Breach, Remedies and Dispute Settlement in Trade Agreements

We provide a simple but novel model of trade agreements that highlights the role of transaction costs, renegotiation and dispute settlement. The model allows us to characterize the appropriate remedy for breach and whether the agreement should be structured as a system of "property rights" or "liability rules." We then study how the optimal rules depend on the underlying economic and contracting environment. Our model also delivers predictions about the outcome of trade disputes, and in particular about the propensity of countries to settle early versus "fighting it out."International trade agreements, Breach remedies, Dispute settlementLength: 52 pages

Trade Agreements as Endogenously Incomplete Contracts

We propose a model of trade agreements in which contracting is costly, and as a consequence the optimal agreement may be incomplete. Inspite of its simplicity, the model yields rich predictions on the structure of the optimal trade agreement and how this depends on the fundamentals of the contracting environment. We argue that taking contracting costs explicitly into account can help explain a number of key features of real trade agreements.Trade Agreement; WTO; GATT; Endogenously Incomplete Contracts

Trade Agreements as Endogenously Incomplete Contracts

We propose a model of trade agreements in which contracting is costly, and as a consequence the optimal agreement may be incomplete. In spite of its simplicity, the model yields rich predictions on the structure of the optimal trade agreement and how this depends on the fundamentals of the contracting environment. We argue that taking contracting costs explicitly into account can help explain a number of key features of real trade agreements.

Optimal Design of Trade Agreements in the Presence of Renegotiation

We study the optimal design of trade agreements when governments can renegotiate after the resolution of uncertainty but compensation between them is inefficient. In equilibrium, renegotiation always results in trade liberalization, not protection. The optimal contract may be a property rule or a liability rule . High uncertainty favors liability over property rules, while asymmetries in bargaining power favor property over liability rules. Moreover, optimal property rules are never renegotiated. With a cost of renegotiation, property rules are favored when this cost is higher, reversing a central conclusion of the law-and-economics literature. (JEL C78, D86, F13, F15, K12

Breach, Remedies and Dispute Settlement in Trade Agreements

We provide a simple but novel model of trade agreements that highlights the role of transaction costs, renegotiation and dispute settlement. The model allows us to characterize the appropriate remedy for breach and whether the agreement should be structured as a system of “property rights” or “liability rules.” We then study how the optimal rules depend on the underlying economic and contracting environment. Our model also delivers predictions about the outcome of trade disputes, and in particular about the propensity of countries to settle early versus “fighting it out.

Swift J053041.9-665426, a new Be/X-ray binary pulsar in the Large Magellanic Cloud

We observed the newly discovered X-ray source Swift J053041.9-665426 in the X-ray and optical regime to confirm its proposed nature as a high mass X-ray binary. We obtained XMM-Newton and Swift X-ray data, along with optical observations with the ESO Faint Object Spectrograph, to investigate the spectral and temporal characteristics of Swift J053041.9-665426. The XMM-Newton data show coherent X-ray pulsations with a period of 28.77521(10) s (1 sigma). The X-ray spectrum can be modelled by an absorbed power law with photon index within the range 0.76 to 0.87. The addition of a black body component increases the quality of the fit but also leads to strong dependences of the photon index, black-body temperature and absorption column density. We identified the only optical counterpart within the error circle of XMM-Newton at an angular distance of ~0.8 arcsec, which is 2MASS J05304215-6654303. We performed optical spectroscopy from which we classify the companion as a B0-1.5Ve star. The X-ray pulsations and long-term variability, as well as the properties of the optical counterpart, confirm that Swift J053041.9-665426 is a new Be/X-ray binary pulsar in the Large Magellanic Cloud.Comment: 10 pages, 8 figures, accepted for publication in A&

Discovery of a 168.8 s X-ray pulsar transiting in front of its Be companion star in the Large Magellanic Cloud

