The Credibility of Certifiers

It is often argued that certifiers have an incentive to offer inflated certificates, although they deny it. In this paper, we study a model in which a certifier is paid by sellers, and may offer them inflated certificates, but incurs costs if doing so. We find that the certifier may face a commitment problem: The certifier offers inflated certificates if the costs of offering the first inflated certificate are lower than the sellers' willingness-to-pay for it. However, in equilibrium, the buyers cannot be fooled. The certifier would hence make a higher profit if the certifier did not offer inflated certificates and the buyers believed it. The number of inflated certificates, which the certifier offers in equilibrium, depends on the costs of offering inflated certificates. Yet, the certifier may oppose an increase in the costs of offering inflated certificates. We show that whether a certifier welcomes tighter regulation or lobbies against it, may depend on whether the new regulation only imposes higher costs, or also reduces the certifier's commitment problem significantly

The Appeal of Risky Assets

A fund's performance is usually compared to the performance of an index or other funds. If a fund trails the benchmark, the fund manager is often replaced. We argue that this may lead to excessive risk-taking if fund managers differ in ability and have the opportunity to take excessive risk. To match the benchmark, fund managers may increase the risk of their portfolio even if this decreases the expected return on the portfolio

The Credibility of Certifiers

It is often argued that certifiers have an incentive to offer inflated certificates, although they deny it. In this paper, we study a model in which a certifier is paid by sellers, and may offer them inflated certificates, but incurs costs if doing so. We find that the certifier may face a commitment problem: The certifier offers inflated certificates if the costs of offering the first inflated certificate are lower than the sellers' willingness-to-pay for it. However, in equilibrium, the buyers cannot be fooled. The certifier would hence make a higher profit if the certifier did not offer inflated certificates and the buyers believed it. The number of inflated certificates, which the certifier offers in equilibrium, depends on the costs of offering inflated certificates. Yet, the certifier may oppose an increase in the costs of offering inflated certificates. We show that whether a certifier welcomes tighter regulation or lobbies against it, may depend on whether the new regulation only imposes higher costs, or also reduces the certifier's commitment problem significantly.Certification; commitment problem; credibility

The Appeal of Risky Assets

A fund's performance is usually compared to the performance of an index or other funds. If a fund trails the benchmark, the fund manager is often replaced. We argue that this may lead to excessive risk-taking if fund managers differ in ability and have the opportunity to take excessive risk. To match the benchmark, fund managers may increase the risk of their portfolio even if this decreases the expected return on the portfolio.Benchmarking; risk taking

The response of a 300 micron silicon detector to monoenergetic neutrons determined by the use of the Monte Carlo technique

The response of a 300 micron thick silicon detector to an incident monoenergetic neutron beam is evaluated by the Monte Carlo method for the cases of both a shielded and a bare detector. The result of Monte Carlo calculation, using elastic, inelastic, and absorption reactions indicates that the response of the silicon detector to neutrons is basically due to the elastic scattering. In addition, the gamma rays generated in the shield of the detector will result in a response which is 3 or 4 orders of magnitude smaller than response to incident photons. The response of a bare silicon detector is calculated for neutron energies up to 6 MeV and bias energies from 50 to 250 KeV. It is found that the maximum response for a 300 micron thick silicon detector is less than .004 c/n within this selected neutron and bias energy range. When the pulse height defect is introduced in the calculation the results at low energy neutrons were reduced

The shadow economy in Portugal: An analysis with the MIMIC approach

The paper estimates the Portuguese Shadow Economy (SE) from 1977 to 2004 and tests the statistical relationships between the SE and other economic variables. In order to carry out the econometric analysis, a multiple indicators multiple causes (MIMIC) model with means and intercepts is applied. The main causes of the Portuguese SE are analyzed and economic policies to reduce it are suggested. An appraisal on the reliability of estimates and an alternative benchmark strategy for the MIMIC approach are proposed.shadow economy, MIIMIC model, Portugal

On adjunctions for Fourier-Mukai transforms

We show that the adjunction counits of a Fourier–Mukai transform Φ:D(X1)→D(X2) arise from maps of the kernels of the corresponding Fourier–Mukai transforms. In a very general setting of proper separable schemes of finite type over a field we write down these maps of kernels explicitly –facilitating the computation of the twist (the cone of an adjunction counit) of Φ. We also give another description of these maps, better suited to computing cones if the kernel of Φ is a pushforward from a closed subscheme Z⊂X1×X2. Moreover, we show that we can replace the condition of properness of the ambient spaces X1 and X2 by that of Z being proper over them and still have this description apply as is. This can be used, for instance, to compute spherical twists on non-proper varieties directly and in full generality