Principal agent problems under loss aversion: an application to executive stock options

Executive stock options reward success but do not penalise failure. In contrast, the standard principalagent model implies that pay is normally monotonically increasing in performance. This paper shows that, under loss aversion, the use of carrots but not sticks is a feature of an optimal compensation contract. Low risk aversion and high loss aversion is particularly propitious to the use of options. Moreover, loss aversion on the part of executives explains the award of at the money options rather than discounted stock or bonus related pay. Other features of stock option grants are also explained, such as resetting or reloading with an exercise price equal to the current stock price

Small-scale coronal structure, part 3

Recent observations and models pertaining specifically to solar coronal bright points (BPs) and generally to small-scale coronal structure are reviewed. Two questions were addressed: What is the degree of correspondence among various alleged signatures of BPs at different levels of atmosphere and what can PBs tell about the emerging flux spectrum of the sun

Can the mana of Maori men who sexually abuse children be restored?

The problem of child sex abuse is prevalent across all segments of society, and Maori, unfortunately, are overrepresented in this problem. In the total prison population of 6591, 13.6% are identified as child sex offenders. Of the 3,299 Maori in prison 283 (8.5%) are identified as child sex offenders whereas 631 (18.6%) of the 3292 non-Maori have been so identified. However, Maori only represent approximately 15% of the general population. In proportionate terms, approximately one of every 970 Maori men is currently in prison for child sex offences, while for non-Maori that figure is one in 31251. Also, disclosures from offenders suggest that sexual abuse is particularly common in rural or disadvantaged areas, with offenders frequently reporting being abused by multiple offenders and being aware of chronic abuse, little of which was ever reported

Complexity of the XY antiferromagnet at fixed magnetization

We prove that approximating the ground energy of the antiferromagnetic XY model on a simple graph at fixed magnetization (given as part of the instance specification) is QMA-complete. To show this, we strengthen a previous result by establishing QMA-completeness for approximating the ground energy of the Bose-Hubbard model on simple graphs. Using a connection between the XY and Bose-Hubbard models that we exploited in previous work, this establishes QMA-completeness of the XY model