Behavioral Macroeconomics and Macroeconomic Behavior

Nobel Prize lecture.Behavioral economics;

Correlative studies of astrophysical sources of very high and ultra high energy gamma-rays

During the period of this contract, June 1, 1991 to November 14, 1992, the major results of our research effort have come from the Whipple air shower experiment in Tucson, AZ. The most notable development has been the discovery of TeV photons from the BL Lac object, Markarian 421. This result depended critically on the identification of Mrk 421 by the EGRET team as a source of GeV gamma rays

Faint high-energy gamma-ray photon emission of GRB 081006A from Fermi observations

Since the launch of the Fermi gamma - ray Space Telescope on June 11, 2008, the LAT instrument has solidly detected more than 20 GRBs with high energy photon emission above 100 MeV. Using the matched filter technique, 3 more GRBs have also shown evidence of correlation with high energy photon emission as demonstrated by Akerlof et al. In this paper, we present another GRB unambiguously detected by the matched filter technique, GRB 081006A. This event is associated with more than 13 high energy photons above 100 MeV. The likelihood analysis code provided by the $Fermi$ Science Support Center (FSSC) generated an independent verification of this detection by comparison of the Test Statistics (TS) value with similar calculations for random LAT data fields. We have performed detailed temporal and spectral analysis of photons from 8 keV up to 0.8 GeV from the GBM and the LAT. The properties of GRB 081006A can be compared to the other two long duration GRBs detected at similar significance, GRB 080825C and GRB 090217A. We find that GRB 081006A is more similar to GRB 080825C with comparable appearances of late high energy photon emission. As demonstrated previously, there appears to be a surprising dearth of faint LAT GRBs, with only one additional GRB identified in a sample of 74 GRBs. In this unique period when both $Swift$ and $Fermi$ are operational, there is some urgency to explore this aspect of GRBs as fully as possible.Comment: ApJ, 745, 7

Workers' Trust Funds and the Logic of Wage Profiles

This paper defines a concept, a worker's trust fund, which is useful in analyzing optimal age-earnings profiles. The trust fund represents what a worker loses if dismissed from a job for shirking. In considering whether to work or shirk, a worker weighs the potential loss due to forfeiture of the trust fund if caught shirking against the benefits from reduced effort. This concept is used to show that the implicit bonding in upward sloping age-earnings profiles is not a perfect substitute for an explicit upfront performance bond (or employment fee). It is also shown that the second-best optimal earnings profile in the absence of an upfront employment fee pays total compensation in excess of market clearing in a variety of stylized cases.

Do Deferred Wages Dominate Involuntary Unemployment as a Worker Discipline Device?

In the most widely analyzed type of efficiency wage model of involuntary unemployment, firms pay wages in excess of market clearing to give workers an incentive not to shirk. Such payments in excess of market clearing and the resultant equilibrium unemployment act as a worker discipline device. This paper concerns what is usually considered the most important theoretical criticism of such models: the so-called bonding argument. The essence of the bonding critique is that contracts whereby workers pay a bond to the firm upon taking a job (or pay an employment fee to gain employment) can eliminate involuntary unemployment. Explicit upfront bonds are only quite rarely observed. A more subtle form of the bonding critique argues that implicit bonding through upward sloping wage profiles and other deferred payment schemes can perfectly substitute for upfront bonds in providing incentives not to shirk and thereby allow the labor market to clear. This paper shows that upward sloping wage profiles do not act as a perfect substitute for explicit bonds in a natural extension of the shirking model in which workers are finite lived, the monitoring of worker behaviors on the job is costly, and firms have reputations for honesty as employers. In the absence of direct upfront bonding, optimal payment schedules will be in excess of market clearing. The reason why upward sloping wage profiles that are market clearing will not generally be the optimal labor contract is simple: delayed payment may provide sufficient incentive to prevent shirking late in the life of the contract, but in the beginning of the contract it does not prevent shirking. And it turns out in a variety of stylized cases, it is cheaper for the firm to pay a wage premium rather than to accept worker shirking early in the contract. The implications of potential worker malfeasance in the absence of explicit bonds for compensation schedules, job assignments, and firm monitoring strategies over the course of a worker's career are also analyzed.

Looting: The Economic Underworld of Bankruptcy for Profit

macroeconomics, economic underworld, bankruptcy, profit

GRB 990123: Reverse and Internal Shock Flashes and Late Afterglow

The prompt (t \siml 0.16 days) light curve and initial 9-th magnitude optical flash from GRB 990123 can be attributed to a reverse external shock, or possibly to internal shocks. We discuss the time decay laws and spectral slopes expected under various dynamical regimes, and discuss the constraints imposed on the model by the observations, arguing that they provide strongly suggestive evidence for features beyond those in the simple standard model. The longer term afterglow behavior is discussed in the context of the forward shock, and it is argued that, if the steepening after three days is due to a jet geometry, this is likely to be due to jet-edge effects, rather than sideways expansion.Comment: M.N.R.A.S., subm. 2/26/99; (preprint uses aaspp4.sty), 9 page