Listen to the market, hear the best policy decision, but don’t always choose it

The updated version of this working paper (28 February 2019) is available in ORE at http://hdl.handle.net/10871/36180Real-world policymakers want to extract investors' private information about a policy's likely effects by 'listening to' asset markets. However, this brings the risk that investors will profitably 'manipulate' prices to steer policy. We model the interaction between a policymaker and an informed (profit-seeking) investor who can buy/short-sell an asset from uninformed traders. We characterize when the investor's incentives do not align with the policymaker's, implying that to induce truth-telling behavior the policymaker must commit to sometimes ignoring the signal (as revealed by the investor's behavior driving the asset's price). This implies a commitment to executing the policy with a probability depending on the asset's price. We develop a taxonomy for the full set of relationships between private signals, asset values, and policymaker welfare, characterizing the optimal indirect mechanism for each case. We find that where the policymaker is ex-ante indifferent, she commits to sometimes/never executing after a bad signal, but always executes after a good signal. Generically, this 'listening' mechanism leads to higher (policymaker) welfare then ignoring the signals. We discuss real-world evidence, implications for legislative processes, and phenomena such as 'trial balloons' and 'committing political capital'

Listen to the market, hear the best policy decision, but don't always choose it

This is an updated version of the 20 February 2014 working paper of the same title, which is available in ORE at http://hdl.handle.net/10871/26685Policymakers often consider policies with (a) uncertain social benefits and (b) uncertain impacts on the value of private assets; we characterize six ways (a) and (b) may be inter-related. Where investors have private information over (b), policymakers may attempt to learn this through the response of asset markets to proposed policies. However, where this information is concentrated, an informed trader may profitably hide his information and “manipulate” the market. We show that it is nonetheless generically optimal for policymakers to listen and respond to asset markets, but under specified conditions they must commit (e.g., through “political capital”) to sometimes pursuing a policy even when the expected welfare effects are negative. Surprisingly, allowing traders to short-sell can make it easier for policymakers to induce truth-telling actions

Commitments to Give-if-you-Win Exceed Donations After a Win

Should fundraisers ask a banker to donate “if he earns a bonus” or wait and ask after the bonus is known? Standard EU theory predicts these are equivalent; loss-aversion and signaling models predict a larger commitment before the bonus is known; theories of affect predict the reverse. In five experiments incorporating lab and field elements (N=1363), we solicited donations from small lottery winnings , varying the conditionality of donations between participants. Overall, we find conditional donations (“if you win”) exceeded ex-post donations. This represents the first evidence on how pro-social behavior extends to conditional commitments over uncertain income, with implications for charitable fundraising, giving pledges, and experimental methodologyWe would like to thank the Universities of Essex, Düsseldorf, Mannheim and Bonn for providing financial support for our research

Losing Face

This is the author accepted manuscript. The final version is available from Oxford University Press via the DOI in this record.When Al makes an offer to Betty that Betty observes and rejects, Al may suffer a painful and costly “loss of face” (LoF). LoF can be avoided by letting the vulnerable side move second, or by setting up “Conditionally Anonymous Environments” that only reveal when both parties say yes. This can impact bilateral matching problems, e.g., marriage markets, research partnering, and international negotiations. We model this assuming asymmetric information, continuous signals of individuals’ binary types, linear marriage production functions, and a primitive LoF term component to utility. LoF makes rejecting one’s match strictly preferred to being rejected, making the “high types always reject” equilibrium stable. LoF may have non-monotonic effects on stable interior equilibria. A small LoF makes high types more selective, making marriage less common and more assortative. A greater LoF (for males only) makes low-type-males reverse snobs, which makes high-females less choosy, with ambiguous effects on the marriage rate

Ex-ante Commitments to "Give if you Win" Exceed Donations After a Win

This is the author accepted manuscript. The final version is available from Elsevier via the DOI in this record.Should fundraisers ask a banker to donate “if he earns a bonus” or wait and ask after the bonus is known? Standard EU theory predicts these approaches are equivalent; loss-aversion and signaling models predict a larger commitment before the bonus is known; theories of affect predict the reverse. In five experiments incorporating lab and field elements (N=1363), we solicited charitable donations from small lottery winnings, varying the conditionality of donations between participants. Pooling across experiments, participants are 23% more likely to commit to donate from the winning income and commit 25% more when asked before the lottery’s outcome is determined—relative to those asked to donate after they learn they have won. These differences are strongly statistically significant. This represents the first evidence on how pro-social behavior extends to conditional commitments over uncertain income, with implications for charitable fundraising, giving pledges, and experimental methodology.We would like to thank the Universities of Essex, Düsseldorf, Mannheim and Bonn for providing financial support for our research

On reminder effects, drop-outs and dominance: evidence from an online experiment on charitable giving

