Breach Remedies Including Hybrid Investments

We show that parties in bilateral trade can rely on the default common law breach remedy of ‘expectation damages’ to induce simultaneously ?rst-best relationship-speci?c investments of both the sel?sh and the cooperative kind. This can be achieved by writing a contract that speci?es a suffciently high quality level. In contrast, the result by Che and Chung (1999) that ‘reliance damages’ induce the ?rstbest in a setting of purely cooperative investments, does not generalize to the hybrid case. We also show that if the quality speci?ed in the contract is too low, ‘expectation damages’ do not necessarily induce the ex-post effcient trade decision in the presence of cooperative investments

Breach Remedies Including Hybrid Investments

We show that parties in bilateral trade can rely on the default common law breach remedy of ‘expectation damages’ to induce simultaneously ?rst-best relationship-speci?c investments of both the sel?sh and the cooperative kind. This can be achieved by writing a contract that speci?es a suffciently high quality level. In contrast, the result by Che and Chung (1999) that ‘reliance damages’ induce the ?rstbest in a setting of purely cooperative investments, does not generalize to the hybrid case. We also show that if the quality speci?ed in the contract is too low, ‘expectation damages’ do not necessarily induce the ex-post effcient trade decision in the presence of cooperative investments.breach remedies; incomplete contracts; hybrid investments; cooperative investments; sel?sh investments

Expectation Damages and Bilateral Cooperative Investments

We examine the efficiency of the standard breach remedy expectation damages in a setting of bilateral cooperative investment by a buyer and a seller. Contracts may specify a required quality level and an upper bound to the cost of production. We find that it is optimal to write an augmented Cadillac contract that sets one threshold such that it cannot be met with positive probability together with an extreme price. Then, one of the parties becomes a residual claimant of the trade relationship. The other threshold can be used to balance the incentives of the other party

Contract, Renegotiation, and Holdup: When Should Messages be Sent?

I consider a setting of complete but unverifiable information in which two agents enter a contractual relationship to induce mutually beneficial investments. As my main result, I establish that the famous irrelevance of contracting paradigm, that arises due to the detrimental effect of renegotiation, is resolved if there is a fixed point in time when actions have to be chosen and one accounts for the fact that renegotiation takes time. What drives my optimality result is that, by stipulating when the mechanism is to be played, the agents ensure that renegotiation is possible ex ante but not ex post

Essays in Law and Economics

The first two chapters of this thesis are situated in a branch of the literature that is most often referred to as the economic analysis of contract law. This literature, that perhaps began blooming with the seminal work by Shavell (1980), considers the performance of contracts against the background of so called legal breach remedies. A breach remedy constitutes a standard legal rule that determines the consequences of a breach of contract. The third chapter is situated in the economic analysis of eminent domain and considers the efficiency of standard compensation regimes in a situation where a landowner faces the risk that a government may take her or his property ex-post. In the first chapter, we show that parties in bilateral trade can rely on the default common law breach remedy of expectation damages to induce simultaneously first-best relationship-specific investments of both the selfish and the cooperative kind. This can be achieved by writing a contract that specifies a sufficiently high quality level. In contrast, the result by Che and Chung (1999) that reliance damages induce the first best in a setting of purely cooperative investments, does not generalize to the hybrid case. We also show that if the quality specified in the contract is too low, expectation damages do not necessarily induce the ex-post efficient trade decision in the presence of cooperative investments. The second chapter examines the efficiency of the standard breach remedy expectation damages in a setting of bilateral cooperative investment by a buyer and a seller. Contracts may specify a required quality level and an upper bound to the cost of production. We find that it is optimal to write an augmented Cadillac contract that sets one threshold such that it cannot be met with positive probability together with an extreme price. Then, one of the parties becomes a residual claimant of the trade relationship. The remaining threshold can be used to balance the incentives of the other party. The analysis of the third chapter focuses on a situation where a landowner and the government invest prior to the government's taking decision. When the government suffers from budgetary fiscal illusion, optimal compensation amounts to the hypothetical value of the landowner's property had she invested efficiently. In contrast, under a government that maximizes social welfare, the only regime to induce the first best grants as compensation the social benefit of the taking. Consequently, if the government can only raise capital up to a certain amount, society may be better off under a non-benevolent government

Mobile telephony in emerging markets

Rapidly increasing sales of multi-SIM phones, mobile penetration rates above 100% and reported customer behavior all point to the fact that a significant share of mobile customers in emerging markets tend to use more than one SIM card. A primary motive for this is to avoid making expensive off-net calls. We add a segment of flexible prepaid customers, who choose to "multi-sim" in equilibrium to the seminal model of competing telephone networks a la Laffont, Rey and Tirole (1998b). In equilibrium, the networks choose to set a very high prepaid off-net price to achieve segmentation. This incentive prevails, even if termination rates are set to marginal costs

