Third parties as an incentive to comply

Within an incomplete contract setting, the paper analyses the role of third parties in ameliorating incentive problems arising in the context of financial contracts with costly verification. Contrary to the findings of the bilateral lender-borrower relationship, characterised by no information revelation and a breakdown of the market, it is shown that, in the presence of third parties, an optimal contract exists and has partial information revelation. The importance of third parties is therefore not limited to improving efficiency, as it is when the contract offer comes from the informed party, but to ensure project realisation, and thus to ensure that the surplus that can arise from the project does not get lostBargaining power; contracts; costly state verification

Mathematical modeling of thrombus formation in idealized models of aortic dissection: Initial findings and potential applications

Aortic dissection is a major aortic catastrophe with a high morbidity and mortality risk caused by the formation of a tear in the aortic wall. The development of a second blood filled region defined as the “false lumen” causes highly disturbed flow patterns and creates local hemodynamic conditions likely to promote the formation of thrombus in the false lumen. Previous research has shown that patient prognosis is influenced by the level of thrombosis in the false lumen, with false lumen patency and partial thrombosis being associated with late complications and complete thrombosis of the false lumen having beneficial effects on patient outcomes. In this paper, a new hemodynamics-based model is proposed to predict the formation of thrombus in Type B dissection. Shear rates, fluid residence time, and platelet distribution are employed to evaluate the likelihood for thrombosis and to simulate the growth of thrombus and its effects on blood flow over time. The model is applied to different idealized aortic dissections to investigate the effect of geometric features on thrombus formation. Our results are in qualitative agreement with in-vivo observations, and show the potential applicability of such a modeling approach to predict the progression of aortic dissection in anatomically realistic geometries

Inter-firm trade finance in times of crisis

The paper discusses the main features that distinguish inter-firm international trade finance from alternative sources of financing. On the one hand, inter-firm trade finance could help overcome informational problems associated with other lending relationships; on the other, it may contribute to propagate shocks due to the interconnection among firms along credit chains. The paper evaluates the potential effects of a financial crisis on the use of trade credit for firms operating in developing countries. It argues that while the advantages of trade credit might remain largely unexploited due to poor legal institutions, the disadvantages might be exacerbated because of these firms’ greater exposure to a default chain. Based on these arguments, a menu of choices is identified for what policymakers can do to boost firms’ access to inter-firm trade finance in times of crisis.Debt Markets,Access to Finance,Bankruptcy and Resolution of Financial Distress,Economic Theory&Research,Emerging Markets

Sorting the Good Guys from Bad: On the Optimality of Deterministic Audit with Ex-Ante Information Acquisition

In a costly state verification model under commitment the principal may acquire a costly public and imperfectly revealing signal before or after contracting. If the project remains profitable after all signal realisations, optimally the signal is collected, if at all, after contracting, and it may be acquired randomly or deterministically. Moreover, audit is deterministic and targeted on some signal-state combinations. The paper provides a detailed characterisation of the optimal contract and performs a comparative static analysis of signal acquisition strategy and payoffs with respect to enforcement costs and informativeness of the signal. We explore robustness of the results, including commitment issues.contracts, auditing, ex-ante information

Can Liars Ever Prosper.

