Equality of opportunity and optimal effort decision under uncertainty

We analyze a society that cares about inequality of opportunity. We propose adynamic setting in which effort is a decision variable that individuals adopt as asolution of an explicit utility maximization program. Effort determines themonetary outcome and it depends on the individual¿s preferences andcircumstances. The planner designs an incentive scheme so as to foster higherincomes, reducing the opportunity cost of effort and productivity for the lessfavoured agents. Income is assumed to be random, and contrary to the generalneutral assumption, we obtain that luck does have a biased and persistent effect onincome distribution that may be regarded as unfair. We also study the planner¿soptimal policy when she cannot infer perfectly the individuals¿ responsibilityfeature.Equality of opportunity, effort decision, policy design, luck

TESTING FOR MARKET SHARE STABILITY AND CARTELS

One of the most challenging problems to applied industrial economists is the detection of colluding behavior in oligopolistic markets. In this paper we postulate how low market share variability may be used as a primary indicator of cartel success to maintain the agreed upon levels of production, after controlling from exogenous fluctuations in the economic environment and the market structure. To test this hypothesis we use a unique data set consisting of government-sanctioned cartels in Sweden from 1976 to 1990. The use of a measure of share stability is shown to be an interesting and potentially informative statistic for making comparisons when the cartel agreement is in effect and when it is absent. The conclusion supports our hypothesis that horizontal price fixing cartels are significantly associated with a lower instability than in its absence. The normative implication of the paper is that a measure of market share variability may provide a basic framework for antitrust authorities to call for attention on the possible existence of tacit collusion in industries with similar market structure but significant differences in market share stability.Industrial Organization, Antitrust Economics, Panel Data Analysis

A Note on Strategic Delegation: The Role of Decreasing Returns to Scale

We build a model of optimal design of managerial incentive schemes when the production technology exhibits decreasing returns to scale and firms compete à la Cournot. We borrow Fershtman and Judd (1987) and Kräkel (2005) framework. We show how there is a dominant strategy for entrepreneurs to delegate output decisions. Results depend on the degree of diseconomies of scale. We demostrate how for a class of parameters, managers may increase profits through delegation, a result that with constant returns does not hold.

Bulk locality from modular flow

We study the reconstruction of bulk operators in the entanglement wedge in terms of low energy operators localized in the respective boundary region. To leading order in $N$, the dual boundary operators are constructed from the modular flow of single trace operators in the boundary subregion. The appearance of modular evolved boundary operators can be understood due to the equality between bulk and boundary modular flows and explicit formulas for bulk operators can be found with a complete understanding of the action of bulk modular flow, a difficult but in principle solvable task. We also obtain an expression when the bulk operator is located on the Ryu-Takayanagi surface which only depends on the bulk to boundary correlator and does not require the explicit use of bulk modular flow. This expression generalizes the geodesic operator/OPE block dictionary to general states and boundary regions.Comment: 36 pages, 2 figure

Exact results for the entanglement entropy and the energy radiated by a quark

We consider a spherical region with a heavy quark in the middle. We compute the extra entanglement entropy due to the presence of a heavy quark both in ${\cal N}=4$ Super Yang Mills and in the ${\cal N}=6$ Chern-Simons matter theory (ABJM). This is done by relating the computation to the expectation value of a circular Wilson loop and a stress tensor insertion. We also give an exact expression for the Bremsstrahlung function that determines the energy radiated by a quark in the ABJM theory.Comment: 23+12 pages, 8 figures. V2: references added. V3: references added. V4: small comments and references adde

The Holographic Shape of Entanglement and Einstein's Equations

We study shape-deformations of the entanglement entropy and the modular Hamiltonian for an arbitrary subregion and state (with a smooth dual geometry) in a holographic conformal field theory. More precisely, we study a double-deformation comprising of a shape deformation together with a state deformation, where the latter corresponds to a small change in the bulk geometry. Using a purely gravitational identity from the Hollands-Iyer-Wald formalism together with the assumption of equality between bulk and boundary modular flows for the original, undeformed state and subregion, we rewrite a purely CFT expression for this double deformation of the entropy in terms of bulk gravitational variables and show that it precisely agrees with the Ryu-Takayanagi formula including quantum corrections. As a corollary, this gives a novel, CFT derivation of the JLMS formula for arbitrary subregions in the vacuum, without using the replica trick. Finally, we use our results to give an argument that if a general, asymptotically AdS spacetime satisfies the Ryu-Takayanagi formula for arbitrary subregions, then it must necessarily satisfy the non-linear Einstein equation.Comment: 37 pages, 3 figure