Relational Contracting Under the Threat of Expropriation – Experimental Evidence

We examine how relational contracting in credit and investment relationships is affected by the potential expropriation of funds. We implement credit relationships in which repayment is not third-party enforceable, i.e. borrowers can default on their loans. In our main treatment the borrower can expropriate the lender’s funds: a defaulting borrower can reinvest the loaned funds in future periods. In a control treatment borrowers cannot expropriate borrowed funds, i.e. if they default they cannot reinvest these funds in future periods. We find that potential expropriation decreases the overall volume of credit as lenders offer smaller loans in initial periods. Borrowers are more likely to default in earlier periods of the relationship when expropriation is possible, especially when they receive large loans. Together these results suggest that relational contracts may be particularly difficult to establish in markets where the expropriation of funds is feasible. This finding is relevant to credit markets in which lenders’ rights are weak, but also to sovereign lending, as well as to foreign direct investment in countries with weak investor protection.Relational contracts;Investor protection;Banking;Sovereign debt;Foreign direct investment.

Peer effects in risk taking: Envy or conformity?

We examine two explanations for peer effects in risk taking: relative payoff concerns and preferences that depend on peer choices. We vary experimentally whether individuals can condition a simple lottery choice on the lottery choice or the lottery allocation of a peer. We find that peer effects increase significantly, almost double, when peers make choices, relative to when they are allocated a lottery. In both situations, imitation is the most frequent form of peer effect. Hence, peer effects in our environment are explained by a combination of relative payoff concerns and preferences that depend on peer choices. Comparative statics analyses and structural estimation results suggest that a norm to conform to the peer may explain why peer choices matter. Our results suggest that peer choices are important in generating peer effects and hence have important implications for modeling as well as for policy

g-Factor anisotropy of hole quantum wires induced by the Rashba interaction

We present calculations of the g factors for the lower conductance steps of 3D hole quantum wires. Our results prove that the anisotropy with magnetic field orientation, relative to the wire, originates in the Rashba spin-orbit coupling. We also analyze the relevance of the deformation, as the wire evolves from 3D towards a flat 2D geometry. For high enough wire deformations, the perpendicular g factors are greatly quenched by the Rashba interaction. On the contrary, parallel g factors are rather insensistive to the Rashba interaction, resulting in a high g factor anisotropy. For low deformations we find a more irregular behavior which hints at a sample dependent scenario.Comment: 7 pages, 6 figures (expanded from previous version

The bearable compositeness of leptons

Partial compositeness as a theory of flavor in the lepton sector is assessed. We begin presenting the first systematic analysis of neutrino mass generation in this context, and identifying the distinctive mass textures. We then update the bounds from charged lepton flavor and CP violating observables. We put forward a U(1)3 × CP symmetry of the composite sector, in order to allow the new physics to be not far above the TeV scale. This hypothesis effectively suppresses the new contributions to the electron EDM and μ → eγ, by far the most constraining observables, and results in a novel pattern of flavor violation and neutrino masses. The CP violation in the elementary-composite mixing is shown to induce a CKM phase of the correct size, as well as order-one phases in the PMNS matrix. We compare with the alternative possibility of introducing multiple scales of compositeness for leptons, that also allow to evade flavor and CP constraints. Finally, we examine violations of lepton flavor universality in B-meson semi-leptonic decays. The neutral-current anomalies can be accommodated, predicting strong correlations among different lepton flavors, with a few channels close to the experimental sensitivity

Tourism Demand in Portugal: Market Perspectives

Tourism has experienced different levels of development in the different regions of Portugal. To frame this development, several panel data models were estimated. The main objective is to explain the evolution of overnight stays by nationality in each region. Secondary data from 2000 to 2010 was used. The analysis includes the main tourism markets, such as the United Kingdom, Germany, the Netherlands, Ireland, France and Spain. Tourism literature suggests that, among others, the main determinants of tourism demand are Income (GDP), population, tourist´s income by place of residence, households’ consumption, unemployment rate, inflation rate, compensation of employees, comparative prices and households’ investment rate. It is observed that, although significant, the explanatory power of these variables varies according to the origin and the destination region considered