5,237 research outputs found
Stock options and managerial incentives to invest
We examine the effect of stock options on managerial incentives to invest. Our chief innovation is a model wherein firm value and executive decisions are endogenous. Numerical solutions to our model show that managerial incentives to invest are multi-dimensional and highly sensitive to option strike prices, the manager's wealth, degree of diversification, risk aversion, and career concerns. We find that over-investment problems are far more likely and far more severe that many researchers suggest. Finally, firm value is not a strictly increasing function of a manager's incentive compensation or conventional pay-for-performance metrics. Stronger managerial incentives to invest can benefit or harm a firm. Our results should send a cautionary signal to researchers who study managerial behavior. It is not sufficient to rely on one-dimensional risk-neutral valuation metrics, such as pay-for-performance, to describe the degree of incentive alignment between managers and shareholders.
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How can health economics be used in the design and analysis of adaptive clinical trials? A qualitative analysis
Introduction
Adaptive designs offer a flexible approach, allowing changes to a trial based on examinations of the data as it progresses. Adaptive clinical trials are becoming a popular choice, as the prudent use of finite research budgets and accurate decision-making are priorities for healthcare providers around the world. The methods of health economics, which aim to maximise the health gained for money spent, could be incorporated into the design and analysis of adaptive clinical trials to make them more efficient. We aimed to understand the perspectives of stakeholders in health technology assessments to inform recommendations for the use of health economics in adaptive clinical trials.
Methods
A qualitative study explored the attitudes of key stakeholdersâincluding researchers, decision-makers and members of the publicâtowards the use of health economics in the design and analysis of adaptive clinical trials. Data were collected using interviews and focus groups (29 participants). A framework analysis was used to identify themes in the transcripts.
Results
It was considered that answering the clinical research question should be the priority in a clinical trial, notwithstanding the importance of cost-effectiveness for decision-making. Concerns raised by participants included handling the volatile nature of cost data at interim analyses; implementing this approach in global trials; resourcing adaptive trials which are designed and adapted based on health economic outcomes; and training stakeholders in these methods so that they can be implemented and appropriately interpreted.
Conclusion
The use of health economics in the design and analysis of adaptive clinical trials has the potential to increase the efficiency of health technology assessments worldwide. Recommendations are made concerning the development of methods allowing the use of health economics in adaptive clinical trials, and suggestions are given to facilitate their implementation in practice
Dividing the Indivisible: Procedures for Allocating Cabinet Ministries to Political Parties in a Parliamentary System
Political parties in Northern Ireland recently used a divisor method of apportionment to choose, in sequence, ten cabinet ministries. If the parties have complete information about each others' preferences, we show that it may not be rational for them to act sincerely by choosing their most-preferred ministry that is available. One consequence of acting sophisticatedly is that the resulting allocation may not be Pareto-optimal, making all the parties worse off. Another is nonmonotonictyâchoosing earlier may hurt rather than help a party. We introduce a mechanism that combines sequential choices with a structured form of trading that results in sincere choices for two parties. Although there are difficulties in extending this mechanism to more than two parties, other approaches are explored, such as permitting parties to making consecutive choices not prescribed by an apportionment method. But certain problems, such as eliminating envy, remain.Proportional Representation, apportionment, divisor methods, Sincere and Sophisticated Choices, Envy Free Allocations, Sports Drafts
Symbolic Exact Inference for Discrete Probabilistic Programs
The computational burden of probabilistic inference remains a hurdle for
applying probabilistic programming languages to practical problems of interest.
In this work, we provide a semantic and algorithmic foundation for efficient
exact inference on discrete-valued finite-domain imperative probabilistic
programs. We leverage and generalize efficient inference procedures for
Bayesian networks, which exploit the structure of the network to decompose the
inference task, thereby avoiding full path enumeration. To do this, we first
compile probabilistic programs to a symbolic representation. Then we adapt
techniques from the probabilistic logic programming and artificial intelligence
communities in order to perform inference on the symbolic representation. We
formalize our approach, prove it sound, and experimentally validate it against
existing exact and approximate inference techniques. We show that our inference
approach is competitive with inference procedures specialized for Bayesian
networks, thereby expanding the class of probabilistic programs that can be
practically analyzed
Probabilistic Program Abstractions
Abstraction is a fundamental tool for reasoning about complex systems.
Program abstraction has been utilized to great effect for analyzing
deterministic programs. At the heart of program abstraction is the relationship
between a concrete program, which is difficult to analyze, and an abstract
program, which is more tractable. Program abstractions, however, are typically
not probabilistic. We generalize non-deterministic program abstractions to
probabilistic program abstractions by explicitly quantifying the
non-deterministic choices. Our framework upgrades key definitions and
properties of abstractions to the probabilistic context. We also discuss
preliminary ideas for performing inference on probabilistic abstractions and
general probabilistic programs
Generating and Sampling Orbits for Lifted Probabilistic Inference
A key goal in the design of probabilistic inference algorithms is identifying
and exploiting properties of the distribution that make inference tractable.
Lifted inference algorithms identify symmetry as a property that enables
efficient inference and seek to scale with the degree of symmetry of a
probability model. A limitation of existing exact lifted inference techniques
is that they do not apply to non-relational representations like factor graphs.
In this work we provide the first example of an exact lifted inference
algorithm for arbitrary discrete factor graphs. In addition we describe a
lifted Markov-Chain Monte-Carlo algorithm that provably mixes rapidly in the
degree of symmetry of the distribution
Farmers of the Future: Market Segmentation and Buying Behavior
Dramatic structural changes are occurring in U.S. and world agriculture. These changes have important implications for the customer base and marketing strategy of input supply manufacturers, distributors and retailers. The framework and model presented can and is being used to understand structural change in production agriculture on a global basis.Structural change, Buying behavior, Marketing strategy, Farm size, Marketing,
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