Risk-Return Tradeoffs and Managerial incentives

Moral hazard theory posits that managerial risk aversion imposes agency costs on shareholders, and firms respond by providing risk-taking incentives to mitigate these costs. The underlying assumption in this literature is that increasing shareholder value requires increasing risk, yet there is limited empirical evidence supporting this assumption or the role of such risk-return tradeoffs in incentive compensation design. Using measures based on the firm’s stock price, I find that shareholder value increases with risk, consistent with managerial risk aversion imposing agency costs on shareholders. I also find that firms provide managers with more risk-taking incentives when this risk-return relation is more positive and thus potential risk-related agency costs are more severe. This finding is strongest among firms where value increases with idiosyncratic rather than systematic risk, consistent with theory that these agency costs arise primarily from managers’ exposure to idiosyncratic risk. Overall, these results are consistent with firms designing managerial compensation contracts to mitigate risk-related agency costs. Additional findings highlight that the incentives from equity-based compensation depend on the risk-return tradeoffs that managers face, providing one explanation for the conflicting results in prior literature regarding the incentives from managerial stock price exposure

Fully 3D Monte Carlo image reconstruction in SPECT using functional regions

Image reconstruction in Single Photon Emission Computed Tomography (SPECT) is affected by physical effects such as photon attenuation, Compton scatter and detector response. These effects can be compensated for by modeling the corresponding spread of photons in 3D within the system matrix used for tomographic reconstruction. The fully 3D Monte Carlo (F3DMC) reconstruction technique consists in calculating this system matrix using Monte Carlo simulations. The inverse problem of tomographic reconstruction is then solved using conventional iterative algorithms such as maximum likelihood expectation maximization (MLEM). Although F3DMC has already shown promising results, its use is currently limited by two major issues: huge size of the fully 3D system matrix and long computation time required for calculating a robust and accurate system matrix. To address these two issues, we propose to calculate the F3DMC system matrix using a spatial sampling matching the functional regions to be reconstructed. In this approach, different regions of interest can be reconstructed with different spatial sampling. For instance, a single value is reconstructed for a functional region assumed to contain uniform activity. To assess the value of this approach, Monte Carlo simulations have been performed using GATE. Results suggest that F3DMC reconstruction using functional regions improves quantitative accuracy compared to the F3DMC reconstruction method proposed so far. In addition, it considerably reduces disk space requirement and duration of the simulations needed to estimate the system matrix. The concept of functional regions might therefore make F3DMC reconstruction practically feasible.Comment: 6 pages, 3 figures, 3rd International Conference on maging Technologies in Biomedical Sciences : ITBS2005, Milos Island, Greece, 25-28 september 2005, submitted to NIM

The impacts of airport activities on regional economy - An empirical analysis of New Zealand

This study investigates the impacts of airport activities on regional economies using annual data on 22 regions and airports in New Zealand from 1996 to 2016. Studying all regions of an island country avoids the sample selection bias, and reduces the likelihood of incorrectly capturing the effects of improvements in other transport modes. The use of panel data over an extensive period of time also contributes to a robust identification procedure. In addition to the fixed effects estimation that has been frequently used in the literature, the system generalized methods of moments (GMM) approach and the dynamic common correlated effects (CCE) estimator are applied to account for cross-sectional dependence, cross-regional heterogeneity, and feedback effects. We find that airport activities have a statistically and economically significant impact on a region’s economy. This finding is robust across fixed effects, GMM, and CCE estimations, although more significant effects are identified by the less restrictive CCE approach. Our study suggests a positive effect of aviation on regional economies, and supports local/regional policies promoting aviation activities

Active stiffening of F-actin network dominated by structural transition of actin filaments into bundles

Molecular motor regulated active contractile force is key for cells sensing and responding to their mechanical environment, which leads to characteristic structures and functions of cells. The F-actin network demonstrates a two-order of magnitude increase in its modulus due to contractility; however, the mechanism for this active stiffening remains unclear. Two widely acknowledged hypotheses are that active stiffening of F-actin network is caused by (1) the nonlinear force-extension behavior of cross-linkers, and (2) the loading mode being switched from bending to stretching dominated regime. Direct evidence supporting either theory is lacking. Here we examined these hypotheses and showed that a reorganization of F-actin network from cross-linked filament state to bundled stress fiber state plays a key role on active stiffening of actin network. We demonstrated through computational models that the stretching of cross-linkers and molecular motors has less impact on the active stiffening, while it is more sensitive to cytoskeleton reorganization during the elasticity sensing. The proposed new mechanism involving the cytoskeletal remodeling was able to integrate discrete experimental observations and has the potential to advance our understanding of active sensing and responding of cells

