A Litner Model of Payout and Managerial Rents

We develop a dynamic agency model where payout, investment and financing decisions are made by managers who attempt to maximize the rents they take from the firm, subject to a capital market constraint. Managers smooth payout in order to smooth their flow of rents. Total payout (dividends plus net repurchases) follows Lintner's (1956) target-adjustment model. Payout smooths out transitory shocks to current income and adjusts gradually to changes in permanent income. Smoothing is accomplished by borrowing or lending. Payout is not cut back to finance capital investment. Risk aversion causes managers to underinvest, but habit formation mitigates the degree of underinvestment.

A Theory of Income Smoothing When Insiders Know More Than Outsiders

We consider a setting in which insiders have information about income that outside shareholders do not, but property rights ensure that outside shareholders can enforce a fair payout. To avoid intervention, insiders report income consistent with outsiders' expectations based on publicly available information rather than true income, resulting in an observed income and payout process that adjust partially and over time towards a target. Insiders under-invest in production and effort so as not to unduly raise outsiders' expectations about future income, a problem that is more severe the smaller is the inside ownership and results in an "outside equity Laffer curve". A disclosure environment with adequate quality of independent auditing mitigates the problem, implying that accounting quality can enhance investments, size of public stock markets and economic growth.

A Theory of Income Smoothing when Insiders Know More than Outsiders

We consider a setting in which insiders have information about income that outside shareholders do not, but property rights ensure that outside shareholders can enforce a fair payout. To avoid intervention, insiders report income consistent with outsiders' expectations based on publicly available information rather than true income, resulting in an observed income and payout process that adjust partially and over time towards a target. Insiders under-invest in production and eort so as not to unduly raise outsiders' expectations about future income, a problem that is more severe the smaller is the inside ownership and results in an \outside equity Laer curve". A disclosure environment with adequate quality of independent auditing mitigates the problem, implying that accounting quality can enhance investments, size of public stock markets and economic growth

A Theory of Income Smoothing when Insiders Know More than Outsiders

We consider a setting in which insiders have information about income that outside shareholders do not, but property rights ensure that outside shareholders can enforce a fair payout. To avoid intervention, insiders report income consistent with outsiders' expectations based on publicly available information rather than true income, resulting in an observed income and payout process that adjust partially and over time towards a target. Insiders under-invest in production and eort so as not to unduly raise outsiders' expectations about future income, a problem that is more severe the smaller is the inside ownership and results in an \outside equity Laer curve". A disclosure environment with adequate quality of independent auditing mitigates the problem, implying that accounting quality can enhance investments, size of public stock markets and economic growth

The Balance between Plasmacytoid DC versus Conventional DC Determines Pulmonary Immunity to Virus Infections

Background: Respiratory syncytial virus (RSV) infects nearly all infants by age 2 and is a leading cause of broncialitis. RSV may employ several mechanisms to induce immune dysregulation, including dentritic cell (DC) modulation during the immune response to RSV. Methods and Findings: Expansion of cDC and pDC by Flt3L treatment promoted an anti-viral response with reduced pathophysiology characterized by decreased airway hyperreactivity, reduced Th2 cytokines, increased Th1 cytokines, and a reduction in airway inflammation and mucus overexpression. These protective aspects of DC expansion could be completely reversed by depleting pDCs during the RSV infections. Expansion of DCs by Flt3L treatment enhanced in CD8+ T cell responses, which was reversed by depletion of pDC. Conclusions: These results indicate that a balance between cDC and pDC in the lung and its lymph nodes is crucial for the outcome of a pulmonary infection. Increased pDC numbers induced by Flt3L treatment have a protective impact on the nature of the overall immune environment

Clarifying the translational potential of B-I09

A

CCR2-and Flt3-dependent inflammatory conventional type 2 dendritic cells are necessary for the induction of adaptive immunity by the human vaccine adjuvant system AS01