The paper compares the optimal financial contracts of a firm which has private information over its expost revenues when the finance can be provided by either a single or two groups of investors. When they are the only investors we use a financial contract with non-contractible monitoring, in which the probabilities of cheating by the entrepreneur/firm and monitoring by investors are mutual best responses. The contract is written by the entrepreneur knowing that this equilibrium will subsequently occur. With a second group of investors who have no monitoring rights, we analyse a truth telling contract and a misrepresentation contract in which cheating and monitoring probabilities are chosen in a similar way to those of the single investor contract. The non monitoring investors learn the results of any monitoring for free. Our main results are that: the two investor group truth-telling contract achieves the second best despite the lack of commitment; this contract is only feasible under limited liability of investors if low state revenues are high enough. When low state revenues are too low for this then the two investor misrepresentation contract is optimal. This contract has a negative correlation between repayments to the two investor groups: the contract uses the non-monitoring group to smooth out the repayments of the entrepreneur optimally. This reduces his incentive to make false reports and mitigates the investor's incentive to monitor. A second result is that the two investor scenario is Pareto superior to the single investor model. We show that with unlimited liability on investor groups, the two investor misrepresentation contract is as good as the second best. Generally in this misrepresentation contract investors may have to make repayments to the firm rather than receive them. A further result is that the three party contract is always renegotiation-proof, as well as collusion-proof so long as the low state revenues are below the expected repayments of the monitor. Last we show that under limited liability the share of finance provided by the two is strictly positive and uniquely determined.financial contracts; multiple investors; no commitment.

Separation of functions, Collusion and Supervisors Financial Participation

We derive the optimal principal-supervisor-agent relationship in an incomplete contract setting. We show that while having a three-layer structure with full separation of tasks has no efficiency consequence under a complete contract, it becomes crucial under an incomplete contract and can even lead to a result of irrelevance of the contractual incompleteness. When it is not possible to achieve this outcome, managers non-compliance arises as equilibrium behaviour despite the presence of complying supervisors. However, although always more efficient relative to a bilateral structure, the three-layer structure is prone to collusion and renegotiation. We show that the response to such drawback is to involve financially the supervisor into the venture, with the extent of the participation depending on how costly it is to collude and renegotiate the contract terms. Last, we derive the welfare properties of the various contract forms showing that they depend on the relative scarcity of each form of financing (monitoring/non monitoring), on transaction costs of collusion and on the distribution of cash flows relative to the project size. This allows us to derive the conditions for the emergence of a bilateral structure in which the financing and supervisory task are centralised on to the same subject and to argue that riskier firms, with high risk of collusive behaviour, are more likely to be financed by a single monitoring lender and thus face a higher cost of credit.

Trade Credit, Collateral Liquidation and Borrowing Constraints

The paper proposes a model of collateralized bank and trade credit. Firms use a two-input technology. Assuming that the supplier is better able to extract value from existing assets and has an information advantage over other creditors, the paper derives a series of predictions. (1) Financially unconstrained firms (with unused bank credit lines) take trade credit for a liquidation motive. (2) The reliance on trade credit does not depend on credit rationing, if inputs are liquid enough. (3) Firms buying goods make more purchases on account than those buying services, while suppliers of services offer more trade credit than those of standardized goods. (4) Suppliers lend inputs to their customers but not cash. (5) Greater reliance on trade credit is associated with more intensive use of tangible inputs. (6) Better creditor protection decreases both the use of trade credit and input tangibility.trade credit, collateral, financial constraints, asset tangibility, creditor protection ibility

A multidisciplinary approach to define the hydrogeological model of aquifer systems in the "Fiume Versilia" catchment and the adjacent coastal plain (Northwest Tuscany, Italy)

