Optimally Empty Promises and Endogenous Supervision

We study optimal contracting in team settings, featuring stylized aspects of production environments with complex tasks. Agents have many opportunities to shirk, task-level monitoring is needed to provide useful incentives, and because it is difficult to write individual performance into formal contracts, incentives are provided informally, using wasteful sanctions like guilt and shame, or slowed promotion. These features give rise to optimal contracts with "empty promises" and endogenous supervision structures. Agents optimally make more promises than they intend to keep, leading to the concentration of supervisory responsibility in the hands of one or two agents.Partnership, Teams, Moral hazard, Monitoring, Supervision, Informal sanctions

Study on New Sampling Plans and Optimal Integration with Proactive Maintenance in Production Systems

Sampling plans are statistical process control (SPC) tools used mainly in production processes. They are employed to control processes by monitoring the quality of produced products and alerting for necessary adjustments or maintenance. Sampling is used when an undesirable change (shift) in a process is unobservable and needs time to discover. Basically, the shift occurs when an assignable cause affects the process. Wrong setups, defective raw materials, degraded components are examples of assignable causes. The assignable cause causes a variable (or attribute) quality characteristic to shift from the desired state to an undesired state. The main concern of sampling is to observe a process shift quickly by signaling a true alarm, at which, maintenance is performed to restore the process to its normal operating conditions. While responsive maintenance is performed if a shift is detected, proactive maintenance such as age-replacement is integrated with the design of sampling. A sampling plan is designed economically or economically-statistically. An economical design does not assess the system performance, whereas the economic-statistical design includes constraints on system performance such as the average outgoing quality and the effective production rate. The objective of this dissertation is to study sampling plans by attributes. Two studies are conducted in this dissertation. In the first study, a sampling model is developed for attribute inspection in a multistage system with multiple assignable causes that could propagate downstream. In the second study, an integrated model of sampling and maintenance with maintenance at the time of the false alarm is proposed. Most of the sampling plans are designed based on the occurrence of one assignable cause. Therefore, a sampling plan that allows two assignable causes to occur is developed in the first study. A multistage serial system of two unreliable machines with one assignable cause that could occur on each machine is assumed where the joint occurrence of assignable causes propagates the process\u27s shift to a higher value. As a result, the system state at any time is described by one in-control and three out-of-control states where the evolution from a state to another depends on the competencies between shifts. A stochastic methodology to model all competing scenarios is developed. This methodology forms a base that could be used if the number of machines and/or states increase. In the second study, an integrated model of sampling and scheduled maintenance is proposed. In addition to the two opportunities for maintenance at the true alarm and scheduled maintenance, an additional opportunity for preventive maintenance at the time of a false alarm is suggested. Since a false alarm could occur at any sampling time, preventive maintenance is assumed to increase with time. The effectiveness of the proposed model is compared to the effectiveness of separate models of scheduled maintenance and sampling. Inspired by the conducted studies, different topics of sampling and maintenance are proposed for future research. Two topics are suggested for integrating sampling with selective maintenance. The third topic is an extension of the first study where more than two shifts can occur simultaneously

Oyster Demand Adjustments to Counter-Information and Source Treatments in Response to Vibrio vulnificus

A web-based contingent behavior analysis is developed to quantity the effect of both negative and positive information treatments and post harvest processes (PHP) on demand for oysters. Results from a panel model indicate that consumers of raw and cooked oysters behave differently after news of an oyster-related human mortality. While cooked oyster consumers take precautionary measures against risk, raw oyster consumers exhibit optimistic bias and increase their consumption level. Further, by varying the source of a counter-information treatment, we find that source credibility impacts behavior. Oyster consumers, and in particular, raw oyster consumers, are most responsive to information provided by a not-for-profit, non-governmental organization. Finally, post harvest processing of oysters has no impact on demand. Key Words: Oyster demand; consumer behavior; non-market valuation; Vibrio vulnificus; information treatments; source credibility; optimistic bias

Oyster Demand Adjustments to Counter-Information and Source Treatments in Response to Vibrio vulnificus

A web-based contingent behavior analysis was developed to quantify the effect of both negative and positive information treatments and post harvest processes on demand for oysters. Results from a panel model indicate that consumers of raw and cooked oysters behave differently after news of an oyster-related human mortality. While cooked oyster consumers take precautionary measures against risk, raw oyster consumers exhibit optimistic bias and increase their consumption level. Further, by varying the source of a counter-information treatment, we find that source credibility impacts behavior. Oyster consumers, and in particular, raw oyster consumers, are most responsive to information provided by a not-for- profit, nongovernmental organization. Finally, post harvest processing of oysters has no impact on demand.consumer behavior, information treatments, non-market valuation, optimistic bias, Oyster demand, source credibility, Vibrio vulnificus, Agribusiness, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Institutional and Behavioral Economics, Q18, Q13, Q58,

