Credit, wages, and bankruptcy laws

We analyze how bankruptcy laws affect the general equilibrium interactions between credit and wages. Soft laws reduce the frequency of liquidations and thus ex post inefficiencies, but they worsen credit rationing ex ante. This hinders firm creation and thus depresses labor demand. Rich agents who need few outside funds can invest even if creditor rights are weak. Hence, they favor soft laws that exclude poorer agents from the credit market and reduce the competition for labor. Such laws can generate greater utilitarian welfare than under perfect contract enforcement: By barring access to credit to some agents, soft laws lower wages, which increases the pledgeable income of richer agents and decreases the liquidation rates they must commit to. When they induce strong credit rationing, however, soft laws are Pareto-dominated by tougher laws combined with subsidies to entrepreneurs

Adverse selection, volume and transactions around dividend announcements in a continuous auction system

We show that liquidity providers do not significantly respond to changes in information asymmetry risks, at least when we analyse their trading behaviour around dividend announcements of a representative sample of stocks in a continuous auction trading mechanism. the implicit bid-ask spread does not seem to change beyond what is normally conveyed through an increased number of transactions. We also document that the information in the trading behaviour of investors is primarily contained in the number of daily transactions.Publicad

Belief heterogeneity and survival in incomplete markets

In complete markets economies (Sandroni [16]), or in economies with Pareto optimal outcomes (Blume and Easley [10]), the market selection hypothesis holds, as long as traders have identical discount factors. Traders who survive must have beliefs that merge with the truth. We show that in incomplete markets, regardless of traders’ discount factors, the market selects for a range of beliefs, at least some of which do not merge with the truth. We also show that impatient traders with incorrect beliefs can survive and that these incorrect beliefs impact prices. These beliefs may be chosen so that they are far from the truth

c-di-GMP modulates type IV MSHA pilus retraction and surface attachment in Vibrio cholerae.

Biofilm formation by Vibrio cholerae facilitates environmental persistence, and hyperinfectivity within the host. Biofilm formation is regulated by 3',5'-cyclic diguanylate (c-di-GMP) and requires production of the type IV mannose-sensitive hemagglutinin (MSHA) pilus. Here, we show that the MSHA pilus is a dynamic extendable and retractable system, and its activity is directly controlled by c-di-GMP. The interaction between c-di-GMP and the ATPase MshE promotes pilus extension, whereas low levels of c-di-GMP correlate with enhanced retraction. Loss of retraction facilitated by the ATPase PilT increases near-surface roaming motility, and impairs initial surface attachment. However, prolonged retraction upon surface attachment results in reduced MSHA-mediated surface anchoring and increased levels of detachment. Our results indicate that c-di-GMP directly controls MshE activity, thus regulating MSHA pilus extension and retraction dynamics, and modulating V. cholerae surface attachment and colonization

End-expiratory occlusion maneuver to predict fluid responsiveness in the intensive care unit : an echocardiographic study

Background In mechanically ventilated patients, an increase in cardiac index during an end-expiratory-occlusion test predicts fluid responsiveness. To identify this rapid increase in cardiac index, continuous and instantaneous cardiac index monitoring is necessary, decreasing its feasibility at the bedside. Our study was designed to investigate whether changes in velocity time integral and in peak velocity obtained using transthoracic echocardiography during an end-expiratory-occlusion maneuver could predict fluid responsiveness. Methods This single-center, prospective study included 50 mechanically ventilated critically ill patients. Velocity time integral and peak velocity were assessed using transthoracic echocardiography before and at the end of a 12-sec end-expiratory-occlusion maneuver. A third set of measurements was performed after volume expansion (500 mL of saline 0.9% given over 15 minutes). Patients were considered as responders if cardiac output increased by 15% or more after volume expansion. Results Twenty-eight patients were responders. At baseline, heart rate, mean arterial pressure, cardiac output, velocity time integral and peak velocity were similar between responders and non-responders. End-expiratory-occlusion maneuver induced a significant increase in velocity time integral both in responders and non-responders, and a significant increase in peak velocity only in responders. A 9% increase in velocity time integral induced by the end-expiratory-occlusion maneuver predicted fluid responsiveness with sensitivity of 89% (95% CI 72% to 98%) and specificity of 95% (95% CI 77% to 100%). An 8.5% increase in peak velocity induced by the end-expiratory-occlusion maneuver predicted fluid responsiveness with sensitivity of 64% (95% CI 44% to 81%) and specificity of 77% (95% CI 55% to 92%). The area under the receiver operating curve generated for changes in velocity time integral was significantly higher than the one generated for changes in peak velocity (0.96 ± 0.03 versus 0.70 ± 0.07, respectively, P = 0.0004 for both). The gray zone ranged between 6 and 10% (20% of the patients) for changes in velocity time integral and between 1 and 13% (62% of the patients) for changes in peak velocity. Conclusions In mechanically ventilated and sedated patients in the neuro Intensive Care Unit, changes in velocity time integral during a 12-sec end-expiratory-occlusion maneuver were able to predict fluid responsiveness and perform better than changes in peak velocity

A model for a large investor trading at market indifference prices. I: single-period case

We develop a single-period model for a large economic agent who trades with market makers at their utility indifference prices. A key role is played by a pair of conjugate saddle functions associated with the description of Pareto optimal allocations in terms of the utility function of a representative market maker.Comment: Shorten from 69 to 30 pages due to referees' requests; a part of the previous version has been moved to "The stochastic field of aggregate utilities and its saddle conjugate", arXiv:1310.728

Strategies used as spectroscopy of financial markets reveal new stylized facts

We propose a new set of stylized facts quantifying the structure of financial markets. The key idea is to study the combined structure of both investment strategies and prices in order to open a qualitatively new level of understanding of financial and economic markets. We study the detailed order flow on the Shenzhen Stock Exchange of China for the whole year of 2003. This enormous dataset allows us to compare (i) a closed national market (A-shares) with an international market (B-shares), (ii) individuals and institutions and (iii) real investors to random strategies with respect to timing that share otherwise all other characteristics. We find that more trading results in smaller net return due to trading frictions. We unveiled quantitative power laws with non-trivial exponents, that quantify the deterioration of performance with frequency and with holding period of the strategies used by investors. Random strategies are found to perform much better than real ones, both for winners and losers. Surprising large arbitrage opportunities exist, especially when using zero-intelligence strategies. This is a diagnostic of possible inefficiencies of these financial markets.Comment: 13 pages including 5 figures and 1 tabl