This PhD-research regards a hydrogeological study carried out on important aquifer systems located in the Versilia area, in which high water demand is present and consequently a detailed knowledge of the same systems is necessary to optimize the groundwater resources management. In this scenario a multidisciplinary approach, geological, hydrogeological and hydro-chemical-isotopic has allowed to achieve significant results as regards the fractured/karst aquifer systems in the "Fiume Versilia" catchment and the aquifer systems of the adjacent coastal plain. Fractured/karst aquifer of the mountain area. The two main aims of the research regarding these aquifers were: i) to describe and to model the water-rock interaction processes to define a geochemical conceptual model; ii) to individuate the feeding areas of the most important springs by means of the analyses of the main geological structures and hydrogeological/geochemical-isotopic considerations. The geochemical conceptual model allowed to draw the following considerations: - The air particulate matter collected reflects the outcropping lithologies in different parts of the study area, but there seems to be no obvious phenomena of interaction between the particles and rainwater, whose chemical composition derives mainly from sea spray; - Stable water isotopes confirm that groundwaters have a meteoric origin and that the wide range of values found depends essentially on the different average altitude of feeding zone; - Based on the major dissolved elements of the sampled springs, 3 main chemical facies were identified: Ca-HCO3, Ca-SO4 and Na-Cl. The first two highlight the interaction of water with limestone and carbonate-evaporite rocks, respectively, for a time sufficient to acquire these chemical compositions and to achieve saturation/supersaturation in calcite and dolomite. The Na-Cl groundwaters show a composition not very different from that of rainwater indicating a circulation in rocks containing minerals not very reactive and/or short interaction time with carbonate rocks. These two main types of water-rock interaction are confirmed by the isotopic ratio 13C/12C. In fact, for the first two types (Ca-HCO3 and Ca-SO4 water), 13C values require a significant contribution of carbon derived from dissolution of calcite, while for Na-Cl water, 13C/12C values are consistent with the addition of biogenic CO2 in rainwater; - As regards the reaction path modeling, the two theoretical trends, which describe the dissolution of a local average rock into a local average rainwater, can explain the chemical characteristics of most springs. Finally, with respect to trace metals the theoretical approaches do not show substantial changes from the initial concentrations in the aqueous solution, suggesting that there is a low input of these chemical components in the aqueous phase during the progressive dissolution of carbonate rock. In conclusion, comparing the geological and hydrogeological features with the results of the geochemical processing, it is reasonable to assume that: i) the Na-Cl springs are representative of the shallow circuits, with small feeding zones and very low residence times in the aquifer; ii) the Ca-HCO3 and Ca-SO4 springs are representative of relatively deep circuits developed in extensive aquifers with high permeability, like Marmi, dolomitic marbles and Grezzoni. The firsts type of springs were used to obtain the relationship between the 18O/16O ratio and the altitude of rainwater infiltration. In fact taking into account that they drain a small basin and considering the regulator effect of the aquifers, the isotopic compositions of these springs are very similar to the annual average isotopic values of the local meteoric waters. This relationship was than used to evaluate the average altitude of the feeding area of the second type of springs. Feeding areas were individuated through a multidisciplinary approach using geological, hydrogeological and geochemical-isotopic tools. In particular 17 hydrogeological sections were elaborated in order to define the geometry of the main hydrostructures and to individuate possible groundwater divides. Moreover, in the hydrogeological domain under examination were considered: the injection and recovering points of the tracer tests performed before this research; the zone included between the altitude + 50 m and – 50 m with respect to the average infiltration altitude evaluated by means of isotopic ratios; the possible groundwater divides individuated by means of hydrostructural considerations. All these elements, together with the indications obtained from geochemical processing on the types of rocks mainly involved in water-rock interaction, allowed