Optimally Empty Promises and Endogenous Supervision

We study optimal contracting in team settings, featuring stylized aspects of production environments with complex tasks. Agents have many opportunities to shirk, task-level monitoring is needed to provide useful incentives, and because it is difficult to write individual performance into formal contracts, incentives are provided informally, using wasteful sanctions like guilt and shame, or slowed promotion. These features give rise to optimal contracts with “empty promises” and endogenous supervision structures. Agents optimally make more promises than they intend to keep, leading to the concentration of supervisory responsibility in the hands of one or two agents

The Gravity of R&D FDIs.

The negative effect of distance is justified by the existence of transport costs which hamper the international exchange of final and intermediate goods, and by higher uncertainty about local markets. We submit that distance plays a remarkably different role in the case of R&D FDIs since they mainly involve the international transfer, absorption and use of knowledge. Using data on bilateral investment projects in R&D, manufacturing and other business activities between 58 countries, we find that geographic distance does not hinder R&D FDIs as much as in the case of production and other investment activities. Furthermore, once we control for institutional and psychic distance, in particular language and religious differences, the negative effect of geographic distance vanishes.Multinational Firms, International Business, Technological Change, Choices and Consequences, Diffusion Processes.

Epidemiological studies of bovine digital dermatitis in pasture-based dairy system in New Zealand : a thesis presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Veterinary Sciences at Massey University, Palmerston North, New Zealand

Listed in 2020 Dean's List of Exceptional ThesesAppendices 1, 2, 3, 6 & 7 were removed for copyright reasons, but the published articles may be accessed via the following links: Appendix 1. Farm level risk factors for bovine digital dermatitis in Taranaki, New Zealand: An analysis using a Bayesian hurdle model https://doi.org/10.1016/j.tvjl.2018.02.012 Appendix 2. Effects of climate and farm management practices on bovine digital dermatitis in spring-calving pasture-based dairy farms in Taranaki, New Zealand https://doi.org/10.1016/j.tvjl.2019.03.004 Appendix 3. Estimating the herd and cow level prevalence of bovine digital dermatitis on New Zealand dairy farms: A Bayesian superpopulation approach https://doi.org/10.1016/j.prevetmed.2019.02.014 Appendix 6. Inter-observer agreement between two observers for bovine digital dermatitis identification in New Zealand using digital photographs https://doi.org/10.1080/00480169.2019.1582369 Appendix 7. Detecting bovine digital dermatitis in the milking parlour: To wash or not to wash, a Bayesian superpopulation approach https://doi.org/10.1016/j.tvjl.2019.02.011Bovine digital dermatitis (BDD) is an infectious disease of the feet of cattle. Worldwide, it is one of the most commonly observed foot diseases on many dairy farms, and is the most important infectious cause of lameness in cattle in confined dairy system. Although BDD is generally less common in pasture-based dairy system it can still cause significant production losses and welfare issues, in such systems. This thesis contains seven original research works covering the epidemiological aspects of BDD in pasture-based cattle in New Zealand. Firstly, cross-sectional and longitudinal data obtained from Taranaki were analysed to identify the factors (including climate) associated with the disease. This was followed by a large scale cross-sectional study covering four regions in New Zealand looking at the prevalence of and risk factors for BDD. A longitudinal study was then undertaken on three farms in order to collect disease data (including BDD lesion type) over a lactation. Using this dataset, a deterministic compartment model was built to study the transmission dynamics of BDD within a dairy herd in New Zealand. Along with these large studies, two small validation studies were also carried out. The first study evaluated the agreement between two trained BDD observers in determining BDD presence/ absence in digital photographs, while the second one evaluated the reliability of clinical examination of BDD lesions in the milking parlour without prior washing of the animals’ feet. This work suggests that BDD has spread widely across New Zealand, although it has yet to reach the West Coast. In the four regions where BDD was identified, true between herd prevalences varied by region (from ~ 40% to > 65%). Furthermore, although BDD was found in many herds, true cow level prevalence was low in all affected regions, being generally less than 4% in affected herds. Several biosecurity related management practices were repeatedly identified as factors associated with increased BDD prevalence at both the herd and cow level. These included mixing heifers with animals from other properties; purchasing heifers for replacement and using outside staff to treat lame cows. In addition to the identified management practices, climate (rainfall and soil temperature) was also found to have had a significant association with the prevalence of BDD. These studies used examination in the milking parlour as the method of identifying BDD lesions. This method while the best method of lesion detection for large scale studies is not perfect. It generally requires that feet are washed prior to examination, as lesions masked by dirt are difficult to identify. Our study quantified the effect, under New Zealand conditions, of feet washing prior to examination finding sensitivities of 0.34 (95% credible interval [CrI]: 0.088-0.69) and 0.63 (95%CrI: 0.46- 0.78) for pre- and post-washing, respectively. There was a 93.95% probability that the sensitivity of examination post-washing was greater than that prewashing. Limited information on the reliability of examination in the milking parlour prompted comparison of two trained observers using digital photographs. Agreement between the two observers was good; we could be 75% sure that the two observers had almost perfect agreement and 95% sure the two observers had at least substantial agreement. It is crucial that since examination in the milking parlour is not a perfect reference test for detecting BDD lesions that when estimating prevalence, the sensitivity and specificity of this method is factored into the analysis. This is often achieved using an approach based on the binomial distribution. However, as the dairy herd is a finite population and the sampling of animals for BDD lesion is effectively sampling without replacement, the correct distribution to use is the hypergeometric one. This is computationally complex so the Bayesian superpopulation approach was developed to allow continued use of the binomial distribution. The superpopulation approach was used to estimate prevalence in this thesis, one of the first uses of this approach in the veterinary field. The appearance of BDD in New Zealand is different from that elsewhere. Most lesion have been observed are small grey, rubbery lesions which may or may not have thickened, darker edges. Less commonly larger, more proliferative lesions can also be found. Red active lesions are extremely rare. Post-treatment lesions are not a feature of the disease in New Zealand as lesions are treated only very rarely. Thus modelling approach used a BDD score system which focuses on early stage of BDD. This found that in infected dairy herds, although BDD prevalence will tend to increase year-on-year it is likely to remain relatively low (<18%) even after 10 years of within-herd transmission. It is likely that the low transmission rate during the late lactation (model assumption) results in more cases resolving than developing during this period and therefore results in the low prevalence of infectious cattle at the start of each subsequent lactation. Cattle with larger, more proliferative lesions had a stronger influence on the establishment and maintenance of DD than cattle with small lesions highlighting the importance of targeting these animals for intervention

