Privatizing profits and socializing losses with smoothly operating capital markets

We design a three periods two overlapping generations model to challenge some of the prevailing views regarding privatizing profits and socializing losses in an environment characterized by smoothly operating capital markets. The model has a secondary asset market impaired by adverse selection and moral hazard. An exogenous stochastic shock renders some assets toxic. In the basic setup a tax financed scheme which removes toxic assets exacerbates the moral hazard problem and worsens the resource misallocation. However, introducing a “search for yield” with dynamic spillover effects and/or considering a labor market with some friction makes intervention welfare improving

Monitoring and Pay: An Experiment on Employee Performance under Endogenous Supervision

We present an experimental test of a shirking model where monitoring intensity is endogenous and effort a continuous variable. Wage level, monitoring intensity and consequently the desired enforceable effort level are jointly determined by the maximization problem of the firm. As a result, monitoring and pay should be complements. In our experiment, between and within treatment variation is qualitatively in line with the normative predictions of the model under standard assumptions. Yet, we also find evidence for reciprocal behavior. Our data analysis shows, however, that it does not pay for the employer to solely rely on the reciprocity of employees

A genome-wide survey of human short-term memory

Recent advances in the development of high-throughput genotyping platforms allow for the unbiased identification of genes and genomic sequences related to heritable traits. In this study, we analyzed human short-term memory, which refers to the ability to remember information over a brief period of time and which has been found disturbed in many neuropsychiatric conditions, including schizophrenia and depression. We performed a genome-wide survey at 909 622 polymorphic loci and report six genetic variations significantly associated with human short-term memory performance after genome-wide correction for multiple comparisons. A polymorphism within SCN1A (encoding the α subunit of the type I voltage-gated sodium channel) was replicated in three independent populations of 1699 individuals. Functional magnetic resonance imaging during an n-back working memory task detected SCN1A allele-dependent activation differences in brain regions typically involved in working memory processes. These results suggest an important role for SCN1A in human short-term memory

Optimal liability sharing and court errors: an exploratory analysis

We focus in this paper on the effects of court errors on the optimal sharing of liability between firms and financiers, as an environmental policy instrument. Using a structural model of the interactions between firms, financial institutions, governments and courts we show, through numerical simulations, the distortions in liability sharing between firms and financiers that the imperfect implementation of government policies implies. We consider in particular the role played by the efficiency of the courts in avoiding Type I (finding an innocent firm guilty of inappropriate care) and Type II (finding a guilty firm innocent of inappropriate care) errors. This role is considered in a context where liability sharing is already distorted (when compared with first best values) due not only to the courts' own imperfect assessment of safety care levels exerted by firm but also to the presence of moral hazard and adverse selection in financial contracting, as well as of noncongruence of objectives between firms and financiers on the one hand and social welfare maximization on the other. Our results indicate that an increase in the efficiency of the court system in avoiding errors raises safety care levels, thereby reducing the probability of accident, and allowing the social welfare maximizing government to impose a lower liability [higher] share for firms [financiers] as well as a lower standard level of care

Discordant Gene Expression Signatures and Related Phenotypic Differences in Lamin A- and A/C-Related Hutchinson-Gilford Progeria Syndrome (HGPS)

Hutchinson-Gilford progeria syndrome (HGPS) is a genetic disorder displaying features reminiscent of premature senescence caused by germline mutations in the LMNA gene encoding lamin A and C, essential components of the nuclear lamina. By studying a family with homozygous LMNA mutation (K542N), we showed that HGPS can also be caused by mutations affecting both isoforms, lamin A and C. Here, we aimed to elucidate the molecular mechanisms underlying the pathogenesis in both, lamin A- (sporadic) and lamin A and C-related (hereditary) HGPS. For this, we performed detailed molecular studies on primary fibroblasts of hetero- and homozygous LMNA K542N mutation carriers, accompanied with clinical examinations related to the molecular findings. By assessing global gene expression we found substantial overlap in altered transcription profiles (13.7%; 90/657) in sporadic and hereditary HGPS, with 83.3% (75/90) concordant and 16.7% (15/90) discordant transcriptional changes. Among the concordant ones we observed down-regulation of TWIST2, whose inactivation in mice and humans leads to loss of subcutaneous fat and dermal appendages, and loss of expression in dermal fibroblasts and periadnexial cells from a LMNAK542N/K542N patient further confirming its pivotal role in skin development. Among the discordant transcriptional profiles we identified two key mediators of vascular calcification and bone metabolism, ENPP1 and OPG, which offer a molecular explanation for the major phenotypic differences in vascular and bone disease in sporadic and hereditary HGPS. Finally, this study correlates reduced TWIST2 and OPG expression with increased osteocalcin levels, thereby linking altered bone remodeling to energy homeostasis in hereditary HGPS