Using privileged information to manipulate markets: insiders, gurus, and credibility

Access to private information is shown to generate both the incentives and the ability to manipulate asset markets through strategically distorted announcements. The fact that privileged information is noisy interferes with the public's attempts to learn whether such announcements are honest; it allows opportunistic individuals to manipulate prices repeatedly, without ever being fully found out. This leads us to extend Sobel's [1985] model of strategic communication to the case of noisy private signals. Our results show that when truthfulness is not easily verifiable, restrictions on trading by insiders may be needed to preserve the integrity of information embodied in prices

Higher Algebraic Structures and Quantization

We derive (quasi-)quantum groups in 2+1 dimensional topological field theory directly from the classical action and the path integral. Detailed computations are carried out for the Chern-Simons theory with finite gauge group. The principles behind our computations are presumably more general. We extend the classical action in a d+1 dimensional topological theory to manifolds of dimension less than d+1. We then ``construct'' a generalized path integral which in d+1 dimensions reduces to the standard one and in d dimensions reproduces the quantum Hilbert space. In a 2+1 dimensional topological theory the path integral over the circle is the category of representations of a quasi-quantum group. In this paper we only consider finite theories, in which the generalized path integral reduces to a finite sum. New ideas are needed to extend beyond the finite theories treated here.Comment: 62 pages + 16 figures (revised version). In this revision we make some small corrections and clarification

THERMAL CONDUCTIVITY FOR A NOISY DISORDERED HARMONIC CHAIN

We consider a $d$-dimensional disordered harmonic chain (DHC) perturbed by an energy conservative noise. We obtain uniform in the volume upper and lower bounds for the thermal conductivity defined through the Green-Kubo formula. These bounds indicate a positive finite conductivity. We prove also that the infinite volume homogenized Green-Kubo formula converges

Heat Conduction and Entropy Production in Anharmonic Crystals with Self-Consistent Stochastic Reservoirs

We investigate a class of anharmonic crystals in $d$ dimensions, $d\ge 1$, coupled to both external and internal heat baths of the Ornstein-Uhlenbeck type. The external heat baths, applied at the boundaries in the 1-direction, are at specified, unequal, temperatures \tlb and \trb. The temperatures of the internal baths are determined in a self-consistent way by the requirement that there be no net energy exchange with the system in the non-equilibrium stationary state (NESS). We prove the existence of such a stationary self-consistent profile of temperatures for a finite system and show it minimizes the entropy production to leading order in (\tlb -\trb). In the NESS the heat conductivity $\kappa$ is defined as the heat flux per unit area divided by the length of the system and (\tlb -\trb). In the limit when the temperatures of the external reservoirs goes to the same temperature $T$, $\kappa(T)$ is given by the Green-Kubo formula, evaluated in an equilibrium system coupled to reservoirs all having the temperature $T$. This $\kappa(T)$ remains bounded as the size of the system goes to infinity. We also show that the corresponding infinite system Green-Kubo formula yields a finite result. Stronger results are obtained under the assumption that the self-consistent profile remains bounded.Comment: to appear in J. Stat. Phy

Entanglement between Demand and Supply in Markets with Bandwagon Goods

Whenever customers' choices (e.g. to buy or not a given good) depend on others choices (cases coined 'positive externalities' or 'bandwagon effect' in the economic literature), the demand may be multiply valued: for a same posted price, there is either a small number of buyers, or a large one -- in which case one says that the customers coordinate. This leads to a dilemma for the seller: should he sell at a high price, targeting a small number of buyers, or at low price targeting a large number of buyers? In this paper we show that the interaction between demand and supply is even more complex than expected, leading to what we call the curse of coordination: the pricing strategy for the seller which aimed at maximizing his profit corresponds to posting a price which, not only assumes that the customers will coordinate, but also lies very near the critical price value at which such high demand no more exists. This is obtained by the detailed mathematical analysis of a particular model formally related to the Random Field Ising Model and to a model introduced in social sciences by T C Schelling in the 70's.Comment: Updated version, accepted for publication, Journal of Statistical Physics, online Dec 201

Can Tailored Communications Motivate Volunteers? A Field Experiment

Over 25% of the US population volunteers. Clary et al. (1998) devised a survey that identifies a volunteer’s primary motive for volunteering. We investigate the effect of tailoring the communications that volunteers receive from their organizations (e.g., printed newsletters, update emails) to each volunteer’s stated motive for volunteering affects volunteer performance. We find that in general, such tailoring has no effect, but that for volunteers who are motivated primarily by the pursuit of career-related benefits, such tailoring can have a substantial, positive effect on hours volunteered. We also find that the (in)effectiveness of this tailoring does not depend upon the volunteers’ knowledge of the tailoring. The tailoring of communications does not involve the explicit manipulation of material incentives. This renders it particularly attractive given the emergence of evidence on how extrinsic incentives can crowd out intrinsic incentives, especially in the domain of charitable contributions

Entwicklung und Ungleichheit von Fähigkeiten : Anmerkungen aus ökonomischer Sicht

Nirgends sonst im ökonomischen Handeln fallen Kosten und Nutzen im Zeitablauf und aufgeteilt nach Investoren und Nutznießern so eklatant auseinander wie bei Bildungsinvestitionen. In dem vorliegenden Beitrag wird argumentiert, dass in der sozialen Realität die Bildungsungleichheit im Vorschulalter eine der wichtigsten Ursachen für die Ungleichheit von Fähigkeiten und Kompetenzen auch im Schulalter und im Erwerbsleben ist. Für benachteiligte Kinder scheint somit die Bildungsungleichheit vor dem Schulalter bei uns, ebenso wie in anderen Ländern mit hohen Bildungsausgaben und hoher Wirtschaftskraft ihren schicksalhaften Charakter noch keineswegs verloren zu haben. Um dies zu ändern, bleibt es eine vordringliche Aufgabe auch der Bildungspolitik, den Zugang zu einer angemessenen emotionalen Fürsorge von Anfang an weiter zu verbessern. Darüber hinaus ist es notwendig, den betroffenen Kindern bis ins Jugendalter altersgemäß und individuell zur Seite zu stehen