us to delimit the hydrogeological basins probably drained by the most important springs under study. In addition for each hydrogeological system, a simplified water balance using meteorological data and the effective infiltration coefficients reported in the literature was performed, verifying that the delimited feeding areas are entirely consistent with the flow rate data of the springs. Aquifer system of the coastal plain As regards the coastal plain aquifer system, the main object of the study was to define a reliable conceptual model based on a multidisciplinary approach that highlight the main feeding components and the main processes occurring in the system, based on geological, hydrogeological, and geochemical considerations. A secondary purpose was the implementation of a hydrogeological numerical model and a preliminary calibration under steady-state condition. The first step was the realization of 9 hydrostratigraphic sections to delineate the geometry and thickness of the various hydrogeological complexes constituting the aquifer system. Once delineated the hydrostructural model, all stratigraphic information was re-processed with the “Groundwater Modeling Software” for 3D reconstruction and calculation of the volume and grainsize for each horizon. The hydrostratigraphic elaboration highlights the multilayer type of the aquifer system due to the alternation of sandy and gravelly permeable layers with low and very-low permeability layers consisting of silty and clayey deposits. However the limited thickness and the lack of continuity of the impervious layers allows locally a direct connection between different permeable horizons giving to the system a monolayer character. As evidenced by both water level data and hydrogeochemical data processing, the hydraulic connection between the aquifer horizons is likely present throughout aquifer system, also probably due to the presence of many multiscreening wells. Taking into account the literature data and the results of pumping test performed during this study, the hydraulic conductivity of the permeable horizons is variable from 10-3 m/s to 10-4 m/s. Water level contours, elaborated both in wet and dry season, highlight that an important feeding component toward the coastal plain is the groundwater flow from the upper zone of the Versilia River fan. On the base of the piezometric surface morphology and the transmissivity value of 1,4 E-02 m2/sec, deriving from a pumping test performed on May 2010, the flow rate of this component was evaluated to be closed to 0,38 m3/s and 0,18 m3/s, for high level and low level conditions respectively. Analysing groundwater flow paths, minor inputs toward the coastal plain are individuated on the fans of the secondary rivers and where the limestone complexes of the mountain zone are directly in contact with the permeable horizons of the coastal plain aquifer system. Two principal piezometric minima, with hydraulic head below sea level, are located in the middle part of the plain and near the shoreline, respectively. The first one is caused by drinking water well pumping, whereas the second one is linkable to artificial drainage of the humid area located in the south-western part of the study zone. Geochemical data confirm that Ca-HCO3 waters have meteoric origin and shallow circulation. It is likely that their chemical composition is the result of dissolution of calcite, in a limited or relatively limited time, due to the high kinetic of dissolution of this carbonate mineral. The recharge from the mountain provided by low salinity Ca-HCO3 waters is particularly evident from the foothills to the central strip. Samples collected in the coastal strip have Ca-HCO3 composition only at shallow depths (maximum 10 m). Among Ca-HCO3 waters some samples have a high sulphate content due to partial interaction with carbonate-evaporite rocks and/or other reasons. The Na-Cl-HCO3, mix-Cl-HCO3, mix-HCO3 and Na-HCO3 water are located in the coastal strip and especially near of Forte dei Marmi. It should be emphasized that the presence of these waters must be understood as a positive signal, that is an improvement of water quality previously deteriorated by sea water intrusion. Finally, Na-Cl waters (usually found in relatively deep wells, >30m) are located near the coastline and are likely related to sea water intrusion. The wells that have these characteristics are generally 30m deep or more. The 18O/16O isotopic ratio allowed to identify the different components involved in the aquifer system of the coastal plain. In particular: i) A component characterized by the low isotopic ratios is recognizable starting from the upper part of the Versilia River fan up to the middle