Default and Punishment in General Equilibrium

We extend the standard model of general equilibrium with incomplete markets to allow for default and punishment. The equilibrating variables include expected delivery rates, along with the usual prices of assets and commodities. By reinterpreting the variables, our model encompasses a broad range of moral hazard, adverse selection, and signalling phenomena (including the Akerlof lemons model and Rothschild--Stiglitz insurance model) in a general equilibrium framework. We impose a condition on the expected delivery rates for untraded assets that is similar to the trembling hand refinements used in game theory. Despite earlier claims about the nonexistence of equilibrium with adverse selection, we show that equilibrium always exists, even with exclusivity constraints on asset sales, and transactions-liquidity costs or information-evaluation costs for asset trade. We show that more lenient punishment which encourages default may be Pareto improving because it allows for better risk spreading. We also show that default opens the door to a theory of endogenous assets.

Studies on the Influence of Ultraviolet Light on Initiation in Skin Tumorigenesis

The effect of shortwave ultraviolet (UV) light applied once or 10 times on initiation by 7, 12-dimethtybenz(a)anthracene (DMBA) in two-stage skin carcinogenesis was studied croton oil was used as promoter. The results showed that a single UV treatment increased the formation of benign tumors when given prior to initiation-promotion. The incidence of benign tumors decreased significantly when 10 doses of UV light were given after initiation, although a few carcinomas and sarcomas occurred, suggesting a summative effect of both agents