LIGO's "Science Reach"

Technical discussions of the Laser Interferometer Gravitational Wave Observatory (LIGO) sensitivity often focus on its effective sensitivity to gravitational waves in a given band; nevertheless, the goal of the LIGO Project is to ``do science.'' Exploiting this new observational perspective to explore the Universe is a long-term goal, toward which LIGO's initial instrumentation is but a first step. Nevertheless, the first generation LIGO instrumentation is sensitive enough that even non-detection --- in the form of an upper limit --- is also informative. In this brief article I describe in quantitative terms some of the science we can hope to do with first and future generation LIGO instrumentation: it short, the ``science reach'' of the detector we are building and the ones we hope to build.Comment: 13 pages, including 1 inlined figure

No statistical excess in Explorer/Nautilus observations in the year 2001

A recent report on gravitational wave detector data from the NAUTILUS and EXPLORER detector groups claims a statistically significant excess of coincident events when the detectors are oriented in a way that maximizes their sensitivity to gravitational wave sources in the galactic plane. While not claiming a detection of gravitational waves, they do strongly suggest that the origin of the excess is of gravitational wave origin. In this note we show that the statistical analysis that led them to the conclusion that there is a statistical excess is flawed and that the reported observation is entirely consistent with the normal Poisson statistics of the reported detector background.Comment: 11 pages, 3 figures, to appear in CQ

Credit risk transfer, real sector productivity, and financial deepening

We derive the effects of credit risk transfer (CRT) markets on real sector productivity and on the volume of financial intermediation in a model where banks choose their optimal degree of CRT and monitoring. We find that CRT increases productivity in the up-market real sector but decreases it in the low-end segment. If optimal, CRT unambiguously fosters financial deepening, i.e., it reduces credit-rationing in the economy. These effects rely upon the ability of banks to commit to the optimal CRT at the funding stage. The optimal degree of CRT depends on the combination of moral hazard, general riskiness, and the cost of monitoring in non-monotonic ways

One Share - One Vote: The Theory

The impact of separating cash flow and votes depends on the ownership structure. In widely held firms, one share - one vote is in general not optimal. While it ensures an efficient outcome in bidding contests, dual-class shares mitigate the free-rider problem, thereby promoting takeovers. In the presence of a controlling shareholder, one share - one vote promotes value-increasing control transfers and deters value-decreasing control transfers more effectively than any other vote allocation. Moreover, leveraging the insider's voting power aggravates agency conflicts because it protects her from the takeover threat and provides less alignment with other shareholders. Even so, minority shareholder protection is not a compelling argument for regulatory intervention, as rational investors anticipate the insider's opportunism. Rather, the rationale for mandating one share – one vote must be to disempower controlling minority shareholders in order to promote value-increasing takeovers. As this policy tends to empower managers vis-a-vis shareholders, it is an open question whether it would improve the quality of corporate governance, notably in systems built around large active owners. The verdict in the case of depositary certificates, priority shares, voting and ownership ceilings is less I ambiguous, since they insulate managers from both takeovers and effective shareholder monitoring.Security-voting structure; market for corporate control; controlling minority shareholders