Transformation einer Vorlesung durch E-Learning-Elemente

Die Veranstaltungsform Vorlesung ist vor allem in geistes- und sozialwissenschaftlichen Studienrichtungen umstritten: mangelnde Aktivierung der Studierenden, kaum Dialog und Diskurs, wenig Möglichkeiten zum Feedback. In diesem Beitrag soll an einem Beispiel aus der Lehrpraxis des Studienfachs Pädagogik an der TU Darmstadt gezeigt werden, dass und wie es möglich ist, eine Vorlesung durch Einsatz von E-Learning-Elementen so zu transformieren, dass das aktive und diskursive Arbeiten mit den Vorlesungsinhalten erfolgreich angeregt wird

Workshop on PIDs within NFDI: Report of the Working Group “Persistent Identifiers (PID)” of the Section Common Infrastructures of the NFDI

In order to gain an overview of the current state of the discussion on PIDs and for the identification of use cases for the initiation phase of a PID service within the NFDI basic services, the working group Persistent Identifier of the Section Common Infrastructures of the NFDI hosted an online workshop in January 2023. In the course of the workshop, members of nine different NFDI consortia presented the current application of PIDs in their consortia

PATH-10. Accelerating comprehensive CNS tumor molecular diagnostics with Rapid-CNS2 and MNP-flex: a prospective multi-center validation [Abstract]

BACKGROUND The 2021 WHO classification update highlights the necessity of integrating molecular alterations for precise central nervous system (CNS) tumor diagnoses. However, current molecular reporting methods are hindered by significant initial investment, labor-intensive protocols, and lengthy turnaround times. Methylation-based classification has emerged as a pivotal diagnostic tool but is currently limited to array-based techniques. This necessitates exploration of novel technologies to streamline molecular analysis. METHODS We implemented Rapid-CNS2 - our adaptive sampling-based nanopore sequencing workflow- on 190 adult and pediatric samples at University Hospital Heidelberg and University of Nottingham. Intraoperative potential was assessed through real-time analysis followed by 24-hour sequencing for comprehensive genomic insights. Additionally, we developed MNP-Flex, a platform-agnostic version of the Heidelberg methylation classifier covering 184 CNS tumor classes. We evaluated MNP-flex on a global cohort of over 78,000 samples from methylation arrays, whole genome bisulfite sequencing, nanopore whole genome sequencing, methylation panels and Rapid-CNS2. RESULTS Rapid-CNS2 validation yielded accurate integrated diagnoses in all 190 samples. Within a crucial 30-minute timeframe, we reported accurate methylation families and arm-level copy number profiles followed by next-day reporting of fine-grained methylation classification, SNVs, focal CNVs, MGMT status, fusions and novel structural variants. Moreover, MNP-Flex achieved 92% accuracy over the validation dataset spanning over 78,000 samples from five different technologies. CONCLUSIONS The adoption of Rapid-CNS2 and MNP-Flex enables rapid intraoperative broad methylation classification and copy number alteration reporting within 30 minutes, with additional clinically relevant, fine-grained molecular insights available the following day. It offers clinicians rapid access to comprehensive molecular information critical for treatment decisions. Furthermore, MNP-Flex extends the utility of the Heidelberg methylation classifier to diverse sequencing-based data. By overcoming the limitations of currently available methods, our workflow represents a paradigm shift in the field, promising improved management of CNS tumor patients. Rapid-CNS2 can be executed with a single command, while MNP-Flex is publicly available as a web service, enhancing accessibility and usability for clinical applications

How Long-Term Contracts can Mitigate Inefficient Renegotiation Arising Due to Loss Aversion

A loss-averse buyer and seller face an uncertain environment. Should they write a long-term contract or wait until the state of the world is realized? I show that simple long-term contracts perform better than insinuated in Herweg and Schmidt (2015), even though loss aversion makes renegotiation sometimes inefficient. During renegotiation, the outcome induced by the long-term contract constitutes the reference point to which the parties compare gains and losses induced by the renegotiated transaction. Whereas Herweg and Schmidt consider that the long-term contract is always performed, it should not in "bad" states. This alters the threat point in renegotiation, making it easier to renegotiate and thus improves the performance of long-term contracts. Specific performance contracts perform better than in Herweg and Schmidt but are still problematic. Option contracts perform much better since only one party has the ex-post trade decision making it much easier to prevent the contract is inefficiently enforced due to loss aversion. My findings suggest that loss aversion alone cannot explain why parties sometimes abstain from writing beneficial long-term contracts but give important insights on how long-term contracts should be written when parties are aware they are loss averse.Revised Version: June 14, 202