Designing Free Sofware for Marketing: A Game Theoretic Approach

We develop a vertical differentiation game-theoretic model that addresses the issue of designing free software samples for attaining follow-on sales. When software samples are akin to durable goods, a Monopolist giving a free sample away is likely to engender the cannibalization of sales of its commercial product. We analyze the optimal design of free software according to two characteristics: the trial time allotted for sampling (potentially renewable) and the proportion of features included in the sample. We find that these two dimensions play different roles whenever the software product is innovative or standard. We draw implications regarding the effectiveness of marketing strategies depending on the type of software product offered by a Monopolist.Vertical Differentiation, Monopolist, Free sample, Software, Durable goods, Sales Cannibalization, Optimal Design.

The Equity Premium: Explained by GDP Growth and Consistent with Portfolio Insurance

We find that the long-run equity premium is fully explained by GDP growth and that it is consistent with a short-term portfolio insurance motive. We first derive the macroeconomic equivalent of the standard sustainable growth formula to determine the long-run average return on stocks. The average stock market return depends on the GDP/capita growth rate and the retention rate net of share repurchases. Next, we determine the economy’s return on corporate assets and show that the return on corporate debt is related to overall GDP growth. After calibrating key macro economic/finance parameters, we obtain values for expected equity and corporate debt returns that respectively match the S&P 500 and 3- month T-bill historical arithmetic average returns. Our first conclusion is that in the long-run, the equity premium is generated by economic growth. Our second key result is that the equity premium is also closely approximated by the premium paid on a put option to maintain the value of $1 invested in the market when long-term investors wish to insure against downside risk on a year-to-year basis. These results have implications regarding how risk-free debt is priced and about the economy’s capital structure.Equity Premium, GDP Growth, Corporate Debt, T-Bills, Risk-Free Rate, Downside Risk, Options, Protective Puts, Portfolio Insurance, Total Stock Return.

A General Theory of Stock Market Valuation and Return

We show that the long-term total market and average investor’s compounded stock returns are determined by GDP growth and are much less than believed because of the infeasible assumption that dividends can be fully reinvested. The long-term stock return closely approximates the return on risk-free debt, thus yielding a zero premium on a compounded per-capita basis. We demonstrate that the market earnings yield ratio (inverse P/E) is akin to a minimum expected return and a direct function of inflation and long-term real GDP per capita growth with marginal regard to risk. Our derived valuation formula is tested against the S&P 500 index and produces a 21% mean percentage tracking error, compared to 32% for the “Fed Model” over the period 1954 – 2002.Required yield, Earnings yield, Equity Premium, S&P 500 Valuation, Fed Model.

A General Theory of Stock Market Valuation and Return

We show that the long-term total market and average investor's compounded stock returns are determined by GDP growth and are much less than believed because of the infeasible assumption that dividends can be fully reinvested. The long-term stock return closely approximates the return on risk-free debt, thus yielding a zero premium on a compounded per-capita basis. We demonstrate that the market earnings yield ratio (inverse P/E) is akin to a minimum nominal expected return and a direct function of inflation and a real required yield equal to long-term real GDP per capita growth, with marginal regard to risk. Our derived valuation formula is tested against the S&P 500 index and produces a 21% mean percentage tracking error, compared to 32% for the 'Fed Model' over the period 1954 - 2002.Required yield, Earnings yield, Equity Premium, S&P 500 Valuation, Fed Model.

Sparse Gr\"obner Bases: the Unmixed Case

Toric (or sparse) elimination theory is a framework developped during the last decades to exploit monomial structures in systems of Laurent polynomials. Roughly speaking, this amounts to computing in a \emph{semigroup algebra}, \emph{i.e.} an algebra generated by a subset of Laurent monomials. In order to solve symbolically sparse systems, we introduce \emph{sparse Gr\"obner bases}, an analog of classical Gr\"obner bases for semigroup algebras, and we propose sparse variants of the $F_5$ and FGLM algorithms to compute them. Our prototype "proof-of-concept" implementation shows large speed-ups (more than 100 for some examples) compared to optimized (classical) Gr\"obner bases software. Moreover, in the case where the generating subset of monomials corresponds to the points with integer coordinates in a normal lattice polytope $\mathcal P\subset\mathbb R^n$ and under regularity assumptions, we prove complexity bounds which depend on the combinatorial properties of $\mathcal P$. These bounds yield new estimates on the complexity of solving $0$-dim systems where all polynomials share the same Newton polytope (\emph{unmixed case}). For instance, we generalize the bound $\min(n_1,n_2)+1$ on the maximal degree in a Gr\"obner basis of a $0$-dim. bilinear system with blocks of variables of sizes $(n_1,n_2)$ to the multilinear case: $\sum n_i - \max(n_i)+1$. We also propose a variant of Fr\"oberg's conjecture which allows us to estimate the complexity of solving overdetermined sparse systems.Comment: 20 pages, Corollary 6.1 has been corrected, ISSAC 2014, Kobe : Japan (2014

