A Theory of Ex Post Inefficient Renegotiation

We propose a theory of ex post inefficient renegotiation that is based on loss aversion. When two parties write a long-term contract that has to be renegotiated after the realization of the state of the world, they take the initial contract as a reference point to which they compare gains and losses of the renegotiated transaction. We show that loss aversion makes the renegotiated outcome sticky and materially inefficient. The theory has important implications for the optimal design of long-term contracts. First, it explains why parties often abstain from writing a beneficial long-term contract or why some contracts specify transactions that are never ex post efficient. Second, it shows under what conditions parties should rely on the allocation of ownership rights to protect relationship-specific investments rather than writing a specific performance contract. Third, it shows that employment contracts can be strictly optimal even if parties are free to renegotiate

Procurement with Unforeseen Contingencies

The procurement of complex projects is often plagued by large cost overruns. One important reason for these additional costs are flaws in the initial design. If the project is procured with a price-only auction, sellers who spotted some of the flaws have no incentive to reveal them early. Each seller prefers to conceal his information until he is awarded the contract and then renegotiate when he is in a bilateral monopoly position with the buyer. We show that this gives rise to three inefficiencies: inefficient renegotiation, inefficient production and inefficient design. We derive the welfare optimal direct mechanism that implements the efficient allocation at the lowest possible cost to the buyer. The direct mechanism, however, imposes strong assumptions on the buyer's prior knowledge of possible flaws and their payoff consequences. Therefore, we also propose an indirect mechanism that implements the same allocation but does not require any such prior knowledge. The optimal direct and indirect mechanisms separate the improvement of the design and the selection of the seller who produces the good

Auctions vs. Negotiations:The Effects of Inefficient Renegotiation

For the procurement of complex goods the early exchange of information is important to avoid costly renegotiation ex post. We show that this is achieved by bilateral negotiations but not by auctions. Negotiations strictly outperforms auctions if sellers are likely to have superior information about possible design improvements, if renegotiation is costly, and if the buyer's bargaining position is sufficiently strong. Moreover, we show that negotiations provide stronger incentives for sellers to investigate possible design improvements than auctions. This provides an explanation for the widespread use of negotiations as a procurement mechanism in private industry

Auctions versus Negotiations

For the procurement of complex goods the early exchange of information is important to avoid costly renegotiation. If the buyer can specify the main characteristics of possible design improvements in a complete contingent contract, a scoring auction implements the efficient allocation. If this is not feasible, the buyer must choose between a price-only auction (discouraging early information exchange) and bilateral negotiations with a preselected seller (reducing competition). Bilateral negotiations are superior if potential design improvements are important, if renegotiation is particularly costly, and if the buyer's bargaining position is strong. Moreover, negotiations provide stronger incentives for sellers to investigate design improvements

MontanAqua : Wasserbewirtschaftung in Zeiten von Knappheit und globalem Wandel. Wasserbewirtschaftungsoptionen für die Region Crans-Montana-Sierre im Wallis

Das nationale Forschungsprogramm NFP 61 «Nachhaltige Wassernutzung » des Schweizerischen Nationalfonds hat sich zum Ziel gesetzt, wissenschaftliche Grundlagen zur nachhaltigen Wasserbewirtschaftung in der Schweiz zu liefern. Als Teil dieses Forschungsvorhabens wurde im Rahmen des Projektes MontanAqua die Wasserbewirtschaftung der Region Crans-Montana-Sierre (Wallis) untersucht. Es ging dabei darum, in enger Zusammenarbeit mit den in der Region betroffenen Akteuren nachhaltige Wassernutzungsstrategien für die Zukunft zu entwickeln. MontanAqua hat sich vertieft mit den bestehenden Systemen der Wasserbewirtschaftung auf der regionalen Skala (11 Gemeinden) auseinandergesetzt. Dazu wurden die zukünftigen Auswirkungen der klimatischen und sozioökonomischen Veränderungen einbezogen. Das Forschungsteam analysierte die aktuelle Situation anhand von quantitativen, qualitativen sowie kartografischen Methoden und kombinierte diese mit Modellberechnungen. Für die Modellierung der Zukunft wurden regionale Klimaszenarien und vier mit lokalen Akteuren entwickelte sozioökonomische Szenarien verwendet. Dieser Überblick fasst die Resultate des Projektes MontanAqua zusammen. Fünf wesentliche Fragen werden beantwortet und fünf Kernbotschaften erläutert. Zudem sind Empfehlungen für die Verantwortlichen der regionalen und kantonalen Wasserbewirtschaftung formuliert

