Optimal Design of Social Comparison Effects: Setting Reference Groups and Reference Points

In this paper, we study how social planners should exploit social comparisons to pursue their objectives. We consider two modes of social comparison, referred to as behind-averse and ahead-seeking behaviors, depending on whether individuals experience a utility loss from underperforming or a utility gain from overperforming relative to their peers. Modeling social comparison as a game between players, we find that ahead-seeking behavior leads to output polarization, whereas behind-averse behavior leads to output clustering. A social planner can mitigate these effects in two ways: (i) by providing the full reference distribution of outputs instead of an aggregate reference point based on the average output and (ii) by assigning players into uniform rather than diverse reference groups. Social planners may thus need to tailor the reference structure to the predominant mode of social comparison and their objective. A performance-focused social planner may set the reference structure so as to maximize the output of either the top or the bottom player depending on whether she puts greater marginal weight to larger or smaller outputs. When the social planner also cares about utility, she faces a dilemma because performance optimization may not be aligned with utility maximization. Inevitably, the social planner will have to confront equity issues because better performance may not reflect greater effort or greater ability

The Time–Money Trade-Off for Entrepreneurs: When to Hire the First Employee?

For many early-stage entrepreneurs, hiring the first employee is a critical step in the firm’s growth. Doing so often requires significant time and monetary investments. To understand the trade-offs involved in deciding when to hire the first employee and how hiring differs in entrepreneurial settings from more established firm settings, we present a simple growth model that depends on two critical inputs for revenue generation: the entrepreneur’s time and money. We show that without hiring, the entrepreneur’s time eventually becomes more valuable than money in contributing to the firm’s growth. In that context, the value of the employee is driven by how much relief he provides to the entrepreneur. We characterize the optimal timing of hiring in terms of the firm’s cash position and how the firm is affected if it requires an upfront fixed investment in time and/or money. We find that the upfront investment in time needed for hiring cannot be converted to an equivalent upfront investment in money and that mistiming hiring can be very costly, especially when these upfront investments are high

Thermal performance characterisation using time series data : statistical guidelines: report of Subtask 3.2

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H5N1 Whole-Virus Vaccine Induces Neutralizing Antibodies in Humans Which Are Protective in a Mouse Passive Transfer Model

BACKGROUND: Vero cell culture-derived whole-virus H5N1 vaccines have been extensively tested in clinical trials and consistently demonstrated to be safe and immunogenic; however, clinical efficacy is difficult to evaluate in the absence of wide-spread human disease. A lethal mouse model has been utilized which allows investigation of the protective efficacy of active vaccination or passive transfer of vaccine induced sera following lethal H5N1 challenge. METHODS: We used passive transfer of immune sera to investigate antibody-mediated protection elicited by a Vero cell-derived, non-adjuvanted inactivated whole-virus H5N1 vaccine. Mice were injected intravenously with H5N1 vaccine-induced rodent or human immune sera and subsequently challenged with a lethal dose of wild-type H5N1 virus. RESULTS: Passive transfer of H5N1 vaccine-induced mouse, guinea pig and human immune sera provided dose-dependent protection of recipient mice against lethal challenge with wild-type H5N1 virus. Protective dose fifty values for serum H5N1 neutralizing antibody titers were calculated to be ≤1∶11 for all immune sera, independently of source species. CONCLUSIONS: These data underpin the confidence that the Vero cell culture-derived, whole-virus H5N1 vaccine will be effective in a pandemic situation and support the use of neutralizing serum antibody titers as a correlate of protection for H5N1 vaccines

United we stand? Coordinating capacity investment and allocation in joint ventures

Among the recent innovative strategies for coping with product variety and market risk some firms have partnered to leverage economies of scale and risk pooling by sharing manufacturing capacity. In this paper we study how to structure such a joint venture to achieve full efficiency at low transaction costs. Specifically, we study whether capacity should be owned jointly or separately. Overall, we find that the two ownership structures have complementary strengths and weaknesses in term of their incentives for coordinating capacity allocation and investment. On the one hand, capacity allocation is simple to coordinate under joint ownership, but may entail high transaction costs under separate ownership when the joint venture consists of many firms with different profit margins. On the other hand, capacity investments remain simple to coordinate under separate ownership, but are efficient under joint ownership only in the presence of large economies of scale or asymmetric demands or asymmetric profit margins, and would otherwise entail high transaction costs. Our analysis thus characterizes the trade-off between economic benefits and transaction costs in the choice of capacity ownership structure