We report the discovery of LXP169, a new high-mass X-ray binary (XRB) in the LMC. The optical counterpart has been identified and appears to exhibit an eclipsing light curve. We performed follow-up observations to clarify the eclipsing nature of the system. Energy spectra and time series were extracted from two XMM-Newton observations to search for pulsations, characterise the spectrum, and measure spectral and timing changes. Long-term X-ray variability was studied using archival ROSAT data. The XMM positions were used to identify the optical counterpart. We obtained UV to NIR photometry to characterise the companion, along with its 4000 d long I-band light curve. We observed LXP169 with Swift at two predicted eclipse times. We found a spin period of 168.8 s that did not change between two XMM observations. The X-ray spectrum, well characterised by a power law, was harder when the source was brighter. The X-ray flux of LXP169 is found to be variable by a factor of at least 10. The counterpart is highly variable on short and long timescales, and its photometry is that of an early-type star with a NIR excess. This classifies the source as a BeXRB pulsar. We observed a transit in the UV, thereby confirming that the companion star itself is eclipsed. We give an ephemeris for the transit of MJD 56203.877 + N*24.329. We propose and discuss the scenario where the matter captured from the companion's equatorial disc creates an extended region of high density around the neutron star (NS), which partially eclipses the companion as the NS transits in front of it. This is most likely the first time the compact object in an XRB is observed to eclipse its companion star. LXP169 would be the first eclipsing BeXRB, and a wealth of important information might be gained from additional observations, such as a measure of the possible Be disc/orbital plane misalignment, or the mass of the NS.Comment: Updated version of arXiv 1302.4665v1, accepted for publication in Astronomy and Astrophysics. 11 pages, 8 figures, 3 table

Breach, Remedies and Dispute Settlement in Trade Agreements

We provide a simple but novel model of trade agreements that highlights the role of transaction costs, renegotiation and dispute settlement. The model allows us to characterize the appropriate remedy for breach and whether the agreement should be structured as a system of "property rights" or "liability rules." We then study how the optimal rules depend on the underlying economic and contracting environment. Our model also delivers predictions about the outcome of trade disputes, and in particular about the propensity of countries to settle early versus "fighting it out."

On the Role and Design of Dispute Settlement Procedures in International Trade Agreements

Formal economic analysis of trade agreements typically treats disputes as synonymous with concerns about enforcement. But in reality, most WTO disputes involve disagreements of interpretation concerning the agreement, or instances where the agreement is simply silent. And some have suggested that the WTO's Dispute Settlement Body (DSB) might serve a useful purpose by granting "exceptions" to rigid contractual obligations in some circumstances. In each of these three cases, the role played by the DSB amounts to "completing" various dimensions of an incomplete contract. Moreover, there is a debate among legal scholars on whether or not precedent-setting in DSB rulings may enhance the performance of the institution. All of this points to the importance of understanding the implications of the different possible degrees of activism in the role played by the DSB. In this paper we bring formal analysis to bear on this broad question. We characterize the choice of contractual form and DSB role that is optimal for governments under various contracting conditions. A novel feature of our approach is that it highlights the interaction between the design of the contract and the design of the dispute settlement procedure, and it views these as two components of a single over-arching institutional design problem.

Distinguishing cancerous from non-cancerous cells through analysis of electrical noise

Since 1984, electric cell-substrate impedance sensing (ECIS) has been used to monitor cell behavior in tissue culture and has proven sensitive to cell morphological changes and cell motility. We have taken ECIS measurements on several cultures of non-cancerous (HOSE) and cancerous (SKOV) human ovarian surface epithelial cells. By analyzing the noise in real and imaginary electrical impedance, we demonstrate that it is possible to distinguish the two cell types purely from signatures of their electrical noise. Our measures include power-spectral exponents, Hurst and detrended fluctuation analysis, and estimates of correlation time; principal-component analysis combines all the measures. The noise from both cancerous and non-cancerous cultures shows correlations on many time scales, but these correlations are stronger for the non-cancerous cells.Comment: 8 pages, 4 figures; submitted to PR