Immuno-Electrophysiological Mechanisms of Functional Electrical Connections Between Recipient and Donor Heart in Patients With Orthotopic Heart Transplantation Presenting With Atrial Arrhythmias

[EN] BACKGROUND: The formation of recipient-to donor atrio-atrial connections (AAC) in patients after orthotopic heart transplantation (OHT) is poorly understood. We sought to investigate the mechanisms of atrial tachyarrhythmias after OHT, the role of AACs, and their relationship to the immunologic match. METHODS: In a large series of OHT patients, we performed a retrospective review of 42 patients who underwent catheter ablation for atrial arrhythmias. A realistic 3-dimensional computer model of human atria was used to study AAC conductivity. RESULTS: Patient age was 55 +/- 15 years (71% male). Biatrial anastomosis was present in 24/42 patients (57%). An AAC was found in 9/42 patients (21%, right-sided in 5 patients with biatrial anastomosis, left-sided in 4 patients). The AAC became apparent at the time of the electrophysiology study 10.1 +/- 7.6 years after OHT (range, 0.3-22.2 years). Donor-specific antibodies were present in no patient with AAC but were present in 69% of patients without AAC, P=0.002. In all patients with AAC, a recipient atrial tachycardia propagated via AAC to the donor atrium (4 patients presented with atrial fibrillation). Simulations showed AAC conduction requires an isthmus of >= 2 mm and is cycle length and location dependent. Patients without AAC (n=13) frequently presented with donor atrial arrhythmias, in 77% cavo-tricuspid isthmus flutter was ablated. The procedural success was high, although, 12 patients (29%) required reablation. CONCLUSIONS: AACs are found in 21% of OHT patients with atrial tachyarrhythmias and can manifest very early after OHT. Immune privilege characterized by the absence of donor-specific antibodies may facilitate AAC formation. Propagation across an AAC is width, cycle length, and location dependent. Patients with AAC present with focal atrial tachycardias or atrial fibrillation originating from the recipient atria; patients without most frequently present with cavo-tricuspid isthmus dependent atrial flutter. While multiple arrhythmias frequently require reablation, ablative therapy is highly effective.This study was supported in part by National Institutes of Health grants R21HL138064, and R01HL129136 to Dr Noujaim. This work was partially supported by the Direccion General de Politica Cientifica de la Generalitat Valenciana (PROMETEU2020/043).Herweg, B.; Nellaiyappan, M.; Welter-Frost, AM.; Tran, T.; Mabry, G.; Weston, K.; Tobón, C.... (2021). Immuno-Electrophysiological Mechanisms of Functional Electrical Connections Between Recipient and Donor Heart in Patients With Orthotopic Heart Transplantation Presenting With Atrial Arrhythmias. Circulation Arrhythmia and Electrophysiology. 14(4):412-423. https://doi.org/10.1161/CIRCEP.120.008751S41242314

Transnational policy entrepreneurs and the cultivation of influence : individuals, organizations and their networks

The ‘policy entrepreneur’ concept arises from the Multiple Streams’ theory of agenda setting in Policy Studies. Through conceptual stretching’, the concept is extended to global policy dynamics. Unlike ‘advocacy networks’ and ‘norm entrepreneurs’, the discussion addresses the strategies of ‘insider’ or ‘near-governmental’ non-state actors. The analysis advances the policy entrepreneur concept in three directions. First, the discussion develops the transnational dimensions of this activity through a case study of International Crisis Group. Second, rather than focusing on charismatic individuals, the discussion emphasizes the importance of organizational resources and reputations for policy entrepreneurship and access into international policy communities. Organizations maintain momentum behind policy solutions and pressures for change over the long term when individuals retire or depart for other positions. Third, the discussion outlines four distinct entrepreneur strategies and techniques that both individuals and organizations cultivate and deploy to enhance their power and persuasion in global policy processes and politics