Financial Expertise as an Arms Race

We propose a model in which firms involved in trading securities overinvest in financial expertise. Intermediaries or traders in the model meet and bargain over a financial asset. As in the bargaining model in Dang (2008), counterparties endogenously decide whether to acquire information, and improve their bargaining positions, even though the information creates adverse selection. We add to this setting the concept of "financial expertise" as resources invested to lower the cost of later acquiring information about the value of the asset being traded. These investments are made before the parties know about their role in the bargaining game, as proposer or responder, buyer or seller. A prisoner's dilemma arises because investments to lower information acquisition costs improve bargaining outcomes given the other party's information costs, even though the information has no social benefit. These investments lead to breakdowns in trade, or liquidity crises, in response to random but infrequent increases in asset volatilityFinancial services;over-the-counter markets;financial crisis

Why Mutual Funds “Underperform”

I propose a parsimonious model that reproduces the negative risk-adjusted performance of actively managed equity mutual funds. In the model, a fund manager can generate state-dependent active returns at a disutility. Negative expected performance and mutual fund investing simultaneously arise in equilibrium because the active return the fund manager generates covaries positively with a component of the pricing kernel that the performance measure omits, consistent with recent empirical evidence. Using data on U.S. funds, I also document new empirical evidence consistent with the model\u27s cross-sectional implications

Single- and Double-Grip Harvesters – Productive Measurements in Final Cutting of Shelterwood

To compare the performance and cost of two machine types, a time study of single-grip harvesters (SGH) and double-grip harvesters (DGH) was conducted in the final cutting of three shelterwood stands in central parts of Sweden. A randomized block design was used with one block in each stand and the treatments SGH and DGH, respectively. The stands were characterized by dense to relatively dense advanced regeneration under approximately 200 trees/ha. No significant differences were found in mean harvesting time between SGH and DGH or between stands. Fewer trees, but approximately the same volume per hour, were harvested when shelterwood stands were cut as compared with clear– cutting of ordinary stands. Despite few stems per hectare and the dense regeneration hindering the operator's field of view, final cutting was done with fairly high productivity (15.9– 34.0 m3/E15-h) and a low harvesting cost (2.7 – 6.0 USD/m3). It was concluded that both machine types gave acceptable results regarding cost and productivity. The SGH could be recommended as a good choice in general due to the low cost per machine hour as compared with the DGH, while the properties of the DGH would be beneficial in shelterwood stands with a large proportion of trees with large diameter (e.g. >7 cm) branches

Effects of vegetated buffers on salt marsh plant composition and groundwater nitrogen uptake

Vegetated shoreline buffers are a best management practice to reduce anthropogenic nitrogen influences on estuarine ecology. This study examined the effects of buffers on (1) groundwater chemistry; (2) the salt marsh border plant community (fertilized and control); and (3) Agropyron pungens response to fertilization. All buffer widths (5 to 15 meters) were somewhat effective at removing groundwater nutrients, with greater concentrations of TDN, NO3--N, NH4 +-N, and DOC found in groundwater wells upslope of the buffer. Although on-site manure storage resulted in 30-fold greater groundwater nitrate concentrations (mean 23 mg/L) at the widest buffer, no differences were found in nitrate uptake rates between buffer widths. The manure storage confounded any buffer width effect and indicated potential nitrogen saturation of the widest buffer. Fertilization increased A. pungens leaf N content (N%; p\u3c0.001); yet the response decreased with buffer width (r2 = 0.91). Buffered plots at two sites had greater species richness (+33%) and species diversity index values (+24%) than unbuffered plots. However, the inclusion of more sites in the study found no significant effect of buffer width, plant diversity, species richness or non-native species. Results suggest groundwater nitrogen interacts with buffers but appears to bypass marshes, pointing to greater importance of buffers in protecting estuaries

Compensating Financial Experts

We propose a labor market model in which financial firms compete for a scarce supply of workers who can be employed as either bankers or traders. While hiring bankers helps create a surplus that can be split between a firm and its trading counterparties, hiring traders helps the firm appropriate a greater share of that surplus away from its counterparties. Firms bid defensively for workers bound to become traders, who then earn more than bankers. As counterparties employ more traders, the benefit of employing bankers decreases. The model sheds light on the historical evolution of compensation in finance

The Labor Market for Bankers and Regulators

We propose a labor market model in which agents with heterogenous ability levels choose to work as bankers or as financial regulators. When workers extract intrinsic benefits from working in regulation (such as public-sector motivation or human capital accumulation), our model jointly predicts that bankers are, on average, more skilled than regulators and their compensation is more sensitive to performance. During financial booms, banks draw the best workers away from the regulatory sector and misbehavior increases. In a dynamic extension of our model, young regulators accumulate human capital and the best ones switch to banking in mid-career

Crommet Creek Conservation Area Management Plan

The Crommet Creek Conservation Area comprises the largest block of natural lands in the immediate Great Bay watershed, and in New Hampshire’s North Atlantic Coast Ecoregion. It includes the entire watershed of two tidal creeks that flow directly into the Great Bay Estuary. The area has been identified by the Great Bay Resource Protection Partnership as a protection priority due to the size of the natural area; the diversity of habitats and wildlife it supports; and it’s integral role in protecting the regional water quality and resources within the Great Bay Estuary. The Conservation Area includes headwater wetlands, and the entire spectrum of freshwater and estuarine wetland and aquatic communities along both Lubberland and Crommet creeks. The Great Bay is a shallow inland tidal estuary of national importance for migratory birds. The Great Bay supports 29 species of waterfowl, 27 species of shorebirds, 13 species of wading birds, osprey and bald eagle. The Estuary is unique in that it is recessed 9 miles from the ocean along the Piscataqua River. Although development is increasing in the watershed, it remains one of the more healthy and viable estuarine ecosystems on the North Atlantic coast

Asymmetric Information and Intermediation Chains

We propose a parsimonious model of bilateral trade under asymmetric information to shed light on the prevalence of intermediation chains that stand between buyers and sellers in many decentralized markets. Our model features a classic problem in economics where an agent uses his market power to inefficiently screen a privately informed counterparty. Paradoxically, involving moderately informed intermediaries also endowed with market power can improve trade efficiency. Long intermediation chains in which each trader\u27s information set is similar to those of his direct counterparties limit traders\u27 incentives to post prices that reduce trade volume and jeopardize gains to trade