Coordination Risk and the Price of Debt

Creditors of a distressed borrower face a coordination problem. Even if the fundamentals are sound, fear of premature foreclosure by others may lead to pre-emptive action, undermining the project. Recognition of this problem lies behind corporate bankruptcy provisions across the world, and it has been identified as a culprit in international financial crises, but has received scant attention from the literature on debt pricing. Without common knowledge of fundamentals, the incidence of failure is uniquely determined provided that private information is precise enough. This affords a way to price the coordination failure. Comparative statics on the unique equilibrium provides several insights on the role of information and the incidence of inefficient liquidation.Common knowledge, debt pricing, credit risk, default

System aspects of spacecraft charging

Satellites come in a variety of sizes and configurations including spinning satellites and three-axis stabilized satellites. All of these characteristics have a significant effect on spacecraft charging considerations. There are, however, certain fundamentals which can be considered which indicate the nature and extent of the problem. The global positioning system satellite serves to illustrate certain characteristics

Information-Constrained Optima with Retrading: An Externality and Its Market-Based Solution

This paper studies the efficiency of competitive equilibria in environments with a moral hazard problem and unobserved states, both with retrading in ex post spot markets. The interaction between private information problems and the possibility of retrade creates an externality, unless preferences have special, restrictive properties. The externality is internalized by allowing agents to contract ex ante on market fundamentals determining the spot price or interest rate, over and above contracting on actions and outputs. Then competitive equilibria are equivalent with the appropriate notion of constrained Pareto optimality. Examples show that it is possible to have multiple market fundamentals or price islands, created endogenously in equilibrium.Externalities; Private information; Moral hazard; Retrading; Walrasian equilibrium; Constrained efficiency; Decentralization

A literature review of expert problem solving using analogy

We consider software project cost estimation from a problem solving perspective. Taking a cognitive psychological approach, we argue that the algorithmic basis for CBR tools is not representative of human problem solving and this mismatch could account for inconsistent results. We describe the fundamentals of problem solving, focusing on experts solving ill-defined problems. This is supplemented by a systematic literature review of empirical studies of expert problem solving of non-trivial problems. We identified twelve studies. These studies suggest that analogical reasoning plays an important role in problem solving, but that CBR tools do not model this in a biologically plausible way. For example, the ability to induce structure and therefore find deeper analogies is widely seen as the hallmark of an expert. However, CBR tools fail to provide support for this type of reasoning for prediction. We conclude this mismatch between experts’ cognitive processes and software tools contributes to the erratic performance of analogy-based prediction

Distributed automatic control of technological processes in conditions of weightlessness

Some problems associated with the automatic control of liquid metal and plasma systems under conditions of weightlessness are examined, with particular reference to the problem of stability of liquid equilibrium configurations. The theoretical fundamentals of automatic control of processes in electrically conducting continuous media are outlined, and means of using electromagnetic fields for simulating technological processes in a space environment are discussed

Do Robots Dream of Virtual Sheep: Rediscovering the "Karel the Robot" Paradigm for the "Plug&Play Generation"

We introduce ”C-Sheep”, an educational system designed to teach students the fundamentals of computer programming in a novel and exciting way. Recent studies suggest that computer science education is fast approaching a crisis - application numbers for degree courses in the area of computer programming are down, and potential candidates are put off the subject which they do not fully understand. We address this problem with our system by providing the visually rich virtual environment of ”The Meadow”, where the user writes programs to control the behaviour of a sheep using our ”CSheep” programming language. This combination of the ”Karel the Robot” paradigm with modern 3D computer graphics techniques, more commonly found in computer games, aims to help students to realise that computer programming can be an enjoyable and rewarding experience and intends to help educators with the teaching of computer science fundamentals. Our mini-language-like system for computer science education uses a state of the art rendering engine offering features more commonly found in entertainment systems. The scope of the mini-language is designed to fit in with the curriculum for the first term of an introductory computer program ming course (using the C programming language)

Coordination Risk and the Price of Debt

Creditors of a distressed borrower face a coordination problem. Even if the fundamentals are sound, fear of premature foreclosure by others may lead to pre-emptive action, undermining the project. Recognition of this problem lies behind corporate bankruptcy provisions across the world, and it has been identified as a culprit in international financial crises, but has received scant attention from the literature on debt pricing. The apparent multiplicity of equilibria is a barrier to development of this issue in asset pricing, but this multiplicity is only apparent. Without common knowledge of fundamentals, the incidence of failure is uniquely determined provided that private information is precise enough. This affords a way to price the coordination failure. There are two further conclusions. First, coordination is more difficult to sustain when fundamentals deteriorate. Thus, when fundamentals deteriorate, the onset of crisis can be very swift. Second, "transparency" -- in the sense of greater provision of information to the market -- does not generally mitigate the coordination problem. Transparency is not a panacea.