Individual vs. Collective Bargaining in the Large Firm Search Model

We analyze the welfare and employment effects of different wage bargaining regimes. Within the large firm search model, we show that collective bargaining affects employment via two channels. Collective bargaining exerts opposing effects on job creation and wage setting. Firms have a stronger incentive for strategic employment, while workers benefit from the threat of a strike. We find that the employment increase due to the strategic motive is dominated by the employment decrease due to the increase in workers' threat point. In aggregate equilibrium, employment is ineciently low under collective bargaining. But it is not always true that equilibrium wages exceed those under individual bargaining. If unemployment benefits are sufficiently low, collectively bargained wages are smaller. The theory sheds new light on policies concerned with strategic employment and the relation between replacement rates and the extent of collective wage bargaining

Dynamic Bonus Pools

We analyze a two-period agency problem with limited liability and nonverifiable information. The principal commits to a dynamic bonus pool comprising a fixed total payment that may be distributed over time to the agent and a third party. We find that the optimal two-period contract features memory. If the agent succeeds in the first-period, second-period incentives are weakened whereas higher-powered incentives are provided if he fails. The two-period bonus pool offers a complementary reason for why third-party payments are not commonly observed in practice

Smoking Bans in the Presence of Social Interaction

This paper analyzes the welfare effects of a public smoking ban in bars. We construct a model that captures crucial features of bar life: competing bars, social interaction, and heterogenous preferences for a smoking ban. Smokers and non-smokers simultaneously choose a bar given their preferences for meeting other people. Bars anticipate the behavior of individuals and choose the smoking regime strategically. Since the (dis)utility from smoking and social interaction are substitutes, the smoking regime is a stronger coordination device if the disutility from smoking is large. If all bars allow smoking in equilibrium, a public smoking ban enhances welfare

The Strategic Effects of Smoking Bans

We analyse the welfare effects of a publicly imposed smoking ban in privately owned places like bars. In an economy where households have heterogenous (positive and negative) attitudes towards smoking bans, bars can use the smoking regime choice as a strategic variable. In doing so, bars may endogenously implement a product differentiation. Focusing on the possibility to separate markets, we derive the Nash equilibrium of the decentral economy in a setting in which duopoly bars compete in capacity and choose the smoking regime. We show how the smoking regime choice is a function of the heterogeneity of households. Moreover, we show that the social planer implements the smoking regime obtained in the decentral economy. As such, imposing smoking bans is welfare decreasing in an economy in which bar landlords chose to allow smoking.Smoking Ban, Endogenous Product Differentiation

Deciding when to decide : time-variant sequential sampling models explain the emergence of value-based decisions in the human brain

The cognitive and neuronal mechanisms of perceptual decision making have been successfully linked to sequential sampling models. These models describe the decision process as a gradual accumulation of sensory evidence over time. The temporal evolution of economic choices, however, remains largely unexplored. We tested whether sequential sampling models help to understand the formation of value-based decisions in terms of behavior and brain responses. We used functional magnetic resonance imaging (fMRI) to measure brain activity while human participants performed a buying task in which they freely decided upon how and when to choose. Behavior was accurately predicted by a time-variant sequential sampling model that uses a decreasing rather than fixed decision threshold to estimate the time point of the decision. Presupplementary motor area, caudate nucleus, and anterior insula activation was associated with the accumulation of evidence over time. Furthermore, at the beginning of the decision process the fMRI signal in these regions accounted for trial-by-trial deviations from behavioral model predictions: relatively high activation preceded relatively early responses. The updating of value information was correlated with signals in the ventromedial prefrontal cortex, left and right orbitofrontal cortex, and ventral striatum but also in the primary motor cortex well before the response itself. Our results support a view of value-based decisions as emerging from sequential sampling of evidence and suggest a close link between the accumulation process and activity in the motor system when people are free to respond at any time

Do not trust me: Using malicious IdPs for analyzing and attacking Single Sign-On

Single Sign-On (SSO) systems simplify login procedures by using an an Identity Provider (IdP) to issue authentication tokens which can be consumed by Service Providers (SPs). Traditionally, IdPs are modeled as trusted third parties. This is reasonable for SSO systems like Kerberos, MS Passport and SAML, where each SP explicitely specifies which IdP he trusts. However, in open systems like OpenID and OpenID Connect, each user may set up his own IdP, and a discovery phase is added to the protocol flow. Thus it is easy for an attacker to set up its own IdP. In this paper we use a novel approach for analyzing SSO authentication schemes by introducing a malicious IdP. With this approach we evaluate one of the most popular and widely deployed SSO protocols - OpenID. We found four novel attack classes on OpenID, which were not covered by previous research, and show their applicability to real-life implementations. As a result, we were able to compromise 11 out of 16 existing OpenID implementations like Sourceforge, Drupal and ownCloud. We automated discovery of these attacks in a open source tool OpenID Attacker, which additionally allows fine-granular testing of all parameters in OpenID implementations. Our research helps to better understand the message flow in the OpenID protocol, trust assumptions in the different components of the system, and implementation issues in OpenID components. It is applicable to other SSO systems like OpenID Connect and SAML. All OpenID implementations have been informed about their vulnerabilities and we supported them in fixing the issues

Real-time macroeconomic data and ex ante predictability of stock returns

We report results on the ex ante predictability of monthly excess stock returns in Germany using real-time and revised macroeconomic data. Our real-time macroeconomic data cover the period 1994-2005. We report three results. 1) Real-time macroeconomic data did not contribute much to ex ante stock-return predictability. 2) The performance of an investor who had to rely on noisy real-time macroeconomic data would have been comparable to the performance of an investor who had access to revised macroeconomic data. 3) In real time, it is important for an investor to know which real-time variable to use for predicting stock returns. --Ex ante predictability of stock returns,real-time macroeconomic data,performance of investment strategies,Germany

End-effects of strongly charged polyelectrolytes - a molecular dynamics study

We investigate end-effects in the ion distribution around strongly charged, flexible polyelectrolytes with a quenched charge distribution by molecular dynamics simulations of dilute polyelectrolyte solutions. We take the counterions explicitly into account and calculate the full Coulomb interaction via an Ewald summation method. We find that the free counterions of the solution are distributed in such a way that a fraction of the chain charges is effectively neutralized. This in turn leads to an effective charge distribution which is similar to those found for weakly charged titrating polyelectrolytes that have an annealed charge distribution. The delicate interplay between the electrostatic interactions, the chain conformation and the counterion distribution is studied in detail as a function of different system parameters such as the chain length Nm, the charge fraction f, the charged particle density rho, the ionic strength and the solvent quality. Comparisons are made with predictions from a scaling theory.Comment: 20 pages, 10 figures. J. Chem. Phys, to appear June 200