Liquidity constraints and credit subsidies in auctions

I consider an auction with participants that differ in valuation and access to liquid assets. Assuming credit is costly (e.g. due to moral hazard considerations) different auction rules establish different ways of screening valuation-liquidity pairs. The paper shows that standard auction forms result in different allocation rules. When the seller can deny access to capital markets or offer credit subsidies, she gains an additional tool to screen agents. The paper derives conditions under which the seller increases profits by way of subsidizing loans. In particular, in a second price auction, the seller always benefits from offering small subsidies. The result extends to a non-auction setting to show that a monopolist may use credit subsidies as a price discrimination device

MORAL HAZARD IN TEAMS WITH LIMITED PUNISHMENTS AND MULTIPLE OUTPUTS

This paper studies incentive provision with limited punishments. It revisits the moral hazard problem with risk neutral parties and solves for optimal compensation schemes in situations where agents' participation is implied by a limited liability constraint. Providing minimum cost incentives to teams or individuals requires awarding high bonuses only when extreme performances are observed. Even when the first-best is attainable, the principal may prefer to induce more (or less) effort than it is sociably desirable because she only cares about the marginal cost of motivation. With positive production externalities joint bonuses are optimal. With limited liability on the principal's side, the optimal scheme becomes a tournament---even in the absence of externalities. The paper also looks at conditions that favor one incentive scheme over another when agents adapt their strategies as information becomes available.

LIQUIDITY CONSTRAINTS AND CREDIT SUBSIDIES IN AUCTIONS

I consider an auction with participants that differ in valuation and access to liquid assets. Assuming credit is costly (e.g. due to moral hazard considerations) different auction rules establish different ways of screening valuation-liquidity pairs. The paper shows that standard auction forms result in different allocation rules. When the seller can deny access to capital markets or offer credit subsidies, she gains an additional tool to screen agents. The paper derives conditions under which the seller increases profits by way of subsidizing loans. In particular, in a second price auction, the seller always benefits from offering small subsidies. The result extends to a non-auction setting to show that a monopolist may use credit subsidies as a price discrimination device.

Creating a Vision for XYZ Research Corporation: A Case Study

A strategic analysis was developed for XYZ Research Corporation (the true company's name is disguised). The strategic analysis involved a series of visits to the company to conduct focus groups with its employees and management. Five focus groups were carried out at XYZ Research Corporation. This method proved to be effective and valuable when aiming to gather detailed information on the specifics of a firm's operation. Information and insights on the company and its business that would not become evident through any kind of meticulous financial or economic analysis of the company's and industry's numbers - which in fact were unavailable or scarce - was efficiently obtained by personal communication from the employees in the interviews. The focus group and interview method is recommended as a valid alternative to gathering detailed data and information when facing limited availability of reliable quantitative economic data on sales, size, and other information on the industry. The amount and quality of person-to-person information gathered in the interviews made the questionnaire a more powerful tool versus the alternative of simply mailing it. In the process of developing a strategic plan for XYZ, data and information used to write an undergraduate level teaching case study was gathered. The focus group method allowed for digging out intricate functional relationships within the company and between the company and the industry, which allowed for writing a more complete and educationally interesting case study.Focus Groups, Strategic Analysis, Food Safety, Outsourcing, Research Methods/ Statistical Methods, A22, C99, L21, M10,

Bounds on area and charge for marginally trapped surfaces with cosmological constant

We sharpen the known inequalities $A \Lambda \le 4\pi (1-g)$ and $A\ge 4\pi Q^2$ between the area $A$ and the electric charge $Q$ of a stable marginally outer trapped surface (MOTS) of genus g in the presence of a cosmological constant $\Lambda$. In particular, instead of requiring stability we include the principal eigenvalue $\lambda$ of the stability operator. For $\Lambda^{*} = \Lambda + \lambda > 0$ we obtain a lower and an upper bound for $\Lambda^{*} A$ in terms of $\Lambda^{*} Q^2$ as well as the upper bound $Q \le 1/(2\sqrt{\Lambda^{*}})$ for the charge, which reduces to $Q \le 1/(2\sqrt{\Lambda})$ in the stable case $\lambda \ge 0$. For $\Lambda^{*} < 0$ there remains only a lower bound on $A$. In the spherically symmetric, static, stable case one of the area inequalities is saturated iff the surface gravity vanishes. We also discuss implications of our inequalities for "jumps" and mergers of charged MOTS.Comment: minor corrections to previous version and to published versio

Are Time-Domain Self-Force Calculations Contaminated by Jost Solutions?

The calculation of the self force in the modeling of the gravitational-wave emission from extreme-mass-ratio binaries is a challenging task. Here we address the question of the possible emergence of a persistent spurious solution in time-domain schemes, referred to as a {\em Jost junk solution} in the literature, that may contaminate self force calculations. Previous studies suggested that Jost solutions are due to the use of zero initial data, which is inconsistent with the singular sources associated with the small object, described as a point mass. However, in this work we show that the specific origin is an inconsistency in the translation of the singular sources into jump conditions. More importantly, we identify the correct implementation of the sources at late times as the sufficient condition guaranteeing the absence of Jost junk solutions.Comment: RevTeX. 5 pages, 2 figures. Version updated to match the contents of the published articl