Trade, the Damage from Alien Species, and the Effects of Protectionism Under Alternate Market Structures

We first construct three measures of the expected damage from the unintentional introduction of alien species into a country called Home. We then focus on four market structures. First, perfect competition prevails in both Home and Foreign and Home is a small country. Second, the Home and the Foreign markets are both perfectly competitive but Home is now a large country. Third, the exporter in Foreign is a monopolist and there are no import competing firms in Home. Finally, the Foreign exporter and the import competing firm in Home engage in Cournot competition. In all four scenarios, we analyze the impact of small and optimal Home tariffs on prices, exports, imports, the damage from alien species, and social welfare, in Home. Inter alia, our analysis identifies conditions under which it makes sense to use trade policy (tariffs) to regulate invasive species and conditions under which it does not.Alien Species, International Trade, Market Structure, Social Welfare, Tariff

Cow and herd-level risk factors associated with mobility scores in pasture-based dairy cows

peer-reviewedLameness in dairy cows is an area of concern from an economic, environmental and animal welfare point of view. While the potential risk factors associated with suboptimal mobility in non-pasture-based systems are evident throughout the literature, the same information is less abundant for pasture-based systems specifically those coupled with seasonal calving, like those in Ireland. Therefore, the objective of this study was to determine the potential risk factors associated with specific mobility scores (0 = good, 1 = imperfect, 2 = impaired, and 3 = severely impaired mobility) for pasture-based dairy cows. Various cow and herd-level potential risk factors from Irish pasture-based systems were collected and analyzed for their association with suboptimal mobility, whereby a mobility score of 0 refers to cows with optimal mobility and a mobility score ≥ 1 refers to a cow with some form of suboptimal mobility. Combined cow and herd-level statistical models were used to determine the increased or decreased risk for mobility score 1, 2, and 3 (any form of suboptimal mobility) compared to the risk for mobility score 0 (optimal mobility), as the outcome variable and the various potential risk factors at both the cow and herd-level were included as predictor type variables. Cow-level variables included body condition score, milk yield, genetic predicted transmitting ability for ‘lameness’, somatic cell score, calving month and cow breed. Herd-level variables included various environmental and management practices on farm. These analyses have identified several cow-level potential risk factors (including low body condition score, high milk yield, elevated somatic cell count, stage of lactation, calving month, and certain breed types), as well as various herd-level potential risk factors (including the amount of time taken to complete the milking process, claw trimmer training, farm layout factors and foot bathing practices) which are associated with suboptimal mobility. The results of this study should be considered by farm advisors when advising and implementing a cow/herd health program for dairy cows in pasture-based systems