The Adjuvant System AS01 contains monophosphoryl lipid A (MPL) and the saponin QS-21 in a liposomal formulation. AS01 is included in recently developed vaccines against malaria and varicella zoster virus. Like for many other adjuvants, induction of adaptive immunity by AS01 is highly dependent on the ability to recruit and activate dendritic cells (DCs) that migrate to the draining lymph node for T and B cell stimulation. The objective of this study was to more precisely address the contribution of the different conventional (cDC) and monocyte-derived DC (MC) subsets in the orchestration of the adaptive immune response after immunization with AS01 adjuvanted vaccine. The combination of MPL and QS-21 in AS01 induced strong recruitment of CD26(+)XCR1(+) cDC1s, CD26(+)CD172(+) cDC2s and a recently defined CCR2-dependent CD64-expressing inflammatory cDC2 (inf-cDC2) subset to the draining lymph node compared to antigen alone, while CD26(-)CD64(+)CD88(+) MCs were barely detectable. At 24 h post-vaccination, cDC2s and inf-cDC2s were superior amongst the different subsets in priming antigen-specific CD4(+) T cells, while simultaneously presenting antigen to CD8(+) T cells. Diphtheria toxin (DT) mediated depletion of all DCs prior to vaccination completely abolished adaptive immune responses, while depletion 24 h after vaccination mainly affected CD8(+) T cell responses. Vaccinated mice lacking Flt3 or the chemokine receptor CCR2 showed a marked deficit in inf-cDC2 recruitment and failed to raise proper antibody and T cell responses. Thus, the adjuvant activity of AS01 is associated with the potent activation of subsets of cDC2s, including the newly described inf-cDC2s

Microbial ligand costimulation drives neutrophilic steroid-refractory asthma

Funding: The authors thank the Wellcome Trust (102705) and the Universities of Aberdeen and Cape Town for funding. This research was also supported, in part, by National Institutes of Health GM53522 and GM083016 to DLW. KF and BNL are funded by the Fonds Wetenschappelijk Onderzoek, BNL is the recipient of an European Research Commission consolidator grant and participates in the European Union FP7 programs EUBIOPRED and MedALL. The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.Peer reviewedPublisher PD

Tnfaip3 expression in pulmonary conventional type 1 Langerin‐expressing dendritic cells regulates T helper 2‐mediated airway inflammation in mice

BACKGROUND: Conventional type 1 dendritic cells (cDC1s) control antiviral and antitumor immunity by inducing antigen-specific cytotoxic CD8+ T-cell responses. Controversy exists whether cDC1s also control CD4+ T helper 2 (Th2) cell responses, since suppressive and activating roles have been reported. DC activation status, controlled by the transcription factor NF-κB, might determine the precise outcome of Th-cell differentiation upon encounter with cDC1s. To investigate the role of activated cDC1s in Th2-driven immune responses, pulmonary cDC1s were activated by targeted deletion of A20/Tnfaip3, a negative regulator of NF-κB signaling METHODS: To target pulmonary cDC1s, Cd207 (Langerin)-mediated excision of A20/Tnfaip3 was used, generating Tnfaip3fl/fl xCd207+/cre (Tnfaip3Lg-KO ) mice. Mice were exposed to house dust mite (HDM) to provoke Th2-mediated immune responses. RESULTS: Mice harboring Tnfaip3-deficient cDC1s did not develop Th2-driven eosinophilic airway inflammation upon HDM exposure, but rather showed elevated numbers of IFNγ-expressing CD8+ T-cells. In addition, Tnfaip3Lg-KO mice harbored increased numbers of IL-12-expressing cDC1s and elevated PD-L1 expression in all pulmonary DC subsets. Blocking either IL-12 or IFNγ in Tnfaip3Lg-KO mice restored Th2-responses, whereas administration of recombinant IFNγ during HDM sensitization in C57Bl/6 mice blocked Th2-development. CONCLUSIONS: These findings indicate that the activation status of cDC1s, shown by their specific expression of co-inhibitory molecules and cytokines, critically contributes to the development of Th2-cell-mediated disorders, most likely by influencing IFNγ production in CD8+ T-cells