Acquisition of/stochastic evidence

We explore two highly interrelated models of "hard information." In the evidence-acquisition model, an agent with private information searches for evidence to show to the principal about her type. In the signal-choice model, a privately informed agent chooses an action which generates a random signal whose realization may be correlated with her type. We show that the signal-choice model is a special case and, under certain conditions, a reduced form of the evidence-acquisition model. We develop tools for characterizing optimal mechanisms for these models by giving conditions under which some aspects of the principal's optimal choices can be identified only from the information structure, without regard to the utility functions or the principal's priors. We also give a novel result on conditions under which there is no value to commitment for the principal.First author draf

Disclosure and choice

An agent chooses among projects with random outcomes. His payoff is increasing in the outcome and in an observer's expectation of the outcome. With some probability, the agent can disclose the true outcome to the observer. We show that choice is inefficient: the agent favors riskier projects even with lower expected returns. If information can be disclosed by a challenger who prefers lower beliefs of the observer, the chosen project is excessively risky when the agent has better access to information, excessively risk{averse when the challenger has better access, and efficient otherwise. We also characterize the agent's worst-case equilibrium payoff

Successful Takeovers without Exclusion

While most takeover models assume atomistic stock-holders, we analyze a single-raider model with finitely many stockholders. Because the raider can always make some stockholders pivotal, he can overcome the free-rider problem identified by Grossman and Hart (1980) and others in atomistics-stockholder models and profitably take over even without exclusion. One might expect that it would be harder for the raider to make stockholders of more widely held firms pivotal and that exclusion would thus become necessary; however, the infinite-stockholder game cannot yield this conclusion. We also consider the limit of the finite-stockholder game and give conditions under which exclusion is unnecessary. Finally, we show that exclusion leads to the possibility of inefficient takeovers.Center for Research on Economic and Social Theory, Department of Economics, University of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/100765/1/ECON022.pd

Stock Price Manipulation Through Takeover Bids

The possibility that a takeover bid is designed solely to allow the bidder to drive up the stock price, sell his holdings at the higher price and drop the bid has not been studied nor incorporated into analyses of takeovers. The purpose of this paper is to explore the viability of this type of manipulation and its effects on takeover attempts.Center for Research on Economic and Social Theory, Department of Economics, University of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/100754/1/ECON021.pd

Provision of Public Goods: Fully Implementing the Core through Private Contributions

Standard economic intuition would say that private provision of public goods will be inefficient due to free-rider problems. This view is in contrast to the results in the literature on full implementation where it is shown that (under certain conditions) games exist which only have efficient equilibria. The games usually used to demonstrate existence are quite complex and seem “unnatural†possibly leading to the perception that implementation requires a central authority to choose and impose the game. In a simple public goods setting, we show that a very natural game—similar to one often used elsewhere in the literature to model private provision—in fact fully implements the core of this economy in undominated perfect equilibria. More specifically, we consider a complete information economy with one private good and two possible social decisions. Agents voluntarily contribute any non-negative amount of the private good they choose and the social decision is to provide the public good iff contributions are sufficient to pay for it. The contributions are refunded otherwise. The set of undominated perfect equilibrium outcomes of this game is exactly the core of the economy. We give some extensions of this result, discuss the role of perfection and alternative equilibrium notions, and discuss the intuition and implications of the results.Center for Research on Economic and Social Theory, Department of Economics, University of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/100743/1/ECON020.pd

Takeover Bids, Defensive Stock Repurchases, and the Efficient Allocation of Corporate Control

The objective of this paper is to define a simple form of "fair" competition between the manager and the raider for corporate control, and then explore the characteristics of the resulting allocation process. In particular, we let the raider make one any-or-all bid for sharaes in the firm, and allow the manager to respond by declaring support or opposition and if opposition by making a bid to repurchase a fixed number of the outstanding shares. In doing so, we rule out a variety of defensive tactics, such as greenmail, poison pills, or simply imposing endless delays on the process, since these tactics are available only to the manager and so are "unfair." Use of a repurchase bid as a defensive tactic has become more common recently, and we provide a formal analysis of when and why it can be used successfully.Center for Research on Economic and Social Theory, Department of Economics, University of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/100709/1/ECON017.pd

Development and Validation of a Risk Score for Chronic Kidney Disease in HIV Infection Using Prospective Cohort Data from the D:A:D Study

