Principal agent problems under loss aversion: an application to executive stock options

Executive stock options reward success but do not penalise failure. In contrast, the standard principalagent model implies that pay is normally monotonically increasing in performance. This paper shows that, under loss aversion, the use of carrots but not sticks is a feature of an optimal compensation contract. Low risk aversion and high loss aversion is particularly propitious to the use of options. Moreover, loss aversion on the part of executives explains the award of at the money options rather than discounted stock or bonus related pay. Other features of stock option grants are also explained, such as resetting or reloading with an exercise price equal to the current stock price

Massive stealth scalar fields from field redefinition method

We propose an uni-parametric deformation method of action principles of scalar fields coupled to gravity which generates new models with massive stealth field configurations, i.e. with vanishing energy-momentum tensor. The method applies to a wide class of models and we provide three examples. In particular we observe that in the case of the standard massive scalar action principle, the respective deformed action contains the stealth configurations and it preserves the massive ones of the undeformed model. We also observe that, in this latter example, the effect of the energy-momentum tensor of the massive (non-stealth) field can be amplified or damped by the deformation parameter, alternatively the mass of the stealth field.Comment: 12 page

Dynamics of two interacting particles in classical billiards

The problem of two interacting particles moving in a d-dimensional billiard is considered here. A suitable coordinate transformation leads to the problem of a particle in an unconventional hyperbilliard. A dynamical map can be readily constructed for this general system, which greatly simplifies calculations. As a particular example, we consider two identical particles interacting through a screened Coulomb potential in a one-dimensional billiard. We find that the screening plays an important role in the dynamical behavior of the system and only in the limit of vanishing screening length can the particles be considered as bouncing balls. For more general screening and energy values, the system presents strong non-integrability with resonant islands of stability.Comment: REVTEX manuscript, 4 figures (1 ps + 3 gif, Postscript versions available upon request). Also available at http://www.phy.ohiou.edu/~ulloa/ulloa.htm

Probing Yukawian gravitational potential by numerical simulations. I. Changing N-body codes

In the weak field limit general relativity reduces, as is well known, to the Newtonian gravitation. Alternative theories of gravity, however, do not necessarily reduce to Newtonian gravitation; some of them, for example, reduce to Yukawa-like potentials instead of the Newtonian potential. Since the Newtonian gravitation is largely used to model with success the structures of the universe, such as for example galaxies and clusters of galaxies, a way to probe and constrain alternative theories, in the weak field limit, is to apply them to model the structures of the universe. In the present study, we consider how to probe Yukawa-like potentials using N-body numerical simulations.Comment: 17 pages, 11 figures. To appear in General Relativity and Gravitatio