We present the results of an experiment that (a) shows the usefulness of screening out drop-outs and (b) tests whether different methods of payment and reminder intervals affect charitable giving. Following a lab session, participants could make online donations to charity for a total duration of three months. Our procedure justifying the exclusion of drop-outs consists in requiring participants to collect payments in person flexibly and as known in advance and as highlighted to them later. Our interpretation is that participants who failed to collect their positive payments under these circumstances are likely not to satisfy dominance. If we restrict the sample to subjects who did not drop out, but not otherwise, reminders significantly increase the overall amount of charitable giving. We also find that weekly reminders are no more effective than monthly reminders in increasing charitable giving, and that, in our three months duration experiment, standing orders do not increase giving relative to one-off donations

Quercetin elevates p27Kip1 and arrests both primary and HPV16 E6/E7 transformed human keratinocytes in G1

Our previous work with primary bovine fibroblasts demonstrated that quercetin, a potent mutagen found in high levels in bracken fern (Pteridium aquilinum), arrested cells in G1 and G2/M, in correlation with p53 activation. The expression of bovine papillomavirus type 4 (BPV-4) E7 overcame this arrest and lead to the development of tumorigenic cells lines (Beniston et al., 2001). Given the possible link between papillomavirus infection, bracken fern in the diet and cancer of the upper gastrointestinal (GI) tract in humans, we investigated whether a similar situation would occur in human cells transformed by human papillomavirus type 16 (HPV-16) oncoproteins. Quercetin arrested primary human foreskin keratinocytes in G1. Arrest was linked to an elevation of the cyclin-dependent kinase inhibitor (cdki) p27Kip1. Expression of the HPV16 E6 and E7 oncoproteins in transformed cells failed to abrogate cell cycle arrest. G1 arrest in the transformed cells was also linked to an increase of p27Kip1 with a concomitant reduction of cyclin E-associated kinase activity. This elevation of p27Kip1 was due not only to increased protein half-life, but also to increased mRNA transcription

Transient Photoreceptor Deconstruction by CNTF Enhances rAAV-Mediated Cone Functional Rescue in Late Stage CNGB3-Achromatopsia

Achromatopsia is a genetic disorder of cones, and one of the most common forms is a channelopathy caused by mutations in the β-subunit, CNGB3, of the cone cyclic nucleotide-gated (CNG) channel. Recombinant adeno-associated virus of serotype 5 (rAAV5)-mediated gene transfer of human CNGB3 cDNA to mutant dog cones results in functional and structural rescue in dogs \u3c0.5 years of age, but treatment is minimally effective in dogs \u3e1 year. We now test a new therapeutic concept by combining gene therapy with the administration of ciliary neurotrophic factor (CNTF). Intravitreal CNTF causes transient dedifferentiation of photoreceptors, a process called deconstruction, whereby visual cells become immature with short outer segments, and decreased retinal function and gene expression that subsequently return to normal. Cone function was successfully rescued in all mutant dogs treated between 14 and 42 months of age with this strategy. CNTF-mediated deconstruction and regeneration of the photoreceptor outer segments prepares the mutant cones optimally for gene augmentation therapy

Canine CNGA3 Gene Mutations Provide Novel Insights Into Human Achromatopsia-Associated Channelopathies and Treatment

Cyclic nucleotide-gated (CNG) ion channels are key mediators underlying signal transduction in retinal and olfactory receptors. Genetic defects in CNGA3 and CNGB3, encoding two structurally related subunits of cone CNG channels, lead to achromatopsia (ACHM). ACHM is a congenital, autosomal recessive retinal disorder that manifests by cone photoreceptor dysfunction, severely reduced visual acuity, impaired or complete color blindness and photophobia. Here, we report the first canine models for CNGA3-associated channelopathy caused by R424W or V644del mutations in the canine CNGA3 ortholog that accurately mimic the clinical and molecular features of human CNGA3-associated ACHM. These two spontaneous mutations exposed CNGA3 residues essential for the preservation of channel function and biogenesis. The CNGA3-R424W results in complete loss of cone function in vivoand channel activity confirmed by in vitro electrophysiology. Structural modeling and molecular dynamics (MD) simulations revealed R424-E306 salt bridge formation and its disruption with the R424W mutant. Reversal of charges in a CNGA3-R424E-E306R double mutant channel rescued cGMP-activated currents uncovering new insights into channel gating. The CNGA3-V644del affects the C-terminal leucine zipper (CLZ) domain destabilizing intersubunit interactions of the coiled-coil complex in the MD simulations; the in vitro experiments showed incompetent trimeric CNGA3 subunit assembly consistent with abnormal biogenesis of in vivochannels. These newly characterized large animal models not only provide a valuable system for studying cone-specific CNG channel function in health and disease, but also represent prime candidates for proof-of-concept studies of CNGA3 gene replacement therapy for ACHM patients