Nighttime chemistry at a high altitude site above Hong Kong

Nighttime reactions of nitrogen oxides influence ozone, volatile organic compounds, and aerosol and are thus important to the understanding of regional air quality. Despite large emissions and rapid recent growth of nitrogen oxide concentrations, there are few studies of nighttime chemistry in China. Here we present measurements of nighttime nitrogen oxides, NO3 and N2O5, from a coastal mountaintop site in Hong Kong adjacent to the megacities of the Pearl River Delta region. This is the first study of nighttime chemistry from a site within the residual layer in China. Key findings include the following. First, highly concentrated urban NOx outflow from the Pearl River Delta region was sampled infrequently at night, with N2O5 mixing ratios up to 8 ppbv (1 min average) or 12 ppbv (1 s average) in nighttime aged air masses. Second, the average N2O5 uptake coefficient was determined from a best fit to the available steady state lifetime data as γ(N2O5) = 0.014 ± 0.007. Although this determination is uncertain due to the difficulty of separating N2O5 losses from those of NO3, this value is in the range of previous residual layer determinations of N2O5 uptake coefficients in polluted air in North America. Third, there was a significant contribution of biogenic hydrocarbons to NO3 loss inferred from canister samples taken during daytime. Finally, daytime N2O5 mixing ratios were in accord with their predicted photochemical steady state. Heterogeneous uptake of N2O5 in fog is determined to be an important production mechanism for soluble nitrate, even during daytime. Key Points Large (up to 12 ppbv N2O5) but infrequent nocturnal NOx outflow from the Pearl River Delta Average N2O5 uptake coefficients 0.014 ± 0.007, in line with residual layer measurements in the U.S. Daytime N2O5 follows predicted steady state but rapidly produces soluble nitrate in fog.Department of Civil and Environmental Engineerin

The effect of adjusting LDL-cholesterol for Lp(a)-cholesterol on the diagnosis of familial hypercholesterolaemia

BACKGROUND: Familial hypercholesterolaemia (FH) diagnostic tools help prioritise patients for genetic testing and include LDL-C estimates commonly calculated using the Friedewald equation. However, cholesterol contributions from lipoprotein(a) (Lp(a)) can overestimate 'true' LDL-C, leading to potentially inappropriate clinical FH diagnosis. OBJECTIVE: To assess how adjusting LDL-C for Lp(a)-cholesterol affects FH diagnoses using Simon Broome (SB) and Dutch Lipid Clinic Network (DLCN) criteria. METHODS: Adults referred to a tertiary lipid clinic in London, UK were included if they had undergone FH genetic testing based on SB or DLCN criteria. LDL-C was adjusted for Lp(a)-cholesterol using estimated cholesterol contents of 17.3%, 30% and 45%, and the effects of these adjustments on reclassification to 'unlikely' FH and diagnostic accuracy were determined. RESULTS: Depending on the estimated cholesterol content applied, LDL-C adjustment reclassified 8-23% and 6-17% of patients to 'unlikely' FH using SB and DLCN criteria, respectively. The highest reclassification rates were observed following 45% adjustment in mutation-negative patients with higher Lp(a) levels. This led to an improvement in diagnostic accuracy (46% to 57% with SB, and 32% to 44% with DLCN following 45% adjustment) through increased specificity. However all adjustment factors led to erroneous reclassification of mutation-positive patients to 'unlikely' FH. CONCLUSION: LDL-C adjustment for Lp(a)-cholesterol improves the accuracy of clinical FH diagnostic tools. Adopting this approach would reduce unnecessary genetic testing but also incorrectly reclassify mutation-positive patients. Health economic analysis is needed to balance the risks of over- and under-diagnosis before LDL-C adjustments for Lp(a) can be recommended

(1S,2S,4R)-7-tert-But­oxy­bicyclo­[2.2.1]hept-5-en-2-yl (2S)-2-(6-meth­oxy­naphthalen-2-yl)propano­ate

In the title mol­ecule, C25H30O4, the napthalene ring system is slightly bowed, with a dihedral angle of 4.37 (13)° between the two benzene rings