaluate the influence of the difference between preoperative corneal and refractive astigmatism [ocular residual astigmatism (ORA)] on outcomes obtained after laser in situ keratomileusis (LASIK) surgery for correction of myopic astigmatism using the solid-state laser technology. Methods: One hundred one consecutive eyes with myopia or myopic astigmatism of 55 patients undergoing LASIK surgery using the Pulzar Z1 solid-state laser (CustomVis Laser Pty Ltd, currently CV Laser) were included. Visual and refractive changes at 6 months postoperatively and changes in ORA and anterior corneal astigmatism and posterior corneal astigmatism (PCA) were analyzed. Results: Postoperatively, uncorrected distance visual acuity improved significantly (P < 0.01). Likewise, refractive cylinder magnitude and spherical equivalent were reduced significantly (P < 0.01). In contrast, no significant changes were observed in ORA magnitude (P = 0.81) and anterior corneal astigmatism (P = 0.12). The mean overall efficacy and safety indices were 0.96 and 1.01, respectively. These indices were not correlated with preoperative ORA (r = −0.15, P = 0.15). Furthermore, a significant correlation was found between ORA (r = 0.81, P < 0.01) and PCA postoperatively, but not preoperatively (r = 0.12, P = 0.25). Likewise, a significant correlation of ORA with manifest refraction was only found postoperatively (r = −0.38, P < 0.01). Conclusions: The magnitude of ORA does not seem to be a predictive factor of efficacy and safety of myopic LASIK using a solid-state laser platform. The higher relevance of PCA after surgery in some cases may explain the presence of unexpected astigmatic residual refractive errors.

Risk sharing with the monarch: Excusable defaults and contingent debt in the age of Philip II, 1556-1598

Contingent sovereign debt can create important welfare gains. Nonetheless,there is almost no issuance today. Using hand-collected archival data, we examine thefirst known case of large-scale use of state-contingent sovereign debt in history. Philip IIof Spain entered into hundreds of contracts whose value and due date depended onverifiable, exogenous events such as the arrival of silver fleets. We show that this allowedfor effective risk-sharing between the king and his bankers. The data also stronglysuggest that the defaults that occurred were excusable they were simply contingenciesover which Crown and bankers had not contracted previously.