183 research outputs found

    Temptation–Driven Preferences

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    What behavior can be explained using the hypothesis that the agent faces temptation but is otherwise a “standard rational agent”? In earlier work, Gul–Pesendorfer [2001] use a set betweenness axiom to restrict the set of preferences considered by Dekel, Lipman, and Rustichini [2001] to those explainable via temptation. We argue that set betweenness rules out plausible and interesting forms of temptation including some which may be important in applications. We propose a pair of alternative axioms called DFC, desire for commitment, and AIC, approximate improvements are chosen. DFC characterizes temptation as situations where given any set of alternatives, the agent prefers committing herself to some particular item from the set rather than leaving herself the flexibility of choosing later. AIC is based on the idea that if adding an option to a menu improves the menu, it is because that option is chosen under some circumstances. From this interpretation, the axiom concludes that if an improvement is worse (as a commitment) than some commitment from the menu, then the best commitment from the menu is strictly preferred to facing the menu. We show that these axioms characterize a natural generalization of the Gul–Pesendorfer representation.

    Disclosure and choice

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    An agent chooses among projects with random outcomes. His payoff is increasing in the outcome and in an observer's expectation of the outcome. With some probability, the agent can disclose the true outcome to the observer. We show that choice is inefficient: the agent favors riskier projects even with lower expected returns. If information can be disclosed by a challenger who prefers lower beliefs of the observer, the chosen project is excessively risky when the agent has better access to information, excessively risk{averse when the challenger has better access, and efficient otherwise. We also characterize the agent's worst-case equilibrium payoff

    Acquisition of/stochastic evidence

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    We explore two highly interrelated models of "hard information." In the evidence-acquisition model, an agent with private information searches for evidence to show to the principal about her type. In the signal-choice model, a privately informed agent chooses an action which generates a random signal whose realization may be correlated with her type. We show that the signal-choice model is a special case and, under certain conditions, a reduced form of the evidence-acquisition model. We develop tools for characterizing optimal mechanisms for these models by giving conditions under which some aspects of the principal's optimal choices can be identified only from the information structure, without regard to the utility functions or the principal's priors. We also give a novel result on conditions under which there is no value to commitment for the principal.First author draf

    Successful Takeovers without Exclusion

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    While most takeover models assume atomistic stock-holders, we analyze a single-raider model with finitely many stockholders. Because the raider can always make some stockholders pivotal, he can overcome the free-rider problem identified by Grossman and Hart (1980) and others in atomistics-stockholder models and profitably take over even without exclusion. One might expect that it would be harder for the raider to make stockholders of more widely held firms pivotal and that exclusion would thus become necessary; however, the infinite-stockholder game cannot yield this conclusion. We also consider the limit of the finite-stockholder game and give conditions under which exclusion is unnecessary. Finally, we show that exclusion leads to the possibility of inefficient takeovers.Center for Research on Economic and Social Theory, Department of Economics, University of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/100765/1/ECON022.pd

    Stock Price Manipulation Through Takeover Bids

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    The possibility that a takeover bid is designed solely to allow the bidder to drive up the stock price, sell his holdings at the higher price and drop the bid has not been studied nor incorporated into analyses of takeovers. The purpose of this paper is to explore the viability of this type of manipulation and its effects on takeover attempts.Center for Research on Economic and Social Theory, Department of Economics, University of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/100754/1/ECON021.pd

    Takeover Bids, Defensive Stock Repurchases, and the Efficient Allocation of Corporate Control

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    The objective of this paper is to define a simple form of "fair" competition between the manager and the raider for corporate control, and then explore the characteristics of the resulting allocation process. In particular, we let the raider make one any-or-all bid for sharaes in the firm, and allow the manager to respond by declaring support or opposition and if opposition by making a bid to repurchase a fixed number of the outstanding shares. In doing so, we rule out a variety of defensive tactics, such as greenmail, poison pills, or simply imposing endless delays on the process, since these tactics are available only to the manager and so are "unfair." Use of a repurchase bid as a defensive tactic has become more common recently, and we provide a formal analysis of when and why it can be used successfully.Center for Research on Economic and Social Theory, Department of Economics, University of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/100709/1/ECON017.pd

    MISHIMA - a new method for high speed multiple alignment of nucleotide sequences of bacterial genome scale data

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    <p>Abstract</p> <p>Background</p> <p>Large nucleotide sequence datasets are becoming increasingly common objects of comparison. Complete bacterial genomes are reported almost everyday. This creates challenges for developing new multiple sequence alignment methods. Conventional multiple alignment methods are based on pairwise alignment and/or progressive alignment techniques. These approaches have performance problems when the number of sequences is large and when dealing with genome scale sequences.</p> <p>Results</p> <p>We present a new method of multiple sequence alignment, called MISHIMA (Method for Inferring Sequence History In terms of Multiple Alignment), that does not depend on pairwise sequence comparison. A new algorithm is used to quickly find rare oligonucleotide sequences shared by all sequences. Divide and conquer approach is then applied to break the sequences into fragments that can be aligned independently by an external alignment program. These partial alignments are assembled together to form a complete alignment of the original sequences.</p> <p>Conclusions</p> <p>MISHIMA provides improved performance compared to the commonly used multiple alignment methods. As an example, six complete genome sequences of bacteria species <it>Helicobacter pylori </it>(about 1.7 Mb each) were successfully aligned in about 6 hours using a single PC.</p
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