Search, Moral Hazard, and Price Dispersion

We study the effects of insurance coverage on consumer search behavior and the pricing of services covered by insurance, constructing a general equilibrium model of moral hazard in search with an endogenous price distribution. When an insured event occurs, households request quotes from firms, who offer a homogenous service at various prices. We show that lower coinsurance rates reduce the amount of search by households, allowing firms to increase their prices. Hence, moral hazard in search is far more costly than shown in previous models, which ignored equilibrium firm response to changes in consumer search behavior.

Sticking with What (Barely) Worked

Outcome bias occurs when an evaluator considers ex-post outcomes when judging whether a choice was correct, ex-ante. We formalize this cognitive bias in a simple model of distorted Bayesian updating. We then examine strategy changes made by professional football coaches. We find they are more likely to revise their strategy after a loss than a win — even for narrow losses, which are uninformative about future success. This increased revision following a loss occurs even when a loss was expected, and the offensive strategy is revised even when failure is attributable to the defense. These results are consistent with our model’s predictions.

Pay-to-Bid Auctions

We analyze a new auction format in which bidders pay a fee each time they increase the auction price. Bidding fees are the primary source of revenue for the seller, but produce the same expected revenue as standard auctions. Our model predicts a particular distribution of ending prices, which we test against observed auction data. Our model fits the data well for over three-fourths of routinely auctioned items. The notable exceptions are video game paraphernalia, which show more aggressive bidding and higher expected revenue. By incorporating mild risk-loving preferences in the model, we explain nearly all of the auctions.

Rushing to Overpay: The REIT Premium Revisited

We explore the questions of whether and why Real Estate Investment Trusts (REITs) pay more for real estate than non-REIT buyers, consequently breaking the law of one price. We develop a model where REITs optimally pay more for property because (1) they are able, due to capital access advantages and, (2) are occasionally compelled, due to regulatory time constraints on the deployment of capital. We show that the typically large (20 to 60 percent) and statistically significant (p-values less than 0.01) REIT-buyer premiums found in standard empirical hedonic pricing models are biased due to unobserved explanatory variables. Using a repeat-transaction methodology that controls for unobserved independent variables, we find the REIT-buyer premium to be about 5 percent. Furthermore, we show that REITs¿ ability (as measured by access to capital markets) and regulator compulsion (as measured by capital deployment deadlines) are related to the price premium.Real Estate Investment Trusts (REITs), commercial properties, hedonic price analysis, repeat transactions, market efficiency, law of one price, price premium

Searching on a Deadline

Abstract We analyze an equilibrium search model where the buyer seeks to purchase a good before a deadline. The buyer's reservation price rises continuously as the deadline approaches. A seller cannot observe a potential buyer's remaining time until deadline, and hence posts a price that weighs the probability of sale versus the profit once sold. The model has a unique equilibrium, which can take exactly one of two forms. In a late equilibrium, buyers initially forgo any purchases, only accepting some offers as the deadline draws near. In an early equilibrium, buyers are willing to accept some offers even as they enter the market. Equilibrium price dynamics are determined by the concentration of buyers near their deadline, as well as their urgency of completing the transaction before their deadline

The n-Person Kalai-Smorodinsky Bargaining Solution under Pre-Donations

Abstract This study examines the behavior of simple n-person bargaining problems under pre-donations where the Kalai-Smorodinsky (KS) solution is operant. Pre-donations are a unilateral commitment to transfer a portion of one's utility to someone else, and are used to distort the bargaining set and thereby influence the bargaining solution. In equilibrium, these pre-donations are Pareto-improving over the undistorted solution; moreover, when the agents' preferences are sufficiently distinct, the equilibrium solution coincides with the Concessionary Division rule

The effect of linguistic and visual salience in visual world studies

Research using the visual world paradigm has demonstrated that visual input has a rapid effect on language interpretation tasks such as reference resolution and, conversely, that linguistic material-including verbs, prepositions and adjectives-can influence fixations to potential referents. More recent research has started to explore how this effect of linguistic input on fixations is mediated by properties of the visual stimulus, in particular by visual salience. In the present study we further explored the role of salience in the visual world paradigm manipulating language-driven salience and visual salience. Specifically, we tested how linguistic salience (i.e., the greater accessibility of linguistically introduced entities) and visual salience (bottom-up attention grabbing visual aspects) interact. We recorded participants' eye-movements during a MapTask, asking them to look from landmark to landmark displayed upon a map while hearing direction-giving instructions. The landmarks were of comparable size and color, except in the Visual Salience condition, in which one landmark had been made more visually salient. In the Linguistic Salience conditions, the instructions included references to an object not on the map. Response times and fixations were recorded. Visual Salience influenced the time course of fixations at both the beginning and the end of the trial but did not show a significant effect on response times. Linguistic Salience reduced response times and increased fixations to landmarks when they were associated to a Linguistic Salient entity not present itself on the map. When the target landmark was both visually and linguistically salient, it was fixated longer, but fixations were quicker when the target item was linguistically salient only. Our results suggest that the two types of salience work in parallel and that linguistic salience affects fixations even when the entity is not visually present. © 2014 Cavicchio, Melcher and Poesio

