Public information and IPO underpricing

We analyze the effect of public information on rational investors' incentives to reveal private information during the bookbuilding process and their demand for allocations in the IPO. Our model generates several new predictions. First, investors require more underpricing to truthfully reveal positive private information in bear markets than in bull markets (the incentive effect). Second, the fraction of positive private signals and of underpriced IPOs is increasing in market returns (the demand effect). Combined, these two effects can explain why IPO underpricing is positively related to pre-issue market returns, consistent with extant evidence. Using a sample of 5,000 U.S. IPOs from 1981-2008, we show that the empirical implications of the model are borne out in the data.Public information; partial adjustment; underpricing; IPOs; bookbuilding

The Rise and Fall of the Oslo School

In 1931 Ragnar Frisch became professor at the University of Oslo. By way of his research, a new study programme and new staff he created the ”Oslo School”, characterised by mathematical modelling, econometrics, economic planning and scepticism towards the market economy. Consequently, detailed state economic planning and governance dominated Norwegian economic policy for three decades after WWII. In the 1970s the School’s dominance came to an end when the belief in competitive markets gained a foothold and the economy had poor performance. As a result a decentralized market economy was reintroduced. However, mathematical modelling and econometrics remain in the core of most economic programmes.

Probiotics in gnotobiotic mice: Short-chain fatty acids production in vitro and in vivo

Several bacterial strains are currently used as probioties. Sixteen of them belonging to the genera: Bifidobacterium. Enterococcus. Lactobacillus and Streptococcus, were selected to test short-ehain fatty acids (StJFAs) production in w‘tm and/‘er in viva. The probiotic strains were monoeultivated in specific media and/or monoassoeiated with NMRl-Kl germfree (GF) mice. The individual and total amounts of SCFAs were measured in the media and in the large intestinal content of the ex-GF mice. All the samples were assayed by gas-liquid chromatography. We found that commercially available media contain detectable amounts of acetic and propionic acids. When cultivated in vitro. none of the probiotie strains was able to increase the amounts of SCFAS present in the medium. Rather, a tendency to lowering the concentration of SCFAs following cultivation. was observed. We also found that commercially available laboratory rodents chow contained detectable amount of all SCFAs. When the probiotics were monoinoculated t0 GF animals, nine out of sixteen groups of mice showed higher amount of intestinal SCFAS than in the GF control group. Acetic acid was the dominant one. In all eases. however, the values of the SCFAs were far from those found in conventional mice.The results clearly underline the importance of working with laboratory animals with a known flora. i. e. gnotobiotie animals, when the biochemical “profile" eta prohiotie is worked out

Impacts of reindeer grazing on soil properties on Finnmarksvidda, northern Norway

Numerous investigations have documented changes in vegetation due to reindeer grazing in Finnmark County, Northern Norway. However, rather few studies have focused on impacts of reindeer grazing on soil properties. The aim of this investigation was to identify possible changes in physical and chemical soil properties due to reindeer grazing. Furthermore, root distribution was detected. At four different locations on Finnmarksvidda three sample sites each were selected subjectively according to lichen and plant cover: A) ample, B) reduced, and C) poor lichen and plant cover. It was supposed that differences in lichen and plant cover were due to differences in reindeer grazing intensity. Results showed that the organic layer beneath ample lichen cover had an about 20% higher CEC and a 30—50% higher concentration of plant available Ca and Mg and total Mg compared to those beneath reduced ones. At sites with poor lichen and plant cover, an organic layer was mostly missing. The exposed mineral Eh-horizons at these sites had a significant (P<0.05) higher organic C content, higher CEC, concentrations of total P, Ca and K, and plant available K, when compared to E-horizons beneath better lichen covers. Rooting depth and amounts of plant available water in the rooting zone were lower at sites with reduced and poor lichen cover. A relation was found between soil organic C and CEC for all soil samples, indicating that soil organic matter is an essential key factor for soil fertility at the investigate sites on Finnmarksvidda. Assuming that differences in lichen and plant cover are related to differences in grazing intensity, results indicate that overgrazing by reindeers can cause a significant degradation of the organic layer, followed by significant losses of essential plant nutrients, a reduction in plant available water and consequently soil fertility

Aggregates explain the high clay retention of small constructed wetlands : a micromorphological study

Earlier studies have shown that small constructed wetlands are more efficient as sedimentation basins for eroded soil material than expected from calculations based on detention time. It has been suggested that this is caused by sedimentation of aggregates. The present microscopic study of thin sections made from undisturbed samples of wetland sediments confirmed that the fine silt and clay fractions are present in aggregated form. Aggregates from the wetland sediments had the same mineralogical composition as those from the corresponding arable land, but were more rounded, indicating erosion during transport. To prevent breakdown of aggregates, wetlands should therefore be constructed as close to the source of erosion as possible. A correct prediction of particle retention in constructed wetlands has to take into account the presence of aggregates. Textural analysis methods, which require clay dispersion pre-treatment, are not suitable for the calculation of the retention of fine silt and clay

Average crack-front velocity during subcritical fracture propagation in a heterogeneous medium

We study the average velocity of crack fronts during stable interfacial fracture experiments in a heterogeneous quasibrittle material under constant loading rates and during long relaxation tests. The transparency of the material (polymethylmethacrylate) allows continuous tracking of the front position and relation of its evolution to the energy release rate. Despite significant velocity fluctuations at local scales, we show that a model of independent thermally activated sites successfully reproduces the large-scale behavior of the crack front for several loading conditions

Partial Adjustment to Public Information in the Pricing of IPOs

Extant literature shows that IPO first-day returns are correlated with market returns preceding the issue. We propose a rational explanation for this puzzling predictability by adding a public signal to Benveniste and Spindt (1989)’s information-based framework. A novel result of our model is that the compensation required by investors to truthfully reveal their information decreases with the public signal. This “incentive effect” receives strong empirical support in a sample of 6300 IPOs in 1983–2012. Controlling for the incentive effect, the positive relation between initial returns and pre-issue market returns disappears for top-tier underwriters, where the order book is held to be most informative, effectively resolving the predictability puzzle