Ristola M. on työryhmien DAD Study Grp ; Royal Free Hosp Clin Cohort ; INSIGHT Study Grp ; SMART Study Grp ; ESPRIT Study Grp jäsen.Background Chronic kidney disease (CKD) is a major health issue for HIV-positive individuals, associated with increased morbidity and mortality. Development and implementation of a risk score model for CKD would allow comparison of the risks and benefits of adding potentially nephrotoxic antiretrovirals to a treatment regimen and would identify those at greatest risk of CKD. The aims of this study were to develop a simple, externally validated, and widely applicable long-term risk score model for CKD in HIV-positive individuals that can guide decision making in clinical practice. Methods and Findings A total of 17,954 HIV-positive individuals from the Data Collection on Adverse Events of Anti-HIV Drugs (D:A:D) study with >= 3 estimated glomerular filtration rate (eGFR) values after 1 January 2004 were included. Baseline was defined as the first eGFR > 60 ml/min/1.73 m2 after 1 January 2004; individuals with exposure to tenofovir, atazanavir, atazanavir/ritonavir, lopinavir/ritonavir, other boosted protease inhibitors before baseline were excluded. CKD was defined as confirmed (>3 mo apart) eGFR In the D:A:D study, 641 individuals developed CKD during 103,185 person-years of follow-up (PYFU; incidence 6.2/1,000 PYFU, 95% CI 5.7-6.7; median follow-up 6.1 y, range 0.3-9.1 y). Older age, intravenous drug use, hepatitis C coinfection, lower baseline eGFR, female gender, lower CD4 count nadir, hypertension, diabetes, and cardiovascular disease (CVD) predicted CKD. The adjusted incidence rate ratios of these nine categorical variables were scaled and summed to create the risk score. The median risk score at baseline was -2 (interquartile range -4 to 2). There was a 1: 393 chance of developing CKD in the next 5 y in the low risk group (risk score = 5, 505 events), respectively. Number needed to harm (NNTH) at 5 y when starting unboosted atazanavir or lopinavir/ritonavir among those with a low risk score was 1,702 (95% CI 1,166-3,367); NNTH was 202 (95% CI 159-278) and 21 (95% CI 19-23), respectively, for those with a medium and high risk score. NNTH was 739 (95% CI 506-1462), 88 (95% CI 69-121), and 9 (95% CI 8-10) for those with a low, medium, and high risk score, respectively, starting tenofovir, atazanavir/ritonavir, or another boosted protease inhibitor. The Royal Free Hospital Clinic Cohort included 2,548 individuals, of whom 94 individuals developed CKD (3.7%) during 18,376 PYFU (median follow-up 7.4 y, range 0.3-12.7 y). Of 2,013 individuals included from the SMART/ESPRIT control arms, 32 individuals developed CKD (1.6%) during 8,452 PYFU (median follow-up 4.1 y, range 0.6-8.1 y). External validation showed that the risk score predicted well in these cohorts. Limitations of this study included limited data on race and no information on proteinuria. Conclusions Both traditional and HIV-related risk factors were predictive of CKD. These factors were used to develop a risk score for CKD in HIV infection, externally validated, that has direct clinical relevance for patients and clinicians to weigh the benefits of certain antiretrovirals against the risk of CKD and to identify those at greatest risk of CKD.Peer reviewe

Current Draft

Lipman [2003] shows that in a finite model, the common prior assumption has weak implications for finite orders of beliefs about beliefs. In particular, the only such implications are those stemming from the weaker assumption of a common support. To explore the role of the finite model assumption in generating this conclusion, this paper considers the finite order implications of common priors in a countable model. I show that in countable models, the common prior assumption also implies a tail consistency condition regarding beliefs. More specifically, I show that in a countable model, the finite order implications of the common prior assumption are the same as those stemming from the assumption that priors have a common support and have tail probabilities converging to While controversial, the common prior assumption (CPA) continues to be used in the vast majority of work in incomplete information game theory and information economics. It is a key ingredient in almost all of the standard results in the growing literature on epistemology, such as Aumann’s classic 1976 “agreeing–to–disagree ” theorem or the no

Cooperation Among Egoists in Prisoner's Dilemma and Chicken Games

Axelrod has developed an evolutionary approach to the study of repeated games and applied that approach to the Prisoners' Dilemma. We apply this approach, with some modifications in the treatment of clustering, to a game that has the Prisoners' Dilemma and Chicken as special cases, to analyze how the evolution of cooperation differs in the two games. We find that the main barrier to the evolution of cooperation in Chicken is that cooperation may not always be correctly thought of as socially optimal, but that strong forces do push the players toward socially optimal action. We derive some of the results on mixed populations for any game with pairwise interaction.Center for Research on Economic and Social Theory, Research Seminar in Quantitative Economics, Department of Economics, University of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/100866/1/ECON319.pd