Advice by an Informed Intermediary: Can You Trust Your Broker?

The paper investigates credibility of the intermediary's advice in a bilateral trade model. A seller and a buyer with private and independent uniformly distributed valuations exchange a unit of good. Their trade is mediated by an intermediary, who at the pre-bargaining stage observes a coarse signal about the buyer's valuation and reveals some information to the seller. We first show that if the broker gets a fixed fee for each executed transaction, he can transmit his information credibly via cheap talk. Full information revelation can be sustained even when the intermediary's information about the buyer becomes arbitrarily precise. The transmission of information by the broker increases ex ante welfare of the seller and the broker, but has ambiguous impact on the buyer. If the intermediary observes signals about valuations of both participants, the fully revealing equilibrium exists only under certain restrictions on parameters of the model. Another limit to effcient communication can be imposed by competition between intermediaries. We then consider the mechanism design problem for an informed intermediary, and prove that choosing an appropriate system of two-part tariffs allows the intermediary to secure the same payoff as in the optimal direct mechanism.

Why Less Informed Managers May Be Better Leaders

Unlike the textbook model of a top manager being an omniscient planner, coordinator and monitor, the real life managers suffer from discontinuity, lack of systematic information collection and limited time for analysis and re?ection. Why do not business leaders set up their organizations in the way that would allow themselves to make informed choices based on thorough analysis? We argue that in some situations top managers may benefit from being less informed. In our model, additional information raises ex post flexibility of the decision-makers which may undermine the ex ante incentives of their subordinates to make specific investments. The subordinates expect less informed leaders to be more committed to the original strategy which increases the returns to the strategy-specific investments. We show that this effect is more likely to take place in more predictable environments; we also discuss how this effect depends on the hierarchical structure of the organization.leadership, commitment, organizational structure

Discretionary Bonuses as a Feedback Mechanism

This paper studies the use of discretionary rewards in a finitely repeated principal-agent relationship with moral hazard. We show that the principal, when she obtains a private subjective signal about the agent’s performance, may pay discretionary bonuses to provide credible feedback to the agent. Conistent with the often observed compression of ratings, we show that in equilibrium the principal communicates the agent’s interim performance imperfectly, i.e. she does not fully di?erentiate good and bad performance. Furthermore, we show that small rewards can have a large impact on the agent’s effort provided that the principal’s stake in the project is small. Our analysis further reveals that, also in accordance with the empirical findings, the principal may ex ante prefer to choose a ’smoky’, rather than a fully transparent performance monitoring system, thereby acquiring an implicit commitment device to reward the agent through discretionary bonuses.discretionary rewards, feedback, self confidence, subjective performance, moral hazard, monitoring system

Bad News: An Experimental Study on the Informational Effects of Rewards

Both psychologists and economists have argued that rewards often have hidden costs. One possible reason is that the principal may have incentives to offer higher rewards when she knows the task to be dificult. Our experiment tests if high rewards embody such bad news and if this is perceived by their recipients. Our design allows us to decompose the overall effect of rewards on effort into a direct incentive and an informational effect. The results show that most participants correctly interpret high rewards as bad news. In accordance with theory, the negative informational effect co-exists with the direct positive effect.reward, bonus, informational content, motivation, crowdingout, laboratory experiment

Verification of dynamic stability calculations in electric power systems

When assessing the dynamic stability of the power system, the question arises of considering the variety of transients in the power system. This diversity is due to the magnitude of the disturbances that occur in a large number of elements of the power system. The main way to solve this problem is mathematical modeling, but to obtain the reliability of the results obtained it is necessary to verify the modeling complexes

Whole Genome Phylogenetic Tree Reconstruction Using Colored de Bruijn Graphs

We present kleuren, a novel assembly-free method to reconstruct phylogenetic trees using the Colored de Bruijn Graph. kleuren works by constructing the Colored de Bruijn Graph and then traversing it, finding bubble structures in the graph that provide phylogenetic signal. The bubbles are then aligned and concatenated to form a supermatrix, from which a phylogenetic tree is inferred. We introduce the algorithms that kleuren uses to accomplish this task, and show its performance on reconstructing the phylogenetic tree of 12 Drosophila species. kleuren reconstructed the established phylogenetic tree accurately, and is a viable tool for phylogenetic tree reconstruction using whole genome sequences. Software package available at: https://github.com/Colelyman/kleurenComment: 6 pages, 3 figures, accepted at BIBE 2017. Minor modifications to the text due to reviewer feedback and fixed typo

Solving Structural Problems of Ceramic Materials

Methods for the crystal structure determination from powder diffraction data are reviewed with special emphasis on the application to technical ceramics. Experimental techniques using other than laboratory X-ray, such as synchrotron radiation, neutron and electron beams, are also described. As an illustrative example, the crystal structure determinations of compounds LaNbTiO6, La0.462Nb0.614Ti0.386O3 and La0.37Nb0.889Ti0.111O3 in the ternary system of La2O3–Nb2O5–TiO2 are reported