strip of the coastal plain. The relatively large extension of territory in which this component found highlights the importance of this input, in agreement with the indication deriving from piezometric surfaces. The low isotopic ratio is not compatible with a local origin of water but requires an input from the mountain area. Considering the hydrostructural features, a groundwater flow from rock reliefs to the porous aquifer of the plain is unlikely in this zone; consequently the input of water from the mountains is through the Versilia River, as confirmed by water levels; ii) a further component, even if less important than the last one, is represented by contributions from permeable carbonate rocks, where these are close to the coastal plane, and from other minor alluvial fans, as T.Baccatoio in the southern part and T.Montignoso in the northern part; iii) a further and significant component is the local rainwater characterized by a specific isotopic ratio. This input is well recognizable in the part of the plain close to the coastline, although its influence on the other input is evident also in the inner part. Finally, the study of isotopes has contributed to investigate in more detail the sea water intrusion phenomenon occurring both directly and through inflow along stream courses, as well as the relationship between groundwaters and main rivers. Direct marine ingression is evident in wells with depths higher than 25-30 m and located in a strip of about 1 km from the coastal line. The ingression inside the water courses, instead, is particularly evident in the Versilia river where the sea water reaches the intermediate strip (travelling for more than 2 km along the course of the river, with about 15% of mixing). The ingression inside the water course occurs also in the T.Baccatoio/F.Motrone with a maximum distance of about 1 km from the coastline. Finally, for the Fiumetto ditch the ingression is stopped by the Vinciane Port at 500 m from the coastline. In agreement with stream water level/groundwater head level relationship, geochemical and isotopic features of water show that rivers/streams/ditches are in hydraulic connection with the aquifer almost throughout the coastal plain. Since the Versilia River has an important role in aquifer feeding, a detailed geochemical survey was carried out to better investigate the stream water-groundwater relationship. Obtained results indicate that the river feeds the aquifer from the upper part of the plain up to the middle one (ex-Lago di Porta zone) and in the final stretch of the river course. In the ex-Lago di Porta zone the river is likely not connected with the aquifer. In conclusion, based on hydrostructural, hydrogeological, and geochemical-isotopic considerations the main input to the aquifer system are: - an important component from the Versilia River alluvial fan, which is essentially recharged by the river itself; - a component, less important than the previous one, developed in minor alluvial fans and some carbonate rocks in the foothill strip; - an important local rainwater infiltration; - stream water infiltration; - a sea water component, even if of minor importance, developed both directly from the shoreline to the aquifer and indirectly through of the stream courses. Based on the above described hydrogeological conceptual model, a numerical flow model was implemented and calibrated under steady state condition. The results of the calibration generally confirm the conceptual model, although in some zones differences between observed and model values are significant and suggest that model refinement is necessary. This is essentially due to the insufficient and not homogeneous distribution of some type of data, as hydraulic parameters and stratigraphic information. Following these possible improvements, a transient flow model and transport model could be implemented also thanks to the amount and quality of data produced during this research. Lastly, the results of this PhD-research not only are scientifically interesting but can also have practical implications for the protection and the correct management of the groundwater resource. For example, the multidisciplinary approach used for delimiting the hydrogeological basin of some important springs in the mountain area responds to the need to define the protection zones of water resources, as recommended by the European Community normative and the national normative. On the other hand, the conceptual/numerical model obtained for the coastal plain aquifer system represents an important tool for a correct planning and regulation of groundwater exploitation, to preclude a qualitative and quantitative deterioration of this indispensable resource

