Some Simple Economics of Crowdfunding

It is not surprising that the financing of early-stage creative projects and ventures is typically geographically localized since these types of funding decisions are usually predicated on personal relationships and due diligence requiring face-to-face interactions in response to high levels of risk, uncertainty, and information asymmetry. So, to economists, the recent rise of crowdfunding - raising capital from many people through an online platform - which offers little opportunity for careful due diligence and involves not only friends and family but also many strangers from near and far, is initially startling. On the eve of launching equity-based crowdfunding, a new market for early-stage finance in the U.S., we provide a preliminary exploration of its underlying economics. We highlight the extent to which economic theory, in particular transaction costs, reputation, and market design, can explain the rise of non-equity crowdfunding and offer a framework for speculating on how equity-based crowdfunding may unfold. We conclude by articulating open questions related to how crowdfunding may affect social welfare and the rate and direction of innovation

Chloroquine delivery to erythrocytes in Plasmodium berghei-infected mice using antibody-bearing liposomes as drug vehicles

Suitability of anti-erythrocyte F(ab')2-bearing liposomes as vehicles for chloroquine in the treatment of chloroquine resistantPlasmodium berghei infections in mice has been examined. Free chloroquine or chloroquine encapsulated in antibody-free liposomes failed to show much effect on the resistant infections, but the same doses of this drug after being encapsulated in antibody-bearing liposomes exhibited a significant inhibitory effect on this infection. These results indicate that chloroquine delivery in antibody targeted liposomes may help in the successful treatment of the chloroquine resistant malarial infections

The Geography of Crowdfunding

Perhaps the most striking feature of "crowdfunding" is the broad geographic dispersion of investors in small, early-stage projects. This contrasts with existing theories that predict entrepreneurs and investors will be co-located due to distance-sensitive costs. We examine a crowdfunding setting that connects artist-entrepreneurs with investors over the internet for financing musical projects. The average distance between artists and investors is about 3,000 miles, suggesting a reduced role for spatial proximity. Still, distance does play a role. Within a single round of financing, local investors invest relatively early, and they appear less responsive to decisions by other investors. We show this geography effect is driven by investors who likely have a personal connection with the artist-entrepreneur ("family and friends"). Although the online platform seems to eliminate most distance-related economic frictions such as monitoring progress, providing input, and gathering information, it does not eliminate social-related frictions.

Slack Time and Innovation

The relationship between slack resources and innovation is complex, with the literature linking slack to both breakthrough innovations and resource misallocation. We reconcile these conflicting views by focusing on a novel mechanism: the role slack time plays in the endogenous allocation of time and effort to innovative projects. We develop a theoretical model that distinguishes between periods of high- (work weeks) versus low- (break weeks) opportunity costs of time. Low-opportunity cost time during break weeks may induce (1) lower quality ideas to be developed (a selection effect); (2) more effort to be applied for any given idea quality (an effort effect); and (3) an increase in the use of teams because scheduling is less constrained (a coordination effect). As a result, the effect of an increase in slack time on innovative outcomes is ambiguous, because the selection effect may induce more low-quality ideas, whereas the effort and coordination effect may lead to more high-quality, complex ideas. We test this framework using data on college breaks and on 165,410 Kickstarter projects across the United States. Consistent with our predictions, during university breaks, more projects are posted in the focal regions, and the increase is largest for projects of either very high or very low quality. Furthermore, projects posted during breaks are more complex, and involve larger teams with diverse skills. We discuss the implications for the design of policies on slack time

Laminar fluid flow and heat transfer in an annulus with an externally enhanced inner tube

Laminar forced convection in a double-pipe heat exchanger is studied numerically. In this study, an isothermal tube with periodic enhancements (promoters) is placed concentrically inside an isulated circular tube. Pressure drop and heat transfer characteristics of promoters are obtained at various geometric and flow condtions. These are compared to an unenhanced (circular) tube annulus of identical length and heat transfer surface area while the mass flow rate and the Reynolds number are kept the same. A promoter with Gaussian shape established superiority over a cosine shape and other normal distribution shapes, since it provides high heat transfer enhancement with a small increase in the pressure drop. Effects of promoter length and spacing on the pressure drop and heat transfer are small. The pressure drop is influenced significantly by the promoter height and the annular grap, while the promoter height is the only significant geometric parameter affecting the heat transfer. At Reynolds numbers of less than 500, the pressure drop in the enhanced tube annulus is 50 percent more than in the unenhanced tube annulus. Heat transfer enhancement, though small (about 20 percent) at a Peclet number (ReD Pr) less than 200, increases with the Reynolds number and the Prandtl number. At the highest ReD (=1,000) and Pr (=5) investigated, heat transfer from the enhanced tube annulus is about eight times more than that from the unenhanced tube annulus. However, for this case the pressure drop increase by only a factor of two.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/30922/1/0000592.pd

2001-GT-0007 EFFECTS OF FUEL COMPOSITION ON FLAMMABILITY LIMIT OF A LEAN PREMIXED COMBUSTOR

ABSTRACT Fuel flexibility is desired in advanced power generating gas turbines operating in the lean premixed combustion mode. In this study, experiments were performed in a lean premixed, swirl-stabilized combustor operated at atmospheric pressure to quantify how adding liquid petroleum gas (LPG), hydrogen, oxygen, nitrogen, and carbon dioxide to natural gas (NG) affected the flame stability. The flame extinction characteristics were obtained for NG fuel mixtures with up to 40% by volume of the indicated gases. The combustion air was supplied at room temperature and the fuel-air mixture was fully premixed before reaching the combustor. The total fuel-air flow rate was varied by a factor of two to achieve a range of aerodynamic conditions. Results demonstrate that additions of hydrogen and oxygen to NG extended the stable operating range of the combustor. Addition of LPG to NG had a slightly adverse effect while the non-reactive species in the NG did not affect the lean flammability limit