The decision-making process for breast reconstruction after cancer surgery: representations of heterosexual couples in longstanding relationships

International audienceOBJECTIVES: Most people deal with intrusive life events such as cancer and the care trajectory together with their intimate partners. To our knowledge, no research has studied the involvement of the partner in the decision-making process regarding breast reconstruction (BR) after cancer. This study aimed to gain a better understanding of the couples' decision-making process for BR in the cancer context and particularly to investigate the partners' involvement in this process.METHOD: Eighteen participants (nine women who underwent a mastectomy following a first breast cancer and their intimate partners) took part in this study. We conducted semidirective interviews, and a general inductive approach was chosen to capture the representations of the couples.RESULTS: The women in the sample were aged between 33 and 66 years (M = 54, SD = 7.5) and their partner between 40 and 76 years (M = 59, SD = 11.6). The duration of their intimate relationship was on average 18 years (SD = 10.4; minimum = 4; maximum = 33). The analysis revealed 11 major themes. The two most salient ones were 'external influence' and 'implication of the partner'. The exploration of the subthemes revealed that the decision-making process is often reported as an interrelated experience by the couples and as a dyadic stressor. The partner's role is depicted as consultative and mostly supportive.CONCLUSION: These results provide new insights on the involvement of the partner in decision-making. Thus, it now seems crucial to develop a prospective study, which will help understand the progression of the decision-making process over time. Statement of contribution What is already known on this subject? Most people deal with intrusive life events such as cancer and the care trajectory together with their intimate partners. Shared decision-making between patients and physicians is now the 'gold standard' in Western Europe and the United States. However, in the context of breast reconstruction (BR) after cancer, factors guiding the decision-making process for BR, especially the potential involvement of the partner, are not very well understood. What does this study add? Provides a qualitative insight on the specific nature of heterosexual couples' representations regarding the decision-making process for breast reconstruction after cancer. Reveals that the decision-making process is often reported as an interrelated experience by the couples and as a dyadic stressor. Underlines the consultative function of partners with women engaged in breast reconstruction

Analytical validation of a next generation sequencing liquid biopsy assay for high sensitivity broad molecular profiling.

Circulating tumor DNA (ctDNA) analysis is being incorporated into cancer care; notably in profiling patients to guide treatment decisions. Responses to targeted therapies have been observed in patients with actionable mutations detected in plasma DNA at variant allele fractions (VAFs) below 0.5%. Highly sensitive methods are therefore required for optimal clinical use. To enable objective assessment of assay performance, detailed analytical validation is required. We developed the InVisionFirst™ assay, an assay based on enhanced tagged amplicon sequencing (eTAm-Seq™) technology to profile 36 genes commonly mutated in non-small cell lung cancer (NSCLC) and other cancer types for actionable genomic alterations in cell-free DNA. The assay has been developed to detect point mutations, indels, amplifications and gene fusions that commonly occur in NSCLC. For analytical validation, two 10mL blood tubes were collected from NSCLC patients and healthy volunteer donors. In addition, contrived samples were used to represent a wide spectrum of genetic aberrations and VAFs. Samples were analyzed by multiple operators, at different times and using different reagent Lots. Results were compared with digital PCR (dPCR). The InVisionFirst assay demonstrated an excellent limit of detection, with 99.48% sensitivity for SNVs present at VAF range 0.25%-0.33%, 92.46% sensitivity for indels at 0.25% VAF and a high rate of detection at lower frequencies while retaining high specificity (99.9997% per base). The assay also detected ALK and ROS1 gene fusions, and DNA amplifications in ERBB2, FGFR1, MET and EGFR with high sensitivity and specificity. Comparison between the InVisionFirst assay and dPCR in a series of cancer patients showed high concordance. This analytical validation demonstrated that the InVisionFirst assay is highly sensitive, specific and robust, and meets analytical requirements for clinical applications

Socioeconomic Disadvantage and Child Morbidity: An Australian Longitudinal Study

While an extensive body of literature has demonstrated an association between socioeconomic status and child mortality, there have been relatively few papers which discuss the impact of socioeconomic inequality on child morbidity. This absence of data is partly attributable to methodological problems (need for large samples, the difficulty of assessing morbidity) and partly to the absence of relevant official health statistics. This paper reports results from the Mater-University of Queensland Study of Pregnancy (MUSP) and its outcomes. The sample comprises 8556 consecutive pregnancies, of which over 90% were followed up to birth. Of those mothers giving birth, approx. 70% of children were successfully given a health assessment five years after the birth (mothers report of the child's health using a set of standard indicators). The results indicate a consistent pattern with the children of the most socioeconomically disadvantaged mothers manifesting the worst health. Thus children living in socioeconomic disadvantage have a higher rate of health service utilisation, more chronic health problems and poorer dental health. The paper discusses some social policies for redressing these inequalities