A Simple Impossibility Result in Behavioral Contract Theory

The paper analyses, within a moral hazard scenario, a contract between an agent with anticipatory emotions and a principal who responds strategically to those emotions. The agent receives a private signal on the profitability of the task he was hired for. If the signal is informative about the return from effort, the agent would benefit from knowing accurate news. However, if the agent derives utility from the anticipation of his final payoff, the suppression of a bad signal may induce a positive interim emotional effect. We show that it may be impossible to achieve the first-best, even though the risk-neutral parties are symmetrically informed at the contracting stage and complete contracts can be written.Hidden action, anticipatory utility.

DEGASSAMENTO DIFFUSO IN ITALIA: contributo alla valutazione del rischio gas nell’area geotermica di Larderello

Nell’ambito del progetto V5 (INGV-DPC), denominato “Diffuse Degassing in Italy”, l’Unità di Ricerca del IGG-CNR di Pisa ha il compito di valutare il flusso globale di CO2 emesso in atmosfera dal settore sud-occidentale della Toscana ed in particolare dal campo geotermico di Larderello. Gli obiettivi principali del progetto sopra citato sono quelli di individuare e mappare le zone caratterizzate da flussi anomali di CO2 dal suolo per creare un archivio di schede in formato elettronico disponibili in rete delle principali manifestazioni gassose presenti nel territorio italiano. La presente tesi di laurea si inserisce nel quadro di queste attività sia per ciò che riguarda l’individuazione di tutte le zone termicamente anomale sia per ciò che concerne lo studio della composizione chimica ed isotopica dei gas emessi dalle principali manifestazioni termali e l’acquisizione di tutte le informazioni che sono necessarie per scopi di protezione civile-gas hazard (ad esempio le relazioni esistenti fra emissione gassosa ed assetto strutturale ed idrogeologico, ecc). Le attività hanno inizialmente previsto la raccolta di dati di letteratura disponibili sulle manifestazioni note da tempo (ubicazione, composizione chimica e isotopica ecc.). Successivamente la ricerca è stata volta all’individuazione di nuove aree sede di emissione anomala di gas (sia emissioni diffuse che puntuali). Date le peculiari caratteristiche della zona in oggetto (tutto il settore sud-occidentale della Toscana è caratterizzata da un flusso anomalo di calore) è stato deciso di utilizzare inizialmente alcune immagini satellitari per individuare le aree termicamente anomale sulle quali concentrare l’attenzione e approfondire lo studio. Per teli aree sono state utilizzate alcune foto aeree per individuare le relazioni esistenti con la morfologia e per meglio delimitare le aree prive di vegetazione. Dopo questa fase preliminare sono stati effettuati numerosi e accurati rilievi di terreno per accertarsi dell’effettiva presenza di tali manifestazioni e per quantificare la loro estensione areale. Nell’intera area sono state individuate numerose tipologie di manifestazioni termali: zone di emissione diffusa, fumarole, pozze gorgoglianti e sorgenti calde. Le informazioni derivanti dall’osservazione delle immagini da satellite e/o aeree, unite a quelle derivanti dai rilievi di terreno, sono state utilizzate per selezionare alcuni siti particolarmente sensibili al rilascio di gas in atmosfera e caratterizzati da una morfologia che può favorire il ristagno al suolo dei gas emessi. Sulle aree ad emissione diffusa selezionate sono state realizzate direttamente in campagna alcune riprese effettuate con un radiometro IR per meglio delimitare eventuali anomalie termiche locali, alle quali in genere sono associati elevati flussi di vapore e gas. Successivamente sono state effettuate due campagne di esplorazione geochimica (Novembre 2005 e Luglio 2006) durante le quali sono stati prelevati 26 campioni di acque e 15 campioni di gas. Il doppio campionamento ha lo scopo di individuare eventuali variazioni stagionali delle sorgenti termali mettendo in evidenza dei circuiti idrici a ricarica rapida. Le analisi chimiche ed isotopiche delle acque e dei gas campionati sono state effettuate presso i laboratori dell’IGG del CNR di Pisa. Per le acque sono stati determinati i contenuti dei costituenti principali (Na, K, Ca, Mg, Alcalinità, SO4, Cl, NO3), alcuni minori (B, Li, SiO2, NH4, F,Al) e i metalli in tracce (Fe, Mg, Zn, Cu, Cr, Cd, Pb, As, Sr, Ni).Per i gas sono stati analizzati i contenuti di CO2, H2S, H2, CH4, CO, N2, Ar, He e O2. Le acque sono state classificate tramite i classici diagrammi di Langelier-Ludwig e relative sezioni al fine di identificare i tipi chimici principali e l’eventuale esistenza di fenomeni di mescolamento tra le acque stesse; inoltre è stata effettuata l’analisi delle componenti principali e della regressione lineare multipla per l’individuazione delle anomalie di fuga (T, PCO2, B e NH4); sono state applicate delle tecniche geotermometriche sui soluti; ed infine è stato utilizzato un software di calcolo (EQ3/6) per lo studio della speciazione chimica e per la verifica dell’esistenza delle condizioni di equilibrio tra le acque campionate e le principali fasi mineralogiche delle rocce presenti. Lo studio sui gas ha previsto l’applicazione delle principali tecniche geotermometriche. Tutte le informazioni raccolte durante le campagne di rilevamento e le successive analisi di laboratorio sono state inserite nelle schede in formato elettronico che sono già disponibili in rete per tutte le unità di ricerca del progetto in esame