Contracting still matters! Or: How to design a letter of intent

Any cooperation that profits from relation-specific investments suffers from the well-known hold-up problem. If investments are not enforceable by an outside authority, the gains fall prey to individual opportunism caused by a free-rider problem. If, in addition, individual investments exhibit positive cross effects, Che and Hausch (1999) provide a negative result and show that contracts cannot overcome the hold up due to a lack of verifiable commitment. This paper develops a mechanism that provides such a commitment device: (1) It introduces an acknowledgement game that procures reliable. (2) It embeds the original contracting problem into two institutional designs - a market based one and a private design - that support enforcement. These two devices reestablish efficient investments as enforceable results of a contract.

Contracting still matters! Or: how to design a letter of intent

Any cooperation that profits from relation-specific investments suffers from the well-known hold-up problem. If investments are not enforceable by an outside authority, the gains fall prey to individual opportunism caused by a free-rider problem. If, in addition, individual investments exhibit positive cross effects, Che and Hausch (1999) provide a negative result and show that contracts cannot overcome the hold up due to a lack of verifiable commitment. This paper develops a mechanism that provides such a commitment device: (1) It introduces an acknowledgement game that procures reliable. (2) It embeds the original contracting problem into two institutional designs - a market based one and a private design - that support enforcement. These two devices reestablish efficient investments as enforceable results of a contract

How and when can economic skills enhance cooperation?

Conventional wisdom has it that economic training and education tends to produce less cooperative people - where cooperation means following group-oriented goals. This issue has attracted particular attention in discussions of the current economic crisis where it was asked if increasing marketization of societies has created an environment encouraging amoral selfish behavior of financial intermediaries and other economic agents. We provide some evidence against this claim with the help of an experiment, using an investment game with a public-goods character. Modest guidance of strategic abilities increases the degree of cooperation if the institutional setting permits reputation building. We thus conclude that economic practice can enhance cooperation in a socially stable environment

Anyone up for helping the fisherman's wife? More solidarity with accidental misery than with man-made misery

We examine the willingness to donate depending on whether “misery” is random generated or self-inflicted by too high demands in bilateral negotiations. We find that randomness has a positive influence on the total amount of donation. In case of self-inflicted “misery” we observe that the subject who may have caused the unfavourable situation receives significantly less than the perceived innocent subject

Social Coordination, Self-Image, and Cooperation in Investment Games

Why do people cooperate in social groups? This paper provides experimental evidence that the fear of losing the self-image as a norm-compliant player might be one explaining factor. To that end an investment game with a public-goods character is played in different institutional setups that vary in the possibility to build reputation as well as in the communication of potential social norms. In addition, it provides a model that explains participants' decisions based on an extension of the neoclassical model. It covers a trade-off between pure wealth maximization and the minimization of damage to the self-image of being compliant. Experimental results show that this tradeoff is important in those treatments that allow for reputation building. We conclude that the wish to “do the right thing” can enhance cooperation in a socially stable environment

Anyone up for helping the Fisherman's wife? More solidarity with accidental misery than with man-made misery

We examine the willingness to donate depending on whether “misery” is random generated or self-inflicted by too high demands in bilateral negotiations. We find that randomness has a positive influence on the total amount of donation. In case of self-inflicted “misery” we observe that the subject who may have caused the unfavourable situation receives significantly less than the perceived innocent subject.altruism, bargaining experiment

Association between age of cannabis initiation and gray matter covariance networks in recent onset psychosis

Cannabis use during adolescence is associated with an increased risk of developing psychosis. According to a current hypothesis, this results from detrimental effects of early cannabis use on brain maturation during this vulnerable period. However, studies investigating the interaction between early cannabis use and brain structural alterations hitherto reported inconclusive findings. We investigated effects of age of cannabis initiation on psychosis using data from the multicentric Personalized Prognostic Tools for Early Psychosis Management (PRONIA) and the Cannabis Induced Psychosis (CIP) studies, yielding a total sample of 102 clinically-relevant cannabis users with recent onset psychosis. GM covariance underlies shared maturational processes. Therefore, we performed source-based morphometry analysis with spatial constraints on structural brain networks showing significant alterations in schizophrenia in a previous multisite study, thus testing associations of these networks with the age of cannabis initiation and with confounding factors. Earlier cannabis initiation was associated with more severe positive symptoms in our cohort. Greater gray matter volume (GMV) in the previously identified cerebellar schizophrenia-related network had a significant association with early cannabis use, independent of several possibly confounding factors. Moreover, GMV in the cerebellar network was associated with lower volume in another network previously associated with schizophrenia, comprising the insula, superior temporal, and inferior frontal gyrus. These findings are in line with previous investigations in healthy cannabis users, and suggest that early initiation of cannabis perturbs the developmental trajectory of certain structural brain networks in a manner imparting risk for psychosis later in life

The heterogeneity of attenuated and brief limited psychotic symptoms: association of contents with age, sex, country, religion, comorbidities, and functioning

INTRODUCTION The Attenuated Psychosis Symptoms (APS) syndrome mostly represents the ultra-high-risk state of psychosis but, as does the Brief Intermittent Psychotic Symptoms (BIPS) syndrome, shows a large variance in conversion rates. This may be due to the heterogeneity of APS/BIPS that may be related to the effects of culture, sex, age, and other psychiatric morbidities. Thus, we investigated the different thematic contents of APS and their association with sex, age, country, religion, comorbidity, and functioning to gain a better understanding of the psychosis-risk syndrome. METHOD A sample of 232 clinical high-risk subjects according to the ultra-high risk and basic symptom criteria was recruited as part of a European study conducted in Germany, Italy, Switzerland, and Finland. Case vignettes, originally used for supervision of inclusion criteria, were investigated for APS/BIPS contents, which were compared for sex, age, country, religion, functioning, and comorbidities using chi-squared tests and regression analyses. RESULT We extracted 109 different contents, mainly of APS (96.8%): 63 delusional, 29 hallucinatory, and 17 speech-disorganized contents. Only 20 contents (18.3%) were present in at least 5% of the sample, with paranoid and referential ideas being the most frequent. Thirty-one (28.5%) contents, in particular, bizarre ideas and perceptual abnormalities, demonstrated an association with age, country, comorbidity, or functioning, with regression models of country and obsessive-compulsive disorders explaining most of the variance: 55.8 and 38.3%, respectively. Contents did not differ between religious groups. CONCLUSION Psychosis-risk patients report a wide range of different contents of APS/BIPS, underlining the psychopathological heterogeneity of this group but also revealing a potential core set of contents. Compared to earlier reports on North-American samples, our maximum prevalence rates of contents were considerably lower; this likely being related to a stricter rating of APS/BIPS and cultural influences, in particular, higher schizotypy reported in North-America. The various associations of some APS/BIPS contents with country, age, comorbidities, and functioning might moderate their clinical severity and, consequently, the related risk for psychosis and/or persistent functional disability