A Required Yield Theory of Stock Market Valuation and Treasury Yield Determination

Stock market valuation and Treasury yield determination are consistent with the Fisher effect (1896) as generalized by Darby (1975) and Feldstein (1976). The U.S. stock market (S&P 500) is priced to yield ex-ante a real after-tax return directly related to real long-term GDP/capita growth (the required yield). Elements of our theory show that: 1) real after-tax Treasury and S&P 500 forward earnings yields are stationary processes around positive means; 2) the stock market is indeed priced as the present value of expected dividends with the proviso that investors are expecting fast mean reversion of the S&P 500 nominal growth opportunities to zero. Moreover, 3) the equity premium is mostly due to business cycle risk and is a direct function of below trend expected productivity, where productivity is measured by the growth in book value of S&P 500 equity per-share. Inflation and fear-based risk premia only have a secondary impact on the premium. The premium is always positive or zero with respect to long-term Treasuries. It may be negative for short-term Treasuries when short-term productivity outpaces medium and long run trends. Consequently: 4) Treasury yields are mostly determined in reference to the required yield and the business cycle risk premium; 5) the yield spread is largely explained by the differential of long-term book value per share growth vs. near term growth, with possible yield curve inversions. Finally, 7) the Fed model is partially validated since both the S&P 500 forward earnings yield and the ten-year Treasury yield are determined by a common factor: the required yield.Fisher Effect, Required Yield, Earnings Yield, Equity Premium, S&P 500 Valuation, Fed Model, Treasury Yields, Yield Spread, Productivity, and Book Value of Equity per Share Growth.

Stainable aluminum and not aluminum content reflects bone histology in dialyzed patients

Stainable aluminum and not aluminum content reflects bone histology in dialyzed patients. Quantitative evaluation of stainable bone aluminum and measurement of bone aluminum content were done in 55 patients on chronic maintenance dialysis. All patients underwent bone biopsies. Histomorphometry of static and dynamic parameters of bone structure, bone formation and resorption, and quantitation of stainable bone aluminum at the osteoid–bone interface were performed. In addition, bone aluminum content was measured by atomic absorption spectrophotometry. Bone aluminum content was elevated in all patients (81 ± 9.6 vs. 18 ± 6 µg/g dry wt) and stainable aluminum was found in 47% of them. All patients with predominant low–turnover osteomalacia or adynamic bone disease displayed stainable bone aluminum. In contrast, stainable bone aluminum was not present in individuals with predominant–hyperparathyroid bone disease. Patients with stainable aluminum had lower bone mass (P < 0.05), higher volume and surface of lamellar osteoid (P < 0.01), less volume and surface of woven osteoid (P < 0.05 and P < 0.01), lower osteoblastic and osteoclastic indices (P < 0.01), less doubly labelled osteoid seams, lower mineral apposition rate and lower bone formation rates (P < 0.05 to P < 0.01). Stainable aluminum correlated with volume of lamellar osteoid and cellular parameters of bone formation and resorption, mineral apposition rate, and bone formation rates (P < 0.05 to P < 0.001). In contrast, bone aluminum content correlated with volume of lamellar osteoid only (P < 0.001). These findings indicate that stainable aluminum at the mineralization front and not aluminum content of bone reflects the histopathologic changes found in bone of dialyzed patients

France vétérinaire international : professional expertise to promote international "good health governance", particularly in developing countries

France Vétérinaire International (FVI) is responsible for uniting, coordinating and promoting French veterinary expertise worldwide. FVI is a non-profit organisation involved in the coordination and management of a dynamic network including 17 French public and private partners with multiple and complementary areas of expertise. The members are public institutions (Ministry of Agriculture, Foods and Forestry, Ministry of Foreign Affairs, National Veterinary Colleges, National School of Veterinary Services, National Training Institute for Ministry of Agriculture personnel, Agricultural Research Centre for International Development, French Food Environment and Labor Safety Agency, French Association for Managers and Executives of Public Veterinary Laboratories), and private organizations (Agronomists and Veterinarians Without Borders, the French Private Group for International Veterinary Cooperation to which most practitioners are affiliated, the Livestock Institute, and the Industry of Veterinary Drug and Reagent Union). FVI has therefore access to a wide range of expertise for activities related to food safety, animal health, animal welfare, laboratories diagnostics, veterinary training and research, support to veterinary administrations, audit and assessment. FVI manages, as a consortium where applicable, international programs (e.g. for FAO or OIE) and European programs (twinning, technical assistance), for which it organizes training seminars and study visits, and recruits veterinarians for expert missions. FVI focuses particularly on developing countries, providing seminars on food safety in Africa, support for "Veterinary Laboratory Network in West and Central Africa", twinning in favor of Tunisian "National Centre for Animal Health Watchfulness", etc.France Vétérinaire International (FVI) est chargé de fédérer, coordonner et promouvoir l’expertise vétérinaire française à l’international. Organisation à but non lucratif, c’est une structure opérationnelle de coordination et de management d’un réseau dynamique unissant 17 membres partenaires publics et privés aux domaines d’expertise multiples et complémentaires. FVI regroupe des institutions publiques (Ministère de l’Agriculture, de l’Agroalimentaire et de la Forêt, Ministère des Affaires Étrangères, Écoles Nationales Vétérinaires, École Nationale des Services Vétérinaires, Institut national de formation des personnel du Ministère de l’Agriculture, Centre de Coopération Internationale en Recherche Agronomique pour le Développement, Agence Nationale de Sécurité Sanitaire de l’alimentation, de l’environnement et du travail, Association française des directeurs et cadres des laboratoires vétérinaires publics d'analyses) et des organisations privées (l’ONG Agronomes et Vétérinaires Sans Frontières, la Coopération Vétérinaire Privée Française à l'International qui regroupe la plupart des praticiens, l’Institut de l’Élevage et le Syndicat de l’industrie du médicament vétérinaire et réactif). FVI dispose ainsi d’une large gamme d’expertises pour des missions en lien avec la sécurité sanitaire des aliments, la santé et la protection animale, les techniques de diagnostic de laboratoire, la formation et la recherche vétérinaire, l’appui aux administrations vétérinaires, l’audit et l’évaluation. FVI gère, le cas échéant en consortium, des programmes internationaux (pour la FAO ou l’OIE par exemple) et européens (programmes de jumelages et d’assistance technique), pour lesquels il organise des séminaires de formation, des visites d’étude et mobilise des vétérinaires pour des missions d’expertise. FVI intervient ainsi notamment dans les Pays du Sud : séminaires sur la sécurité sanitaire des aliments en Afrique, appui au « Réseau des Laboratoires vétérinaires d’Afrique de l'Ouest et du Centre », Jumelage en faveur du « Centre National de Veille Zoo-sanitaire » tunisien, etc

Macrofoundations for A (Near) 2% Inflation Target

Economists have argued that a long-term inflation target near 2% is optimal (Summers, 1991; Fischer, 1996; Goodfriend, 2002; Coenen et al., 2003; Bernanke, 2003). However, these arguments are really about why a low positive inflation rate is ideal to avoid a deflationary trap, not explaining why the specific value of 2% (or a value near it) happens to be the optimal long-run inflation rate. In line with the transaction motive literature (Baumol, 1952 and Tobin, 1956), I postulate that new forms of money and technological progress generate cost savings in the transaction technology by comparison to barter. I derive the optimal velocity of money, which depends on real GDP/capita and the net return on depository institutions’ assets. As long as progress is on average biased towards new forms of money, the velocity of money will grow at a pace slower than long-term real GDP/capita growth; i.e. less than 2%. The empirical tests using Johansen’s (1995) VECM approach for the U.S. over the period 1959-2007 confirm that this is indeed the case. Along with a parameter representing the type of bias in the technical progress affecting transactions, the depository institutions’ overall mean leverage ratio also appears as a key parameter in the long-run equilibrium equation describing the behavior of the velocity of narrow money (M1, M1RS and M1S). I show that a ‘naïve’ Friedman k-percent monetary rule that aims at growing the money supply at the same rate as real GDP naturally leads to a rate of inflation equal to the rate of velocity growth. Hence, setting an inflation target near but below 2% makes economic sense. In spite of previously held beliefs, a money growth objective is compatible with an interest-targeting objective; i.e. a derived Taylor (1993) type rule. A Taylor rule that embeds the optimal inflation target defined here is more flexible to account for possible changes in velocity vs. a pure money growth rule

La triple existence de l’argent dans les îles Loyauté (Nouvelle-Calédonie)

Comment ce petit bout de papier coloré que l’on appelle « billet de banque » peut-il faire autant peur aux Kanaks ? Un objet aussi inoffensif posséderait-il réellement cet étrange pouvoir de révolutionner la société et la culture? C’est à partir de descriptions ethnographiques effectuées en Nouvelle‑Calédonie sur l’île de Maré que je voudrai apporter des éléments de réponse à ces questions. Les spécificités de l’argent, si elles existent, ne résident pas, comme le prétendent les sens communs et savants, occidentaux et mélanésiens, dans son prétendu pouvoir intrinsèque de révolutionner les sociétés et les cultures mais, bien plutôt, dans son triple registre de significations : des significations contextuelles, une signification « idéologique » universalisante, et enfin des propriétés matérielles particulières qui sont propres à l’objet « billet de banque ».How is it that the small piece of coloured paper called a « banknote » can provoke such fear among Kanaks? Could such an inoffensive object really possess this strange power to revolutionise society and culture? On the basis of ethnographic descriptions carried out in New Caledonia on the island of Maré, I make an attempt to answer these questions. The specificity of money, if it exists, does not reside in its supposed intrinsic power to revolutionise societies and cultures – as Western and Melanesian common‑sense and scientific opinion suppose – but rather in its three levels of meaning: contextual meanings, a universalising « ideological » meaning, and finally particular material properties which are peculiar to the « banknote » as an object